Holiday Shopping And Streaming

Santa brought Turbo a new (used) set of vintage 1988 Ben Hogan “Redline” blade golf clubs…whether or not they’ll do anything to help lower his handicap remains to be seen!

Well, I hope you and yours are having a happy holiday season, wherever in the world you may be.

I just returned from a wonderful visit to see my parents and some extended family up in my hometown of Denton, Texas, where we were treated to our first white Christmas in three years, the snow billowing down starting around mid-day Christmas Day, and plunging the Dallas/Ft. Worth roads into a virtual ice skating rink.

As for the Christmas holiday shopping season, Sarah Perez with TechCrunch just reported that Amazon.com once again came out on top, in terms of online satisfaction.

No big surprise there.  I conducted a large portion of my own holiday shopping via Amazon, and received everything I ordered within a few days. I also treated myself to a set of Ben Hogan 1988 “redline” blade golf clubs, which I discovered on eBay for a very agreeable price. Unfortunately, the weather in Texas has kept me off the golf course (now back in Austin, I hope for that to change in the next few days!).

Of course, if you were trying to watch movies on Netflix on Monday, you might have found yourself watching a blank screen. Due to an Amazon Web Services outage, Netflix viewers were treated to bags full of coal starting around 3:30 PM on Monday, AWS’s third major outage this year.

Myself, I went on a “Redbox” binge over the holiday, discovering some recent titles for $1.20 a pop (including the latest Spiderman!), only to discover they’ll be bringing some competition to the streaming realm with the introduction of “Redbox Instant,” expected to go into private beta sometime soon. Redbox Instant is expected to match Netflix’s monthly streaming subscription price of $8 U.S.

Whatever your preference, it certainly looks like more and more Americans will be viewing filmed entertainment on devices other than their TVs. Another TechCrunch story reports that one in four Americans now owns a tablet computing device, with such devices now even having overtaken the number of e-reading devices like the Kindle (again, I did my fair share here over the holidays, giving out two Kindle Fire HDs as family gifts. Now I can only cross my fingers my family will use them!)

Regardless of your preference, the story goes on to say that one in three people in the U.S. now owns some kind of tablet or e-reading device, and this data before the full gamut of holiday shopping data has hit analysts’ spreadsheets.

One such analyst, Strategy Analytics, has Apple’s iPad still leading the pack, with Amazon and Samsung quickly narrowing that lead.

So what did Santa bring YOU for Christmas, and better yet, what did Santa YOU give others???

Pay As You Go

Thus far, this has been a pretty “mobilized” summer, with news breaking every day about the increasingly important role mobile computing is playing in our business and personal lives.

Today, we heard about the new Samsung Galaxy 10.1 tablet (even Walt Mossberg kinda likes it!), and TechMeme has early screenshots and guestimates about what the newer, smaller iPad’s going to look like.

But devices aren’t the whole picture. Infrastructure, application lifecycle management, security and privacy, and other related issues are key to mobile success. And, until these devices are enabled with an easier payment capability, money will be left on the table.

Lots of it.

Ironically, it’s been Apple that has been the closest to providing such a system thus far, with their Apple ID linkage to our credit cards.  But that’s just for the stuff I buy from Apple…what about everybody else?

So today, the Wall Street Journal’s Robin Sidel explained that more than a dozen big merchants are expecting to announce their plans to develop a mobile-payments network that would go up against the likes of Google.

Called the “Merchant Customer Exchange,” the new venture is being led by Wal-Mart, Target, 7-Eleven Inc., and Sunoco, and will attempt to find its way to a more standarized mobile payment system.

Though this may move may be an intended counter to Google’s Wallet capability on the Android platform, Sidel’s story reminds us we also have another joint venture called Isis, led by a number of telcos, as well as the recent $25 million investment by Starbucks in mobile payment start-up Square, also in the running.

And of course, let’s not forget some of those other existing systems which have millions of credit card accounts, including Amazon, whose 1-Click payment capability stands apart, and PayPal, with their unique person-to-person payments capability.

In this emerging roulette wheel of mobile payments, I’m not quite sure where I’d place my bets just yet, as the wheel’s just getting going.

But there’s a lot at stake.

I just attended comScore’s quarterly webcast on the “State of the U.S. Online Retail Economy.” For the second quarter of this year, nearly one in ten of all e-commerce dollars spent were done so via a mobile or tablet device.

Moreover, nearly two in five tablet owners have purchased something online via their device in the past month (a number more than double of that of smartphone owners).

One wonders if that smartphone purchasing number might not be a few percentage points higher were it easier to hand over one’s payment information via smartphone handsets.

Looking at the bigger picture for a moment, comScore also reported in the webcast that the channel shift to online appears to be accelerating, with online sales overall up 15 percent for the quarter, while on a comparable category basis, offline sales only increased two percent.

At the forthcoming IBM Smarter Commerce Global Summit in Orlando (see this post for more details), IBM has some 20+ sessions that contain a mobile component, including one entitled “Mobile Payments, An IBM POV” (IB-3440).

That event will be held September 5-7 at the Walt Disney Swan and Dolphin Resort in Orlando, Florida, and you can learn more about it here.

All About The Content Razorblades

The Interwebs platform wars continue to escalate.

Not days after I read Ken Auletta’s fine New Yorker piece on the U.S. antitrust suit against Apple and several book publishers for alleged price fixing — a scheme that clearly had Amazon and its Kindle Fire in its gunsights — do we discover that Amazon is working with Foxconn on its own mobile mousetrap, one that, like the Fire, would presumably provide easy access to all kinds of compelling content from Amazon’s vast cloud of digital entertainment.

Books, movies, gaming apps…Amazon’s play suggests that the Internet industry is moving into the razor/razorblade club, with the devices being the razors, and the razorblades being all that vast digital content.

I, personally, mostly don’t care which razor I use. I’ve owned tablets and smartphones both Android and iOS now, and most recently have given a Kindle (not the Fire) a test drive.

The most important element for me in the digital content wars are the depth and sophistication of the content libraries themselves.

That is to say, help me move beyond Amazon and Apples’  57 Channels On Demand and Nothing On!

Amazon’s bookstore, of course, has virtually the world’s book population at your disposal, so no complaints when it comes to reading (although I do agree we need healthy, competitive alternatives to the Amazon reading ecosystem).

But when I go into my Amazon Prime movie library, which lets me watch some movies for free with my Prime subscription, it’s like dragging the bottom of the movie barrel.

To some degree, I see the same problem with Netflix, although Netflix has seemed to have worked more diligently to expand its library.  Amazon Prime, on the other hand,  just added a bunch of new episodes of William F. Buckley’s “Firing Line.”

Woo hoo, where do I renew my subscription??!

The cloud providers may be lining to try and lock in as many denizens as they can via their device and subscription services, but the form factor is less important than the catalog function.

What’s kept me from cutting my own cord on the TV is the fact that the Netflix’s and Amazons of the world don’t have enough diversity of content (never mind live event access to major sporting events, which for my money are msotly worth the high cost of monthly cable subscriptions alone).

So if the Apples and Googles and Amazons really want to move these markets, they need to quickly hire some sophisticated business development executives and hard-driving attorneys who can  make some negotiation headway in the hills of Hollywood’s film libraries  rather than try to draw lines around the device footprints.

It’s never about the razors, always about the razorblades.

Into The Amazon Digital Jungle

Whoa, what ants got into Amazon.com’s pants this quarter??

Amazon announced earnings earlier today, and though profits for the first quarter dropped 35 percent to $130 million from last year’s same quarter, revenue jumped 34 percent to $13.2 billion, beating the Street’s expectations.

Is this a bellwether indicator for e-commerce en generale, or is it isolated to the ‘Zon?

Hard to say, but The Wall Street Journal is reporting that part of Amazon’s spending has gone towards making itself operate more efficiently.  If you remember, Amazon spent a cool $775 million to buy Kiva Systems last month, which is intended to help them automate and lower their warehouse operations costs.

The Journal story’s also highlighting the fact that the e-commerce market in general “has been strong,” with Amazon reporting particularly good sales for digital goods, including e-books and online video (which, read, means little to no distribution costs other than bandwidth!)

In Amazon’s earnings press release, Amazon pointed out that “9 out of 10 top sellers on Amazon.com were digital products — Kindle, Kindle books, movies, music and apps.”

In the quarter, Amazon also introduced a new version of its Kindle for iPad app, which is the #5 free iPad app of all time and the #1 free books app on iPad.

The Amazon left jab strikes Apple on the chin! Pow!

The Kindle, retailing for $199 through Amazon, continues to be the company’s best-selling product, and the most “gifted.”

I may have even contributed to the strong quarter with a few Amazon purchases meself, come to think of it!

For my money (what little I have left of it after shopping with Amazon), this digital trend is a larger barometric indicator — folks are finally getting more comfortable with consuming books and other media in digital formats, and though it certainly has a negative impact on the “traditional” media industries on one side of the balance sheet, that starts to get offset as the digital column increases.

Of course, I haven’t even gotten to some of the social commerce trends which Amazon is also likely benefiting from (mentions via Facebook, Twitter, etc.) and their own leading adoption of customer ratings and reviews.

Click, mortar, AND pixels is the name of the game for smarter commerce, something IBM thought leaders will be discussing at the upcoming IBM Global Smarter Commerce Summit in Madrid May 22-24^th.

More on that in a prior post here.

Platform Warriors, Come Out And Play-Ayy

My daddy always told me, never bring a knife to a gun fight.

Actually, he didn’t tell me that, but it sounds like something he would say.But what happens when everyone brings a knife to the knife fight??

That sounds a little something like what’s happening with the emerging Platform Wars of 2011.

Google, Facebook, Apple, and Amazon are lining up in the back alley, emotions are heating up, and somebody’s about to get hurt…the only question is, who?

Are the platform war stalwarts ready to rough and tumble it in the virtual streets? WAR-YERs, come out and PLAY-AYY!

The most recent tidings that suggest evidence of this: A machination that allegedly keeps Google+ invite links from appearing on Facebook user news feeds.

CNET’s Josh Lowensohn filed about this recently, and it just sent me cracking up.  No matter its origin or even veracity, it’s the kind of Silicon Alley back alley knife fight we’re going to see a lot more of.

No, Johnny, you can’t play on our side of the playground…you’re not one of the cool kids!

I’m having flashbacks to the OS/2 and Windows wars of the early 1990s (although we in OS/2 land lost that one pretty soundly – although I still miss my beloved Warp toolbar!)

Only this time around, the knives are much bigger and much sharper, and the stakes are that much higher. This time around, it’s not only the ruling consumer IT platform at stake: It’s also the mobile, publishing, and entertainment industry hubs.

Another analogy: This is three dimensional chess with moving pieces, and Deep Blue is nowhere to be found to help figure out what the next move should be.

This all kinda reminds me of that infamous 1979 cult classic, “The Warriors.”

If you know the movie, you remember that siren call: “WAR-YERS, come out and PLAY-AYY!!!”

But instead of the Gramercy Riffs and the Turnbull ACs, we’ve got the Googlers and the Facebookers and the Amazonians and the Applers.  Although imagining Mark Zuckerberg holding a Bowie knife kinda makes me laugh.

Get out your baseball bats, boys and girls, there’s gonna be a rumble!!

In any good rumble, though, you have to keep an eye out for the alliances that are forming –- they could be critical in the coming clash.

Facebook and Microsoft, which put in an early $150M stake, then FB’s acquisition of ConnectU, FriendFeed, Beluga, and a host of others.

Google, first with dMarc, Postini, DoubleClick, YouTube, and now their Motorola Mobility acquisition, which gives them an aggressive mobile and ITV set-top play (someone had to do something to revive the Google TV patient, who was dead on arrival at the Beverly Hills ER).

Amazon, with their acquisition spree of Zappos, Audible, Woot, Lovefilm, the Book Depository, and a host of other vertical commerce and entertainment plays and formidable portfolio of credit-card carrying members (including me) who are loyal to a fault.

Apple, with their vertical integration and fortress-like wall around their hardware and software, not to mention their PR office and social media team and brilliant business development in music and entertainment (maybe Steve Jobs could go teach the President a thing or two about negotiating?)

Apple’s competitive differentiation is the Great Wall of Apple. Steve Jobs doesn’t have  to get along with the other kids in the sandbox — his is only big enough for one genius!

Me, I’ve never been an operating system one-trick pony, and so I figure I’ll play the same quadfecta for the looming platform knife fight.

I’m on Google+ and use Google search every day; I use Facebook to keep in touch with people from high school I hoped I’d never hear from again; I have several Macs, 4 iPods, an iPad, and an Apple TV, and I still don’t know how to get my music from one machine over to another; and Amazon…well, I wouldn’t short that stock anytime soon, as I’m sure I’ve probably given them more sheckels than any of the other platform warriors over the years.

Yes, it’s gonna be a wild ride out to Coney Island.  Director Tony Scott in 2008 suggested he was going to make a remake of “The Warriors,” only this time he said the movie would take place in Los Angeles and would feature thousands of gangs.

Methinks he might want to consider moving the setting up to Silicon Valley and settle for four Goliaths instead of a few thousand Davids.

Defending The Fortress

I believe it was Napoleon who said “Never interrupt your enemy when he is making a mistake.”

Ron Markezich, the sales lead for enterprises and partners in the U.S. at Microsoft, apparently explained to AllThingsD earlier this week that for every dollar companies spend on Microsoft software, they have to spend $6 to get it running right.

So I went and read the interview to get the full context.

The specific question Markezich was asked centered around Microsoft’s disruption of its traditional business model that “has brought in billions upon billions of dollars is sold” and whether or not “this new model [cloud delivery] ultimately catch up with and supplant the old one?”

Here’s the latter part of his response:

…So every one of these customers, we see their total spend with Microsoft go up anywhere from 2 to 6 times what it was before. The other thing is that if you look at the total industry spend, most of it is on activities where there’s no value added. Every dollar you spend on software from Microsoft, you spend $6 trying to get it to do anything. What we’re trying to do is drive that six dollars to zero.

It was also Napoleon who explained that “the fate of a nation may sometimes depend upon the position of a fortress.”  Insert “business” for “nation” and the intent of the statement remains.

But after the last two days, some perhaps might ask if the cloud ain’t all it’s cracked up to be, either.  

Amazon’s cloud done been down, off and on, for a couple of days now.  

ReadWriteWeb’s Alex Williams is keepin’ ‘em honest, and updated, which apparently Amazon hasn’t been too busy doing.

ComputerWorld describes it as an outright black eye for the “dominant player in the cloud market,” with sites like Quora, Reddit, and foursquare “left staggering or totally knocked out” because of server problems in the Amazon datacenter.

By way of example, Reddit’s site explained it was in “emergency read-only mode” because of Amazon’s degradation.

In the ComputerWorld piece, analyst Rob Enderle suggests the biggest impact from the outage may be to the cloud itself.

“What will take a hit is the image of this technology as being on you can depend on, and that image was critically damaged today,” Enderle is quoted as saying.

On the other hand, it should be noted there are lots of flavors of cloud computing, and a fully public, rentable cloud service like Amazon EC2 doesn’t even pretend to offer 100% availability.  In fact, it quite clearly states in its public FAQs that “The Amazon EC2 SLA guarantees 99.95% availability of the service within a Region over a trailing 365 day period.”

In any case, I would recommend carefully reading all the FAQs before fully banking one’s business in the public cloud.

And I would also recommend reading more widely about cloud implementations around the globe.

One size doesn’t fit all (there’s the public cloud, the private cloud, the hybrid, etc.), and the IBM Academy of Technology conducted a survey released this past October entitled “Cloud computing insights from 110 implementation projects” which explains pros and cons, the good and the bad, as well as related considerations to be thoughtfully considered before embarking upon cloud deployments.

Maybe read a little of that before the media or the blogosphere scare you back into your private data center bunker with your AR-15 and 10-day survival kits!

Singin’ In The Amazon Cloud

If the sun doesn’t come back out in Austin soon, I’m going to have to move closer to the equator.

But for some, cloudy skies are just what the doctor ordered.

Amazon’s new Cloud Drive, Cloud Player for Web, and Cloud Player for Android was announced overnight and tees up some big guns pointed directly at Google and Apple in the online music marketplace.

According to the Amazon press release, “these services enable customers to securely store music in the cloud and play it on any Android phone, Android tablet, Mac or PC, wherever they are.

“Customers can easily upload their music library to Amazon Cloud Drive and can save any new Amazon MP3 purchases directly to their Amazon Cloud drive for free.”

Music in the clouds?  Or in too many Amazon executive’s heads?

Only time, and perhaps a few gazillion Amazonian music streams, will tell the tale.

The good news is, the streaming service from the Amazon cloud is free.

The bad news is, how do I get all those countless hours of my life back that I spent burning CDs into iTunes?

What do you mean, there’s no rebate for that??

Don’t pay any attention to me, I’m obviously biased (although I’ve never been a big fan of iTunes, either.  Come to think of it, I really just don’t like DRM!)

Engadget deconstructs the new service and explains that it works something like this: Existing Amazon customers in the US can upload their MP3 purchases from Amazon to their own 5GB cloud space (I’ve always wanted to have my own place in the clouds!).

This is then upgradable to a one-year 20GB plan for free upon purchasing an MP3 album, with additional plans then starting at $20 a year.

My two cents: It’s one heckuva lot easier to just subscribe to Slacker or Pandora for a year.

But maybe that’s just me: I gave up moving all those digital files around about the moment I figured out how I was spending way much more time moving music files around that I was actually listening to music.

But, I’m a forever Amazon customer, so I’ll give them the benefit of the doubt and see how this plays out.

Pun intended.

Black Friday: Social And Upwardly Mobile

It’s Cyber Monday.

Bosses everywhere, go ahead and hang it up.  Simply consider Cyber Monday an extension of the long holiday weekend.

Your employees are going to be plenty busy today, but not for work: There are deals to be had, submit buttons to be struck, credit card security codes to be discovered, shopping carts to be filled!!

And if early results in for Black Friday are any indication, a glorious Cyber Monday it could be.

IBM Coremetrics’ Third Annual Black Friday Benchmark Report was issued over the weekend, an analysis of the online retail sector during this important holiday shopping period.

Here’s what was witnessed from Friday’s e-shopping tidings:

• Consumer Spending Increases: Online sales were up a healthy 15.9 percent, with consumers pushing the average order value up from $170.19 to $190.80 (an increase of 12 percent)
• Luxury Goods Make a Comeback: Jewelry retailers reported a 17.6 percent increase in sales. These affluent shoppers appear very willing to open their wallets.
• Surgical Shopping: Consumers know what they want and where to get it. People are viewing 18.0 percent fewer products on sites than they did last year, suggesting that they are shopping with a specific item in mind and quickly moving on.
• Social Shopping: Consumers appear increasingly savvy about their favorite brands’ social presence, and are turning to their networks on social sites for information about deals and inventory levels. While the percentage of visitors arriving from social network sites is fairly small relative to all online visitors — nearly 1 percent — it is gaining momentum, with Facebook dominating the space.
• Mobile Shopping: On Black Friday, 5.6 percent of people logged onto a retailer’s site using a mobile device, a jump of 26.7 percent compared to the prior Friday.

John Squite, chief strategy officer for IBM Coremetrics, had this to say about this year’s results:

“On Black Friday, consumers came, they clicked and they shopped their way across the Internet, and this time, they weren’t just looking for bargains. Consequently, we’re watching online retail, and increasingly social media and mobile, become the growth engines for retailers everywhere as consumers embrace online shopping not only for its ease and convenience, but as a primary means of researching goods and services.”

In related news, Comscore announced its own holiday e-commerce spending numbers: U.S. retail e-commerce spending for the first 26 days of the November – December 2010 holiday season: $11.64 billion has been spent online, a 13-percent increase versus the corresponding days last year.

Black Friday saw $648 million in online sales, making it the heaviest online spending day to date in 2010 and representing a 9-percent increase versus Black Friday 2009.

Thanksgiving Day (November 26), traditionally a lighter day for online holiday spending, achieved a strong 28-percent increase to $407 million.

Amazon continued its juggernaut performance, with a net positive 25 percent year-over-year increase in unique visitors on Black Friday (compared to 9 percent at Target, 1 percent at Best Buy, and a negative 1 percent at Wal-Mart).

My two cents on this year’s Black Friday: The digital mobile and social nexus is far from reaching its apogee — the mobilly-empowered shopper is a new species, one unafraid to walk into the store with information and resources at their fingertips, from the Web, and their friends and family, to inform their purchases: before, during, and even after their purchases.

Smart retailers, rather than discourage price-conscious mobile shoppers, should turn lemons into lemonade, offering more price-matching and e-couponing that draws such mobile shoppers into their stores in droves.

Now if you’ll excuse me, it’s early Monday morning and I’ve got some holiday shopping to do.

Gaga for Ebooks

Didja see the Grammys last night?

I caught the opening act with Lady Gaga and Elton John, which I found quite entertaining.

And then Stephen Colbert took the stage to kick things off as this year’s Grammys emcee.

And before too long, it became clear Apple’s product placement team had been earning their keep, because instead of a staid ol’ envelope containing the names of the nominees for “Song of the Year,” Colbert pulled from his jacket what appeared to be a working Apple iPad.

You could hear Mac fanboys sighing in synchronicity from around the globe.

They were sighing almost as loudly as the digerati were crying about Amazon’s decision to acquiesce to Macmillan publishing’s request to sell their e-books on Amazon for $15.

Why the —storm?  Well, as Henry Blodget points out, the incremental costs for publishing e-books is “pretty much zero,” and Macmillan’s driving Amazon to adopt Macmillan’s pricing regime as opposed to letting Amazon continue to decide at what price to price its books.

Hey, at least they’ve not jumped completely into Chris Anderson-land and announced they’re giving them away for free.

Who’d a thunk that 10 years after I got my first e-book reader (the Rocket e-Book reader), that the publishing and e-retailing industry would still be squabbling over the price of an e-book?

Life’s really too short for this.

All I know about the book publishing industry is this: I went in to my local Borders yesterday to get a copy of the new political tome Game Change, only to find out they were charging $27.00 U.S.!

I came home and surfed through Amazon to find they were offering it for $13.99.

Done, done and done.  I’ll give one guess as to where I bought the book.

And really, that’s all you need to know about the Amazon juggernaut.

I’m hopeful that Amazon’s caving to Macmillan’s pricing request is part of a larger strategy.

Can we all just get along?  Or better yet, move it along?

When’s somebody gonna unleash Steve Jobs on the negotiating case with Macmillan?

That’s a negotiating session I’d like to be a fly on the wall for.

And, one for which I might even pay a premium so I could get a signed autographed copy from the author.

Back In Black Friday?

For those of you in the U.S., I hope you had yourselves a very happy (and long) Thanksgiving weekend.

They’re never long enough.

So did anybody out there go and do a little shopping?

It seems that quite a few of you certainly went shopping online.

Me, I beat the rush, heading over to Amazon on Thanksgiving Day to buy a couple of new photography toys.

But it was Black Friday, as we’ve come to coin the shopping day after Thanksgiving, where things really heated up.

comScore just released its numbers overnight, and indicated that Black Friday reached $595M U.S. in U.S. online holiday spending, up 11 percent over last year.

For the first 27 days of November, $10.57B had been spent online, a 3 percent increase over the corresponding days last year.

For Black Friday deal seekers, it was clear the discount shoppers were out in force, with the number of visitors to coupon sites growing 17 percent over last year, at 3.3M visitors.

And it was ShopLocal.com which ranked as the most visited comparison shopping site on Black Friday (2M visitors on Friday), helping turn local Web inquiries into local “brick and mortar” sales.

Now for the drumroll….the five top online retail properties surpassed four million U.S. unique visitors on Black Friday, with Amazon garnering a 28 percent increase unique visitors over last year, followed by Walmart (22 percent), Apple.com (39 percent), Target (2 percent), and BestBuy (24 percent).

Overall, a strong start to the holiday shopping season, but as they ask on Broadway, does it have legs?

Larry Dignan over at ZDNet cites discounts and promotions as having led to the early pop, and it’s clear that the Amazon v. Walmart match is proving to be the event of this holiday season.

Of course, it’s way too soon to tell who has been naughty, nice, or profitable, and who’s simply giving away the online store to get customers in and spending.

Santa still has plenty of rounds to make, including today’s round of “Cyber Monday,” when we worker bees head back to the office corporate networks to shop during our lunch break.

But the early holiday online shopping signs at least offer some hope that the kiddies will get more than charcoal this year.