Publishers face e-reader challenges

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E-reading devices and services, such as the Kindle and Skiff, and tablets, such as the iPad, may hold significant opportunities for b-to-b publishers in the not-too-distant future, but there are a few potential issues to address in the present. Publishers must carefully consider the economics of any deals they strike, said Kiliaen Van Rensselaer, CMO of e-reading company Skiff. “A lot of the e-reading companies out there are making it very difficult for publishers to survive in the digital world,” he said, citing revenue shares that are unfavorable for publishers, platforms that don't include advertising and e-readers that effectively discontinue the publisher's relationship with the reader. “What we saw early on with some of the first e-reading companies that made it to market is that they were able to get a lot of publishers to sign up almost as an experiment,” he said. “But then that experiment, as it starts to take on scale, suddenly turns into something that could be a legitimate percentage of a publisher's business, and they've already signed up for certain economics that they can't sustain over time.” Even with e-readers that do support advertising, publishers must make sure that advertisers will make the jump from print to mobile device, said Prescott Shibles, CEO of Vital Business Media. “One of the scariest scenarios that I could see happening is suddenly your print circ is dwindling, your e-reader circ goes through the roof, but your advertisers aren't willing to support it,” he said. Among the technical challenges, mobile vendors are developing devices on multiple operating systems, including Android, Apple's iPhone OS (on which the iPad will run) and Windows 7. “I think it's going to end up being a horse race,” said Marc Strohlein, chief agility officer at research company Outsell Inc. “Publishers will probably end up publishing for those three platforms at a minimum.” Publishers will likely have time to meet those challenges. Though the iPad and e-readers have generated significant buzz in the media world, smartphones still represent a much bigger market and could remain so for a long time, Shibles said. “People need to temper their enthusiasm a little bit about the whole e-reader phenomenon,” he said. “Prepare for it; be smart about it; recognize that it is the future. But also recognize that it's not a silver bullet.” —M.E.M.
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