Monday, June 12, 2006


Sony, Philips make headway with Hearst, Pearson on flexible E-paper editions

ORIGINAL URL:,71131-0.html?tw=wn_technology_2

E-newspapers just around the corner. Really

By Kenneth Li
Monday, June 12, 2006; 11:13 AM

NEW YORK (Reuters) - The newspapers of the future - cheap digital screens
that can be rolled up and stuffed into a back pocket - have been just
around the corner for the last three decades.

But as early as this year, the future may finally arrive. Some of the
world's top newspapers publishers are planning to introduce a form of
electronic newspaper that will allow users to download entire editions
from the Web on to reflective digital screens said to be easier on the
eyes than light-emitting laptop or cellphone displays.

Flexible versions of these readers nay be available as early as 2007.

The handheld readers couldn't come a moment too soon for the newspaper
industry, which has struggled to maintain its readership and advertising
from online rivals.

Publishers Hearst Corp. in the U.S., Pearson Plc.'s (PSON.L) Les Echos in
Paris and Belgian financial paper De Tijd are planning a large-scale
trials of the readers this year.

Earlier attempts by book publishers to sell digital readers failed due to
high prices and a lack of downloadable books.

But a new generation of readers from Sony Corp. (6758.T) and iRex, a
Philips Electronics (PHG.AS) spin-off, have impressed publishers with
their sharp resolution and energy efficiency, galvanizing support for the
idea again.

"This could be a real substitution for printed paper," Jochen Dieckow,
head of the news media and research division of Ifra, a global newspaper
association based in Germany, said.

It's easy to see why publishers are keen. Digital newspapers, so called
e-newspapers, take advantage of two prevailing media trends -- the growth
of online advertising and widespread use of portable devices like the iPod
music player.

Nearly all papers run Web sites, but few readers relish pulling out
laptops in transit or risk dropping one in the bathroom.

E-newspapers would cut production and delivery costs that account for some
75 percent of newspaper expenses.

Circulation in the $55 billion U.S. newspaper industry has slid steadily
for nearly two decades as papers compete with Internet news for attention
and advertising dollars.

Some publishers now see new devices as a way to help them snatch a bigger
slice of online advertising and protect their franchise in reading away
from home.

Ad spending on newspaper Web sites grew 32 percent in 2005 but only
accounted for 4 percent of total ad spending in newspapers, according to
the Newspaper Association of America.

Still, little is known about demand for an e-paper. "The number of
consumers who are interested in reading on the go as opposed to listening
to music on the go is probably smaller in the U.S. today," NPD Group
analyst Ross Rubin said.


Sony and iRex's new devices employ screen technology by E Ink, which
originated from the Massachusetts Institute of Technology's Media Lab.
Investors include Hearst, Philips, McClatchy Co. (MNI.N), Motorola Inc.
(MOT.N) and Intel Corp.


The company produces energy-efficient ink sheets that contain tiny
capsules showing either black or white depending on the electric current
running through it.

Some of the latest devices apply E Ink's sheets to glass transistor
boards, or back planes, which are rigid. But by 2007, companies such as
U.K.-based Plastic Logic Ltd will manufacture screens on flexible plastic
sheets, analysts say.

Separately, Xerox Corp. (XRX.N) and Hewlett-Packard Co. (HPQ.N) are
developing methods to produce flexible back planes cheaply. Xerox, in
particular, has created a working prototype of system that lets
manufacturers create flexible transistor boards much like one would print
a regular paper document.

Production costs are expected to be low enough soon for publishers to
consider giving away such devices for free with an annual subscription.
Data on subscribers could also help publishers better tailor ads.

Sony's reader will cost between $300 and $400. "If you can get one of
these products to cost less than the cost of a year's subscription it
could probably work," Kenneth Bronfin, president of Hearst Interactive
Media, said.

He declined to name which other groups plan testing, but said Hearst's San
Francisco Chronicle and Houston Chronicle will likely be among the first
of its 12 daily papers to offer such devices to several hundred
subscribers later this year.

In Europe, Ifra is discussing trials with 21 newspapers from 13 countries.
The New York Times Co. (NYT.N) is a member.

Sony is separately in discussions with some publishers to offer newspaper
downloads in its e-bookstore due to launch this summer, although no
decision has been made, said Lee Shirani, vice president of Sony's online
content service, Sony Connect.


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