Time Inc.: Time for a New E-Reader

Magazine giant considering own gadget, e-reader startup

By Owen Thomas
|  Thursday, Sep 10, 2009  |  Updated 4:39 PM CDT
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Time Inc.: Time for a New E-Reader

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Is this the future of the magazine business? Time Inc. worries it might be.

"And with your subscription to Sports Illustrated, you'll get ..." a gadget with which to read the magazine?

An internal document from Time Inc. obtained by NBC Bay Area shows the magazine giant, publisher of Time, Sports Illustrated, People and other titles, wants to start competing with Amazon's Kindle and other electronic readers before the end of the year.

It's a big shift in strategy by Time, which earlier this year said it would not introduce its own e-reader. But things have changed, and Time's plans for the e-reader market are on a fast track. According to the in-house presentation, Time Inc. is seeking to unveil its plans within the next three months.

E-readers are handheld devices meant to display printed content in a friendlier manner than traditional websites. Amazon.com's Kindle, the best-known device, allows readers to purchase electronic copies of books and subscribe to newspapers. In May, it introduced a larger-format version, the Kindle DX, better suited for displaying electronic versions of newspapers and magazines. More recently, Sony, which has introduced electronic readers in the past to a poor reception by consumers, is trying again with new e-book devices.

Publishers are interested in the market as well. News Corp. is exploring an electronic reader for its large newspaper business. Hearst, a large magazine publisher, also unveiled its own plans for an e-reader in March. At that time, Time Inc. executives said they had no plans to enter the field.

The Time Inc. presentation, titled "New Platforms & Business Models for Publishers," is dated June 25, 2009, which shows how rapidly Time's internal strategy shifted. The version obtained by NBC shows handwritten notes updating the presentation, which circulated as recently as August, which indicate Time plans to launch something within the next three months.

"We’re speaking with a number of hardware and software companies as well as other content companies about various projects," said Time Inc. spokeswoman Dawn Bridges when asked about the project. "At this point we don’t have anything else to say publicly."

"Portable digital reading devices are emerging as a big publishing opportunity," a slide on the presentation reads. It mentions as opportunities Sony and Amazon's black-and-white readers, as well as full-color smartphones like the iPhone and forthcoming tablet computers -- large-screen, keyboardless touch-sensitive computing devices -- from HP and Apple.

"Whoever defines the interface wins," another slide concludes. A slide labeled "Key components to the winning model" includes a "commerce engine" -- an online store like Amazon.com; "product design" including "tools for research, design innovation and manufacturing," which suggests plans for a physical gadget; and a "consumer-facing brand" -- a name for the device and service akin to Amazon's Kindle.

The presentation concludes that Time Inc. and other partners should form a new, jointly owned company. Time Inc. might spin out its Maghound service, a service which lets consumers bundle multiple magazines together into a single monthly subscription, to form the base of the joint venture. The company is also considering acquiring other businesses to jumpstart the venture.

Handwritten notes indicate Time Inc. executives have discussed the new venture with other magazine publishers, including Conde Nast, Meredith, and Hearst.

The result, according to the presentation, will be that publishers like Time Inc. will hold "our destiny with readers, advertisers and distributors ... in our hands."

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