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Summary:

For the last couple of years, Amazon’s Kindle has owned the market — a very small one, to be sure — when it comes to delivering subscripti…

Kevin Hamiltion, CEO, iRex North America

For the last couple of years, Amazon’s Kindle has owned the market — a very small one, to be sure — when it comes to delivering subscriptions to U.S. e-readers. It’s also irked publishers with a 70-30 rev share in the retailer’s favor and by retaining control of customer relationships, sending them scurrying for alternatives. Kevin Hamilton, the North American CEO of IREX Technologies, promises to provide just that with the upcoming 3G iRex Digital Reader 800SG, although much of the “dramatically different” model he’s promising may not be visible to the consumer for months. No matter how different, it’s not likely to make a dent in Amazon’s control any time soon (if at all) but the emphasis on “open” may well give people pause about buying the “closed” Kindle.

The three-pronged approach to selling newspapers and magazines through the iRex includes: single-copy sales of more than 1,200 newspapers via NewspaperDirect and its reader software; a subscription-based custom iRex News Stand produced by LibreDigital; and, most significant in some respects, standalone storefronts for major publishers. The first two partnerships are in place and will be made public today. The “storefronts” are a different matter. Hamilton spoke of the Wall Street Journal and The New York Times, among others, in that category but when pressed would only say the “two titles are very important to our strategy and we’re in substantive discussions right now,” adding later, “we’re in conversations with many major publishers.” (The two companies also have been coy about their plans for being on additional e-readers but stressing their desire for other platforms.) During an interview with paidContent from Germany, where iRex was showing at the Frankfort Book Fair, Hamilton also talked about content partner Barnes & Noble’s planned e-reader; the still-mythical Apple (NSDQ: AAPL) tablet; more differences with Kindle and international plans. (He also talked about possible subsidized sales; see more at our sister site mocoNews.net.)

Periodically speaking: How does the iRex model for periodical publishers differ from Amazon? Hamilton’s pitch: “We’re saying, you promote your product, you price your product, you format and deliver your product in the way that you want to and you’ll enter into a 1-to-1 relationship with your customer. We’ll facilitate that and we’ll take a piece of the revenue. We don’t want to stand in between the customer and the publisher, if you want to cross sell or upsell or cross market or do other things with your customer, it’s your customer. We’re not going to try to dictate or control that. The Amazon approach is very different .. The publisher is cut out of the loop. Almost every publisher we’ve gone to has been very dissatisfied with that model and they’re very eager to be connected to their customers.”

No commerce solution yet: But that makes life a little tougher for the consumer. Unlike Amazon’s one-click shopping, which lets customers buy across the store seamlessly, iRex literally will be like going to a mall where each store requires a separate purchase.  Publishers will be offered a design spec based on XML to fit into a “global commerce solution” with a single sign-in that’s in development. Hamilton says standardization is probably months away. The revenue shares vary by publisher, too. He wouldn’t talk rev share details but said it’s “dramatically different” from the 70-30 that’s been publicized for Amazon (NSDQ: AMZN).

News Stand and storefronts: The iRex mall opens with two news stands and plans to add some storefronts. The largest news stand is serviced by NewspaperDirect, focusing more on single-copy sales from nearly 1,200 titles delivered in its proprietary format. The focus is on ethnic and international. Hamilton says they’ve had good traction with NewspaperDirect on the 10-inch Wi-Fi iLiad unit being sold in Europe for the past year. The lack of 3G for that device hampered the ability to offer a true subscription model where the newspaper would be delivered every night. LibreDigital is aggregating the ePub formatted content for the iRex News Stand, starting with about 20 newspapers and 20 magazines; plans call for 60-80 titles by early next year. iRex will actually be the provider, selling the subscriptions for $15-20, including the delivery cost. Libre already produces replicas of USA Today, the Times and The Washington Post. When I asked if expected those papers to be in the News Stand, Hamilton said yes but it’s not clear if there are any deals. He also talked about branded storefronts for larger national papers and magazines. That would seem to have the most flexibility for papers like the Journal or magazine publishers like Time Inc.

Global plans: With 3G service from Verizon (NYSE: VZ), iRex will be U.S.-centric at launch but Hamilton says discussions already are underway with carriers around the world to take advantage of its Qualcomm (NSDQ: QCOM) Gobi chip. “We may charge a little differently for that world edition.” At $399, the device is already one of the most expensive aimed specifically at the consumer market but Hamilton said some discussions with carriers include possible subsidies for the device.

Barnes & Noble: For books, iRex, like Plastic Logic, will rely on the Barnes & Noble eBookstore, with its access to 350,000 titles for sale and a half-million Google (NSDQ: GOOG) public-domain titles. The deal announcement in August stressed that “the companies share a distinctive, open view of the eReader market

  1. I very much support the 'open platform' approaches against the big gorilla power games of Amazon. Content aggregation and ease of payment remain an issue though. See also techTOinnovate blog: http://techtoinnovate.blogspot.com/2009/09/irex-attacks-amazon-kindle-open-versus.html

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