US media conglomerate Time Inc is spearheading efforts to create an industry-wide joint venture to develop an online store for magazines and newspapers.
The new service, which is planned for 2010, will be a means for the publishing industry to avoid having to surrender their fates to companies like Amazon, inside sources told the Financial Times.
The publishing industry reportedly fears repeating the mistakes of the major music labels, which failed to act on digital distribution until after piracy had become virtually commonplace, and Apple had dominated the market with its iTunes store.
Music labels were then forced to negotiate on Apple's terms, and the delay in embracing digital distribution is often cited as a major contributing factor to the industry's declining profits.
Online storefronts offering digital distribution of print media offerings - such as Amazon's Kindle store - have the potential to take the same toll on the already struggling publishing industry, the sources said.
The business model is expected to be similar to that adopted by online video site Hulu, the JV between NBC, News Corp and Disney. Founders will take equity stakes, and the whole venture will be financed by its partners.