Finding a Replacement for Declining Print

Media Morph: Kindle as Newspaper Savior -- or Foe

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Kindle DX
WHAT IT IS: Known as the Kindle DX, this large-format e-reader -- introduced by Amazon last week -- is two-and-a-half-times larger than the typical Kindle and better for reading newspapers, textbooks and documents. (Price tag: $489.)

At its launch, The New York Times, Boston Globe and Washington Post jumped onboard to test a limited program: They will subsidize the cost of the DX when customers who live outside the papers' home-delivery zones sign long-term digital-subscription contracts.

The deals hint at ways traditionally print media brands might use new devices -- in addition to the Kindle, there's Apple's iPhone or Research in Motion's Blackberry -- to supplement their declining print distribution. Already the Kindle store has dozens of papers and magazines for subscription or single-edition purchase.

THE CATCH: Not every publisher is onboard with the DX. News Corp. "will not be sending our content rights to the fine people who created the Kindle," said CEO Rupert Murdoch on the company's earnings call last week. That's because it and Hearst reportedly have their own electronic readers incubating. Another key issue? They don't want to give up the billing rights to a third party.

And there's a reality check: Kindle is still niche. And according to Dallas Morning News Publisher and CEO James Moroney, Amazon wants to keep 70% of the subscription revenue. He spoke about the device last week to Congress: "Now is that a business model that is going to work for newspapers? I get 30%, and they get the right to license my content to any portable device -- not just ones made by Amazon? That, to me, is not a model. Maybe [the device] Plastic Logic comes up with or what Hearst comes up with might provide a good model, but today Kindles [have] less than 1% penetration in the U.S. market. They're not a platform that's going to save newspapers in the near term."

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