September 2011

The Omnivore

Amazon’s 1990s slogan -- ”Earth’s largest bookstore” -- stood for an ambition that now seems cute.

Amazon boasted of its unlimited selection of books, even though in most cases it was simply having them shipped directly from distributors. Today, Amazon sells millions of goods and services, from toys and high-definition televisions to server space for other Internet companies and digital reading devices for book lovers. Borders found it impossible to match Amazon’s selection and went out of business earlier this year. Best Buy has watched Amazon undercut it and commoditize whole product categories, and is now trying to shrink the square footage of its superstores. Wal-Mart Stores has struggled to match the ease and reliability of Amazon’s shipping network, and posted nine straight quarters of declining same-store sales. Web sites that have matched Amazon in selection, price, and customer service­Zappos, Diapers.com­Bezos has quickly acquired. As its rivals steadily asphyxiate, Amazon is ringing up 50 percent growth in quarterly revenues, and could reach $50 billion in sales this year. Walmart needed almost twice the time -- 33 years -- to cross that threshold. “Amazon is such a smart learning organization,” says Nancy F. Koehn, a professor of business administration at Harvard Business School. “It’s like a biological organism that through natural selection and adaptation just keeps learning and growing.”

Can Publishers Capitalize On Kindle Tablet To Boost’ Digital Downloads?

Hearst Magazines says it has exceeded the number 300,000 in paid distribution for its digital editions across iTunes, B&N Nook Color and the Zinio Newsstand. That amount includes a combination of monthly digital edition subscriptions and single copy sales -- a 10-fold increase from September last year, Hearst says. Condé Nast points to 500,000 digital circulation, with a subscriber/authenticated print reader ratio of 50/50.

In August, Time said its digital magazine and related content apps have been downloaded more than 11 million times, though the company didn't offer a breakdown of how well individual brands have done. It also said that of its total 28 million print subscribers, “hundreds of thousands” have upgraded their subscriptions to include the four tablet editions at no extra cost. The publisher claims to be adding thousands of new subscribers every week. At that point, Time also said it has sold more than 600,000 digital single copies among its four titles -- Time magazine, People, Sports Illustrated and Fortune -- is working on creating tablet editions for its entire roster of 21 titles by the end of 2011.

Prepare to Pay More if You Don't Want Ads on Your New Kindle

Amazon is using advertising to subsidize the cost of the hardware.

For example, the Kindle Touch with Special Offers costs only $99, but if you want one without ads it will cost $40 more. The new Kindle, without a touchscreen, costs $109 — that’s $30 more than the attractive $79 pricetag for the ad-subsidized model. Amazon started experimenting with advertising earlier this year, by discounting the Wi-Fi and 3G versions by $25 to $114 and $139, respectively. Amazon said earlier this month that both of those are already the bestselling Kindles, and that “customers report that they love the money-saving special offers.”

Fox Sports sues Dodgers, trying to halt TV rights sale

Fox Sports filed suit against the Dodgers in U.S. Bankruptcy Court, alleging the team has breached its current television contract in pursuit of a new one.

The suit is intended to stop the Dodgers from their proposed sale of the team's television rights, the key to owner Frank McCourt's plan to emerge from bankruptcy as the Dodgers' owner. The suit asks that the court reject any such sale except in accordance with the current contract, under which Fox retains exclusive negotiating rights through November 2012 as well as the right to match any other offer. The auction process proposed by McCourt and his attorneys would not honor those rights. Fox alleges that the Dodgers have shared confidential broadcast contract information -- "even after direct and explicit warnings," the suit claims -- and have threatened the success of the cable channel Prime Ticket. In the absence of court intervention, Fox would suffer "great and irreparable injury," the suit alleges.

CTIA expects supercommittee to propose spectrum auctions

Steve Largent, president of CTIA, a wireless trade association, said that he expects the congressional supercommittee to include spectrum auctions in its deficit-reduction plan. "I'm confident they'll have something on spectrum," he said. "We're helping, not hurting [deficit-reduction efforts]." The auctions could raise as much as $25 billion in revenue for the government, according to estimates.

Memo reveals which telecoms store your data the longest

The nation’s major mobile-phone providers are keeping a treasure trove of sensitive data on their customers, according to a newly released Justice Department internal memo that for the first time reveals the data retention policies of America’s largest telecoms.

The single-page Department of Justice document, Retention Periods of Major Cellular Service Providers, is a guide for law enforcement agencies looking to get information -- like customer IP addresses, call logs, text messages and web surfing habits -- out of US telecom companies, including AT&T, Sprint, T-Mobile and Verizon. The document, marked “Law Enforcement Use Only” and dated August 2010, illustrates there are some significant differences in how long carriers retain your data.

Internet Observatory offers real-time IP traffic trends

A new website dubbed the Internet Observatory, from German traffic management company Ipoque, offers real-time insights into what Internet users are doing online at any given time.

The idea behind the Internet Observatory, unveiled at the Broadband World Forum in Paris, is to show continent by continent how much traffic is caused by P2P; how Skype traffic fares against SIP traffic; and which Instant Messaging client generates the most traffic. The project is currently restricted to statistics from Europe, but real-time data for other continents as well as more in-depth statistics about each continent should to added soon, according to Ipoque. Even with its limited geographic scope, the site already reveals some interesting trends.

Broadband World Forum report: Nearly one in 10 broadband subscribers have IPTV

With some industry pundits predicting that before long, more people will access the Internet using mobile rather than landline devices, applications such as IPTV are becoming increasingly critical to the future of landline broadband. And according to a report released yesterday at the Broadband World Forum in Paris, about 9% of landline broadband users now use IPTV.

The total number of landline broadband and IPTV subscribers worldwide as of mid-2011 were 557.8 million and 51 million respectively, according to the Broadband and IPTV Growth Report, prepared for the Broadband World forum by industry analysts Point Topic—and IPTV growth is outpacing that of broadband. While the number of broadband subscribers was up 12% from mid-2010, when the total number of broadband subscribers was 498 million, IPTV subscribership was up 32%, rising from 38.5 million a year earlier.

Larry Page Outlines His Plan And Vision For Google

According to CEO Larry Page, Google's model is: invent wild thing that will help humanity, get them adopted by users, profit, and then use the corporate structure to keep inventing new things.

For shareholders and other Google stakeholders, this is a clear message: While Page is in charge, you can expect Google to stray from its core competencies into all sorts of businesses. The Google CEO gave Android, Chrome, and YouTube as examples of this pattern in successful action. Chrome has 160 million users now. Android is ubiquitiuos. YouTube has 3 billion playbacks a day and its revenue has grown 3X for the past three years. Page also says that the other advantage to pursuing wildly ambitious goals is that it actually makes business easier because it attracts the world's best talent.

Closed Captions for the Open Internet?

The Federal Communications Commission has launched a rulemaking to implement the closed captioning sections of the 21st Century Communications and Video Accessibility Act (CVAA).

The new rules will impose closed captioning requirements on certain online television programming; they will also require captioning capability for a wide variety of devices that are designed to receive or play back video, potentially including smartphones, computers, tablets, game consoles, video recorders, and set-top boxes.

This proceeding is set to move quickly, mainly because of the Congressionally-imposed deadline (January 12, 2012) for getting the rules adopted. The Commission’s Notice of Proposed Rulemaking got hustled into the Federal Register, as a result of which comments are due by October 18, 2011, and reply comments by October 28.