In the initial hyperventilated media coverage of the new Kindle DX, a common theme was that the large-screen e-reader would rescue newspapers from decline. But for a variety of reasons, it’s doubtful the latest version of Amazon CEO Jeff Bezos’ electronic reader will do much to shore up the fortunes of the Fourth Estate. Ironically, it’s a combination of too little, too late, and too much, too soon.
Where Were You Five Years Ago?
It takes time for most new content-delivery platforms to gain a critical mass (the Apple iPhone is a notable exception), and despite Amazon’s best efforts, the Kindle has yet to hit its stride in the marketplace. A significant impediment is cost — the smaller, six-inch Kindle retails for $359, while the 9.7-inch Kindle DX rings in at $489. That’s three years of newspapers at the local newsstand.
That’s not to say that the new Kindle won’t appeal to consumers. The Wall Street Journal cites a number of analysts who believe the Kindle will quickly become a significant part of Amazon’s cash flow. According to one estimate, the Kindle and Kindle DX could generate $3.7 billion in revenues in 2012, with gross profits as high as $840 million.
Already, the Journal said, sales of Kindle electronic editions accounted for more than 10 percent of books sold in the U.S. in the first quarter, roughly four million units out of 38 million sold. And as Bezos said during the introduction of the Kindle DX, when a Kindle edition of a book is available, it typically accounts for 35 percent of the book’s sales.
Tough Deals
Consumers aren’t the only ones questioning the economics of the Kindle DX. If early reports are correct, the device is no bargain for newspapers, either. During testimony before the U.S. Senate, Dallas Morning News President James Moroney outlined the…