Amazon plans big screen Kindle: Textbook margins are the real aim not saving newspapers -from ZDnet

Editor in Chief of ZDNet, Larry Dignan convincingly writes that the new Big Screen Kindle’s are designed and marketed to serve the $8.6 Billion college textbook market.

It’s for Newspapers

Looking to Big-Screen E-Readers to Help Save the Daily Press -from NYTimes

“…it is Amazon, maker of the Kindle, that appears to be first in line to try throwing an electronic life preserver to old-media companies.”

We don’t know who it’s for

Will Anybody Buy The New Large-Format Kindle? -from wired

Wired is owned by Conde Nast who is owned by Advance who owns many newspapers like the Staten Island Advance and Newark Star-Ledger so this is an interesting take on the situation.  Where’s the market demand?

Murdoch also predicted that the New York Times Co. (NYT) will have to charge online for access to its flagship newspaper.

“The inventory of display advertising on the web is doubling every year,” said Murdoch. “They’re never going to make money on an advertising model to replace what they’re losing.”

This is a paid article available only to subscribers, ironically, if you access this article through google news, you don’t have to sign in to access it.  I’m sure that will change too though.

I’m not sure why newspaper publishers are attempting to create their own eReaders though.  Can you imagine having a Hearst reader for their titles, a newscorp reader for their titles, a cell phone, and Ipod and a laptop to carry around?  Crazyness.

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News Media Innovation, Convergence and Sustainability – Interview with Don Carli

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Don has been a leading researcher, author, educator and speaker addressing the sustainability of media supply chains for the last decade, and for over 25 years has been a respected media technology and marketing strategy consultant to major advertisers, agencies and publishers.

RI- Why are newspapers and other traditional publishers pushing the issue of eReaders as a communications medium when something like less than one third of one percent of the reading population of the United States owns these products? Is it a paper sustainability issue? Is it a cost issue? What’s the justification?

DC- Other than pushing the “cool” factor, one of the main selling points being made by marketers of eReaders is that they are greener than print. It is little surprise that the common view held by consumers who don’t know the backstory is that going digital means going green and saving trees. Many are in for a rude awakening. When subjected to “cradle-to-cradle ” Lifecycle Analysis eReading is not nearly as green as many naively assume it is.

There is no question that print media could do a better job of managing the sustainability of its supply chains and waste streams, but it’s a misguided notion to assume that digital media is categorically greener. Computers, eReaders and cell phones don’t grow on trees and their spiraling requirement for energy is unsustainable.

Making a computer typically requires the mining and refining of dozens of minerals and metals including gold, silver and palladium as well as extensive use of plastics and hydrocarbon solvents. To function, digital devices require a constant flow of electrons that predominately come from the combustion of coal, and at the end of their all-too-short useful lives electronics have become the single largest stream of toxic waste created by man. Until recently there was little if any voluntary disclosure of the lifecycle “backstory” of digital media.

Sadly, print has come to be seen as a wasteful, inefficient and environmentally destructive medium, despite the fact that much of print media is based on comparatively benign and renewable materials. In addition, print has incredible potential to be a far more sustainable medium than it is today… and a truly digital medium as well. Despite its importance to business, government and society, print has been cast in the role of a dark old devil in decline. Digital media has been cast as the bright young savior on the rise.

Ironically the future of digital media and eBook readers is likely to be based on flexible polymer electronics manufactured using printing presses rather than silicon semiconductor fabrication technologies. In fact, the next generation of eReaders will most likely be digital AND be printed. For example, major components of the soon to be released PlasticLogic eReader are printed flexible polymer electronics.

RI- What is the demand for eReaders now though?

DC: Well it’s a category that has been “emerging” for over 15 years. What one can say is that eReaders are once again capturing media attention and there appears to be significant latent demand for gadgets that can replace printed media, but mainstream adoption still remains years away. E-reader device sales and eReader content revenues are still rounding error in relation to print media revenues. In a survey of attendees at this year’s Frankfurt Book Fair 40% predicted digital book content sales would overtake traditional printed book sales by 2018, but over 30% said digital content would never surpass traditional books sales, and 66% said they expect traditional books to dominate the market for the next decade.

We’ll likely see many fits, starts and failures with different products, media formats and business models over the next five years to ten years until someone hits on the sweet spot and develops a business model that supports the profitable creation of content as well as a system of commercially practical devices and a sustainable supporting infrastructure. One of the major problems is that people tend to be fixated on the announcements of cool new devices rather than on the development of business models and sustainable supply chain business ecologies.

For an example of what I mean, consider why Edison was successful. Edison didn’t invent the first electric light bulb, but he did develop the first commercially practical incandescent lighting system. It encompassed every aspect of the lighting lifecycle including not just the bulb but also a business model for a successful electric energy generation and distribution system.

I think a comparable challenge exists for eReaders. People focus on the eReader devices, but it’s not the invention of the coolest e-reader that matters most, it’s the availability of a sustainable business ecology that matters most. I don’t think traditional publishers or device manufacturers have yet identified that sweet-spot combination of content, medium and business model that’s required for e-readers to become mainstream.

Unfortunately many of the business models that drive media companies still have both the content and production/distribution aspects of the business intertwined. They are struggling to find ways to uncouple them and remain profitable. We saw companies like Kodak face the same challenge in trying to decouple the business of capturing and preserving memories from the business of selling analog film photography and photofinishing systems. They are still struggling with a profitable transition to the use of digital imaging technologies. Newspapers are likely to face similar problems trying to decouple newsgathering, journalism, creative and advertising from production and delivery in print to delivery via networked digital eReaders and handsets.

RI- What other examples of fundamental business model failure can you give me?

DC- Sure. One example is the failure to recognize the value of “waste” and the true cost of externalities like greenhouse gas emissions or water use. Print media value chains have become extremely complex and tend to cross-subsidize and institutionalize wasteful and inefficient flows of energy and materials. A case in point of institutionalized waste is the fact that more than 60% of magazines distributed to newsstands never get sold or read. Another example is the failure to consider the full lifecycle costs or carbon footprint of media. Newspaper publishers deliver newspapers but they don’t typically recover them and recycle them or use them as an energy source locally. Few if any know what the carbon footprint of their products are. Why is that?

Until recently, companies like Nine Dragons were shipping our waste paper half way around the world to make cardboard out of it, and then shipping it back to us as packaging which we were sending to landfills. Going forward, the carbon cost of print and digital media will no longer be swept under the rug. It will soon have to appear on the balance sheets of advertisers, publishers and retailers. It will also appear in the price tags of goods and services. The climate crisis is another market failure that is now coming to light.

Business models that fail to recognize full lifecycle cost and value will be unlikely to succeed going forward. As we exit the global recession we will simultaneously be transitioning to a low carbon global economy that will change the meaning and value of waste and inefficiency. As we do so, print will survive if it reconfigures its supply chains to use energy and materials more eco-efficiently and publishers will survive if they can decouple the message from the medium while meeting the requirement for “triple bottom” line results that are economically viable, environmentally restorative and socially constructive. The growing demand for sustainable business practices, lifecycle analysis and environmental product disclosure will impact eReader manufacturers and digital media companies as well.

I expect there will be new opportunities for sustainable digital printing and print on demand to compete with toxic eReaders and coal-powered digital media. I also think there will be exciting new opportunities for printed electronics to blur the categories of print and digital media. Ultimately both print and digital media will have to become more sustainable if either of them is to survive, and judgment of which is environmentally preferable or cost effective will increasingly be based on comparative lifecycle analysis, carbon footprints and environmental product declarations based on standards such as ISO 14040, PAS 2050 and ISO 14025. Sustainability science and the triple bottom line are becoming an increasingly important aspects of business and public policy decision-making. There is every reason to believe they will also become increasingly important in media business and policy decisions.

RI- What have you seen in other countries that sticks out in your mind?

DC- When you leave the Stockholm’s airport to get on the high-speed train to downtown Stockholm there are book vending machines! While some may choose to download content to a phone or eReader, for many a book, a magazine or a newspaper will continue to be preferred. One of the major challenges print needs to address is waste, and another is the customization of format and content. There is no technical barrier to replacing newsstands and vending machines with hard copy media output devices or “fabricators” that could produce customized or personalized books, magazines or other media objects on demand. That would be one of the ways print media could compete with the immediacy and customization potential of digital media while also eliminating newsstand distribution waste.

RI- Sounds to me like the future is looking digital.

DC- As I said earlier, the distinction between print and digital media will ultimately vanish. The media of the future will be digitally printed and printed digital devices.

RI- Will people still care where they get their news from?

DC- I don’t think people care so much about where their news comes from, but journalism… yes I believe they still care. Anyone can make news and anyone can report it, but journalism is different and that difference matters. For example, Twitter is fast becoming one the most important source of breaking news, but it isn’t journalism. I think a robust Fourth Estate capable of independent investigative journalism is essential. The first tenet of sustainability is having a political system that secures effective participation of its citizens in decision making. That is the role served by journalists and the media channels that deliver and store their content.

The capacity of our society to effectively participate in decision making is contingent upon our having sources of news, journalism and dialogue that represent a diversity of informed opinions as well as a diversity of textual, graphical and other content types. Likewise, the sustainability of our society is dependent upon the supply chains and media that carry that content being diverse and sustainable as well. While much of current media debate is about the future of journalism as the sea change shift to digital media is occurring, we need to recognize that our current digital media supply chains and media types are unsustainable before we kick print media to the curb and entrust our future to an ephemeral and uncertain digital media monoculture.

As publishers struggle to extricate themselves from the advertising business models that encumber them, we are likely to see them continue to trim editorial staffs and funding for investigative journalism. However we are likely to begin to see syndicates of content creators and journalists emerge who are independent of any particular distribution channel or media type. Spot.us is an example of how journalists may increasingly be directly supported by their audiences rather than by a publisher who is supported by advertising.

If the capital structure of traditional media cannot support the research and legal expenses that investigative journalism demands then those entrepreneurs will find other sources of funding for their efforts.

RI- So do you have to go to newspapers to get journalism?

DC- No, as I said, we’re already starting to see things like spot.us and syndicates, as well as entrepreneurial journalists operating outside of mainstream media advertising supported business models.

RI- Last question. What should I be asking you right now?

DC- The real question is “how can we encourage both advertisers and publishers to consider the sustainability of the media supply chains they depend on?” Whether they are print or digital, they consume energy, and neither are sustainable. Will they have to learn the way fish learn about the importance of water? Will they only be aware of it when it is gone?

Looking at Print media, we can basically agree that it is dependent on paper. The paper making industry in the United States is in tragic decline. We haven’t built a paper mill in the US for over 12 years and we’ve shut down hundreds of paper making machines. We’ve exported more waste paper than any other product. In fact waste paper is this country’s single largest export! The paper has gone primarily to China where it is recycled into cardboard and shipped back to us as containers and then ultimately devoted to landfill.

We’ve effectively put ourselves in a situation where in short order we may be as dependent on imported paper as we are dependent on imported oil. If we don’t address the strategic importance of an intact infrastructure for papermaking in the US we may not have print media in time because we won’t be able to afford the substrate to print it on. Hopefully the current administration’s focus on renewable energy holds promise for the reinvention of America’s papermaking industry.

Over the next 10 years we need to transition from making paper in outmoded papermills mills build by our grandparents to producing paper, fuels, energy and renewable chemical and pharmaceutical feedstocks in a new generation of integrated biorefineries.

Likewise we need to transition from printing methods that employ wasteful and inefficient mass production to those which employ leaner greener digital printing and printed electronics manufacturing that support mass customization and dematerialization.

Looking at digital media from the same perspective it is not economically or environmentally sustainable either. During 2006 energy consumption from data centers and servers consumed 61billion kilowatt hours of electricity. The consumption rate for data centers doubled from 2000-2006 and is set to double again in 2010. Additionally, e-waste now constitutes the most significant toxic waste stream in our landfills and it is the single largest toxic waste export. We are about to witness a veritable tsunami of toxic e-waste as people turn in their CRT TV’s and buy new HD digital sets to cope with the FCC’s analog to digital mandate.

RI- Ok, that wasn’t the last question. After you mentioned exporting toxic waste to other countries I’m wondering; what are the global implications of publishers switching to new media /new medium?

DC- Thinking that we can transition from books to ebooks, and satisfy the fundamental needs of all 6.7 billion people on the planet is a fallacy. We don’t have clean water in many countries, let alone 3G towers to feed our Kindle’s today’s newspaper news. 2 billion people don’t have clean water in the world. As publishers, advertisers, and consumers, we have to find ways to encourage development of both sustainable print and digital media supply chain management technologies. We need to reframe the issue. Today’s print vs. digital media debates are a zero sum game. Regardless of which media wins the war of words we all lose. The fact is we will need both print and digital media for many years to come and we need them to both become far more sustainable than they are today.

RI- Thank you for sharing your ideas with metaprinter regarding news media innovation, convergence and sustainability. When is your next upcoming conference and what can people learn there?

DC- SustainCommWorld’s next Green Media Conferences will be held on June 9, 2009 in Washington DC and on June 23 in Chicago. The Green Media Conference website has detailed program information on it and the Green Media Connect Social networking site is where attendees can network, blog and share information before during and after the events. In addition, I post news items and exchange tweets with the thousands of people who follow me on twitter each day. Thank you for taking time to speak with me about this important topic. I look forward to seeing you and your readers at the Green Media Conferences in June.

More about Don Carli’s work:

The Institute for Sustainable Communication was created to raise awareness of the issues and train the next generation of media and communication supply chain professionals. We do that through various non-profit education and outreach initiatives such as the Sustainable Advertising Partnership (www.SustainableAds.org) being developed in partnership with Ad-ID (www.Ad-ID.org) and our Students of Sustainability (www.SOSReach.org) programs. ISC also supports the SustainCommWorld LLC Green Media Conferences which were created to provide advertisers, media planners, media buyers, creative professionals, publishers and suppliers in the print and digital media supply chains with real world and virtual world forums where they can network, explore and forge sustainable print and digital media supply chains solutions. In addition, ISC is working with Fortune Custom Publishing to produce a special section to Fortune Magazine in the Fall of 2009 focusing on the ways in which sustainable print and digital media supply chains can be a powerful force in the effort to address our global economic recovery and the challenge of climate change.

Related Links:

http://www.greenmediaconference.com

http://www.greenmediaconnect.com/

http://www.twitter.com/dcarli

http://www.sustaincom.org

Word Cloud of this Interview click for big view

I think switching to The Times on the Kindle 2 is a fantastic way to lessen your impact on the environment, reducing tremendous waste from paper, print, delivery and plastic bags. Perhaps saving a forest. However, it’s not for everyone. You’ll need to be willing to commit to the form factor and accept changes in the reading experience.

Overall, I give the Kindle 2 with the New York Times a B to B+. If Amazon makes the software updates I mentioned above, this would raise the experience to an A-.

I love my iPhone and I’ve used both the NetNewswire application and the New York Times application on it – but reading The Times on the Kindle is better in enough ways to make me carry both…before even considering the Kindle’s blog and book reading capabilities… continue

Thorough review of the kindle 2 for newspaper readers.  I’m still not convinced that it is cheap enough for the masses. The cost of reading the NYTimes.com site from home, office, laptop, or on my blackberry is free (right now). If the economics of this change, then the kindle 2 and others, will become more attractive.  Having said that, if the cost becomes prohibitively expensive or constrained (ie. you must buy our Hearst eReader to read Heast content) then quality free content will continue to grow in popularity.

Dear media companies: Please stop trying to innovate. You’re lousy at it.  Hearst‘s supposed “Kindle killer,” an electronic reader for magazines, is just the latest in a series of debacles from the moribund print-media business.

Hearst Media Magazine Company Planning Their Very Own E-Book Reader -Gizmodo

If high costs of producing paper goods are hurting the media, I’m not sure it makes sense to get into the game of something more expensive to read from today — when such a device already exists from Amazon — even if it saves them a few bucks tomorrow. Oh yeah, and magazines are better in color (on LCD or paper).

Cosmo Publisher Plans an E-Reader of its Own -Wired

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?

Hearst to launch wireless e-reader, potentially revolutionize print media -Engadget

I can wait for the future, when I will carry my cell phone, a netbook, a kindle for books, a hearst media reader for that companies articles and a newscorp media reader for the other articles I will need, that wont be available on the web.  its gonna be great! pffft. -from commenter Sim

Hearst developing e-reader, charging for e-news -Cnet News

“Our cost base is significantly out of line with the revenue available in our business today,” Hearst’s Swartz concluded, as he noted other advertising initiatives, such as partnering on advertising with real-estate site Zillow and Yahoo, and raising prices for print subscriptions and mobile-phone access to its content. “It is equally inescapable that during good times, our industry developed business practices that were, at best, inefficient.”

Hearst to Begin Charging for Digital News -WSJ.com

A top executive at Hearst, which publishes 16 newspapers including the Houston Chronicle and Seattle Post-Intelligencer, said the company is mulling how much of its online offerings to keep free, while reserving some content exclusively for people who pay.

It seems that no one thinks this is a good idea except Hearst, which leads me to believe that something big is happening behind the scenes.  Perhaps the cost of paper is about to skyrocket?  I heard this scenario late last year, at an NYU sustainability discussion, where their is little to no domestically produced paper (paper and pulp mills moved out of the country a few years ago), compound this situation with the fact that the Obama administration is moving forward with their carbon cap and trade plan, making “dirty” industries and their products prohibitively expensive.   What follows is a situation where the only paper that will be plentiful is expensive eco-friendly paper for notebooks and direct mailers.

With no signs that our depressed economy is turning around, perhaps the publishers are using this as an excuse to think long-term to expand into eReaders?  Am I giving them too much credit for this move?  Does Hearst really think that a proprietary reader will be better medium than a printed magazine?  Personally I’m not sold on the idea of proprietary hardware as a business model for publishers.  I think they need to focus on content creation and let the hardware makers fight over how to best display it.

When I bumped into him at TOC2009 today I told him that I was disappointed with the display by the Plastic Logic Reader (every working model had terrible vertical lines on the screens)  and I really wanted to see the Readius he mentioned and with that, Blamo!  Here it is!  within 10 seconds people started gathering around.

Above, Igor is  holding the device while cradling an iRex Tablet.  He was at the event to showcase NewspaperDirect‘s new iPhone Application and PressReader features for the iRex and Readius. Read more about that in their release.

The Readius is not yet available for sale to the general public so just watch this older YouTube clip below to get an idea of the functionality and style of this thing are and wait, wait, wait.

Weight:
Ultra light. At 115g just one third the average weight of current eBook readers

Display size:
Large 5″ display, 16 greyscales

Device size:
The only pocket sized eReader

Battery life:
30 hours of continuous reading

Connectivity:
Global wireless connectivity, with the greatest coverage of any eReader (Tri Band/3.5G HSDPA)
Supporting ActiveSync and USB mass storage (USB FS)
Communication with accessories and other devices (Bluetooth 2.0)

Processor:
Powerful processing engine (ARM11 400MHz)

Storage:
Flexible, today commercially available up to 8GB (High Capacity Micro SD)

User Interface:
Just 8 SimpleTouch Buttons

With sustainability and environmental issues dominating business strategy these days I became interested in what types of applications were available to newspaper publishers to reduce their carbon footprint. I discovered NewspapersDirect and their Smart Edition ePaper solution. Smart Edition is a version of their PressDisplay.com offering for newspaper publishers to serve up PDF versions of their content online.

In the past I have been critical of newspapers simply digitizing their newspaper and putting it online. I feel this is an under-utilization of the capabilities which the internet and high speed broadband connections offer. I was skeptical of this application, but wanted to learn more about their technology which is more dynamic than a simple reader.

I asked for and received a temporary account to PressDisplay.com and dove in to check the offerings of their technology. Readers by the way can also do this by following THIS link, clicking next, and typing “be green” as the promotional code.

Right off the bat I’m impressed by the newspaper offerings. There are over 700 titles from over 106 countries available for reading, cover to cover. Here is the really neat par. The entire newspaper, advertisements and all, is capable of being searched for keywords just like you would on Google or any other search engine. Also, any email address, phone number, or link is live should you want to utilize those things. Even better, if you have Skype you can click on the phone number and make a call!

I set up a profile, made a few comments on articles, and read a few newspapers from around the world. Another neat feature is the ability to have any news story read to you in its original language. The English voice sounded a little like Stephen Hawking, but if you listen to other languages the tone and inflection changes. This is a pretty cool feature if you are using your mobile device to access the paper. You don’t have to strain your eyes on a small screen.

Meta: Who is your target audience? Your software is quite powerful and the access to over 700 global newspapers seems too much for the average person.

Igor: Our site is useful to anyone, but we target unique markets that are underserved by traditional publishers. We target cruise lines, hotels, libraries, universities, and government institutions. Our delivery system is more cost effective and less impactful on the environment than traditional print and delivery systems. We have also partnered with 1200 commercial print installations around the world to serve up the content in a larger format.

Meta: What about revenue streams? How do you generate money?

Igor: Our service is subscriber based. Our PDF’s are to Audit Bureau of Circulation (ABC) standards so publishers can count their ePaper toward their circulation figures. We have our own advertising platform called Adget which is an advertising widget. Participating advertisers can make their print ads dynamic with video, pictures, audio, and interactive contact capability like email and telephone. Adget is an up-sell for us. We also make money on royalties through revenue sharing with publishers every time someone views a page past page one. Our service is free to publishers. All we ask is that they provide us with a standard, readable PDF in a timely fashion. Often we put up content before it is even printed.

Another part of calculating readership is a reading application which tracks where on a page users are reading. The mapping technology and an algorithm calculates where the user is spending their time. The information is quite useful and the publishers love this kind of data they could never get with their paper product. (Author’s note. See the image below for an example of the reader tracking in action. The color coding is for illustration purposes only and the reader never sees anything.)

Meta: Anything interesting come from that data?

Igor: Yes, readers spend a tremendous amount of time where there are NO advertisements like the letters to the editor pages, comics, and puzzles. It’s up to the publisher to capitalize on this data

Meta: Does your service compete with online news aggregators like Google News?

Igor: Google news almost never offers up all the content that was in the days publication. We have an exact PDF of the printed newspaper and our world-wide print installations, so we feel that they do not, can not, compete with us.

Meta: Tell me about your “Green” initiative.

Igor: We see our product as an environmentally friendly alternative to a traditional printed publication (I say publication because we are offering up not just newspapers but magazines like Billboard and Hollywood Reporter). For example; Publishers can use our platform to deliver their Newspapers In Education (NIE) newspapers to schools. This saves on consumables and reduces the carbon footprint of the newspaper publisher.

On the upper right hand corner of the home page you will see a “Trees Saved” widget that shows how many trees were saved by utilizing our product versus the original newspaper.

Meta: What else?

Igor: We’re not only online, we also have an offline program for your computer and have mobile applications for the Apple IPhone, Blackberry, and others. The most exciting thing is going to be our application for the pocket eReader Readius. The reader will be available by the end of next month and is being launched in Italy. Check this thing out!!!

From Polymer Vision‘s website: The 3.5G HSDPA tri-band phone allows worldwide high speed instant updates from personally selected news sources, special services and email. The Micro SD High Capacity storage ensures easy access to other favorite information and eBooks. Readius® also features phone as well as audio capabilities (such as MP3) forpodcasts, audio books and music.

Readers can go to PressDisplay.com and view the front page of any news story for free, Just like if you walked by a news-stand or kiosk. To go past the front page you need to be a subscriber. Their packages run from $9.95 a month for a personal subscription to over $200 a month for a corporate subscription. Remember to use the “go green” promo code for a free taste of the offerings.

Meta: Thanks for the interview!

Igor: Thank YOU!! and check out PressDisplay.com