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Industry leaders discuss the future of E-Readers in a series of interviews conducted during May and June 2009.

When Microsoft announced its investment to develop applications for PC tablet computers, founder Bill Gates predicted that consumers would someday get their newspapers on these devices.

Amazon KindleSean Reily of the Los Angeles Times read Gates’ prediction and picked up the phone to call the Seattle-based software giant. “Why not test this with real news?” Reily asked the project manager. Microsoft did use the L.A. Times for its test, but tablets never really gained traction, outside of niche markets like hospitals.

But nearly a decade later, Reily is still pursuing how journalists and technologists can figure out how to bring news to new devices, not dead trees. Indeed, Amazon’s recent commitment to a new generation of Kindle, a hand-held, flat device that allows users to buy books and newspapers, shows consumers have a growing appetite for so-called “e-reading.” While the Kindle is smaller, Reily says the next generation will have a 8 ½ x 11, page-sized screen.

“People will use it to read newspapers. Students will use it. It will be much easier than carrying a half-dozen textbooks.”

“When that exists, people will use it to read newspapers,” Reily says. “Students will use it. It will be much easier than carrying a half-dozen textbooks.”

Reily is pursuing that next generation of e-readers and NetBooks in his 2009-2010 Donald W. Reynolds Fellowship at the Reynolds Journalism Institute.

His first priority in research is to get a handle on the scope of existing consumer research on e-reading. What is already known is that users of Kindle readers don’t necessarily dump the print edition of newspapers, magazines or all books when they buy the electronic device. Many use it to supplement their Sunday newspaper.

On the technology, hardware side of the equation, electronics companies such as Sony Corp. iRex Technologies, Plasticlogic and First Paper, as well as Amazon, are working on devices. “Three or four more hardware manufacturers will enter the marketplace in the next six to nine months alone,” Reily predicts.

One annoyance: how long the charge will last.

One annoyance that frustrates users of all battery-operated devices like the early PC tablets is how long the charge will last. The newer e-reader products are less frustrating because they use a new E Ink technology flat screen instead of the energy-guzzling, back-lit screens. “It’s very easy on your eyes. On a computer, your eyes wear out,” Reily says.

Besides the obvious portability of carrying one device instead of a briefcase full of newspapers, magazines and books, the new e-reader devices are reloaded wirelessly. Consumers can click on Amazon or other sites and order books and, moments later, it’s sent to their device.

One hurdle for broad consumer distribution: the price

One hurdle for broad consumer distribution: the price is $300 and up for very limited devices, and up to $1,000 for more fully-functioning machines. As seen in everything from TVs to laptops, more competition will drive the prices down in a matter of months.

For newspaper publishers, this new platform is a natural outgrowth of the continuing march to digital publishing. It’s well known that readers will buy for quality content, whether on print or via computer. “But subscription revenue alone can’t support them,” Reily says.

Just like newspapers, radio and TV, publishers will look for ways to sell advertising around the content.

Just like newspapers, radio and TV, publishers will look for ways to sell advertising around the content. Reily says the upcoming devices will have color, which hasn’t been available. Publishers, advertisers and manufacturers have to come up with a standardized format for ads that will work across all of the product lines, just like ad agencies can do for broadsheet newspapers or TV spots.

To really make it profitable, however, there must be transactional revenue that engages readers to a deeper level. For instance, readers of news on the Internet can click on ads and be routed to a retailer’s website to order a product in the ad.

Just like Microsoft partnered with the Los Angeles Times, early pacts for new devices might start with the national publications. But metros and smaller papers can get in on the action, as long as they have a digital feed of their content.

One model may be selling a subscription along with a discounted or leased e-reading device to consumers, Reily says.

Just like the music industry sells songs via iTunes and other sites, readers will shop and tailor their e-reading to their interests. It will be a whole world of “electronic newsstands,” Reily says. “The readers will decide what to buy.”



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