Scott Barrow

Will the Kindle Save Newspapers?

In Uncategorized on February 28, 2009 at 5:11 am

The PC and by extension the Web have evolved to become paid content killers.  But a promising new generation of consumer devices with integrated software and services offers new hope– one of which just might save the newspaper business.

Amazon recently launched the Kindle 2, the follow-up to their e-book reader.  It retails for $359, and in addition to offering over 240,000 books, the integrated Kindle Store also offers newspapers, magazines, and blogs.  Newspaper subscriptions range from $5.99 to $14.99 per month and are delivered “automatically and wirelessly to your Kindle, so it’s waiting for you to read first thing in the morning.”

Newspapers continue to lose value in their paper form and the consumer has come to expect free content [of all kinds] on the Web.  Now, the Kindle offers a new opportunity for the industry to reinvent itself.  If the Kindle becomes the iPod of print, will consumers pay for the convenience of automatic, wireless delivery on their favorite e-book reader?  At least one publisher seems to think so.

Newspapers shouldn’t just embrace the Kindle, they should promote it as if their lives depended on it.  They could model themselves after mobile carriers.  Like a free phone with a service plan, imagine the New York Times offering readers a free Kindle with a commitment of a 2-year subscription.

Ebay, Craigslist, and the Web itself may have nearly destroyed the newspaper business, but Amazon can save it.

Sadly it’s too late for the Rocky Mountain News.  Colorado’s oldest newspaper published its final edition today, just two months shy of its 150 year anniversary.

UPDATE:

Looking to Big-Screen E-Readers to Help Save the Daily Press.”  New York Times, 3 May 2009.

Amazon’s Kindle has a big job: saving the newspaper industry.”  Los Angeles Times, 7 May 2009.

Murdoch Warns That Without eTablets, “Newspapers Will Go Out Of Business.” TechCrunch, 17 November 2009.

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  1. He Don’t Read A Paper-We pity the wan who does not take a newspaper. His want of enlightenment leads to endless misfortunes. He lives in a world of constant progress, and deliberately closes his eyes to all the changes which that progress insures. Because he keeps himself unacquainted with such changes, he imagines they don’t exist. He is willfully blind and willfully ignorant and supposes others just as blind and ignorant as himself. Of course, he gets swindled. The case with which he can be defrauded tempts roguery, on all sides, to victimize him. Let him take a newspaper, and keep up with the current of universal information. Let him read the Rocky Mountain News. July 10, 1861

  2. An interesting idea, but I don’t see a business model that would support a newspaper such as the Washington Post or the New York Times. Even if one of those papers was able to get a million subscribers at $15 a month, that’s $180 million. But currently, at the NYT, advertising revenues are almost $1 Billion, even during the downturn. Would you pay $15 a month, and want to page thru ads? Would advertisers be willing to pay anything near the even depressed rates they are now paying for print ads on a platform like the Kindle?

    Interesting, but I think no.

    • Steve,

      You make a fair point, but let’s take the Rocky Mountain News as an example. In 2008, their expenses came in around $25M. At $15 a month, they’d only need 139k subscribers to break even, and that’s before looking at the question of advertising revenue. So for smaller papers with a smaller cost structure, I think it’s completely plausible. Certainly a better answer than ending the publication.

      Further, if the Kindle evolved into a larger format tabloid format (Kindle 3?) with better resolution I think you could find a way to develop an advertising model that provided additive revenue and didn’t hamper the user experience. It may even start to look like an actual paper, just digital, dynamic, and without the same cost of production and distribution.

      All industries go through tectonic shifts over time (railroads, steel, auto, music). All have to lower their costs of production, manage expectations of lower margins, find new and diverse sources of revenue, face consolidation, etc. And overall, everyone has to realize that trading analog dollars for digital pennies comes at a price. The question shouldn’t be how does the New York Times maintain $1B in ad revenue, the question should be how does the New York Times adapt and brace itself against the inevitable digital tipping point buffeting at their doors. Revenue may be less, but not all newspapers need face the tragedy of the Rocky Mountain News, San Fransisco Chronicle, Seattle Post-Intelligencer, Minneapolis Star-Tribune, Philadelphia Inquirer, Chicago Tribune, or The Los Angeles Times if they manage the transition smartly and get ahead of the curve.

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