Can Hearst Save Newspapers With an E-Reader?

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Two intriguing developments today in the ongoing saga of the vanishing American newspaper: Hearst Corp. will launch a wireless e-reader later this year, and the Long Island daily Newsday plans to end free Web content and charge readers for its online edition.

Hearst has a stable of magazines including Cosmopolitan, Esquire, Good

Housekeeping, Popular Mechanics, Seventeen, and SmartMoney, as well as 20 or so newspapers, some of which are on life support. Things are so bad that Hearst may shut down two money-losing dailies, the San Francisco Chronicle and Seattle Post-Intelligencer, if it can't sell them; the prospect of selling both newspapers is next to impossible in this economy.

Can the Hearst e-reader save the daily? Details are sketchy at this point, but the device will reportedly have a large screen that's better suited to print articles and ads than the Amazon Kindle, but similar to the Kindle in features: low power consumption and an electronic ink display. The Kindle screen's dimensions are roughly those of a paperback book; Hearst's e-reader would be larger than that. And since the Hearst reader and its underlying technology would be available to other publishers, the gadget seems like a last-ditch effort to save the entire newspaper publishing industry as we know it--albeit without the paper--rather than one designed to gain an edge on the competition.

Many questions remain. Would subscribers pay for the e-reader? And why would readers buy (or rent) the e-reader if the newpaper's Web site has the same content for free, accessible from existing mobile devices? It's not a stretch to assume that the e-reader could mean the end of free content at newspaper sites--or at least an attempt by publishers to move in that direction.

You can't blame newspaper owners for trying. They're scrambling to find new ways to monetize their product before the industry implodes. Newsday's decision to charge for its Web content is an ominous sign for readers who've grown accustomed to free news online.

The Hearst e-reader is intriguing, and it may work if readers see added value there. But I have serious doubts about Newsday's plan. With a few exceptions, most notably the Wall Street Journal, the online subscription model has failed miserably, as readers have found they could get free news elsewhere.

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