Thursday, May 7, 2009

Murdoch Rebuffs Amazon's terms for Kindle model

Financial Times's Kenneth Li and Andrew Edgecliffe-Johnson report Murdoch's strong resistance to Amazon's Kindle business model.

Proposing a new revenue stream for newspapers, Amazon apparently wants as much as 70% of any subscription revenues earned through the Kindle, per a statement by James Moroney, the chief executive of the Dallas Morning News during a Senate hearing on the future of Journalism.  Moroney mentioned that Amazon also wants "the right to republish the newspaper’s stories on other portable devices," per the FT writers.

 It's been established (but not mentioned in the FT article) that Amazon offers Kindle book publishers 35% of the List price but can discount their own selling price to $10~ while still paying the publisher 35% based on the publisher's price.
 So, if a publisher sets the List price at at $25 and Amazon sells a book at $10, Amazon pays the publisher almost $9 from the sale and keeps about $1.

Murdoch is quoted as saying that though News Corp could make money from customers' interest in using a mobile device to read the news, "We will not be giving our content rights to the fine people who created the Kindle."

At the same time he said one of his general newspapers will start charging for its content online, within the year.

The New York Times and the Washington Post are backing the Kindle model (though the pricing could vary somewhat for each company).  And the FT adds that "Textbook publishers Pearson, owner of the Financial Times, Cengage Learning and Wiley are also to offer some books on Kindle."

UPDATE 5/8/09: - Financial Times is puzzled by this, since Wall St. Journal and Harper Collins are part of his operation and are already on Kindle.  Is he threatening to withdraw? (Not ultra likely) Below are ways to Share this post if you'd like others to see it.
-- The Send to Kindle button works well only on Firefox currently.

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(Older posts have older Kindle model info. For latest models, see CURRENT KINDLES page. )
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