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E-readers: can Plastic Logic bring in e-revenue for newspapers?

E-readers: can Plastic Logic bring in e-revenue for newspapers?

E-readers have been on the market for some years now, but only very recently has it seemed even mildly likely that the idea might take off and they would become a widely used product. Currently e-Readers are still far from having must-have status. But with Amazon's much anticipated launch of Kindle 2.0, Plastic Logic's announcements of media partners for its upcoming product, and Hearst's recent news that it will also produce an electronic reader, it seems that the supply at least is ready, in case the demand does appear. E-readers could have far-reaching consequences for newspapers if they do increase in popularity, as publishers can bring in significant income from wirelessly delivering digital editions of their papers to users. The Editors Weblog spoke to Plastic Logic Vice President of Business Development Daren Benzi, about the company's business-orientated e-reader and its potential impact on newspapers.

Big screen news

Plastic Logic is planning to release its, as yet un-named, reader in January 2010. The main difference between it and the Kindle, or Sony's somewhat unoriginally titled Reader, is that the Plastic Logic product will have a considerably larger display and will be marketed towards the 'mobile business professional,' rather than the leisure reader, clarified Benzi. The screen will measure 10.7 inches diagonally (about 27cm) compared to Kindle's 6 inch/15cm display. Despite its larger size, the device will weigh about the same as the Kindle, as it will be made from plastic rather than glass and silicon. This also gives it the advantage of being more robust and durable, explained Benzi. The screen itself is flexible, but the rest of the components are not as the technology is not quite ready, and Benzi added that consumer testing has shown that people "would like it to have some form to make it easier to carry." The device is extremely easy to use, Benzi added, with an "intuitive touch screen" and just one button to power the display.

An important development compared to other e-readers, Benzi remarked, is that rather than just passing through text, Plastic Logic is "trying to deliver a deeper, richer reading experience," meaning that more information would be placed on the device. Some modifications will still have to be made to put a newspaper on such a product, but Benzi explained that there are companies which can do that for them. It will also be much easier to transfer documents such as word or pdf files from a computer to the e-reader, via a USB port. Although the product is focused on the needs of a business person, that does not mean that books will not be available also: "I don't want to discount the fact that the business professional enjoys leisure reading," Benzi added.

Partnerships with newspapers

Benzi was clear that one of Plastic Logic's key aims is to provide newspaper content on its e-reader. "Because of the size of our device, newspapers and magazines really are our core focus," he stressed, "right away a newspaper company sees the greater opportunity to publish on an end user product that is much closer to the print version." Content will be available through a shop, similar to Kindle's. The first product will be in grey scale but Benzi described the company's commitment to producing a colour device in the near future as a reason why papers with strong colour branding, such as the Financial Times and USA Today, are so keen to collaborate. Plastic Logic recently signed deals with these two publications, and Benzi was confident that the company will be announcing "lots more direct relationships as we approach the launch." Other partners include Libre Digital, which manages several digital newspaper titles and Zinio, which produces digital magazines.

This attempt to "pass through the print like experience" extends to advertising, which Benzi said had "often been left behind in these device segments." It is however crucial for newspapers as a revenue stream in addition to income from subscriptions. Benzi explained that although the first device will not access the internet, consumers might well be able to click on an advertisement for additional information on products or offers:"we could put a catalogue on the device if we wanted to, there is plenty of information that users can have at their finger tips." Plastic Logic will be able to "track the information about what the customer is doing with the device," a system which would seem to offer benefits to both newspapers and advertisers.

"Customers have shown in the past that they are prepared to pay for news, and they will again in the future: you just have to give them the right experience."

Benzi emphasised that although he could not claim that e-readers would be the newspaper industry's saviour, he believed that partnerships with Plastic Logic could be "a greatly valuable asset to newspapers' overall mix of business models." He added that "the great advantage with us is that there is no paper or ink involved, and no moving things around with trucks," which significantly reduces the cost of delivering content. He explained that his conversations with newspapers have focussed on how they can work together "drive new revenue and hopefully reach new customers for our partners." With regards to charging for content that might be available free on the web, Benzi is convinced that it is not necessary to "devalue content" and that "customers have shown in the past that they are prepared to pay for it, and they will again in the future: you just have to give them the right experience." Pricing for the device or for subscriptions have not yet been finalised, but Benzi confirmed that prices would be competitive. He accepts that there are some savings when producing a digital product which should be passed on to the customer, and that will be taken into account when comparing the pricing with a print subscription.

The market case for e-Readers

Benzi was confident that the time is right for e-readers. "I think that the factors and trends are much more aligned now than five years ago," he explained. This is partly because of technological advances, meaning that the devices can be smaller, lighter and easier to use, and also because of the way mindsets have changed, meaning that "people are a lot more comfortable reading digital content, and are more conscious of the benefits of getting their information this way." Another huge advantage of digital paper, and one that has maybe not been giving the attention it deserves, is that it is more environmentally friendly, an issue will presumably only become more important, and should appeal to many consumers.

Benzi believes the time is right for e-readers: "the factors and trends are much more aligned now than five years ago"

Most of Plastic Logic's target market, the mobile business professional, are very likely to possess a lap top computer and a smart phone, so why do they need a third device, and would they agree to use one? Benzi insisted that there is room for such a product, as it would replace the need to carry around not just newspapers and magazines, but other documents also. Compared with a computer, one of the advantages of the device is that readers can focus entirely on consuming content, they will not be disturbed by emails, for example. It is also far easier to use, and there is no glare, "it feels like you're reading on paper." Lastly, it has much longer battery life than a computer or a smart phone.

It would appear that the most fierce competition for e-readers comes from smart phones, for which many different newspapers have created applications that allow consumers to access their content. However, Benzi was insistent that he did not view smart phones as competitors. He explained that he realises that they are an alternative partner for newspapers, but "for what we are trying to accomplish, their screens are too small." Reading the news on a smart phone is fine if you are just after the bare information, he commented, but Plastic Logic is aiming to deliver "a totally different kind of reading experience," one which is far more similar to print.

Smart phones are not competition: "for what we are trying to accomplish, their screens are too small."

Amazon's Kindle 2 has been met with mixed reviews, largely because it is not seen as being different enough to the first model; not least because the company has not given any indication that the product will be available outside the US. Its text-to-speech function recently suffered setbacks after protests from publishers: now publishers will decide whether to allow their books to be read by the device. Amazon has refused to release sales figures for either versions of Kindle, suggesting that numbers might not be what Amazon had been hoping for. At $359, it is not cheap.

Will the Plastic Logic device be better received? Its larger screen will undoubtedly be more suited to reading newspapers and documents, and the business market may well be more receptive to such a product. It must expect some competition from Hearst, which just announced that it is to release a large-format wireless e-reader this year, "suited to the reading and advertising requirements of newspapers and magazines," according to Fortune. It seems that the newspapers are indeed enthusiastic, but are the customers? Or will it take something more to persuade them to give up their attachment to paper, and possibly greatly reduced prices for the basic device?



Emma Goodman


2009-03-03 14:44

The World Editors Forum is the organization within the World Association of Newspapers devoted to newspaper editors worldwide. The Editors Weblog (www.editorsweblog.org), launched in January 2004, is a WEF initiative designed to facilitate the diffusion of information relevant to newspapers and their editors.

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