Media giant Hearst has a bailout plan for its newspapers and magazines business: Get into the e-ink business.
Hearst, the publisher of Cosmopolitan, Good Housekeeping, and the struggling San Francisco Chronicle, plans to launch a wireless e-reader this year. The device will be similar to the Amazon Kindle or Sony Reader, although it will have a larger screen to facilitate reading magazine or newspaper content, according to comments from an interview with Hearst Interactive honcho Kenneth Bronfin. Hearst will also allow other publishers to adapt the device’s underlying technology, Bronfin shared in an upcoming issue of Fortune magazine.
Ambitious it may be, but Hearst is battling big odds, says Forrester analyst James McQuivey. "My basic assessment of their chances is not good," he says. "Hearst doesn’t have the tech credibility or relationships to make this a successful venture."
Mounting losses and declining advertising and subscription revenue threaten the survival of newspapers, and to a lesser extent magazines, nationwide. Colorado’s oldest newspaper, the Rocky Mountain News, published its final edition Friday. Meanwhile, the Seattle Post-Intelligencer and the Chronicle, both Hearst-owned newspapers, face threats of closure.
Hearst is betting an e-reader could help turn the tide. The company, however, offered few details on its plans. "Hearst Corporation is keenly interested in e-reading
and expects that new devices and media platforms will be a big part of its
future," a company representative said in a one-line statement to Wired.com.
The e-reader market has taken off in a big way in the last two years. Amazon launched the first Kindle in 2007 for $400 with a 6-inch screen and wireless internet connectivity. A second iteration, the Kindle 2, made its debut this month; it’s a slimmer, sleeker device with better battery life. Amazon rival Sony also makes a e-book reader that is available in a touchscreen version.
Hearst Interactive’s Bronfin already sits on the board of directors
for E Ink, the company whose screens power both the Kindle and Sony
Reader. That means an E Ink screen is a near certainty for the Hearst
e-reader. However, if Hearst plans to launch an e-reader this year it
is likely the screen will be black and white, rather than color.
The newspaper industry has experimented with a digital reader before. In 2000, some newspapers and magazines (including Wired) gave away a cat-shaped barcode scanner called the CueCat to readers. Readers could scan the barcodes from ads in the newspaper and magazine pages using the CueCat and the device would take them to the webpage for the product without having to type the URL. The CueCat was a commercial disaster.
Hearst is hoping its e-reader will meet a different fate. But McQuivey states that a device that debuts with a black and white screen would be a deal killer for many of the company’s subscribers.
"Periodicals are just not effective in black and white," McQuivey says. "People who buy Esquire or Harper’s Bazaar buy them because they want to see the magazine in color."
Instead, Amazon’s Kindle or the Sony Reader — despite their monochrome screens — are likely to have a better shot at success, says McQuivey. "Amazon has a very successful relationship with readers and publishers and they can probably capitalize on it better," he says. Hearst could probably be better off partnering with them instead of launching its own gadget, he suggests.
For Hearst, here’s one way to think about the problem. Can the company convince nail salons, probably the biggest subscribers to its Cosmopolitan and Marie Claire magazines, to buy e-readers instead of print subscriptions?
Also see:
Amazon Kindle 2 Review
Amazon Set to ReKindle its E-Book Reader
Photo: Amazon Kindle 2(Jon Snyder/Wired.com)
