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Amazon launches unlimited e-book subscription plan
by Staff Writers
New York (AFP) July 18, 2014


Forbes publisher sold to Asian investors
New York (AFP) July 18, 2014 - The publisher of the US business magazine Forbes said Friday a controlling stake in the group had been sold to a Hong Kong-based investment consortium.

Forbes Media will remain privately held and US-based, but a majority stake is being sold to the newly formed Integrated Whale Media Investments, based in Hong Kong.

The Forbes family will retain "a significant ownership stake" in the company under the plan and will continue to participate in its operations.

Steve Forbes, grandson of the company's founder, will maintain his role as chairman and editor-in-chief under the plan, which brings new capital into the publishing group.

"This is a major milestone for the company and our family, and we're pleased to partner with a forward-looking investor group to further drive the evolution and growth of this exceptional company," Steve Forbes said in a statement.

"Our partners respect our brand and values, and support our longstanding mission of championing entrepreneurship and free market capitalism through quality, independent business journalism. The best evidence of their commitment to what we stand for is their insistence on the continued involvement of the Forbes family, the current management and our highly talented editorial team."

The group is led by Integrated Asset Management (Asia) Limited founded by Tak Cheung Yam.

Another investor, Wayne Hsieh, is the co-founder of ASUSTeK Computer Inc., which makes the Asus brand of personal computers and electronics. He is based in Singapore.

The amount of the investment was not disclosed by Forbes, but the New York Times said it will be some $475 million.

Under the deal, Elevation Partners, which includes U2 singer Bono and which has had a minority stake in Forbes since 2006, will divest from the group.

The magazine, known for its rankings of wealthy Americans and global business leaders, was launched in 1917 by Scottish immigrant BC Forbes. It was run by his son Malcolm Forbes before being taken over by Steve Forbes, a onetime presidential candidate.

The magazine has some six million readers in the United States and international editions published in 21 languages, which brings the number of global readers to some 75 million.

The investor group "will provide capital, as well as financial and operational expertise, and intends to leverage its international relationships to strategically enlarge Forbes Media's reach on a global scale," according to the statement.

"The group supports Forbes Media's ongoing transformation into a global media, branding and technology company."

According to the statement, Forbes Media "is profitable and, in 2013, achieved its best financial performance in the last six years."

The move comes amid turmoil in the print journalism segment, following the spinoff of Time Inc. -- which publishes Forbes rival Fortune -- by conglomerate Time Warner.

US online giant Amazon unveiled a Netflix-style subscription plan Friday for unlimited access to e-books, a move which could shake up the world of publishing.

The $9.99 per month Kindle Unlimited program offers access to some 600,000 titles in the Amazon Kindle format.

Subscribers will be able to access the books on Amazon's Kindle tablets, as well as other devices with a Kindle app, including iPads and iPhones, Windows devices and Android-powered mobile gadgets.

Amazon is using a model made popular by Netflix for films and television programs, but also by services such as Spotify for music.

Colin Gillis at BGC Partners said the move to subscriptions is part of a trend toward "a 'rent, not own' society. We see it with music, with movies. It makes sense that they would do that with books."

Gillis said the move was "a logical extension" for Amazon but would not produce "meaningful" revenues anytime soon.

James McQuivey, an analyst at Forrester Research, said most new or best-selling books would not be offered because Amazon does not have the rights to include them in subscription packages.

Amazon will initially have many self-published books and titles from small and independent publishers but could use its market power to force the hand of major publishers, he said.

"The subscription idea is very popular with consumers for digital content," McQuivey told AFP.

"Amazon sees this. And they could wait for publishers to come in or they can try to make it happen and control it."

Publishers meanwhile are resisting the subscription model because it effectively cuts the price of books and royalties paid.

"If you're a publisher and a big one, you don't want the world to think the new Dean Koontz novel is free," McQuivey said. "You're already mad that Amazon discounts it. The big publishers don't want the price pressures."

- Great for 'big readers' -

Despite this, Amazon knows that some of its readers will be receptive to this model, said McQuivey.

"Amazon knows its customers," the analyst said. "They know if you read a mystery every week, they know whether they are in a position to make you an offer you can't refuse."

He noted that this could be a great offer for a segment of Amazon customers but not others.

"If you're a one book a month reader and a best seller person, this isn't going to work for you," McQuivey said.

Roger Kay, analyst at Endpoint Technologies Associates, said the new Amazon system has the potential to change the economic model for publishers and authors, because the price of $9.99 is roughly the cost of a single e-book.

"If I'm a big reader, I like it," Kay told AFP.

"And then I begin to wonder what happens to the authors. They get paid usually with a percentage of the sales. So this further destroys the economic model that has been feeding the authors."

The Kindle Unlimited service will also include audio books available through the Audible service.

The service is being launched for US customers, with other countries likely to follow.

In the book segment, similar services are offered by Scribd, which offers some 400,000 titles for $8.99 per month, and Oyster, which charges $9.95 for access to its catalog of 500,000 books.

Amazon shares closed up 1.76 percent at $358.66.

soe/rl/bfm

AMAZON.COM

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