Amazon to Papers: Give us 70% of your revenue!

[Sonist]

Didn't see this posted here, but the Kindle DX doesn't sound like such a great deal for the newspaper industry:

James Moroney, President and CEO of the Dallas Morning News, at the Senate hearing last week:

"... the best deal Amazon will give the Dallas Morning News-and we've negotiated this up to the last two weeks-they want 70 percent of the subscriptions revenue. I get 30 percent, they get 70 percent. On top of that they have said we get the right to republish your intellectual property to any portable device. Now is that a business model that is going to work for newspapers?"

http://gizmodo.com/5244171/amazon-wa...e-distribution

[maynard]

Wow. Glad I closed my account with that firm. They keep making me happier and happier I'm not their customer. Way to go Amazon!

[Moejoe]

Unbelievable, this company is becoming more and more distasteful with every new article.

[K-Thom]

Same for Rupert Murdoch, who owns and/or controls more media business than I could list here (http://en.wikipedia.org/wiki/News_Corporation). And if HE decides not to support the Kindle DX this would be quite a setback for the Kindle as a newspaper device.

Amazon sometimes seems to forget that they are only the distributor of content others create. 70% is utterly ridiculous.

[zelda_pinwheel]

hm. given that newspapers seem to be struggling to stay afloat as it is, it really doesn't seem likely that amazon is going to convince very many of them with a business model like that.

now i wonder how things will go when the next large-screen, wireless-enabled device will show up...

[Andybaby]

just to chime in, NYT has a 3 way split between sprint, amazon and themselves, 33% each

but that is just the subscription,

the DX is supposed to bring forth the ad's I thought? NYT would make all the money from that.

[Boston]

Forrester Research Blog (apologies if posted elsewhere)

http://blogs.forrester.com/consumer_...ewspapers.html

Kindle DX: Will It Save Newspapers?

[Posted by Sarah Rotman Epps]

As part of the Kindle DX announcement this morning, Amazon revealed that they're working with three newspapers--the New York Times, The Boston Globe, and the Washington Post--on a pilot program this summer where the publishers will offer the Kindle DX at a reduced price to subscribers in exchange for a long-term contract. The Detroit Free Press and Detroit News are launching a similar program with Plastic Logic devices.

I advocated that newspapers do something like this at a speech I gave last month for the Newspaper Association of America. Why? Because if they do nothing and wait for the eReader market to evolve organically, newspapers will at best see modest incremental revenue from eReaders. We estimate that just over 1 million consumers have bought Kindles and Sony Readers so far--impressive, but not enough to drive mass adoption of eReader newspaper subscriptions. Publishers need to catalyze adoption of the devices to get as many subscribers as possible buying content if they want to see real revenue and real cost savings from cutting print.

Will the Kindle program work? I don't know--it depends on how deep the discounts are for subscribers. For a device that retails for $489, the discounts will need to be mighty steep to convince those that weren't otherwise considering buying Kindles to take them up on the offer.

The other unknown element is advertising: The Kindle DX has better image display than earlier Kindles, but Bezos didn't mention anything about an ad model. Newspapers rely on advertising for a significant portion of their revenue, and they need partners that support this model. Luckily for newspapers, they're about to have a lot more choice as more competitors come on the market in the coming year.

[Sonist]

Originally Posted by Andybaby

... the DX is supposed to bring forth the ad's I thought? NYT would make all the money from that.

And this may be the reason for Amazon implementing PDF (kicking a screaming....) Ads look better in PDF.

But still, 30% for the newspapers, is kind of pathetic. Amazon might have gotten a bit too greedy, and might be killing the proverbial golden goose.

Where ARE the the large-screen alternatives, though? This market needs announcements from some major players.

[delphidb96]

Originally Posted by Sonist

Didn't see this posted here, but the Kindle DX doesn't sound like such a great deal for the newspaper industry:

James Moroney, President and CEO of the Dallas Morning News, at the Senate hearing last week:

"... the best deal Amazon will give the Dallas Morning News-and we've negotiated this up to the last two weeks-they want 70 percent of the subscriptions revenue. I get 30 percent, they get 70 percent. On top of that they have said we get the right to republish your intellectual property to any portable device. Now is that a business model that is going to work for newspapers?"

http://gizmodo.com/5244171/amazon-wa...e-distribution

If they're willing to put ONTV in as part of the subscription, I'd take it! Our local yellow-rag (used to be a decent paper, too - the Sacramento Bee) has gotten as low as charging $0.25 each week for the weekly TV programming guide. Cheap-ass newspaper. And they're still laying off and shedding content pages!

Derek

[power100]

The news papers should learn the lesson here.
For so many years, they act like ostrich burying head in sand, regardless the
fast changing internet.

if they feel harmed so much, they should team up to boost other Eink producer, like sony, irex, hanlin...

Originally Posted by Sonist

Didn't see this posted here, but the Kindle DX doesn't sound like such a great deal for the newspaper industry:

James Moroney, President and CEO of the Dallas Morning News, at the Senate hearing last week:

"... the best deal Amazon will give the Dallas Morning News-and we've negotiated this up to the last two weeks-they want 70 percent of the subscriptions revenue. I get 30 percent, they get 70 percent. On top of that they have said we get the right to republish your intellectual property to any portable device. Now is that a business model that is going to work for newspapers?"

http://gizmodo.com/5244171/amazon-wa...e-distribution

[Andybaby]

Newspapers arent gonna back any device that does not have wireless distribution (atleast wifi)

the cost to send these new papers will be expencive especially with ads and pictures on the kindle. sprint wants a big cut.

amazon is producing the device, maintaining the server side, hosting the papers, managing subscriptions, acting as Customer suppport. they need to be paid for this too.

the Newspapers will be putting out the content, and getting 1/3rd of the subscription fee. + all ad revenue. in the paper world, from what I hear they make absolutely nothing from the subscription price, that just pays for the printing and delivery.

[Sonist]

Originally Posted by Andybaby

...
the cost to send these new papers will be expencive especially with ads and pictures on the kindle. sprint wants a big cut.

... in the paper world, from what I hear they make absolutely nothing from the subscription price, that just pays for the printing and delivery.

Actually, as long as here is free capacity on their network, downloading a paper doesn't cost Sprint anything additional. I'd love to see unlocked ereaders, to balance the market a bit.

As to ads supporting the newspapers: true, except that electronic ads pay much less. And the impact of ads, on a 9" screen, may be lessened.

Basically, this kind of pricing structure will ensure, that newspapers set up their own delivery methods, and presumably push for open wireless devices. Which may be a very good thing for all.

[Ankh]

Originally Posted by Andybaby

Newspapers arent gonna back any device that does not have wireless distribution (atleast wifi)

That's... weird. Why would they care? If somebody is willing to download the el. edition, then transfer it to a device, why would they refuse to sell it that way?