5 major publishers to take on Amazon

Five major publishers -- Conde Nast Publications, Hearst Corp., Meredith Corp., News Corp. and Time Inc. -- announced Tuesday that they would join forces to develop an online storefront to rival Amazon.com Inc.

The companies -- which publish such titles as Sports Illustrated, the Wall Street Journal, Better Homes and Gardens, Wired and Vanity Fair -- said their venture would sell newspapers and magazines online but could also be used to sell digital comics and books.

As more readers cancel their print subscriptions in favor of browsing stories online, which has led to precipitous drops in advertising revenue, traditional media companies have been frantically experimenting with ways to deliver and make money from digital content.

New York Times Co. and Washington Post Co., for example, on Tuesday unveiled a project they had jointly developed with Google Inc., dubbed “Living Stories.” The idea is to pool the many stories a newspaper writes on a single topic, such as healthcare reform, on a single Web page that will automatically update with new and related stories.

“Everybody is trying to figure out how content evolves for these new digital presentations,” said Greg Sterling, an Internet media analyst in San Francisco. “There are a lot of experiments going on. What’s going to stick is not yet clear.”

The five publishers envision a Web store that would sell full-color, interactive digital versions of their newspapers and magazines that would be readable on next-generation touch-screen reading devices, said John Squires, the group’s interim managing director. He estimated that the store would open for business late next year, but that applications for smart phones, such as Apple Inc.’s iPhone, could be available sooner.

For readers, the venture promises the ability to buy content once and then be able to read it on multiple devices. Currently, newspapers purchased on the Amazon Kindle reading device cannot be read on Sony Corp.’s Reader, for example. “Once purchased, this content will be ‘unlocked’ for consumers to enjoy anywhere, any time, on any platform,” Squires said.

New devices, including an upcoming 12-inch touch-screen tablet from Fusion Garage, present a new way for beleaguered publishers to make money.

“Publishers missed the opportunity to make money from the Web, and they see these devices as a second chance to do things right,” said Ken Doctor, news industry analyst with Outsell Inc., a consulting firm in Burlingame, Calif. “They’re sensing a new business model around these devices.”

Seeing how the music industry has chafed against Apple’s iTunes music store, publishers are also eager to avoid giving too much market power to Amazon, Sterling said.

Whereas Amazon pays book publishers 50% of the cover price, newspaper and magazine publishers get 30% of the sales of their content on Kindle.

“Amazon takes 70%, which publishers view as greedy,” Sterling said. “They’re trying to take control of their content in terms that would be more favorable to them. That’s smart.”

alex.pham@latimes.com