For newspapers, the advantages of e-readers are obvious. They save on printing and delivery costs and can reach readers outside the newspapers' normal delivery areas.
"It does change your business model," said Janet Hasson, senior vice president of audience development at the Detroit Media Partnership, which provides business management for the two papers. "The No. 1 cost for newspapers is newsprint and distribution expenses."
The service also requires readers to purchase a subscription. Amazon currently charges $5.99 to $13.99 for monthly Kindle subscriptions to newspapers such as the Los Angeles Times and the New York Times.
Eventually, newspapers hope also to run ads on e-book readers, potentially charging print advertising rates. One of publishers' biggest complaints about online advertising is that it hasn't commanded very high prices because there is a limitless number of Web pages where advertisers can buy space.
"We think that advertising is very important to the publishing business in general. It's a great additional way for newspapers and magazines to replace customers," said Daren Benzi, vice president of business development at Plastic Logic, which is releasing an e-reader geared toward business professionals in early 2010.
Still, adoption of the devices is key. The high price tag might slow down the transition. Forrester Research estimates that Amazon and Sony Corp., maker of the Sony Reader, sold about 1 million readers by the end of 2008 and that the market for the devices is around 5 million consumers.
That's not enough subscribers to help newspapers, said Epps, the Forrester analyst. The devices might assist in another way, though, by getting readers accustomed to the practice of paying for subscriptions again. Consumers have already shown a willingness to pay up to $10 a month for a newspaper subscription on Kindle, she said.
E-readers will also have to compete with the iPhone and other smartphones that allow consumers to read books without buying an expensive new device. In March, Amazon released a free application that lets iPhone users read e-books purchased at Kindle's store.
Amazon doesn't seem worried that the Kindle won't take off. At a news conference Wednesday, Amazon Chief Executive Jeff Bezos said Kindle sales made up 35% of Amazon sales for books for which Kindle editions were available.
