Kindle Fire, not iPad, leading shift in news media consumption


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Newsweek made news of its own this week with the announcement that it will halt publication of its print edition with the Dec. 31 issue and transition to an all-digital, tablet-optimized version early next year. "Our business has been increasingly affected by the challenging print advertising environment, while Newsweek's online and e-reader content has built a rapidly growing audience through the Apple (NASDAQ:AAPL), Kindle, Zinio and Nook stores," said editor-in-chief Tina Brown. "Tablet use has grown rapidly among our readers and with it the opportunity to sustain editorial excellence through swift, easy digital distribution."

Newsweek began publishing in 1933--its subscriber base has been in sharp decline for years, plummeting from a peak of 3 million to its current 1.5 million. It's not the only publication struggling for survival in a digital world: Just 23 percent of Americans read a print newspaper yesterday, down from 41 percent a decade ago, and 17 percent read a print magazine, off from 23 percent in 2002, according to a recent Pew Research Center for the People and the Press survey. That doesn't mean Americans aren't keeping tabs on the news, however: Fifty-five percent of regular New York Times readers primarily consume the publication on a computer or mobile device--48 percent of regular USA Today readers and 44 percent of Wall Street Journal readers favor digital options as well. Readers still prefer the print editions of magazines like The New Yorker, The Atlantic and Harpers, but even so, 23 percent read them mostly on a device screen.

It's far too soon to determine whether Newsweek's shift to digital will turn its fortunes around, but it's clear that tablets are the future of printed media--not to mention the future of companies that sell those books, magazines and newspapers. Two in five U.S. tablet owners read papers and/or magazines on their device in August, with one in 10 reading those publications almost daily, according to a comScore study published this week. In fact, tablet traffic now generates 7 percent of total online newspaper page views. But while Apple's iPad dominates 68 percent of the worldwide tablet market, Amazon's (NASDAQ:AMZN) rival Kindle Fire actually boasts more avid digital readers: 39.2 percent of Kindle Fire owners read newspapers on the device at least once per month, ahead of iPad owners at 38.3 percent. Another 43.9 percent of Fire owners peruse magazines each month, ahead of the iPad at 40.3 percent.

Although Amazon would no doubt love to enjoy tablet sales on par with Apple's, beating the iPad on news consumption is a sure sign its efforts to transition its business from physical media sales to digital media sales are paying off. And for Amazon, that's what this tablet business is about: Selling content, not hardware. "We want to make money when people use our devices, not when they buy our devices," Amazon founder and CEO Jeff Bezos said last month. "If somebody buys one of our devices and puts it in a desk drawer and never uses it, we don't deserve to make any money."

Last week, Bezos even confirmed rumors that Amazon sells Kindle devices at cost to get them into as many hands as possible. Newsweek's pending disappearance from newsstands is yet another blow for traditional media, but Amazon won't miss a beat--print or pixels, it's all the same as long as people keep reading.--Jason