According to The New York Observer's John Koblin, a deal between these rival publishers is imminent. According to Koblin's anonymous sources, Time, Condé Nast and Hearst aren't planning to release their own e-reader for these magazines, but want to build a store and apps that would allow users to download and consume content on a large variety of devices. By grouping together, these publishing houses hope to save money. Koblin's sources also point out that this would be a risky venture for one publisher, but the three companies together could give users a single store to find all of the magazine content they want.

Reinventing Magazines for Digital Distribution

As the Atlantic's Derek Thompson rightly notes, however, these companies will have a hard time charging for content that they are already giving away for free online. To make this venture work, these publishers would either have to offer unique content in their digital magazines or they would have to erect a paywall around all of their sites.

Most importantly, these companies will also have to reinvent their magazines for the digital age along the lines of Wired's app for the rumored Apple Tablet or Condé Nast's iPhone version of GQ (iTunes link). One of the reasons these publications are suffering is the long lead time that makes most of the content outdated by the time it arrives at the printer. While this still works for magazines like the Atlantic, which mostly publishes in-depth long form articles that aren't time-sensitive, gossip magazines can't really compete with TMZ or Perez Hilton. Just putting a digital copy of their magazines online simply won't cut it.