Kindle

Early one Sunday morning, half a lifetime ago, when I was living in a still borderline neighbourhood of Washington’s Capitol Hill, the doorbell rang. It was a young man dressed for church. He said he needed five dollars for the collection plate. To get it, he had taken hostage my freshly delivered copy of the New York Times. I regret to admit I paid the ransom.

Such blackmail would not work today. The New York Times is still an essential part of my Sunday but it arrives in too many forms to be intercepted by a shakedown artist. I can read it on my PC, my  laptop, my cell phone, and this week at least on the Kindle e-book viewer the kind folks at Amazon.com, the giant online retailer, have lent me to review.

The Kindle lets you read books, magazine and newspapers bought from Amazon. Available only in the US at this stage, the device is about a centimetre thick and has the footprint of a full-size Moleskin notebook. A larger version has been announced. The screen of the present model is the size of the smaller Moleskin and renders text with the sharpness and quality of a printed page. Like a printed page, it requires external illumination but is readable and all but free of glare from any angle.  It is very easy on the eye, though less so, at $359 (R3 100), on the wallet.

Content is delivered via the high-speed wireless data network of Sprint, a major US cell phone provider. You buy a book — $10 (R90) for most new titles, half to a third the print price — using your Amazon account; your purchase is instantly beamed to your device at no additional charge. Newspaper subscriptions likewise. You awake to find your Kindle loaded with the morning’s paper.

Sprint’s coverage is good and fast. You can use the Kindle’s keyboard to annotate what you’re reading, store clips, and conduct web searches. Links to Google and Wikipedia, the online user created encyclopaedia, are built in, but the Kindle is not optimised for surfing. Its browser is limited, which makes sense.  Amazon is charging users $14 (R120) a month for a Kindle subscription to the New York Times which can otherwise be read for free, and with a lot more bells and whistles, on the open Internet.

Can the Kindle rescue America’s ailing newspaper industry? Nicholas Carlson of Silicon Valley Insider has calculated that the Times could save itself around $350 million a year by scrapping its printing presses and buying Kindles, at retail, for each of its 830 000 subscribers.  Based on the Times’ disclosures to the Securities and Exchange Commission, Carlson reckons it is costing the Times at least $644 million a year to print and deliver its product on paper – not counting the $200 million newsroom budget.  Kindles for every subscriber would run $297 million.

There are obvious objections to these figures. They don’t take into account the ad revenue the Times would lose by moving to the ad-free Kindle, not to mention reduced income from subscriptions and street sales.  $14 a month is a lot less that a lot less than Times’ dead tree subscription rate, and there is resistance from Kindle customers to paying even that. Amazon doesn’t say how many devices it has sold – the best estimate is around 500 000 units as of February this year — but based on the Times’ financial statements, it looks as though only one in 50 buyers is signing up.

It also seems that Amazon is driving a hard bargain with publishers.  Jim Moroney, publisher of the Dallas Morning News, says the very best deal he could get was 30 per cent of subscription revenue with Amazon acquiring exclusive rights to his content for use on any portable device, Amazon-owned or not. Moroney balked.

So at this point, the Kindle is not the answer to the industry’s prayers.  However it, or devices like it, will very likely be part of the answer.  Despite the existential angst wracking the American Fourth Estate, there is still, and always will be, a market for what the New York Times’ editors and writers so brilliantly produce every day and the good news is that is has never been easier or cheaper to deliver that product to consumers.

Generating revenue from those consumers will require more creativity than the industry has demonstrated heretofore. The answer, in an ever more segmented and segmentable marketplace, lies in identifying who will pay how much for what. Right now, I’m in a segment that would seriously consider paying to receive the New York Times every morning on a Kindle. It’s a lot more convenient on a crowded commuter train than a laptop or a newspaper. And it’s cool.

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