Five Major Newspaper, Magazine Publishers to Develop Digital Newsstand for Portable Devices

By: Lucia Moses Five rival publishing companies went public Tuesday with their plans to develop a digital storefront, but the announcement shows much remains to be worked out.

Conde Nast, Hearst, Meredith, News Corp. and Time Inc. said simply that the five would create an independent venture to develop a storefront and related technology to sell their content -- and efforts from other publishers -- on various digital devices.

The venture's goals are to create a common reading application, publishing platform for multiple devices, operating systems and screen sizes; a digital storefront; and advertising opportunities.

But there's no clear road map to achieving those goals. At this point, the initiative is little more than an idea, backed by a 10-person board comprising two people from each of the five partner companies, which have equal stakes in the venture.

John Squires, who has been spearheading the effort, is stepping down from his post as evp at Time Inc. to serve as its interim managing director.

The initiative lacks a name and staff. More importantly, the venture, like concurrent individual publishing company efforts, is looking to create a platform for magazine-friendly e-reading devices that are expected to come on the market in 2010 but don't exist today.

"We're at the very, very beginning," Squires said. "We've got to build a company and a product road map. It's very early, but the common desire of the partners is to put their money behind a tool set that'll help their publications."

Bob Sauerberg, group president of consumer marketing for Conde Nast, along with group president David Carey, are representing Conde Nast on the venture's board. "Admittedly, the consortium is at the early concept stages of a bold and revolutionary idea," Sauerberg said. "We're really creating something that doesn't exist today."

Initial steps will include hiring staff, a permanent managing director, consultants and developing applications to translate printed material to smartphones already in use, Squires said. Developing a platform to distribute content to other devices and creating a storefront would come later.

The imagined storefront would enable publishers to bundle e-reader versions of their titles with print subscriptions. Squires said he's talking to other content companies, which he wouldn't name, about extending the storefront's offerings beyond newspapers and magazines.

"There will be a vast amount of content -- I think in time book publishing, any paid content focused on reading," he said. "There could be paid blogs, newsletter content, trade publishing, wherever there's a payment from a consumer."

Squires said he saw the venture as a complement to other initiatives by companies such as Conde Nast and Hearst to get ready for e-readers.

"I think Skiff could be complementary," he said of the e-reader content distribution service and online store that Hearst recently announced. "To the degree that we can utilize that platform, we're excited by what they're doing."

The fact that the five partner companies have come together speaks to the seriousness with which they're taking digital readers. As more reading takes place on handheld devices, publishers, having seen their business eroded by the proliferation of free online content, are intent on ensuring they can translate their brands to e-reading devices and maintain the ability to charge consumers and advertisers for it. Publishers don't want to end up losing control of their content to digital distributors as they say the music and book industries did to iTunes and Amazon.

"For five major publishing houses to come together when it's in their blood to compete with each other, to create an independent entity, is a big deal," said a source close to the process.

"I think it's revolutionary," Sauerberg said. "You've not seen all the major players come together and get aligned on a subject. We came together in an incredibly short time. I think it was clear to use that working together, it would allow us to work quicker and more efficiently as this market emerges."

-- Nielsen Business Media


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