A little more detail about an item we reported on during the News Corp (NYSE: NWS). earnings call: the rocky relationship with Amazon (NSDQ: AMZN) over the Kindle. Once again, Rupert Murdoch was openly critical of the way the Kindle separates media outlets from their customers by controlling the financial and consumer relationship. This time, (admittedly in response to questions from me) he came even closer to predicting a “break” with the company. At the same time, he offered Sony (NYSE: SNE) up as the girlfriend he’d rather have — and left unanswered my questions about the similarities between Amazon and the way Apple (NSDQ: AAPL) runs the iTunes store, where Murdoch says he plans to charge for news apps that currently are free.
From the call after I asked when the app charges would kick in for Blackberry and iTunes, and about discussions with Amazon over customer relationships on the Kindle:
Murdoch: “We are changing the price of the Journal on the Kindle and we’ll get a better share of the revenue although I can’t say that I’m satisfied that it’s the final result that we want but it’ll be a lot better. It’s not a big number and we’re not encouraging it at all because we don’t get the names of the subscribers. Kindle keeps them as their subscribers, not as ours, and I think that eventually will cause a break between us.” [Note: The Kindle subscription was $10 a month and is now $15.]
Doesn’t the same situation exist with iTunes, though, and Apple? Murdoch: The same would apply to them. Apple’s not there yet. I can’t answer that exactly; Apple is said to be coming out with a reader before the end of the year. Certainly, Sony is doing better. We’re in active discussions with them and they certainly accept that the subscribers would be our subscribers.”
In terms of iTunes, how is it different? And when will you start charging? Murdoch: “I don’t know.”
Aside from that little wrinkle, Murdoch has yet to say how this might affect News Corp.’s HarperCollins and its relationship with Amazon, Kindle and Sony, although he did once again say it was “highly unlikely” the company would produce its own e-reader.
Is he serious? Yes. Is he negotiating in public? Yes. It’s sort of like Paula Abdul tweeting her resignation from American Idol — there’s just not as much money at stake. Yet.