An ambitious attempt by Amazon.com to create a new revenue stream for newspapers was met last night with immediate dissension as Rupert Murdoch challenged the business model of the new Kindle electronic reader.
The New York Times, The Boston Globe and The Washington Post on Wednesday announced limited tests of a new way of selling the news linked to the larger version of Amazon’s e-book device, the Kindle DX. The newspapers plan to offer readers outside home delivery areas discounts on the device in exchange for longer subscription terms, modelling their partnership on the mobile phone industry’s bundling of handsets and services.
Mr Murdoch, owner of newspapers including The Sun, The Times and The Wall Street Journal, expressed confidence News Corp could make money out of consumers’ appetite for reading news on mobile devices, but said he did not believe in the Kindle model. “We will not be giving our content rights to the fine people who created the Kindle.”
However, he predicted that one or more of his general newspapers would start charging for its content online within a year, making him the largest newspaper owner to test readers’ willingness to pay for what they currently get for free.
Mr Murdoch’s view was echoed at a Senate hearing on the future of journalism. James Moroney, chief executive of the Dallas Morning News, said Amazon wanted 70 per cent of any subscription revenues his paper earned through the Kindle, and the right to republish the newspaper’s stories on other portable devices.
More on the Kindle
“Is that a business model that will work for newspapers? That to me is not a model,” he said.
Arthur Sulzberger Jr, chairman and publisher of The New York Times, backed the Kindle, saying: “We’ve known for more than a decade an e-reader product would offer the same satisfying product as . . . reading a newspaper. That dream continues to get closer to realisation.”
Pricing for the newspaper trials was not disclosed. The new venture was revealed as Amazon unveiled the $489 Kindle DX.
Textbook publishers Pearson , owner of the Financial Times, Cengage Learning and Wiley are also to offer some books on Kindle. Five universities, including Princeton, have agreed to test the feasibility of the Kindle DX replacing textbooks.
