February 28, 2009
Hearst Developing E-Reader For Periodicals
Media publishing giant Hearst Corp. has plans to enter its own electronic reader for periodicals as a competitor to Amazon's wildly popular Kindle book reader.
Fortune magazine reported Hearst's plan on Friday "against a backdrop of plummeting ad revenue for newspapers and magazines and rising costs for paper and delivery."
"I can't tell you the details of what we are doing, but I can say we are keenly interested in this, and expect these devices will be a big part of our future," Kenneth Bronfin, Hearst interactive media group chief, told Fortune.
Fortune reported that Bronfin led an investment more than a decade ago in E Ink, a Cambridge Massachusetts-based company that supplies the electronic-ink technology used in the Kindle and in devices produced by Sony.
"What Hearst and its partners plan to do is sell the e-readers to publishers and to take a cut of the revenue derived from selling magazines and newspapers on these devices," Fortune said.
"Insiders familiar with the Hearst device say it has been designed with the needs of publishers in mind. That includes its form, which will approximate the size of a standard sheet of paper, rather than the six-inch diagonal screen found on Kindle, for example."
Hearst's device "will approximate the size of a standard sheet of paper, rather than the six-inch (15-centimeter) diagonal screen found on Kindle," said the magazine.
"Given the evolving state of the technology, the Hearst reader is likely to debut in black and white and later transition to high-resolution color with the option for video," Fortune said.
Hearst is the publisher of magazines and newspapers including Cosmopolitan, Esquire, and the San Francisco Chronicle "“ which could be shutting down as Hearst decides to cut a "significant" number of jobs.
The Chronicle lost more than $50 million last year and this year's losses to date are worse, Hearst said on its website on Tuesday. It said the paper has lost "major" amounts of money since 2001, a year after Hearst bought the paper, according to Reuters.
Additionally, Hearst in January announced plans to close the Seattle Post-Intelligencer if a suitable buyer cannot be found.
"Survival is the outcome we all want to achieve. But without the specific changes we are seeking across the entire Chronicle organization, we will have no choice but to quickly seek a buyer for the Chronicle or, should a buyer not be found, to shut the newspaper down," Hearst Corp Chief Executive Frank Bennack Jr told Reuters.
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