Who dares wins.

The motto of Great Britain's elite Special Air Service fighting force might be what inspired Macmillan publisher John Sargent.

Sargent, fed up with seeing his books commoditized on Amazon.com's Kindle, yanked them from the e-reader platform.

Considering that the estimated 3 million Kindle users are prime consumers of books (and presumably newspapers), it's a gutsy move.

Even Macmillan's authors, who've suffered monetarily from Kindle's low-ball pricing, celebrated Sargent's actions, according to U.K. newspaper The Guardian.

What was his point? Sargent wanted top dollar for his books. And in a move that surprised the book industry, Amazon blinked and agreed to Macmillan's terms.


Nobody is talking, but it's possible that the e-retailer caved in because it wanted to teach the book industry a lesson: that higher prices hinder e-book sales. Or, perhaps, Amazon, hearing Apple's footsteps, conceded ground because it, too, wants more money and Macmillan simply provided the cover it needed to achieve that goal.

The Macmillan/Amazon clash comes as the e-reader industry is fast becoming saturated. Dozens of models are either on the market or will soon be available, not the least of which is Apple's iPad. And newspapers - yes, newspapers - are in the driver's seat in this new, digital marketplace.

According to market research firm Forrester Research, some 10 million e-readers will be sold in the United States this year. Add previous sales, and you're looking at approximately 13 million of the gadgets in U.S. households by year's end.

The players

Of all the e-readers, Amazon's at the top of the heap when it comes to offering its customers newspapers - nearly 100 titles. But the great mystery about Amazon - and it's not telling - is how many of the devices it's sold.

Although it's publicly traded and held to heightened Sarbanes-Oxley financial disclosure laws, Amazon is under no legal obligation to release Kindle sales.

"A company decides what it's going to disclose," said New York-based securities attorney Robert E. Buckholz Jr.

As long as the firm is audited, and Amazon's senior executives certify its financial records, it's under no requirement to disclose how all revenue is made, Buckholz says.

TechCrunch.com, a Web site tracking technology, reported in January that, since it began marketing Kindles, Amazon has sold 3 million of them. Amazon, of course, would neither confirm nor deny the number.

The Neiman Journalism Lab blog reported that a vast majority of Kindle users - nearly 70 percent - are older than 40, making them some of the best consumers for books and newspapers.

The opposite side of the coin is Apple. While the Cupertino, Calif., firm is famous for its North Korea-like aversion to anyone peering into its research activities or its inner workings, it does release sales figures for its products. And in 2009, Apple sold more than 54 million iPods and nearly 21 million iPhones.

With the Apple iPad, book publishers see an e-reader that will eat into Amazon's turf and - most importantly - restore their pricing power.

The ABCs of e-tailing

Any newspaper executive counting on an e-reader partner to sell subscriptions requires one willing to cooperate with the Audit Bureau of Circulations.


Because "ABC needs some sort of ‘paper' trail to confirm the order, payment and distribution of the newspaper. We would then need to collect records from Amazon or any other e-reader manufacturer to verify the financial transaction by the consumer," said ABC spokesperson Kammi Altig.

If that information is not provided, those subscriptions will not be counted.

Amazon already provides this information and, between the Kindle and the Times Reader, an e-reader application, The New York Times has 53,353 "non-replica subscriptions," Altig says.

A replica is considered an exact copy of the printed edition while a non-replica doesn't contain all of the content, especially the advertising, in the printed edition, Altig said.

The Kindle does not accommodate advertising, so a newspaper sold on a Kindle device would qualify as a non-replica edition," she said.

Which makes Kindle circulation worthless to any advertiser.

Amazon, along with e-reader sellers Plastic Logic and Sony, are associate members of the Audit Bureau, Altig said, which is bringing them up to speed on ABC rules.

Adding confusion to any newspaper circulation audit is the possibility of multiple e-readers in one account. Those users will be able to share content without paying additional fees - much like pass-along readership of a printed daily.

With whom to play ball

If there's an e-reader that newspaper publishers might want to avoid - at least when it comes to ensuring their subscriptions count - it's Barnes & Noble's Nook.

When asked if Barnes & Noble would work with the ABC to provide the information newspapers need to count Nook subscribers, a spokesperson responded by e-mail saying, "That's a question you should ask the ABC."

Not clear on the concept, obviously.

What is clear is that newspaper publishers need to take Macmillan's lesson to heart. Content is king. They must negotiate hard for the best possible deal they can get from e-reader vendors.

Let's remember: An e-reader without content is hollow equipment indeed. A newspaper without an e-reader partner continues to be a treasure trove of content.

Dare to win!

Doug Page blogs and hosts "The Press Room" talk show on newsandtech.com. He can be reached at dpage435@hotmail.com.

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