Looking to Big-Screen E-Readers to Help Save the Daily Press

Plastic Logic (left) expects to begin making digital newspaper readers by the end of this year.

By BRAD STONE in The New York Times, Published: May 3, 2009

The iPod stemmed losses in the music industry. The Kindle gave beleaguered book publishers a reason for optimism.
Now the recession-ravaged newspaper and magazine industries are hoping for their own knight in shining digital armor, in the form of portable reading devices with big screens.
Unlike tiny mobile phones and devices like the Kindle that are made to display text from books, these new gadgets, with screens roughly the size of a standard sheet of paper, could present much of the editorial and advertising content of traditional periodicals in generally the same format as they appear in print. And they might be a way to get readers to pay for those periodicals — something they have been reluctant to do on the Web.

Such e-reading devices are due in the next year from a range of companies, including the News Corporation, the magazine publisher Hearst and Plastic Logic, a well-financed start-up company that expects to start making digital newspaper readers by the end of the year at a plant in Dresden, Germany.

But it is Amazon, maker of the Kindle, that appears to be first in line to try throwing an electronic life preserver to old-media companies. As early as this week, according to people briefed on the online retailer’s plans, Amazon will introduce a larger version of its Kindle wireless device tailored for displaying newspapers, magazines and perhaps textbooks.

An Amazon spokesman would not comment, but some news organizations, including The New York Times, are expected to be involved in the introduction of the device, according to people briefed on the plans. A spokeswoman for The Times, Catherine J. Mathis, said she could not comment on the company’s relationship with Amazon.

These devices from Amazon and other manufacturers offer an almost irresistible proposition to newspaper and magazine industries. They would allow publishers to save millions on the cost of printing and distributing their publications, at precisely a time when their businesses are under historic levels of pressure.

“We are looking at this with a great deal of interest,” said John Ridding, the chief executive of the 121-year-old, salmon-colored British newspaper The Financial Times. “The severe double whammy of the recession and the structural shift to the Internet has created an urgency that has rightly focused attention on these devices.”

Perhaps most appealing about this new class of reading gadgets is the opportunity they offer publishers to rethink their strategy in a rapidly evolving digital world. The move by newspapers and magazines to make their material freely available on the Web is now viewed by many as a critical blunder that encouraged readers to stop paying for the print versions. And publishers have found that they were not prepared to deal with the recent rapid decline of print advertising revenue.
Publishers could possibly use these new mobile reading devices to hit the reset button and return in some form to their original business model: selling subscriptions, and supporting their articles with ads.

The current version of the Kindle has proved in a limited way that this is possible. Even though its six-inch black-and-white screen is made for reading books, Amazon offers Kindle owners subscriptions to more than 58 newspapers and magazines, including The Times, Newsweek and The Wall Street Journal. (The Journal subscription costs $9.99 a month, The Times is $13.99 a month and The New Yorker is $2.99 a month.)

Read the rest at NYT.