Friday, March 20, 2009

Red: The Kindle (Part 1)


A couple of days ago, I bought my own Amazon Kindle. You already know that this is the relatively new reading device from Amazon (now in its second life -- Kindle 2). It is incredibly thin, has a screen that is roughly twice as big as an iPhone and numerous buttons that make reading a book (or newspaper) extremely easy.

I bought it for two reasons: One, because, let’s face it, I am a gadget junkie and I could not wait any longer; Two, because I have for a few years now been fascinated by the concept of some kind of handheld wireless device -- bigger than a phone and smaller than a broadsheet newspaper -- that people could use to read newspapers. Haven’t we all had this thought? It just seemed to me that there are SO many advantages to a device like this:

1. It could very closely replicate the print experience without many of the various costs of printing and delivering a newspaper.
2. You could, quite reasonably, charge a subscription fee.
3. You could, it seems to me, easily incorporate advertising into the product.
4. The newspaper would then become a living thing, no longer tied to the eight-hour shackles of the printing press and circulation, and one that could be updated, wirelessly and constantly, throughout the day.
5. It would be like what they had on The Jetsons.

There are no doubt disadvantages to using something like the Kindle too, but frankly I’m not business savvy enough to see them. I mean, yes, you would have to get these devices into the hands of people. Yes, the Kindle is not the perfect newspaper device -- it would be nice to have a device that was slightly bigger and perhaps had the capability for color -- but these are technical issues and I just find it hard to believe that we do not have the technology to create a remarkable wireless newspaper. I just cannot help but see the Kindle concept as a big part of whatever is the newspaper future ... and this will no doubt be one of the ongoing themes of this blog.

Here is Red with his thoughts about the Kindle. I’ll be back with more. Please feel free to dive into the discussion via comment or email:

* * *

Red:

I believe that the age of paper delivery of the news is just about over. Is this bad? Not in my view. No more so than the loss of the local Iceman, milkman, lamplighter or the town crier for that matter.

I am old enough to have sold the evening paper on the corner to the crowds that got off the streetcars and later buses. Later I had a paper route and flung the paper from my bicycle. Most of the time I even got it near the door. These are fond memories of my youth.

Today's kids will not have these experiences. On the other hand, I have no memories of horses in the street, The Great Depression or World War II. So who's to say?

The delivery of news will continue. Newspapers don't die due to the lack of news. They are dying because no one has figured out to how to deliver news -- and more importantly advertising -- to the individual (your personal copy) without using a press, paper and ink. I like the idea of my personal copy of the newspaper. Something I can have at my desk, the dinner table or den. I believe newspapers can still do that.

Enter the Kindle (or Kindle like devices). Technology is in place now to deliver the "paper" with all it's graphics from the internet "cloud" on a lightweight hand held device A web browser on a laptop is a poor second. Imagine your "paper" delivered to your personal device every day. The only things you would miss would be going outside to pick it up, the smell of ink and and the newsprint and being able to fold it in all those weird ways folks do.

With this model the newspaper would shed it's biggest cost, that of actually printing the paper. I believe news gathering organizations can then survive and prosper.

25 comments:

  1. I always thought the day that newspapers were doomed was when they started giving away all their content on the web for free. Why pay for a paper to be delivered when you can get the same news on your computer for free? For this Kindle idea to work, they would also need to start charging a subscription fee for their online content.

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  2. If you spill your coffee on your kindle, you're out way more than 50 cents.

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  3. You do pay a fee to get newspaper content via kindle, even content that is free on the web. I can't remember what the fee is.

    But of course I agree with you on your larger point. The decision to post newspaper content online for free will go down as one of the biggest gaffes in the history of American media.

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  4. Mikey -
    Also, it's not going to be easy to reverse course at this point and start charging for content. For that to work, you'd basically need an industry wide agreement that everyone would do it. If that would happen though, I think it would help newspapers survive....just in a different form than we're used to. They can still make money on advertising revenue through the web site plus the subscription fees.

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  5. I don't see how this is better than getting news on the internet.

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  6. Rod and Mikey: The biggest reason papers started putting their stuff for free on the net was because people were already doing things like transcribing Dave Barry's column (and tons of other content) and posting it on usenet newsgrops. Given the logistical and PR nightmare of suing the people (often anonymous) who did this, the papers figured, "hey, let's at least get people coming to OUR web pages to read our stuff. We'll add advertizing or subscription services later, but let's get it online!"

    At the same time the wire services were going online too, as were providers of substitute content like ESPN SportsZone, movie listings, and finally, classified advertizing.

    Do you think the papers would have been better off either (a) charging, which with the exception of the WSJ has never worked; or (b) ignoring the online world enitrely?

    As it stands, newspaper websits have many devoted readers, but a weak revenue stream. If they hadn't gone online, they would have had no readers and zero revenue stream.

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  7. While I don't have a Kindle (yet!), the lure is strong. I like the idea of reading online newspaper articles on the Kindle, and would even consider paying a fee for the service. I already pay for both print and online access for the WSJ, so I'm a little atypical.

    The only real drawback to the Kindle is I can't use it to contain the mess under the cat litter boxes, as packing material in boxes, or (in extreme cases, the Sunday comics work) as wrapping paper for a gift. All of those things are only possible with a printed newspaper.

    Of course, 90% of the printed newspapers that arrive at my door (or way down the driveway) just get recycled. I assume there would be some substitute for the uses of old newspapers listed above.

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  8. Craig -
    I see your point, but at the very least they missed the boat with advertising. Something like Google can exist for free on the web with basically only advertising as its revenue stream. Why couldn't a paper develop a similar model for advertising fees? There are so many businesses with web sites and a web presence nowadays that they could even keep the advertising local like the papers were.

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  9. No, no. I would never suggest that newspapers should have ignored the online world entirely. I'm sure you would agree that ignoring the threat from Craigslist was a crippling mistake.

    I do think papers would have been much better off charging from the beginning.

    I'm not in the newspaper business myself, so you may have better information, but I'm not sure it's true to say that the WSJ is the only paper that's been successful charging for content. Doesn't the Arkansas Press-Gazette charge for content and make money? Also, while I recognize this is a different animal, the Daily Racing Form successfully charges for content. And while these are not general-interest dailies, I think Baseball Prospectus and baseball-reference make a decent case that there's room for a hybrid free/paid model for information and analysis.

    You could certainly argue that the successes of paid models are limited and/or have significant caveats, but that still compares very favorably to the free content/ad-supported model which I think we can now judge to be a total failure.

    Newspapers were never a great candidate to survive online just on ad revenue. There's just soooo much online ad inventory and newspapers aren't very well targeted and the nature of the ad content itself is unattractive (mostly small, static, inflexible ads). This isn't just convenient hindsight. A lot of people felt that way at the time, but I think the momentum to just get online, build an audience, and not be left behind was very, very strong. This was and is true in basically ever major media business, at least from what I can see.

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  10. "you'd basically need an industry wide agreement that everyone would do it."

    Isn't there a pretty good chance that this will in fact happen? I know Pelosi is pushing for an anti-trust exception that would basically allow newspapers to collude on newsgathering and pricing (I'm really simplifying here; I don't know all the facts).

    Seems like a pretty significant development but hardly anybody has noticed because we're all busy getting the gallows ready for the bankers.

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  11. The small change you pay for the physical newspaper covers only a small fraction of the cost to produce the content + the physical object, right? Does anyone have figures for this for dailies? In every city alternative weekly newspapers have been free for ages, surviving only on advertising revenue.

    So the real problem is not that the newspapers' content is 'free' online. That was not a mistake. The real problem is that advertisers prefer to reach people through methods other than print ads in print newspapers, thus depriving the papers of a vital revenue stream, but on the otherhand newspapers have not been able to attract enough online advertising to cover their costs. That, I think is unlikely to change, and I think much of the content we take for granted online now will eventually need to find another way to finance itself. I find it hard to believe that online ads really pay for themselves.

    I do think subscription pricing is the way to go, bu the NY Times failed miserably when they tried to go it alone. Bundling subscriptions to a variety of content via your ISP is the way to go, analagous to the cable TV model.

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  12. A comic from the Onion that illustrates this post quite well:

    http://www.theonion.com/content/cartoon/mar-02-2009

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  13. Re bundling to cable TV: I like this idea. I believe phone bills include a monthly fee for service to "underserved" areas. Why not a required tax/fee to support local media?

    Re Pelosi: An important development indeed.

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  14. The 'pay a fee online' model will not work long-term because, as mentioned above, someone will eventaully provide same/sililar content for free.
    Another 'advantage' online advertising has over conventional ads is the stats gathering process. Physical newspapers charge based on how many thousands in circulation, even if only 10 people actually comprehend what the ad is. However, people know exactly how many people 'see' an online ad. Since this number is way less than the circulation number, the revenue they can generate is much lower.
    An Internet affiliate program may be the way to go. If an article references a book, and there's a link to Amazon, etc, the article publisher would get a cut if someone bought the book online. Google Adsense may also work.

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  15. The Fresno Bee (my local paper) did charge for content from their inception. You could get a tag line or two, but to read the article you had to subscribe. I'm not familiar with their decision making process, but the content is now free. I suspect they were finding that they can get more revenue from increased free traffic with ad sales than they can get with limited traffic and a subscription. Unfortunately, once the content is free online, there is no need to pay for the print edition.

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  16. About the Kindle, I love mine. But I've read the NY Times and USA Today on them and I'm not really impressed. I don't know if it's the navigation on thing or if it's the content itself, but it just comes across to me as cold and heavily edited. Part of the fun and excitement of the newspaper is the layout, the photos, the extra charts and pop-outs to emphasize the point.

    On the other end, some websites that I enjoy reading on a daily basis would make excellent reads on the Kindle. I would LOVE to see Baseball Prospectus as a daily subscription on the Kindle. Even a blog like Shysterball (blatant shout out) would be very cool as a Kindle blog. With Amazon's blog subscription, you pay $1.99 a month for the content and anytime the blog is updated it's automatically downloaded to the reader. It's like a mobile, for pay RSS reader. I wouldn't pay $1.99 for all the blogs I read, but there are a few where the content is really good and I would love to read on the Kindle.

    And since they are following the conversation, I would definitely pay $1.99 a month for a subscription to both Shysterball and Joe's Blog. The content is regular, well written, and in Joe's case occasionally novella length anyway. I'd even consider paying a little more monthly for a network of baseball blogs if the content is good. Yes, I could read it for free online, but I'd pay for it and read it on the Kindle if the quality was good.

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  17. Ed -- why don't you just cut me a check each week and I'll call you and read you posts before they go live? May not be as cool as the Kindle, but I could probably figure out the technology easier.

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  18. Actually, staff salaries are the most expensive part of running a newspaper. If you do it right, subscriptions should cover the cost of distribution. Printing costs and newsprint prices are dropping as we speak.

    I still work at a paper, and we're starting to get pissed that thousands of sites steal our stuff, and yes, we're talking about getting together with other papers to try to get a piece of the action. We're not dead yet.

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  19. The problem with a Kindle and online is what happens to our loyal, older readers?

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  20. I hate to be morbid, poker, but older readers are going to die sooner than the online and Kindle demographic. That's not to say you abandon the current, older readers, but you can't exactly build a business model around them either. Ask Buick.

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  21. Could you do a crossword puzzle on a Kindle?

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  22. I would like to see Joe post a separate thread on the issue of whether we should begin charging for online content. I used to be firmly in the "online content should remain free" camp, but I have turned.

    The common argument against charging is that people have come to expect it to be free. I don't care. Let them expect it all they want, but we aren't making money off them now, and that has to change for us to survive.

    We gave it away for free for so long because we believed we could use those "hits" to make money off online advertising, but we obviously based that decision on a false assumption, and it's time to recognize that mistake and reverse it. Whatever minuscule ad revenue we're generating online will soon be canceled by the ad revenue we're losing in print because of dwindling circulation.

    If people don't want to pay, fine; they don't get the product. But we can't continue to give our customers the choice of paying for the product or getting it for free, which has to be the worst business model ever.

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