Amazon’s VOD success depends on distribution deals
Greetings Readers!
The streaming video market has become rather crowded in the last couple of years with services like Hulu and YouTube, but the video service with the most potential is Amazon's VOD service.
Amazon's VOD (Video On Demand) service has been around for a while and has a huge library of tv shows and movies including some of the newest releases yet it has never gained much traction in a world dominated by Netflix. If Amazon hopes to really compete in this market, it needs to do more than advertise its service (which it doesn't do a very good job at anyway). Amazon needs to through its weight behind the service and make sure that everybody is aware of it and it is accessible as possible. How can they make it accessible? Amazon needs more distribution deals with hardware manufactures.
Amazon currently has deals which allow its service to be accessed on Roku boxes, Panasonic Blu-ray players, TiVo DVRs and Sony Bravia TVs, but they have to do much better than that. Amazon needs to push for a deal with every TV manufacture instead of just Sony and their Bravia line. With many people upgrading to new and better TVs after the DTV transition to take advantage of the new HD content, there is a huge opportunity for Amazon if they work to put themselves on all internet connected TVs. Same thing with Blu-ray players, Blu-ray is starting to gain traction and Amazon needs to do its best to get on more than just Panasonic players if it wants to get in on the ground floor before the mass exodus from DVD to Blu-ray begins. As far as TiVo goes, that is a great move for them but they should also work towards being on the DVRs offered by cable and satellite providers.
Amazon has the huge opportunity to grab a huge chunk of the streaming video market if they are willing to do what is necessary to put their service in front of as many people as possible. They have started moving in this direction, but so as Netflix and others, so if they want to put themselves in a dominant position, they must act now!
Finally, I think they need to go mobile with their video on demand service. Apps for the iPhone, Android, Windows Mobile and such should be coming too. Many people like to watch videos on their phones, so if you have a way to stream videos to a phone, even if it is over wifi, you are ahead of the competition.
The competition in this space is in its very early stages and Amazon is on the position of either being left behind or taking the lead. The potential for profit is there, will they strike before its too late?
Microsoft finally advertises its biggest advantage over the iPod, cost
Greetings Readers!
Microsoft has unveiled their latest attack on Apple, but this time it doesn't involve anybody going to a retail store and purchasing a laptop. This time Microsoft is setting its sights on the iPod. The latest commercial attacks Apple for not having a subscription service on iTunes for music downloads. Without a subscription service, they claim it will cost $30,000 to fill a 120GB iPod with mp3s. Microsoft's Zune on the other hand, has an unlimited music service that is $15/mo for unlimited music downloads. It would take over 166 years of a Zune Pass subscription to equal what it would cost if you were to fill a 120GB iPod from iTunes. I believe that this is a great move from Microsoft. When you talk saving money during hard economic times, people are going to listen. Much like the Windows ads, I think that they can do the most damage to Apple if they push the issue of cost.
Of course the commercial doesn't give you the whole story, otherwise you might not be compelled to switch. All music downloaded with a Zune Pass comes with that dreaded DRM garbage that the rest of the world is moving away from. Without the pass, you can get DRM free music but not with it. The subscription has DRM so that you continue to subscribe to the Zune Pass. If you don't keep your subscription renewed, you will end up with a bunch of music that won't play. That is the downside of the Zune Pass. You get to keep 10 songs a month I believe for free but everything else will die if you don't renew. Microsoft paints a pretty picture with the commercial, but everything has a downside and this is one they hope you won't notice. Of course you could crack the DRM and eliminate that downside, but that is not legal. As much as my pirate nature would like to share information with you on how to do that, I am not looking to piss off Microsoft, especially when I have the desire to work for them at some point. Anyway, below is the new Zune ad that attacks the idea that it would cost $30,000 to fill an iPod.
Apple’s Keynote Disappoints Yet Again, Secrecy to Blame
Greetings Readers!
Much like everybody else, I was glued to my laptop yesterday for yesterday's Macworld keynote from Apple (I even live blogged the event), only to be disappointed. While there were a few decent announcements (DRM-free music on iTunes and new prices), the event was almost entirely a snooze-fest.
There are many reasons that could be used for why the event was so boring, everything from the lack of Steve Jobs to the fact that most of the rumored items that people had been hoping for didn't show up, but I believe the main reason is Apple's constant secrecy surrounding all of its events.
Apple has a history of being secretive about everything until the moment it is announced. Sure, there is the occasional leak, but on the whole, nobody really knows anything for sure until its announced. This can certainly give Apple the shock factor when something big is announced, but ultimately, I believe they are shooting themselves in the foot with this strategy.
The secrecy that surrounds the events leads to two things, over-hype and rumors. These are the two largest causes for disappointment at any Apple event. The rumor mill usually starts working overtime around a month or so before an announcement, spinning off every wild idea from the retirement of Steve Jobs to an iPhone Nano (which I still believe is an idea that is beyond stupid) only to end up leaving people with higher expectations than they should have. No company can make everything and hit a home run with every press event, but thanks to the rumor mill, it is expected of Apple. If Apple would reveal what its events were about before hand, it would largely kill the over-hype caused by expectations created from the wild internet rumors. Opening up about the events would allow the hype to be adjusted down to a reasonable level.
The over-hype is really a big problem. Thanks to the rumors and crazed Apple fans, Apple events become over-hyped which leads to a feeling of under-delivery. Asking people, mainly journalists, to come from around the world to cover your products when you tell them nothing about what you are going to talk about is a bit much. If people knew beforehand what is going to be discussed, they would determine if their presence is required and ultimately the expectations and hype around the event that bring people from around the globe would be at a more manageable level.
While any coverage is good coverage for most companies, if Apple expects to have happy customers and stock holders, they need to kill the rumors and over-hype by being less secretive. Apple's stock tends to swing quite a bit around announcements and I think that if Apple wasn't so secretive, these huge swings would not exist. Secrecy might be warrented in some cases, but unless there is a major shift in company strategy, being open and letting people know what they are in for is the best way to control reactions from events such as this.
-Jeremy "pcnerd37" Bray
Apple Announces it is Leaving MacWorld, Shoots Itself in the Foot
Greetings Readers!
After feeding the animals at work I came back to my computer moments ago to discover, thanks to Twitter, that Apple is no longer going to be at MacWorld after this year. Not only that, but Steve Jobs isn't even going to give the keynote for this years MacWord.
To say that this movement is shocking is an understatement. I never thought I would see an announcement like this. It has been clear for a while now that Jobs seems to be trying to get out of the spotlight, but to have Philip Schiller, Apple’s senior vice president of Worldwide Product Marketing, give the speech is rather surprising. Having somebody other than Steve Jobs give the keynote is a huge hit to Apple fanboys everywhere (or at least the ones on Twitter who are crying about it). A move like this really makes you wonder why Apple is doing this. Is a product launching that Jobs doesn't like? Are there no major products to be announced? Is Steve sick? Is he quitting the company? I expect this speculation and many other rumors to run wild over the next month after this announcement.
Apple has been scaling back on trade shows for quite a while, but to leave their last major trade show has me asking myself one simple question, why? If the press release is any indication, Apple seems to think that it is too big to be at trade shows. With Apple successfully launching products at its own events, I don't think that it believes it needs to be at trade shows anymore. Whether they believe they have become too big for trade shows (keep in mind that even Microsoft does trade shows) or they just don't want to share the attention with other vendors when they make announcements, such an elitist attitude can easily lead to their downfall.
Before this announcement, I thought Apple's future was rather bright. Now, I am wondering if this is the beginning of the end. One thing is for sure, with an announcement like this, the stock is certain to plunge tomorrow. I also hate to see what this does for the other companies that are at MacWorld now that the spotlight won't be on the event like it has in the past. This is only the beginning of this story and I believe it will get uglier before it gets better. I will post again as this situation develops and my opinions change.
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-Jeremy "pcnerd37" Bray
Sony Announces Blu-spec CD, Another Format for a Dying Medium
Greetings Readers!
Yesterday, I wrote a post about how CD sales are down and Walmart is reducing the floor space it gives the CD. Clearly, the fools at Sony don't agree with my assessment of the CD and its impending death. Sony has now announced a new CD format, Blu-spec CD. This format is going to be dead before it even has a chance.
The new format is said to be backwards compatible with current CD players, so you will be able to play the blu-spec CDs in the CD players you already have, but what is the point? Are people really going to pay the higher cost of a new format when what they have works just fine and can play the same music, often at a better quality than the digital music that many people listen to now? Sony touts the new Blu-spec CD players will eliminate vibration and therefor make music quality better. When people are generally satisfied with compressed mp3 quality audio, do we really need something better than existing CD quality? I don't think so.
No prices have been announced for the music or the new players, although 60 titles will be available by Christmas. I certainly don't expect the prices to be cheap. Prices for new formats never are. The new technology will use the same Blue Laser Diode as Blu-ray, so from that alone, you can assume it will be quite expensive, especially when Blu-ray players are still running in the hundreds of dollars. With consumers moving in mass to digital downloads for their music, spending a large chunk of money on the new format of a dying medium makes no sense. Somebody needs to relay this message to Sony so that they stop wasting money trying to develop these formats, only to have them die right out of the gate.
While I will always love the CD and listen to it every time I am in my car, with sales down around 23% this quarter, it is not worth investing in a new format when the existing format is quickly dying out to something far more convenient. Sony would be better off to create their own store to compete with iTunes and others in the digital download space rather than to create a whole new format that is truly unnecessary.
The world is moving to digital downloads Sony, get on board and stop trying to keep the past alive!
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-Jeremy "pcnerd37" Bray
Walmart Signals the Death of CDs/DVDs, Looks to the Present and Future
Greetings Readers!
For the past month, maybe more, the local Wal-Marts have been undergoing a major shift. Nearly everything but groceries have changed their location. There are now more groceries, less pet supplies, and the electronics department has roughly doubled in size. Apparently this shift is taking place across the country. A post on Gizmodo today revealed a change in business at Wal-Mart when it comes to consumer electronics. It seems they are cutting back on CDs and DVDs to focus on other products such as Blu-ray.
With CD sales down, digital downloads through the roof, and Blu-ray hoping to replace DVD, such a move was destined to happen at some point, I was just starting to wonder when. With digital downloads exceeding many peoples expectations, it is a matter of time before the CD becomes just another dead physical format. With stores such as Walmart, Circuit City, Best Buy and others still promoting the latest music in CD format, I had honestly started to wonder just when digital downloads would kill the CD. I have known for some time that it was coming but haven't seen any sites of a death anytime soon, until today.
With CD sales down 23% just this quarter for Walmart, it is no surprise that they have now started to take away floor space from the CD and even the DVD to give more room for video games, various consumer electronics such as the iPod and Zune as well as Blu-ray. Such a move is a sign of the times and that death for the CD and DVD formats is nearing. I expect to see other major retailers follow suit in the near future. I will admit that with DVD sales still much higher than Blu-ray sales, I was kind of surprised to see this move at this time. I have long believed that this is necessary for the mass adoption of Blu-ray. When stores stop selling DVDs, people will start moving over to Blu-ray, just like they did for the transition from VHS to DVD. Blu-ray certainly has other issues that it needs to conquer before it can truly take the place of DVD, but this is the first step in the right direction.
While I agree with Walmart in their move to replace CD floor space with portable media players, that isn't really going to help them gain market share in the digital download space such much as it does iTunes and the Zune Marketplace. If they expect to see real success from this, they need to bundle a deal from their new digital download store with the devices. Walmart must give people an incentive to buy music from them before the customer becomes addicted to iTunes or other download service. If they did this, they would see huge growth in their new MP3 store while slowing the growth of their competition.
This is a clear sign that these formats are soon going to go the way of the formats that came before them. While the CD and DVD still have some life in them, if other stores follow suit and this falling sales trend continues, I can easily see the death of the CD within the next 2 years, and the death of the DVD within the next 5 (likely less).
Long live the extremely expensive Blu-ray!
-Jeremy "pcnerd37" Bray
Best Buy and Napster is a Match Made in Heaven!
Greetings Readers!
Before I continue talking about some of the TechCrunch50 companies, I figure I needed to address the Napster acquisition by Best Buy. There seems to be a lot of people in the blogosphere scratching their head about this move, so I figured I should explain why this is such a great move. This can actually be summed up in one name, Wal-Mart.
Like many of you, I woke up to the news this morning that Best Buy purchased Napster for $121 million in cash. I also noticed that the blogosphere seems to be at a complete loss as to the reason for this move. While I generally enjoy any opportunity to bash the company I refer to as "Worst Buy," I think they made a great business move with this purchase.
Wal-mart has been in the digital music distribution game for a while now, becoming the #2 company for selling downloadable music online behind only iTunes. Best Buy on the other hand is a bit late to the game when it comes to moving towards digital downloads. By Best Buy purchasing an established name with a large customer base (approx. 700,000 subscribers), they can quickly jump into the digital downloads game with minimal time and effort spent to develop their own solution to compete with the company that is essentially their largest competitor in many areas. Clearly realizing this is where the market is going, Best Buy needed to jump into digital downloads as soon as possible, and purchasing a company that has been synonymous with downloading music for over a decade is exactly what they needed to do before its too late and it becomes very difficult to gain any traction in the market. Creating their own service, working out distribution deals and many other things that come along with starting your own digital download service would have put Best Buy even further behind and would have likely lead to a number of logistical issues rather than allowing them to hit the ground running.
Not only is this the perfect business decision for Best Buy, who does not want to be left in the dust, it is also a big thing for Napster. Not only are they getting a nice sum of money, but the business they have can now be re-branded and taken to the next level. Napster has had a problem for years now in that it can't seem to shake off the bad image it received when it was taken down by the music industry. Many people are still unsure of the site because of its past, even though it has now become a legitimate place to get music. By having a huge company such as Best Buy purchase them, it basically validates what they are doing and gives them the image that now they are a legitimate music destination rather than a haven for pirates. It seems as though a major acquisition was the only way this image shift was going to occur. And being paid twice what the company is worth for that to happen, isn't a bad deal either.
This is essentially a win/win for everybody involved. Best Buy can jump into the market of music downloads with a large existing user base and can hit the ground running while Napster gets a big boost in their public image and paid twice what they company is worth. The only people that should be concerned about this union are other companies involved in the market such as Amazon and MySpace who is about to launch their own music service this month. Of course Wal-mart should be watching their back as well as this is a direct shot at them to send the signal that they aren't the only big company outside of Apple that can play the digital downloads game. It is only a matter of time until the two get into a heated battle in this space, which im sure will get ugly and allow Apple to run off with all the money while the two giants fight it out. This will be very exciting to watch no matter what and I look forward to seeing how the consumer benefits from this move.
That is all I have to say about this, but I do have more posts coming about several TechCrunch50 companies coming up over the next couple of days, so stay tuned for those! Don't forget to check out my daily podcast for more top technology stories such as this one at GeekNewsDaily.com!
-Jeremy "pcnerd37" Bray
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