NEW YORK (AdAge.com) -- The Kindle's popularity among consumers has let Amazon run roughshod over magazine and newspaper publishers, commanding as much as 70% of subscription revenue and refusing to tell publishers the names of their own subscribers on the device. Now rivals are giving publishers what they want.
Both the Que from Plastic Logic and the Reader Daily Edition from Sony are offering more flexibility, demanding smaller cuts of the proceeds and providing information on subscribers, according to publishers involved. Whether that means change will come to Amazon, which Citi Investment Research predicts will sell 2 million Kindles in 2009, remains an open question. But it does mean publishers are going to work harder to promote Kindle alternatives.
If they succeed, publishers will face a much more encouraging future in digital distribution. The struggle now could also influence the way manufacturers such as Apple try to introduce tablet computers, where many publishers are pinning big hopes for new circulation and ad revenue. Publishers are already trying to build their own digital storefront that would let readers find them without visiting an Amazon or Apple store. But for now, manufacturer's stores are choke points between publishers and their digital readers.
"There's much more flexibility, at least in working with the Plastic Logic guys, in terms of having access to our subscribers to our periodicals," said Bob Carrigan, CEO of IDG Communications, whose titles in the Que store will include Macworld, PC World and Computerworld. "For us that was very important in pursuing that platform. Obviously that is not the case with others."
Another publishing executive putting titles in the planned Que store said the revenue split is significantly better than the Kindle offers. "It's a much more favorable pay structure than the Kindle," he said.
"The relationship with them is a good one," another publisher said. "And they understand what publishers' needs are."
News Corp. Chairman-CEO Rupert Murdoch has complained bitterly about the Kindle's terms. "We don't get the names of the subscribers," he said last summer. "Kindle treats them as their subscribers, not as ours, and I think that will eventually cause a break with us."
The first cracks appeared today, when Dow Jones announced that it will provide Sony's Reader Daily Edition with exclusive content from The Wall Street Journal and MarketWatch as well as the only version of the New York Post for e-readers. Sony will let Dow Jones see the names of its subscribers on the platform and give a better revenue split than the Kindle allows, Dow Jones executives said.
"I won't actually say the price, but I wouldn't be here today if it wasn't a better deal," Dow Jones editor-in-chief Robert Thomson told The New York Times.
Representatives for Amazon and Plastic Logic declined to comment; a representative for Sony did not respond to a message seeking comment. Plastic Logic is introducing the Que at the Consumer Electronics Show in Las Vegas next month. Sony's Reader Daily Edition is coming out this month.
"I do think there will be more flexibility over time," said Mr. Carrigan, the CEO at IDG. "We'll be looking to do deals with e-reader companies that are interested in working with us. We started with Que. We're not interested in throwing our content on devices and not having access to the customers and not getting a decent revenue share to boot."