Posted by: Douglas Macmillan on December 17, 2009
News Corp. chief Rupert Murdoch has made no secret of his disdain for the Amazon Kindle business model, punctuating recent earnings calls with remarks that the e-commerce giant pockets too much of the subscription fees for the Wall Street Journal and other content. On Thursday morning his company’s actions spoke louder than words, as it announced an exclusive deal with Sony, Amazon’s top rival in the e-reader business.
Sony’s Daily Edition device will be the first to receive automatic wireless updates of The Wall Street Journal, New York Post, and the MarketWatch Web site. Subscriptions will be offered for a monthly charge of $15 for The Journal, and between $10 and $20 for the other options. For an extra fee, subscribers can choose to receive an update when the markets close in the afternoon, in addition to the morning news.
News Corp. already makes The Journal available for $15 per month on the Kindle, but users of the device cannot receive updates more than once a day. In theory, automatic updates could be made available to the Kindle — but Murdoch’s belief that his company’s cut of $6 to $6.50 is barring any such arrangement. Some speculated News Corp. would walk away from the Kindle altogether, but the new “exclusive” agreement for automatic updates on Sony readers appears to be the best counter the company could muster.
“There [were] issues with Kindle and Sony has been been very understanding of those concerns,” said Robert Thompson, editor of the Wall Street Journal, during a meeting with journalists. “If it wasn’t a better deal I wouldn’t be here today.”
Thompson also referred to another one of News Corp.'s gripes with Amazon: its shielding of subscriber information with content partners. "Our concerns about customer information have been addressed," Thompson said in the briefing.
The deal certainly benefits Sony, which is trying to get an edge over Amazon during the crucial holiday shopping season. Shipment of the Daily Edition reader, a $399 device with touch screen and wireless capabilities, has already been delayed several weeks. The company says the device will be widely available before Christmas.
Update, 5:30 PM ET: Amazon's Kindle does provide daily wireless updates to subscribers of WSJ and other newspapers each morning, and users do not have to manually download that content each morning as this post previously indicated. The ability to update the device with news and analysis after market close is what is being offered exclusively, as is the New York Post. Thanks to Karen from Books on the Knob for pointing this out.