Five Reasons Newspapers Must Embrace E-Readers

(MoneyWatch)  The accelerating pace of e-reader adoption, spurred by lower prices and an exploding inventory of books and other print materials, presents newspaper publishers with a second chance to get in the digital game.

Amazon's decision to lower the price of its Kindle to $259 and to sell it globally is the opening salvo in what will be an e-reader free-for-all this holiday season. And it ultimately could save the failing newspaper industry if publishers respond more quickly and aggressively than they did initially to the Internet.

Forrester Research now projects e-reader book sales will increase 50 percent in 2009 from the prior year, with 30 percent of that growth to come in the fourth quarter. Sales should double each of the the next two years driven by Apple's much anticipated tablet and other big-gun competition from the likes of Sony. Apple is negotiating content agreements with the NYT, McGraw-Hill and others that would redefine the print experience.

While many argue that the economics and reading experience of the printed page can't directly translate to electronic ink on a screen, newspaper and other publishers must seize on the e-reader phenomenon as a way to regain market share and develop new revenue sources.

There are at least five good reasons why newspapers especially must embrace their inner e-reader and shift to electronic reading devices as a home base:

• It would immediately provide publishers with a mechanism to implement content "micro-payments" and targeted e-commerce they are struggling to implement on their web sites.
• It would instantly provide a social networking framework for sharing and participation by digital consumers, who will consider e-readers an extension of interactive activities on smart phones and other mobile devices.
• It would immediately thrust content produced by newspapers and magazines into the digital mainstream and into the hands of Amazon and Apple, which are experts at capitalizing on and moving consumers through their well-oiled ecosystems.
• It would immediately reduce publishers' fixed newspaper paper and production costs and efficiently phase out their inefficient legacy infrastructure and financial models.
• It would provide newspaper and magazine publishers with a new core platform to use as a rallying point and springboard to more effectively address their universal challenges and issues as a group. A new joint venture by Hearst, Time Inc., Conde Nast and others to create new e-reader strategies is just the beginning. Electronic reading devices also will facilitate their interaction with other transforming print-related businesses such as consumer and educational textbooks, book publishers and retailers, advertising and marketing, and consumer research.