Peter Kafka

Recent Posts by Peter Kafka

News Corp. Buys Hearst’s Skiff Platform, Leaves the Reader

In January, Hearst and Sprint showed off something called a Skiff e-reader, which was designed with newspapers and magazines in mind and was supposed to go on sale this year.

Hope you weren’t planning on buying one.

News Corp. announced today that it has purchased Skiff from Hearst–but only the publisher’s e-reader software platform. The device itself remains the property of Hearst, which doesn’t want it, either; I’m told the publisher is trying to find a buyer.

It’s theoretically possible that Sprint (S) will continue forward with a reading device that didn’t seem very appealing in January and that no one seems to want now. But I wouldn’t bet on it. Official word from Sprint PR: “We have no comment at this time.”

So what to make of News Corp.’s purchase?

First: Not a surprise. News Corp. (which owns this Web site) and Hearst have been talking about a deal since last year. As I wrote in January, when I took a look at the Skiff reader and talked to Skiff President Gil Fuchsberg:

…the driving idea behind the company is to create a platform for producing, distributing and selling magazines and newspapers on a variety of devices.

In theory, at least, the publications Hearst distributes and sells should work on any gadget, whether it’s a smartphone like Apple’s (AAPL) iPhone, one of the many tablets coming on the market, or even a rival e-reader like Amazon’s (AMZN) Kindle. And Hearst doesn’t want to sell just its magazines and newspapers, but those of any publisher.

Does this sound familiar? It should because this is also the supposed goal of the “Hulu for magazines” consortium that Time Warner’s (TWX) Time Inc. created last year. And Hearst is a member of that joint venture.

So either Hearst’s company is going to compete with the platform the JV is supposed to create or Skiff will become part of the JV. Ask the various publishers in the group what they think will become of Skiff and you’ll get confusing responses, all of which sound like a muttered version of “I don’t know.”

That said, it seems likely that someone–perhaps the consortium, or perhaps a consortium member like News Corp. (NWS), which also owns this Web site–will end up buying at least a piece of Skiff.

At a minimum, Hearst officials are fairly candid about being interested in finding someone else to invest in the company; I’ve been told the publisher has plowed some $35 million into it to date.

Meanwhile, since the “Hulu for Magazines” joint venture (now officially named “Next Issue Media”) didn’t end up using the Skiff platform, what does News Corp. intend to do with it?

Easy enough to assume that News Corp. will incorporate it into its planned digital news subscription service. But that service is still nascent at best: As of last month, it had zero partners signed up.

It’s also worth noting that News Corp. now has several different ways to play digital media e-commerce: In addition to Skiff, it has a stake in whatever Next Issue Media builds, as well as the digital commerce platform that News Corp.’s Wall Street Journal has built (it’s possible these latter two will be combined).

And News Corp. has purchased yet another option, by buying a stake in Journalism Online, the Gordon Crovitz/Steve Brill online subscription platform.

That’s a whole lot of choices for a market that doesn’t really exist yet, and I assume those will consolidate over time. Keep watching…

In the meantime, check out this January interview with Skiff’s Fuchsberg, who will be joining News Corp. as part of the acquisition.


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