Mark Kolier’s Blog

Archive for September, 2011

Amazon.com CEO Jeff Bezos presented the new Amazon Kindle – called ‘Fire’ this past Wednesday in New York. I’ve written much about the Kindle in general and had not planned to write about it particularly since yesterday’s unveiling offered few if any surprises. We knew there would be a 7 inch color screen, a touch screen, Wi-Fi internet access and a 30 day free trial for Amazon Prime (which includes unlimited, instant streaming of over 10,000 movies and TV shows and free two day shipping on millions of items) which if consumers do not opt out it will be an additional $ 79 renewable ‘gift’ to Amazon that would keep on giving year after year – Mr. Bezos is a smart guy indeed.

Besides access to Amazon Appstore, the Kindle Fire will include a cloud-accelerated “split browser” called Amazon Silk, free storage for all of the user’s Amazon digital content in the Amazon Cloud, built-in email app that gets webmail (Gmail, Yahoo!, Hotmail, AOL etc.) into a single inbox.

We also knew there would be no cameras (unlike the iPad), and no 3G or 4G network access (iPad’s have 3G and Apple is planning 4G access). The Kindle Fire 1.0 does not seem to me to be the iPad killer. The sale price was a bit of a mystery although most experts predicted $ 249 or less and it came out at $ 199. Amazon also released pricing plans for its entry-level black and white Kindle at $ 79 which makes it the least expensive e-reader on the market.

In releasing the Kindle Fire in front of the 2011 Christmas season at what appears to be close to its manufacturing cost, clearly Amazon is banking on increased sales of digital music, videos and books as well as other content if it is to make the new Kindle platform a winning one. The iPad (at more than twice the price) will continue to appeal to those that have the ability to afford it, and are desirous of the larger screen (a pain in the neck to carry around as far as I am concerned) and Apple App Store.

Other tablet makers as well as the Barnes & Noble Nook have great reasons to be concerned. The RIM (Blackberry) Playbook tablet is already gasping for air and the Kindle Fire will likely snuff it out completely. I believe sales of other popular Android based tablets (Galaxy, Xoom etc) will be impacted since there truly is another non-Apple alternative. If the Kindle Fire is not the iPad killer it may turn out to be the killer of many other tablets.

It’s also possible that the market for tablets could be split into two – a premium market headed by the Apple iPad and the everyday (lower end) tablet that is affordable to so many more people. It makes me wonder how many people will decide to own both devices. After all – does owning an iPad preclude one from buying and using an Amazon Kindle Fire?

As a serial early adopter I likely will pick up an Amazon Kindle Fire – 1.0. I still don’t have an iPad although I’ve used one several times and it is a great and cool piece of technology. I have and actually use my original Kindle and it still works fine. But many times since I bought the original Kindle I have wished that I waited for the 2.0 version which has been out for quite some time now.

Amazon would never tell but my burning question is how long will it be until the improved version of the Kindle Fire comes out? I can hardly wait. And that’s the problem.

I attended the OMMA http://bit.ly/q9cZ36 (Online media and marketing association) conference in New York City yesterday. While it is a two-day event I could only steal away for the opening sessions on Monday morning. I’m glad I went since the opening keynote was delivered by Jimmy Wales – Chairman Emeritus and founder of Wikipedia.com. Mr. Wales did a really good job in his short fifteen minute keynote (which by the way seems to me to be an ideal amount of time), and I gained an ever greater appreciation for Wikipedia.com and its mission.

If you spend any time on the internet you are no doubt aware of Wikipedia.com. Touted as the world’s free encyclopedia Wikipedia is available in 282 languages. There are more than 3.7 million articles in English, 19.7 million articles in all with more than 90,000 regularly active contributors. Of course there are reports of errors and vandalism that most of the time are corrected – and corrected quickly. And yes my source is – Wikipedia.com.

The content on Wikipedia.com is all user-generated and contributors are not paid. The crowd acts as its own police force when it comes to what is accepted as content and what is not. The accuracy (as of 2005) as reported in Nature showed that the science articles they compared came close to the accuracy of Encyclopedia Britannica. Personally I have come to rely on the accuracy and concise and easy to digest information contained on Wikipedia.com. I may never buy another set of encyclopedias again.

When Wikipedia.com founders Mr. Wales and Angela Beesley determined that there were topics that did not fit a traditional encyclopedia model, they then started Wikia.com. Wikia’s user-generated wikis range from video games and movies to food and environmental issues – it is considered a collaborative publishing platform for pop-culture. Wikia, Inc. attracts more than 45 million unique visitors per month to its 275,000+ enthusiast communities. Particularly popular with the gaming community, Mr. Wales noted that some Wikis are started and then simply die-off due to lack of interest. It would have to be that way when you really think about user-generated content and the areas of interest in which people would feel compelled to start a Wiki.

What I like best about this ten-year old platform is that at its core it is all about making the world a better place.

I wonder if and how much Julian Assange’s Wikileaks.org (unaffiliated with Wikipeida.com) has damaged Wikipedia.com’s brand?

Netflix CEO Reed Hastings has made a number of really good moves over the past ten years. From knocking out Blockbuster (and nearly every other brick and mortar video store) to becoming THE default source for movie rentals, Netflix parlayed it all into a high flying stock offering and has continued to be a consistent performer. In fact the business even remained solid through the recent (since 2008) seemingly endless economic downturns.

And even more suddenly it all is coming crashing down. The rise in pricing for Netflix subscribers was more than eyebrow-raising but even more so was the creation of something Mr. Hastings is calling ‘Qwikster’. The plan was to have ‘customers’ have both a Netflix account as well as a Qwikster account. I cannot think of a single person that would want to operate two accounts when they only had to have one account before.

The result was that more than one million Netflix account holders cancelled their accounts. That’s a stunning number. A company known for being customer-friendly and really understanding their customers apparently does not have a clue at all.

Supposedly Netflix had 25 million customers paying $ 10 per month before the move, so by losing 1 million customers it would follow that there are now 24 million customers paying $ 16/month. Doing the math would make you think Mr. Hastings remains a genius. In fact there are reports that Netflix had figured in a certain amount of customer attrition in raising their prices.

I am not sure how many people have signed up for Qwikster. I can assure you that I am not one of them. In fact we had cancelled our Netflix account before Netflix made the changes as we were not watching enough to make it worth the expense.

Netflix has made it better for…. Netflix. They did not solve a customer problem at all and may have created some in the process.

But I cannot keep from wondering – was Mr. Hastings really that stupid for making the move? They now have fewer but more profitable customers.

What do you think?

I have made no secret of my disaffection with QR (Quick Response) Codes. You know them as the funny looking little square that you’ve noticed popping up in advertisements in print, billboards, the web and even on television. Although the technology is new to many Americans, it has actually been in use since the 1990’s having been used in Japanese automobile manufacturing factories as an inventory control tool.

In my experience QR codes are clumsy, and don’t work as often as they do work. The smartphone QR code readers are not great and I frequently have to shoot a QR code multiple times in order to get it to ‘register’. For marketers and companies that wish to more deeply engage current and potential customers, QR codes can end up being more harmful than helpful. And asking your prospect or customer to make excessive efforts in order to get information on your company or offer is hardly a path to a consumer-friendly experience. I’m not saying QR codes do not work at all – just that they do not work well.

So if QR codes are to meet their demise something has to be there to replace them – and it has to be better. Near Field Communications (NFC) very well could be the answer. From http://www.Wikipedia.com: ‘NFC, allows for simplified transactions, data exchange, and wireless connections between two devices in close proximity to each other, usually by no more than a few centimeters. It is expected to become a widely used system for making payments by smartphone in the United States. Many smartphones currently on the market already contain embedded NFC chips that can send encrypted data a short distance (“near field”) to a reader located, for instance, next to a retail cash register. Shoppers who have their credit card information stored in their NFC smartphones can pay for purchases by waving their smartphones near or tapping them on the reader, rather than bothering with the actual credit card’.

David Pogue in his excellent column Thursday in the New York Times discusses the relationship between NFC and Google Wallet – http://nyti.ms/nPdh7C. It’s interesting that NFC technology is nearly ten years old and is still being finessed. In fact in the U.S. the current generation of NFC technology is only available on Sprint’s Google Nexus – and admittedly this is NFC 1.0.

For those of you that prefer Katie Boehret’s video review (she also has a written column from Thursday’s Wall Street Journal) that can be found here – http://on.wsj.com/oK7we8
But there have to be many people who like me would welcome the day when we could use a digital wallet and have our phone (which is with us all the time anyway) be able to do so much more when it comes to purchasing goods, receiving timely offers, as well as to request information easily and in a timely fashion.

It’s the wave of the near future. Are you ready?

Pandora.com is pretty cool but in my view Spotify.com blows it away. You have to be ‘invited’ but I don’t think that is a big problem – after all I received an invitation and did nothing special to receive one. In fact all you need to do is invite yourself – http://www.spotify.com/invitation/

Spotify was in Europe for a couple of years before coming to the U.S. in July. There have been many questions on its revenue model which is a mashup of paid subscriptions, ad revenue and display ads (90% of users do not pay) and retail partnerships where music is sold directly to users. John Paul Titlow wrote a good post on the subject back in July – http://rww.to/ngA4sK – and he does note that the company as of that writing was not profitable even with more than 10 million subscribers. Spotify has a goal of having 50 million users within the first year of being live in the U.S.

It suffices to be said that music industry executives are not nearly as enamored of Spotify as are its users. All they can see is the potential loss of revenue. My thoughts and questions are more aligned with creating new sources of revenue and how those new revenue sources would stack up with the declining revenue generated from the sales of singles and albums.

There are several things that make me prefer Spotify over Pandora. At the top of my list is that I like to listen to entire albums and Pandora’s free model precludes you from doing that. Spotify allows you to search for a particular artist and album and immediately it comes up and you can listen to it song by song. There are occasional ad interruptions, but they are not overly frequent and the benefits far outweigh the commercial breaks.

Also on my list is the very user-friendly functionality of the site. Setting up play queues, play lists, syncing with iTunes and other devices are all easy. Pay options allow for the creation of a library, and use ‘anywhere’. The entire experience is good enough that I am even considering opting for one of the pay models.

There’s a ‘Premium’ subscription at $ 9.99/month – advertising free – a bit steep but it also allows you to listen on your mobile device as along with ‘enhanced audio’ and ‘exclusive content’. Also available is a Spotify ‘Unlimited’ subscription for $ 4.99/month which although advertising-free, does not offer Spotify on your mobile device, nor does it offer the enhanced audio or exclusive content. For me the audio quality is very good and I consider myself a bit of an audiophile. I am uncertain of how much better the enhanced audio might be (perhaps Spotify should offer me a ‘free trial’ so I could compare?)

If you like music you should really give Spotify a spin. Yesterday I went to see Steely Dan at the Beacon Theater in New York (they were at the top of their game) and while I was in the office listened to ‘Royal Scam’ (the album they will play this evening) to get primed. It was great and I love it!