Hearst to Move Onto eInk?

It is unclear as to whether individual media companies will follow the Amazon route and build their own devices and try and control their own channels or whether they will adopt a more open and inclusive approach to the market.

Hearst Corporation, the giant media conglomerate, announced it will launch an e-reader of its own by the end of the year. Hearst’s magazine and news papers include SmartMoney, Esquire, Oprah Winfrey's O Good Housekeeping, Cosmopolitan, Popular Mechanics, Seventeen 16 daily and 49 weekly newspapers including San Francisco Chronicle and the Seattle Post-Intelligencer both of which Hearst has put up for sale.

The first unkown is the device which is almost certain to be based on eink with Hearst Interactive Media being among a group of strategic investors that have together poured more than $150 million into E Ink’s technology. Will they use Plastic Logic device or opt for their own? What is becoming clear is that the Hearst e-reader will almost certainly be larger and wireless to accommodate the format of newspapers and magazines. This will help reproduce the more-complex layouts of print periodicals as well as letting advertisers buy spots in the sizes and format they're already used to. However for now they will have to accept greyscale which to some degree will dilute the appeal of their glossy magazines to consumers and to their advertisers. There is some speculation that Hearst is exploring making the device foldable or rollable to enhance portability.

The second unknown is the business model with many predicting that the will attempt to move from the free online to a subscription model a tricky move with only a few such as Wall Street Journal sticking ridgidly to it. However we note that Newsday has declared their intent to move to a paid model for their online edition.

The Hearst e-reader may work if readers see added value but we are now seeing the collapse of newspapers as we have known them for over 100 years. Advertising revenue, the shift of classified advertising to the likes of Craigslist, online free news, services such as Google news and the news on your mobile are all compounding to cannibalising the model.