Blog Post

Dallas Morning News To Senate: Amazon Kindle Is Not A Business Model For Newspapers

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

imageRupert Murdoch wasn’t the only one taking out after Amazon and Kindle the same day it announced a pilot program with the New York Times and the Washington Post. Turns out the subject came up during the U.S. Senate subcommittee hearing on the future of newspapers. Dallas Morning News Publisher and CEO James Moroney spoke up after Arianna Huffington raved about its potential as an option, telling the subcommittee that Amazon wants the lions’ share of the revenue — and expansive licensing rights. Moroney: “They’re not a platform that’s going to save newspapers in the near term.” (HuffingtonPost is one of the blogs available for subscription through Kindle, as is paidContent.)

Moroney, who would like to see a limited anti-trust exemption so publishers can talk about pricing, thinks that would help when it comes to negotiating with a company the size of Amazon (NSDQ: AMZN). He told the Senate: “The Kindle, which I think is a marvelous device, the best deal Amazon will give the Dallas Morning News> — and we’ve negotiated this up to the last two weeks — they want 70 percent of the subscriptions revenue. I get 30 percent, they get 70 percent. On top of that they have said we get the right to republish your intellectual property to any portable device. Now is that a business model that is going to work for newspapers? I get 30 percent and they get the right to license my content to any portable device — not just ones made by Amazon? That, to me, is not a model. Maybe what Plastic Logic comes up with or what Hearst comes up with, might provide a good model but today Kindles are less than 1 percent penetration in the U.S. market. They’re not a platform that’s going to save newspapers in the near term.”

The exchange starts here. (pop-up C-SPAN player.) Full video embedded below courtesy of C-SPAN.

7 Responses to “Dallas Morning News To Senate: Amazon Kindle Is Not A Business Model For Newspapers”

  1. Marcos

    Sorry. Meant 90 cents on the sale price of each paper. The problem is they still need to print a LOT of papers… still need to pay the truck drivers…

  2. Marcos

    The New York Times spends 90 cents on every dollar on distribution… 70 cents on every dollar is a big improvement for them!

  3. Richard Thomchick

    Leaving aside for a moment the debate about whether e-readers can save the newspaper industry, Amazon's predatory stance towards the print media leaves the door open for other companies, particularly those that understand how to transform dying media industries by providing end-to-end experiences that integrate hardware, software, and content distribution channels. Anyone want an apple?

  4. I think the problem is they dont have many options. It seems kindle is not going to provide enough revenue for them to continue operations. At the same time their existing model doesnt work. Its kind of sad because I think newspapers have a place in society. But I think they are going the way of the dinosaur.