What do we expect from e-readers?

E-readers have been around for yonks but only in the past 12 months have newspapers started to explore their possibilities with companies such as amazon.com, PlasticLogic, Apple and Sony.

Many of the world’s largest publishers, including News Corporation, have stated they are exploring technologies and commercial avenues.

I love the possibilities of e-readers and e-papers. Possibly, they may replace the printed word. Possibly not. But a market will emerge and publishers would be foolish to ignore the opportunity.

A moment of caution: our industry needs to learn the lessons of our experience with the Internet. Let’s not buy into business models that we will start to complain about later.

What do I mean by this? Well, our content is only free on the Internet because we have made it so. And Google and other search engines categorise it, deliver it and commercialise it because we have let them.

Most publishers are only now learning the value of our work. News dates; content less so. Today’s journalism is no longer tomorrow’s fish and chips paper . . . and it has not been for almost two decades. Yet, only in the past two years have most publishers realised this. Google’s bottom line and share price should have helped them get the message earlier.

So, we need to be careful about the business models we create or accept for e-readers.

Last year, Amazon.com recruited 13 newspapers publishers to take part in a trial of newspapers for its well known device, the Kindle. Amazon partnered with the telecommunications company MCI, and between them they created the platform for subscribers to receive electronic newspapers on the Kindle.

It was only a trial but already commercial traps were set: platform-specific (the Kindle) and exclusive distributor (MCI). And there is one more thing: they took 70 percent of the cash, leaving the publishers with a minority revenue position and locked into a device and a telco.

Regardless of whether the technology worked, or the devices were a good platform to read our journalism, that business model sucks.

We are flirting a little with a similarly controlled environment – the iPhone. While newspapers around the world have taken about 18 months longer than innovation-driven companies to embrace this platform, with so-called “apps” it should not be forgotten that Apple decides who offers an “app” and who does not.  That’s a lot of power.

E-Readers give newspaper publishers the chance to help create business models in which we have a substantial control, but only if we are sufficiently early to market.

If we are late to this opportunity, the business models may well be locked and loaded, we will be but a content supplier while the real money goes to those who control the pipes and platforms.

Publishers should look at whether a 1st mover advantage exists. It has existed in the classified space for cars, jobs and real estate; so no one should be so sure that it is not important for e-readers.

Some of the other questions might be:

  • Where is the business value and return?
  • What are the infrastructure costs – do the likes of Atex, CCI, Woodwing, et al have software now that we can plug in to do e-reader content quickly and cheaply?
  • With whom do we partner – are Telstra, Optus or Vodafone worth talking to?
  • Can we sell e-readers like mobile phones?
  • How do we share revenue?
  • Who will own the customer?
  • Who does the billing?; and
  • What happens if we ignore e-readers?

As always, there is no single answer for every company, except maybe the answer to the last question.

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