TORONTO (Reuters) - Time Inc is gathering U.S. magazine publishers to start a jointly run digital newsstand next year that would deliver their titles to mobile devices like increasingly popular electronic book readers.
Time Warner is leading the effort, and has approached other big U.S. magazine publishers including Conde Nast and Hearst Corp, a source with knowledge of the joint venture but no authorization to speak about it told Reuters.
Users of the service would get a digital newsstand where they could buy subscriptions, potentially by the month or year or in other forms, the source said.
The venture would let magazines that have been hurt by a sharp decline in advertising in revenue in recent years get their titles in front of people who increasingly are turning to devices like Amazon.com’s Kindle and Apple’s planned tablet device to read books, magazines and newspapers.
It also would charge readers for their content, something that newspaper and magazine publishers have found nearly impossible to do after more than a decade of being on the Web.
The stakes are high for publishers to find more ways to make money online. Print ad revenue is falling across their titles, forcing some to close and putting the long-term futures of others in doubt. Many reports have speculated that Time Warner could even sell its magazine division, though nothing is imminent, sources have previously told Reuters.
A formal announcement of the venture could come within a month, and the service is expected to launch sometime next year, the source said, adding that many financial details still must be worked out.
The idea originated under John Squires, a Time Inc executive who earlier this year was charged with coming up with ways to help Time Inc and its titles such as Time magazine, Sports Illustrated, People and Fortune make money online as the print business declines.
Parent company Time Warner has been trying to do this in other ways, including the ambitious effort with Comcast Corp to work on “TV Everywhere,” a program to extend cable programming to the Internet.
The idea bears some resemblance to the Hulu online TV project run by General Electric’s NBC-Universal, News Corp and Walt Disney’s ABC, as well as private equity company Providence Equity Partners.
Officials at the publishers were not immediately available for comment. The Media Memo and PaidContent.org blogs and the Financial Times newspaper reported the news earlier on Friday.
People already can use the Kindle to read periodicals, but many newspaper publishers do not like the arrangement because Amazon in many cases claims 70 percent of the revenue from those subscriptions.
The joint venture would let publishers set their own terms for dealing with their readers, increasing their leverage with device makers.
Time has held conversations with publishers, and the publishers in turn have had conversations with several device makers to see what kinds of technology would be most attractive for the publishers, the source said.
One important element, the source said, is finding ways to make the act of turning pages on an electronic device as easy as it is with paper. Another is finding ways to present photographs in ways that are as attractive as they appear in many glossy magazines. Yet another would be adding video.
It is unknown whether newspaper publishers would be involved.
Editing by Gary Hill