Dan Kennedy asks a reasonable question: Would it be possible to drop the print model entirely and shift the struggling Boston Globe to a reader-paid model delivered on a Kindle?
At the risk of seeming like a chronic naysayer, I have to point to some problems with the idea:
Capital requirements. This isn't the time to be asking the markets for a big stack of money for the purpose of perpetuating a failing newspaper, based on a completely unproven idea using technology that (despite a great deal of media hype) has barely made a dent in the marketplace.
Lifespan of devices. You'd better not be amortizing a $120 million technology investment over six years. This is a cellphone-subsidy model, and you can learn a lot from Verizon, Sprint and T-Mobile. My kids break their cellphones about once every six months -- sometimes before they even get home from the store. I'd be surprised if the average lifespan of a newspaper tablet exceeded 24 months in real-world usage.
Hidden costs. A completely new product has to be developed, along with all the back-end technology to support it. You can't just dump PDFs of newspaper pages into these things. And I've warned before about overlooking customer-service requirements and expenses.
Probable loss of classifieds revenue. Of course, some folks think that's all going away, anyhow.
Loss of insert revenue. This is a big, big problem. Many newspapers pull in 20 to 40 percent of their revenue by operating essentially as a delivery service for "free-standing stuffers," the preprinted advertising sections that fall out on your lap when you pick up the paper. Buh-bye.
Probable loss of display advertising revenue. There are no full-page ladies' underwear ads in the Kindle universe. You're probably looking at a model that would merge one-third-page ads with content, sort of like Prodigy in 1991. That looks a lot more like Web advertising than print advertising, which immediately raises some uncomfortable questions about actual usage of the product and potential measurability.
Loss of customer relationship to an expensive middleman. Like Walmart, Amazon is not the manufacturer's friend.
A likely low signup rate. People who are still reading newspapers in this century may not be too eager to learn how to operate a digital tablet, even if it's "free." And these things come with some downsides. You can't share a newspaper with your spouse if it's on a digital tablet. These things look more like a computer than print. Why, exactly, would I pay for this? Why wouldn't I just use the Web? I can get a free laptop if I sign up for Internet access, and it works for YouTube.
Now, don't get me wrong. I think these E.Ink-based devices are way cool.
And certainly some people are placing very big bets on them -- especially Hearst, which has invested in a couple of companies working in this space (including E.Ink itself).
There's a high probability that you're going to see one or more newspapers and magazines trying something like this soon, without Amazon's involvement. Privately held Hearst is in a much better position to do it than a public company like the New York Times that's already facing some investors who'd like to see the CEO's head on a pike.
But I don't expect magic.