Thursday, May 7, 2009
It's bigger, but is it better. It's more expensive, but is it better. It's still just a black and white screen, but is it better. The answer is hard to say. And will it save or destroy the print business, that is the $100,000 question.
One thing is clear, it does not seem to be advantageous to the newspaper industry, especially as Amazon seems to take the majority of the revenue for being the distributor of the content. "Amazon does not release financial details about its relationships with newspapers, but newspaper executives say Amazon keeps 70 percent of the revenue — an arrangement the papers have been unhappy with." In fact, the newspapers are not going out of their way to strike deals to encourage Kindle's use over their current distribution and only have deals "for people who live in areas where their paper editions are not available."
Odd that the content creators are at the mercy of the distributor? Not really, but not necessarily the only solution. Just as the broadcast networks have created a digital joint partnership called Hulu to distribute online content, the newspaper companies should consider a similar solution for their digital distribution. Build a joint venture tied to your own device or work with Intel or Apple and create your own broadband service to download content. Retain a much larger percentage of the profits and reduce your printing and distribution overhead at the same time.
Posted by Andy Hunn