The Big Newspaper E-Reader Gamble

Several new large-format e-readers are about to go on sale. Newspaper execs are excited:

These devices from Amazon and other manufacturers offer an almost irresistible proposition to newspaper and magazine industries. They would allow publishers to save millions on the cost of printing and distributing their publications, at precisely a time when their businesses are under historic levels of pressure...

Perhaps most appealing about this new class of reading gadgets is the opportunity they offer publishers to rethink their strategy in a rapidly evolving digital world. The move by newspapers and magazines to make their material freely available on the Web is now viewed by many as a critical blunder that encouraged readers to stop paying for the print versions. And publishers have found that they were not prepared to deal with the recent rapid decline of print advertising revenue.

Publishers could possibly use these new mobile reading devices to hit the reset button and return in some form to their original business model: selling subscriptions, and supporting their articles with ads.

Maybe. The most popular e-reader right now is the iPhone, and it works pretty well. But will readers pay $9.99 a month for the New York Times? Doubtful, but we'll see. The mobile readers have some challenges:

The screens, which are currently in the Kindle and Sony Reader, display no color or video and update images at a slower rate than traditional computer screens.

They also update only once  a day. And expecting readers to pay for each publication seems naive. "Another hitch is that some makers of reading devices, like Amazon, want to set their own subscription prices for publications and control the relationship with the subscriber -- something media companies like Condé Nast object to."

In short, by most measures the portables offer less than readers can get for free on the internet. The one advantage is portability; we'll see if that's enough of a lure.