Hollywood has made tons of money from DVD sales and had hoped that Blue Ray would extend the life of the physical media market. While DVD’s won’t go away anytime soon, and Blue Ray is selling in respectable numbers, the market for movies in boxes is shrinking. Online streams are becoming the favored method of consumption. While streaming rights have become a lucrative channel for Hollywood, the revenue per view is far below that of individual movie sales. Rather than celebrating the growth of a new revenue source, the studios see this as cannibalization. In the real world, cannibals don’t bother with trying to eat mummies.
Hollywood wants movies sold as downloads to replace its physical media sales. There are multiple problems with that concept. The biggest one being that downloads are still expensive and the DRM makes them less universally usable than old physical media. Another big stumbling block is cost. Few consumers are willing to pay $10+ for a DRM crippled download. Somehow and online storage locker is seen as a fix for these problems – even though it doesn’t really address them. Amazon was the first major retailer to roll out the locker service, but it won’t be the last. Apple and even some of the studios themselves plan to offer a similar service.
As a concept, a cloud disk you can play media from is probably something consumers will like. That is if they control the content stored there. It’s more likely Hollywood, Big Music, and the retailers themselves will insist on control of the content. Add to that the high cost of “owning” rather than renting, and we have another great idea crippled by old media control freaks. While new technology can empower an enlightened business the freedom to exponentially grow its market, it can also provide a doomed business model to a way to self destruct a little faster. Unless they can control the content, I think consumers will stick to the streams. Lockers as they are today will go the way of the VHS tape before they even get started.
While it’s successfully held the #1 marketplace position, Ebay management has been largely distracted by winding down the negatives of it’s Whitman era minutia. Under the radar, the company has aggressively cut sweetheart deals with big retailers to attract them to its marketplace. New management has also quietly drained a considerable amount of slime from its shadier seller swamp, presumably improving consumer confidence. While Ebay has labored to bring a little order to its’ own chaos, its competitors have been advancing. Ebay is currently in very real danger of losing it’s #1 position to Amazon. Amazon has successfully integrated other retailers and individuals into its marketplace. Amazon also provides branded storefronts, payment processing and logistics / fulfillment services to businesses that can integrate seamlessly into the Amazon marketplace. These services have been extremely popular with Ebay’ core paying customers – small business. In doing so amazon has largely leveraged its existing IT and distribution assets to create another income channel by renting them out to other businesses. Many small businesses can actually reduce costs by outsourcing payment processing, IT, warehousing and fulfillment functions to Amazon thanks to the economies of scale.
In what appears to a move to better compete with Amazon, Ebay will acquire GSI Commerce.
With more than 180 customers across 14 merchandise categories, GSI has long-term commerce services relationships with a wealth of retailers and brands. eBay says it expects GSI clients to benefit from eBay’s Marketplaces and PayPal services, particularly.
The merger consideration represents a 51 percent premium over GSI’s closing price on March 25, 2011. As usual, the transaction is subject to regulatory approval as well as other customary closing conditions. (Tech Crunch) (more…)
If you pay much attention to the business and investment media, the big buzzword is “cloud” when discussing the future of tech companies. In the realm of a free and open Internet, “cloud” means are broad range of applications and services from many sources that are as device independent as possible. For the corporate monoliths and Wall Street the word “cloud” means the return of the walled garden – with a vengeance.
Walled gardens have been with us for a very long time. They have always benefited cabals and cartels and have often been created to support them. Old school telecom is a perfect example. Less than 30 years ago, you had one choice for telephone service and that same source restricted your choices in services and hardware. What about old school Cable TV? again, one choice, one provider. In these walled gardens, technology stagnates, prices rise and variety of offerings are limited. The internet provided the ultimate work around for consumers of both services and offered them more variety at a price more in line with the actual value of the service. This is why old oligarchies from Telecom to Hollywood hate the Internet.
Back to big tech and the cloud. Companies like Intel, Microsoft and Apple built new walled gardens around software and hardware. The Internet has matured to the point where all of the propriety products have become less relevant. These companies are reacting by building new walled gardens in the “cloud” to once again confine consumers to a single platform. Apple should be credited for starting the trend with iTunes. By simultaniously dumbing down the users interface and restricting choices the company has cultivated a loyal cult that is mesmerized by elegant product packaging. That cult willingly pays large to be constrained to a narrow field of choices, all in the control of the fruit cult overlord. That process has been replicated with smartphones, and even “do no evil” Google is now running an “app store” for it’s increasingly less open Android platform. Even if Google doesn’t restrain alternative app sources for Android, wireless providers can and will. OS’s are largely irrelevant now with the browser being the users main interface. With the browser as the interface devices and OS would have largely become commodities without new walled gardens. (more…)
Google lost its case for orphaned books. More here. But it is a case of ‘who cares?’, because the DIY book scanning craze is taking hold. —
Even a website dedicated to promoting the ability to build your own, here. So the only thing that Google really lost was the ability to monetize the collection they would have built. But no such restriction for the DIY crowd.
The interesting thing is even the crudest set up can scan 1200 pages an hour. It uses cheap pocket cams and open source software. The only stringent requirement seems to be wide color band lighting. (which I might add could be supplied by just taking your rig outside, for free.)
Just something else for the publishing world to worry about.
… Doing the same thing again and expecting different results. Well NYT is off on their paywall tangent. Only this time its for the whole online edition. –
The New York Times paywall is costing the newspaper $40-$50 million to design and construct, Bloomberg has reported.
That fact is both the problem and the opportunity of a leaky paywall. There is no one consistent, workable price for online news content. For the vast majority of people who read a news site, the price they’re willing to pay is zero; for a few, it’s something more. The key question of the Times paywall — and of any paywall, really — is how to maximize the revenue generated from those two extremes and the various gradations in between.
The Times’ approach is to create a relatively high price point — $15 to $35 a month, depending on the package — for those willing to pay. For those who are very casual fly-by readers — those who read fewer than 20 articles a month — the site remains free, and the Times makes money from advertising. And for those in the middle — readers who lack the brand loyalty to want to pay, but nonetheless like to see Times stories pop up in their Twitter feed — the social media “leak” in the paywall will keep letting them in for ads.
Paywalls don’t work. There has been sufficient history to show that is the case. Then to spend $50m to build one? That is the definition of insanity. This could be the case that puts NYT in dire straights financially. For when it flops its going to take a large investment chunk down with it.
I wonder what Carlos Slim thinks?