Media: Newspapers find unlikely hero in e-reader

By J. Sturgeon | Financial Post | Dec. 29, 2009

It is known as an e-reader now, yet 10 years out, it may have earned the title e-saviour for the journalism profession.

Eight years ago, Apple introduced the iPod, a portable media player that helped curb mounting losses for record labels by convincing music lovers to once again pay for songs through its iTunes digital store.

Now, the Kindle, a device made by U.S. online book retailer Amazon, is showing early signs of having the same effect on the troubled newspaper industry.

The device, which went on sale a few months ago, is also portable and its matte screen offers a more enjoyable reading experience than laptops. Little wonder that newspapers (the National Post included) have rushed to sign deals with Amazon to distribute their content.

The results have been optimistic. Many early adopters of the Kindle are choosing to pay to get their paper on the e-reader instead of for free via the Internet. If all goes well, newspapers may have found a life line to stem the loss of readers and revenues. The device could also allow publishers to scale back the use of expensive printing presses.

However, the Kindle, and e-readers in general at the moment, are not without challenges.

"The barriers to entry are still too high for consumers as well as publishers," says Carmi Levy, a London, Ont.-based independent technology analyst. Amazon has lowered the price, but the Kindle still retails for about US$250.

Moreover for cash-strapped newspapers, finding resources to customize their content for a technology that has not yet fully proven itself is a gamble, Mr. Levy says.

The first iteration of the device is also a bit clumsy. Unlike the ultra-simple iPod, the Kindle is a challenge to navigate.

"We haven't yet seen the iPod of e-readers," Mr. Levy says. But we will - and as early as next year.

Apple is rumoured to be on the brink of introducing its "tablet." Details are light, but the tablet is speculated to be a touchscreen device about the same dimensions as the Kindle and will connect to the Web wirelessly.

If Apple has the same level of success it has had with iTunes, the tablet could once again convince readers that news is worth paying for.

That would be music to the ears of publishers everywhere.

jasturgeon@nationalpost.com

Telecom: Virgin Mobile boldy moving up market to ward off new threats

By J. Sturgeon | Financial Post | 12.21.2009

Competition will be the watchword for Canada's wireless industry next year, as established players face off against a cast of new entrants poised to steal market share.

While the current operators are talking tough, questioning whether any of the new startups have the right strategy or wherewithal to challenge meaningfully, a shakeup of the entire sector looms.

Nowhere are the crosshairs of the new players trained more closely than on the lower end of the market -- existing cellphone users who merely want inexpensive voice and text-messaging services or Canadians who own no mobile phone because they find current prices prohibitive.

It means the discount or "flanker" brands of Canada's big three wireless firms -- Fido, owned by Rogers Communications Inc., Koodo, owned by Telus Corp., as well as Solo and Virgin Mobile Canada, owned by BCE Inc. -- will face the fiercest competition.

For one of them, the threat is affecting a reinvention, says its president.

"Early next year, we'll be in the first phases of a very different Virgin," said Robert Blumenthal, the head of Virgin Mobile Canada.

What that means is unclear -- Mr. Blumenthal is mum on details. But he did reveal that Virgin will begin selling Apple Inc.'s iPhone.

It is a move, he says, that signifies a transition at Virgin from a discount sibling to BCE's Bell Canada, which fully acquired it this spring, to a full-weight partner, offering a complete suite of services for consumers who are increasingly demanding faster and more sophisticated devices.

"You'll see a great expansion in our portfolio and us being able to offer higher-value devices and services," he said in an interview last week. "Where we had been traditionally lower down in the marketplace, we'll be expanding to realize our true potential."

In the new year, Public Mobile Inc., DAVE Wireless Inc. and Videotron ltee will all launch, joining WIND Mobile, which began offering services last week in Toronto and Calgary. DAVE and Videotron have been quiet on their plans, but Public Mobile has stated repeatedly it will offer cheap, flat-rate voice and text services for perhaps $40 a month across its coverage areas between Windsor, Ont., and southern Quebec -- the most populous region in the country.

Mr. Blumenthal says the threat is overstated, but admits that pricing pressure will be a theme for next year and that Virgin is "considering everything."

One thing is for certain: He wants Virgin to get simple.

As it stands, Virgin offers dozens of prepaid and contract plans, not to mention several "add-on" options. "The easier you can make the decision, the easier to sell, the easier to buy. It helps sales and it helps the consumer make choice," he said.

Virgin Mobile, a subsidiary of the U.K. conglomerate, originally entered Canada four years ago with its celebrity CEO Sir Richard Branson partnering with Bell. The Montreal firm supported Virgin with its network in exchange for shared revenues.

In May, Bell acquired Mr. Branson's half for $143-million while agreeing to continue paying licensing fees. It was then that Mr. Blumenthal, a former Telus executive, joined Virgin.

The division has become a key driver of wireless growth for Bell. Analysts suggest Virgin now occupies as much as 15% of the telecommunication giant's wireless base.

However, if it is to maintain momentum, Mr. Blumenthal says Virgin must leverage Bell's new network upgrade to capture higher-margin smartphone users, which make up the fastest-growing market segment.

"Over time, I have a belief that as more people become wireless users and their wireless usage becomes more of a necessity than a luxury ... people tend to move up."

-30-