E-ink may prove profitable in the near future
Posted by Evan Fell on December 4, 2007 at 5:25 PM
As print newspaper revenues continue to fall, Bill Richards of Crosscut, suggests that papers look to devices such as Amazon’s Kindle, which use E ink technology.
The Internet has taken away both readers and ad money from print papers, but it hasn’t grown ad revenue enough to make up for the losses. This is where the E ink devices come in. Such devices could make up for the losses in print and make the newspaper industry very profitable.
Hearst has announced its plans to release a wireless online paper within the next two years, using E ink technology with a flexible screen device the size of a tabloid paper. Will it work? Crosscut created a hypothetical paper in order to see the revenue outlook for newspapers that decide to go all digital with E ink devices.
The costs of an e-paper are mostly fixed because circulation does not much matter. The devices are simply a new delivery system for old content, which eliminate production and distribution costs. The building and general & administrative costs at the paper would shrink with the e-paper being the only version. The staff, like in the hypothetical paper could also be cut in half. So, right there a lot of costs are being cut already.
Then we have ad revenue. Advertisers may be more interested because the ads are still displayed in the same manner they are in the regular print newspaper because the e-paper screen is the size of a tabloid paper and, ads could also target specific audiences this way.
"A better technology, more like the regular process of reading a newspaper, conceivably could offer a better display for advertisers than the web is now," says Rick Edmonds, Poynter Institute media business analyst. "If you change the business model," he says, "that is something I would want to explore if I were a newspaper company."
The way the hypothetical paper at Crosscut was worked out, in a half dozen years, the e-paper could be a very profitable endeavor.
Source: Crosscut through Poynter Institute Romenesko
Hearst has announced its plans to release a wireless online paper within the next two years, using E ink technology with a flexible screen device the size of a tabloid paper. Will it work? Crosscut created a hypothetical paper in order to see the revenue outlook for newspapers that decide to go all digital with E ink devices.
The costs of an e-paper are mostly fixed because circulation does not much matter. The devices are simply a new delivery system for old content, which eliminate production and distribution costs. The building and general & administrative costs at the paper would shrink with the e-paper being the only version. The staff, like in the hypothetical paper could also be cut in half. So, right there a lot of costs are being cut already.
Then we have ad revenue. Advertisers may be more interested because the ads are still displayed in the same manner they are in the regular print newspaper because the e-paper screen is the size of a tabloid paper and, ads could also target specific audiences this way.
"A better technology, more like the regular process of reading a newspaper, conceivably could offer a better display for advertisers than the web is now," says Rick Edmonds, Poynter Institute media business analyst. "If you change the business model," he says, "that is something I would want to explore if I were a newspaper company."
The way the hypothetical paper at Crosscut was worked out, in a half dozen years, the e-paper could be a very profitable endeavor.
Source: Crosscut through Poynter Institute Romenesko
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Nice idea, though not new. I have my doubts about some assumptions. For instance: there won't be just one version of the newspaper, there will be many, because you can target the content to the personal preferences of the individual reader. Thus, you cannot cut the staff in half. Yes, you won't need distribution personnel, but editors and sub-editors are still needed in full force. Therefore the reduction in personnel costs won't be as big as predicted.