Publishers of magazines were elated thinking of selling their wares on iPad in 2010, but as we turn the page of the calendar and face this year, they are singing slightly off key. Their optimism has boiled dry. While they are still eager, there is a strong vein of skepticism that carries over to Amazon’s tablet(rumored to be called Kindle Fire). Mostly it is due to how Apple managed the negotiations with the publishers. Apple played the dictator to start and nearly lost everyone. It is no surprise now that publishers are a bit reticent in the next big deal.
There are currently only three of the largest magazine publishers on board with Amazon as it faces releasing its own iPad knockoff. The digital sales deals are between Amazon and Hearst, Conde Nast, and Meredith. They will be allowed the rights to sell their publications on the Amazon tablet.
Time Inc. is the odd man out. Time Warner has failed to reach its agreement with Jeff Bezos, Amazon’s CEO. It is highly possible that there will not be a deal struck until the end of the year.
The deal Amazon is offering imitates Apple’s with its publishers. In this arrangement the publisher takes home 70 percent of the sales and the publisher will have access to customer data. Time has not even struck a deal with Apple yet. They only peddle a few titles here and there through the Apple App Store. It is still a mystery why Time has held out so long with Apple and now is refraining from striking a deal with Amazon.
Many of the titles from the publishers who have entered into arrangements with Amazon have been customized to the seven inches of the new Amazon tablet that will premier this Wednesday. Next year Amazon promises to release a larger version of their tablet which is more similar in size to the iPad. Amazon’s tablets are powered by the Android operating system by Google.
Publishers are making the decision to sign an agreement with Amazon without thinking. They simply know that more is better, not less. If they have more outlets for their wares there is a better chance of making more sales. For over a year, in the face of the Apple struggle over the publishers’ contracts, publishers have been screaming for an iPad competitor.
We certainly cannot foretell that Amazon’s tablet will ever reach the status of iPad competitor. However, Amazon has the leverage to capture publishers by their status as the world’s largest Online distributor.
“At Apple there is the beauty of the design, the elegance of Apple,” explains a publisher who did sign with Amazon. “However, here you’ve got great marketing and a simple to use system. We are quite hopeful.”
The real blackmail item Amazon has over their heads is that Amazon is currently a big deal for distributing their print titles. At the beginning of September Hearst and Amazon codified this in a press release. It declared that Amazon would expand its role to the largest third-party seller of the print versions for Hearst’s magazines through electronic channels.