Hearst Newspapers made two big announcements last week: The company intends to begin charging for some of its online news and plans to soon launch its own e-reader device to rival Amazon’s Kindle 2.
While Gawker cynically decries Hearst’s plan as “the last stand of a doomed industry,” I think this is a step in the right direction. I would encourage Hearst to think carefully, though, about whether it really wants to be in the device business.
Given the evolving state of the technology, the Hearst reader is likely to debut in black and white and later transition to high-resolution color with the option for video as those displays, now in testing phases, get commercialized. Downloading content from participating newspapers and magazines will occur wirelessly. For durability, the device is likely to have a flexible core, perhaps even foldable, rather than the brittle glass substrates used in readers on the market today.
What Hearst and its partners plan to do is sell the e-readers to publishers and to take a cut of the revenue derived from selling magazines and newspapers on these devices. The company will, however, leave it to the publishers to develop their own branding and payment models. “That’s something you will never see Amazon do,” someone familiar with the Hearst project said. “They aren’t going to give up control of the devices.”
CNET noted: “It’s unclear if the device Hearst has been working on has anything to do with the eReader that Plastic Logic unveiled recently, but its principle seems the same. It’s a handheld device used to read digital content, much like the Kindle. The main difference would be that Hearst’s e-reader has a much larger size to accommodate the format of newspapers and magazines.”
It’s a bold plan, but I’m skeptical of it for the same reason as Wired‘s Priya Ganapati: “Hearst doesn’t have the tech credibility or relationships to make this a successful venture.”
Ganapati also wrote: “Hearst Interactive [director Kenneth] Bronfin sits on the board of directors for E Ink, the company whose screens power both the Kindle and Sony Reader. That means an E Ink screen is a near certainty for the Hearst e-reader. However, if Hearst plans to launch an e-reader this year it is likely the screen will be black and white, rather than color”
Ganapati’s story quoted Forrester analyst James McQuivey, who thinks a device that debuts with a black and white screen would be a deal killer for many of the company’s subscribers. “Periodicals are just not effective in black and white,” he told Wired. “People who buy Esquire or Harper’s Bazaar buy them because they want to see the magazine in color.”
It might make more sense for Hearst or other news publishers to partner with a popular, user-friendly e-reader maker to create a special edition product for news. We’ve seen how well grasping too tightly to the “paper” part of “newspaper” has worked out from a business perspective.
I don’t think getting into the “e-reader” business is a better plan. Rather, I think it makes more business sense to view delivery channels or devices as fluid — something a content company should create partnerships for, but not necessarily manufacture or own.
