It’s good to see Jeff Bercovici land on his feet after Portfolio’s demise. At Daily Finance, he quotes News Corp. chief digital officer Jonathan Miller on canceling his WSJ Online subscription:
I went from paying $14 to The Wall Street Journal to paying $10 to Amazon. Now the splits there, and I think this is relatively well known, are very, very much in favor of Amazon. So I became very much less valuable to The Wall Street Journal. That’s part one. Part two is they don’t know I exist. I went from being someone who’s their subscriber to being someone who is an Amazon subscriber, which The Wall Street Journal has no visibility back to and cannot manage that customer relationship… . So they’ve lost both the customer management and, trust me, the lion’s share of the economics.
Those “splits” he speaks of mean that publishers get less than a third of the subscription revenue from Amazon, as we pointed out here. The Kindle numbers don’t work, and they put another barrier between publishers and their audience.
Let’s hope the Plastic Logic model turns out better. And it’s interesting to note that E Ink, which is the foundation technology for these readers, got purchased the other day for $215 million.
Somebody sees a bright future in this business.
"Put another barrier between publishers and their audience"? What nonsense. Has the writer checked the state of newspaper customer service lately? It stinks. Getting automatic digital delivery of a newspaper every morning sure beats picking up a wet one off the driveway, having it show up two hours late, digging it out of the bushes, having a neighborhood dog run off with it, or not getting it at all. I doubt that the folks at the WSJ give a fig about Mr. Miller, regardless of where or how he gets his newspaper, except for money end of the deal.
I'm not so sure about the economics set out by Miller. The $3 the WSJ gets from the $10 Amazon subscription has to be weighed against the net of the $14 print subscription after printing and distributions costs are subtracted. I'll bet there isn't much difference.
There are lots of good reasons to favor print over digital or vice-versa. But fostering a warm fuzzy relationship with the publisher has to be way down the list.
#1 Posted by Tom Bohs, CJR on Thu 4 Jun 2009 at 01:17 PM
Tom,
You're forgetting ads. Please see my earlier piece http://www.cjr.org/the_audit/kindle_is_just_another_way_for.php
And you're completely misreading me on the barrier between publisher and audience. I'm talking about publishers being able to know who their customers are and information about them, something that Kindle precludes.
#2 Posted by Ryan Chittum, CJR on Thu 4 Jun 2009 at 02:03 PM