Amazon Kindle, Part 3

OK, so you know I’m a big fan of the Kindle 2 (but not Kindle 1). It’s a fantastic tool for reading text, and for extending the book industry in new and exciting ways. As I’ve noted, even for voracious readers like me, the Kindle really does make reading fun and exciting.

Since I first got my Kindle 2, Amazon has released the Kindle DX, a larger and heavier version designed to better serve textbook and newspaper readers. Many newspaper traditionalists saw the DX as a savior, and that consumers would suddenly drop what they were doing and open digital subscriptions to
their local newspapers. Um, right.

Certainly there’s a future for “newspapers” online, but it’s silly to think anything more than a minority will flock to e-readers to consume what are essentially replica newspapers. That propensity to “shovel” print content online is in part what’s contributed to newspapers’ inability to gain traction online over the years. Some newspaper execs have even hatched plans to buy Kindles and give them to subscribers for free in exchange for their loyalty. But those concepts ignore the usability question that has driven people away in the first place: You can’t win over readers long-term by shoveling replica-print content online and expect them to flock to it.

The format for reading newspapers on Kindle isn’t ideal for most readers: Stories are broken out by section, but you basically have to work your way through the edition by hitting “next story.” That’s OK for readers like me, who make an effort to read a cross section of news, but bad for so-called "light readers"  who care only about a few sections or who quickly scan pages for interesting stories. There’s no quick scanning with Kindle.

OK, enough about usability. Can newspapers actually benefit from the Kindle?

We’ll, it’s a mixed bag.

The much ballyhooed feature in which Amazon offers digital subscriptions to a growing number of daily newspapers is a horrible deal for newspapers: An exclusive contract to Amazon for a minimum of one year in which Amazon sets the subscription price and keeps 70 percent of the revenue. The Kindle version of the Sunday New York Times costs me 75 cents, well under the $6 the print version costs in Bakersfield. That means NYT keeps only 21.5 cents of that 75-cent purchase price, not exactly a gold mine.

Here’s the big problem for NYT: I have a hard time paying $6, let alone $3 for a Sunday NYT but I gladly fork over 75 cents for the Kindle version, which I consume over the course of a week. So, I’m reading the Sunday NYT more than I have in a long time – but they’re making a ton less money off me, and I’m certain less of a profit. And because the Kindle version contains only news content, I see zero advertising, a bad thing for those many national advertisers who pay beaucoup bucks to read a national audience.

And that's just The New York Times. Most local newspapers don’t have the “second read” appeal that the Times or Wall Street Journal has. That means Kindle isn’t going to be a big alternative for daily newspaper subscribers.

Bakersfield.com Breaking News blog, available in Amazon.coms' Kindle storeThere is a small opportunity, however, that I see for newspapers to market and sell some select ala carte content. Amazon makes it easy for bloggers to get their feeds into the Kindle Store (it took me about 10 minutes to set up a feed for the bakersfield.com Breaking News blog). The Amazon contract terms for blogs are slightly better than the newspaper deal (no long-term exclusive contract, but the same 30-70 revenue split). And the content from some blogs is of such high quality and frequency that some Kindle readers will gladly pay 99 cents or $1.99 per month for the automatic Whispernet download and easy reading. Again, I don’t see masses paying for this content – those same blogs are almost always free on the web -- but Kindle is an opportunity to reach consumers who have shown a propensity to pay for the convenience of quality digital content on mobile devices, something they haven’t generally displayed with stories posted on online-news sites.

So far, the bakersfield.com Breaking News blog on Kindle has one paying customer: Me. It may get one or two or three or 10 more. But the way I see it, a 10-minute investment in my time is a worthy experiment in paid content.