INSIDE MOBILE: Memo to Press Barons: Offer Wireless Connectivity

 
 
By Tom Wheeler  |  Posted 2009-08-11 Print this article Print
 
 
 
 
 
 
 

The Web has changed the economics of the newspaper business, but it doesn't have to mean the end of newspapers-just the end of the business as it is currently conducted. Wireless can do for newspapers what it is already in the process of doing for books. Here, Knowledge Center mobile and wireless analyst Tom Wheeler explains how wireless e-readers allow newspapers to control which information goes over their proprietary network to their own wireless devices and what information goes on the Web for general consumption.

At a recent meeting of the Associated Press, newspaper owners bemoaned how the Internet ruined their business. Bankruptcies, "For Sale" signs, staff cuts and even shutdowns are today's headlines. The cover of Time magazine recently featured a dead fish wrapped in a newspaper. "It is now possible to contemplate a time when some major cities will no longer have a newspaper," the story warned.

Interestingly, however, another ink-on-paper business appears to have found a way to remake itself using new technology. While Time magazine forecasted the death of newspapers, a Newsweek magazine cover proclaimed, "The Book Isn't Dead." The cover featured Amazon.com's Jeff Bezos holding his Kindle e-reader. The article contained a sentence that the press lords should take as their new manual of instructions: "The Kindle's real breakthrough springs from a feature that its predecessors never offered: wireless connectivity."

Yes, the Web has changed the economics of the newspaper business, but it doesn't have to mean the end of newspapers-just the end of the business as it is currently conducted. Wireless can do for newspapers what it is in the process of doing for books. Columnist Michael Kinsley recently observed in a New York Times Op-Ed that newspaper "readers have never paid for the content (words and photos). What they have paid for is the paper that content is printed on."

A week of the Washington Post weighs about eight pounds and costs $1.91 for a new subscriber, home-delivered. With raw paper costs at about 34 cents a pound, Kinsley comments, the Washington Post loses almost a dollar a week on paper costs alone. "A more promising idea is the opposite: give away the content without the paper. In theory, a reader who stops paying for the physical paper but continues to read the content online is doing the publisher a favor."

This, of course, is exactly what Hearst Corporation has done with the Seattle Post-Intelligencer. On May 17, the Post-Intelligencer ceased to be printed and became available only online. It is a step in the right direction, but it still misses the lesson of that other Seattle company (Amazon) and its Kindle. Yes, save the paper and delivery costs with electronic delivery, but don't make the reader go to a computer screen: deliver the content wirelessly to his or her e-reader.



 
 
 
 
Tom Wheeler is Managing Director at Core Capital Partners. He is a guest author of Inside Mobile (a column usually authored by J. Gerry Purdy). Tom can be reached at twheeler@core-capital.com.
 
 
 
 
 
 
 

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