Hearst planning to launch e-reader

New York, March 1: Keeping pace with the digital era, Hearst Corp. is planning to come up with a wireless electronic reader for viewing the newspapers and magazines published by the company.

As per reports pouring in from the Fortune magazine, Hearst is also preparing to launch an e-reader with a big format screen this year. This device would be large enough and equivalent to the layout and advertising prerequisites of newspapers and magazines.

The latest steps are being taken keeping in mind the downfall in the revenues of Hearst, as advertisers are shifting their publicity expenditure priorities towards the Web.

Hearst executives did not reveal details of the business model behind the e-reader but experts do believe that this is going to be a risky proposition.

Even if the experiment fails, Hearst can use the experience to increase their plummeting subscriber base. Also, it can help them determine the reasons behind revenue losses suffered by the publications. So they can work on preventing future losses.

Expressing his views on the e-reader, Michael McGuire, an analyst within Gartner’s media consulting business, said, “This is absolutely the kind of thing they have to be doing – experimenting. There are no set answers anymore.”

He added that Hearst will not be able to turn things in the positive direction immediately. This is really difficult as other publishers are also going to try out different experiments.

In 2007, Amazon (NSDQ: AMZ).com had come up with an e-reader named Kindle. It was a very successful attempt. Kindle helped prospective buyers to visit the online retailer’s site and download or read books, newspapers and magazines.

However, the drawback here is the high price. The $359 price tag will prevent the product from invading the mainstream market. Kindle will be a lucrative buy only for travelling professionals who do not want to carry the load of too many books and periodicals.

McGuire said that Hearst can work on this negative and offer the e-reader at no extra cost to boost up sales. Plus, they can give a multiyear subscription of the magazines and newspapers published by them.

It will be tough to persuade people to completely shift their mindset, which is not used to reading an online newspaper. As of now, everybody is closely watching this endeavor by Hearst.