Don’t ‘Itune’ Us

Attention, would-be professional bloggers: Amazon now lets anyone create a blog and sell subscriptions to owners of its Kindle e-reader device. But Amazon sets the prices, and Amazon keeps 70 percent of the money.

Digital media were supposed to be the greatest thing ever for writers and other creative types—or "content creators," as we're now known. Everyone would sell direct over the Internet. Instead, tech companies keep herding consumers into digital corrals, then anointing themselves gatekeepers and scooping up the spoils.

A good example is Apple's iTunes music store, the biggest U.S. music retailer. In effect, Apple runs a tollbooth, taking 30 cents from every dollar of sales. Now Amazon is doing the same with books, newspapers and magazines (including NEWSWEEK). Last year Amazon sold more than half a million Kindles.

But the media guys know what Apple did to the music companies, and they're determined not to get "iTuned" by Amazon. That's why media veteran Steven Brill (Brill's Content, Court TV) is starting a venture called Journalism Online. The idea is to create a system in which a customer can use a single account to subscribe to different publications on any platform. Brill has hired antitrust lawyer David Boies to help publishers negotiate better terms with Amazon. "The idea that Amazon is getting 70 percent of subscription fees is crazy," Brill says. "This is like Sony saying they want 70 percent of what people pay for HBO because people watch it on a Sony television." An Amazon spokeswoman points out that Amazon provides free wireless service to Kindle customers and doesn't require them to sign a service contract.

So the game is the same today as it was in the old days. The only question is where the money will end up. In the analog world the lion's share of the money ended up in the hands of big, bad media barons. This time around, the geeks in Silicon Valley are pocketing all the dough. They present themselves as a bunch of pious, sweet-natured nerds who are all about making the world a better place. But when it comes to exploitation, the new guys make those old media barons look like a bunch of amateurs.

© 2009