How will the Kindle Fire impact magazine apps?
*Updated with comments from Hearst Magazines EVP and GM John Loughlin*
Amazon’s new Kindle Fire tablet, introduced on Wednesday, could be a significant new mobile platform for magazine and newspaper publishers. Feature-wise, the Kindle Fire doesn’t offer anything that distinguishes it from the iPad, the BlackBerry PlayBook or the myriad Android tablets that have been launched over the past year. But Amazon brings a lot more to the tablet market than just features.
The most obvious and immediate benefit to publishers – or all app makers, for that matter – is the Fire’s price. At $199 – less than half that of the lowest-priced iPad – the new Kindle is likely to drive a mass market for tablets. Gartner predicts that global tablet sales will surpass 63 million units this year – with Apple’s iPad accounting for nearly three-quarters of total sales. But Gartner has lowered its forecast for Android tablet shipments this year by 28%, saying Android’s appeal has been “constrained by high prices, weak user interface and limited tablet applications.”
The Kindle Fire could change all that. The tablet’s low price point, backed by Amazon’s near-ubiquitous commerce platform and, specifically, its digital newsstand, could create a promising new digital delivery channel for magazine and newspaper apps.
"The challenge is that we have a big segment of the mass market in middle America, who are not early adopters and are price sensitive," Liz Schimel, chief digital officer at Meredith, told the Wall Street Journal. "This device breaks that barrier."
“It’s an extremely welcome development,” John Loughlin, executive vice president and general manager of Hearst Magazines, said in a phone interview. “Amazon introduced a mass-market device with a price point that will incent millions of consumers to take the plunge with tablets. The Amazon entry is jet fuel in the tank.”
A content play
For Amazon, the Kindle Fire is less about consumer electronics and more about content, which is why media companies are paying attention. ClickZ points out that Amazon is willing to set such a low price because it has bigger fish to fry:
“A cheap, zero-margin tablet serves as a point of sale for the business Amazon has always been in: selling books, music and movies. Amazon redesigned its website earlier this month to focus on its digital wares, and it just announced a big content deal with FOX to add more streaming movies and TV shows for Amazon Prime members this fall. Amazon's content offerings are primed and ready for the Kindle Fire.”
Amazon CEO Jeff Bezos admits as much: “We don’t think of the Kindle Fire as a tablet,” he told Businessweek. “We think of it as a service.”
Third-party magazine and news content will only enhance that proposition. Amazon says the Kindle Fire newsstand will include over 300 magazine and newspaper titles, all with subscription support. (It’s offering a three-month free trial for select publications and a 14-day free trial for the rest.)
Conde Nast will release Kindle Fire editions of 17 titles. Seven of those – The New Yorker, Wired, Vanity Fair, GQ, Golf Digest, Self and Glamour – will be “optimized” for the device, while the others will offer PDF replicas, a spokeswoman said. Earlier this week, Conde Nast said its digital subscriptions have surpassed 500,000 – a number that is sure to increase through the Kindle.
Ditto for Hearst, which plans to have 19 titles ready for the Kindle Fire when the device ships in mid-November. “Given Amazon’s scale, and all the other functionality that comes with the device and their storefront, we expect a substantial increase in paid e-subscriptions,” Loughlin said.
On Tuesday, Hearst said its magazine brands surpassed the 300,000 mark in monthly digital circulation. With the help of the Kindle Fire, "we expect those growth rates to ratchet up," said Loughlin. "I’d be surprised if in the next six months they’re not double where they are today."
"We are especially excited about the newsstand [on Kindle Fire] -- it's easy to navigate and that's not been the case with iPad," John Loughlin, executive VP and general manager at Hearst Magazines, told AdAge.
Amazon’s licensing terms seem to be more appealing to publishers as well. Apple’s subscription requirements – including its 30% cut of all subscriptions sold through iTunes and its unwillingness to share subscriber data with publishers – has been a major sticking point in publishers’ iPad and iPhone initiatives.
The Wall Street Journal, citing executives familiar with the discussions, said that Amazon has agreed to share more customer data, including customers' names and addresses. The revenue share, however, “will roughly mirror the [terms] that Apple has established with most magazines this year,” All Things Digital’s Peter Kafka reported on Monday.
“The negotiation was a very smooth, cordial, straightforward process,” Loughlin said. “They paid attention to some of the debates that preceded their entry in the market.”
Loughlin said the terms were “very attractive, both monetarily and regarding the appropriate sharing of purchase information.”
Another platform to support
One thing the Kindle Fire will not do is solve the cross-platform resource challenge for publishers. It only adds to it, with another device that will require publishers to “optimize” their digital editions in order to ensure compatibility with some of the Fire’s features.
Even though its core operating system is Android, Amazon has clearly put its own spin on the interface. The Fire’s home screen, Mashable writes, “looks like a bookshelf, with access to recently accessed content and Apps (books, movies and music) and another shelf to pin favorites or frequently used items.” A tab for the Newsstand is prominently displayed in the top left, alongside tabs for books, music, video, docs, apps and the Web.
“The dual demand of Apple and Android app development is already too much for some publishers. Amazon’s new tablet may make that worse,” Jeff Sonderman wrote in a post for Poynter. “While its operating system initially will be compatible with existing Android apps, that compatibility is not assured in the future. Amazon is ‘forking’ the OS down its own path; as Android and Amazon continue to develop, it’s conceivable that some features or apps could become incompatible.”
The entrance of yet another tablet device could convince some publishers that they’re better off adopting a browser-based mobile strategy, leveraging responsive design or other techniques that allow their Web content to adapt easily to multiple devices.
But for many others, the appeal of broad distribution via the world’s largest e-commerce platform may be too strong to ignore.
Hearst, for one, sees the Kindle Fire as just the beginning of an extended relationship with Amazon. “Our relationship will go beyond just providing magazines in e-form,” Loughlin said. “You’ll see us do some quite interesting things as it relates to commerce, for example.”
Here’s a demo of the Kindle Fire from TechCrunch: