Amazon, the online giant retailer that has threatened the existence of bookstores, may help save the newspaper industry. That is a possible benefit of a new, larger-screen version of its Kindle e-book reader, which The New York Times reported Sunday will be released soon.
The earlier two Kindles were intended for book reading, while a larger version would be designed specifically for larger-formatted periodicals, such as newspapers and books, and possibly textbooks.
Press Conference Planned
Amazon hasn't confirmed the report, which the Times attributed to "people briefed on the online reader's plans." A press conference by Amazon has been scheduled for Wednesday, although the topic hasn't been announced.
But the Times may be in an unusually good position to know, since the newspaper itself is reported in its article as being involved in the introduction of the new Kindle.
Amazon isn't the only company considering a large-format reader. According to news reports, Plastic Logic of Mountain View, Calif., is working with News Corp. to release large-format e-readers by the end of the year. And Hearst has confirmed it is backing a startup called FirstPaper, which is rumored to be working on a near-tabloid-size e-reader that could have a color screen.
Newspapers and other print-based publications are in critical shape, hit by double whammies of a major recession and the rise of the Internet. The result is a newspaper and periodicals crisis that has been or could be fatal for some leading publications. For instance, The New York Times-owned Boston Globe, a major longtime fixture on the New England and national scene, is reportedly close to bankruptcy.
Business Model Is Key
Sarah Rotman Epps, a media analyst at industry research firm Forrester, said larger-screen e-readers from a variety of device makers are "definitely" coming out later this year and in 2010.
But the key to whether the devices will help newspapers and other publications, she said, depends not only on the capabilities of the devices, but also on the business model behind the device. She noted, for instance, that Amazon currently keeps the majority of newspaper subscription revenue -- publishers say Amazon keeps 70 percent of the subscription fee -- and the online retailer will not allow the display of ads.
"This is an opportunity for newspapers to do something more radical," she said, such as using the cable-company model and leasing the device in exchange for flexible subscription plans, or using the phone-company model and giving the device away in exchange for a long-term fixed subscription.
"This is their last best chance," she said.
Michael Gartenberg, a vice president at Interpret, said such models have been discussed for a while as "a way to jump-start the e-reader industry," such as a book-of-the-month club that gives away the e-reader rather than 20 free books.
He agreed that the business model would have to change for e-readers to have a big effect on newspapers, including more emphasis on ads. "But at the end of the day," he said, "e-readers by themselves are not going to solve the newspaper industry's problems."
Mike Kent also contributed to this report.