The Beginning of the End of the Retailing of Content

Here’s a picture which I snapped last week on San Francisco’s Market Street: A Virgin Megastore which, like all remaining U.S. locations, is going out of business–across the street from one of the largest Apple Stores, which seems to be doing okay. The Virgin store mostly sells content on shiny discs; the Apple Store mostly sells devices for consuming content, no shiny discs involved.

I remember looking forward to the opening of this Virgin location as the building that contains it went up in 1995. (Trivia: The other original tenant was that 1990s relic, Planet Hollywood.) Even then, the days of big music/movie stores like Virgin Megastores were beginning to come to an end: Amazon.com also opened its (online) doors in 1995. Virgin sold its wares at list price or close to it, as you might expect of a business that had to pay for tens of thousands of square feet of primo real estate in some of the country’s most prestigious shopping districts. Amazon, from the start, sold stuff at the sort of deep discounts that a company without any retail footage at all can manage.

Even last week, weeks into the Virgin store’s liquidation, it was a poster child for why the retailing of content is a business that’s winding down. DVDs and CDs had been marked down by thirty percent–a sharp cut by Virgin standards, but still far short of typical Amazon discounts. And Amazon will ship for free. Which makes the only compelling reason to buy at Virgin the pleasure of browsing items in a real store (which I confess I still like) and the elimination of having to wait for an Amazon box to show up on your doorstep.

But it’s not discs shipped out in Amazon boxes that will render Virgin and all of its physical-world competitors irrelevant long term–it’s downloads and streams of the sort that Apple and Amazon, among others, are doing a job of embracing. It’s just going to be a few years until there are essentially no music and movie stores left except for independent ones that soldier on for reasons that go beyond mere profit. (The Bay Area is fortunate to have both Amoeba and Rasputin–long may they wave.)

Bookstores are going to take longer to vanish, but they’re going to get hit hard too, I’m sure. I’m not ready for e-readers to take over, but if there are still two nationwide book-centric merchants with gigantic stores in 2019, I’ll be surprised. I’m also assuming video game stores will be part of history by then, as will in-person DVD rental (hey, it’s not clear Blockbuster will make it to 2010). And as for good old fashioned newsstands? Well, I still like ‘em, but they already give me a plessantly nostalgic feel.

Let’s end this with a T-Poll:

ISPs Should Lead in Curbing Internet Defamation

A friend once said to me, “the internet is good for two things: slander and porn.” For those who have been the target of electronic harassment and bullying, that sentiment could not ring truer.

Too often, individuals and groups on the Internet abuse the free flow of thoughts that is the promise of the Web to turn around and attack or demean others. Oftentimes, those affected can do little to protect themselves, and find themselves on the short end of the stick.

Why does this occur? Simply put, the US has made it easy for ISPs to skirt any responsibility when it comes to what is posted on their servers. Thus some providers will turn a blind eye when a victim comes a-complaining.

Continue reading this story…

Time Running Out for iPod Competitors

If anything was evidence that Apple’s iPod is ready to be the de-facto digital music device, the latest survey of teens by financial research firm Piper Jaffray should be it. Of the 606 teens surveyed (54 percent male, 46 percent female), those planning to buy a player all responded they were considering Apple’s iconic device.

About one out of every five teens are planning to buy a new music player in the next 12 months, down from 34 percent in the fall survey. Of that group, 100% say an iPod.

For whatever reason, Zune’s share has collapsed — probably due to the fact the players have gone without any update for quite awhile. In the fall, 15 percent said they were considering a Zune. If this is true, Microsoft may find itself being forced out of the digital music player market as the youth is what drives this industry.

There really isn’t much untapped potential here either: 92 percent of teens own a player, up from 87 percent in the last survey. So even if this is exaggerated, the growth potential is slipping away for Microsoft — I’ve often heard them argue about the untapped market as its salvation.

I just can’t see with the increasing amount of negative data for Zune how it is worthwhile for the company to stay in the market. We are hearing that the wagons are circling in Redmond and talks are ongoing with partners on the next Zune model, which should come out in the fall if what we are hearing is correct.

However, will it even be worth it?

GameStop Accused of Selling Played Games As New

The world’s largest video game retailer could be in hot water thanks to some investigative work by Kotaku’s Brian Crecente and Michael McWhertor.

Speaking to unnamed GameStop employees and retailers around the US, the popular game blog has exposed a practice in which employee-played games are getting mixed up with unplayed copies kept behind the counter for security purposes. The Federal Trade Commission told Kotaku that this practice could be illegal.

According to GameStop’s written policy, as confirmed by several employees, company staff are allowed to check out store merchandise for up to four days of personal use. When receiving new games, GameStop “guts” several copies, putting the box on display and leaving the disc behind the counter so it doesn’t get stolen. Kotaku reports that these new discs tend to get mixed up with the “check-out” copies that employees take home.

In all cases, customers are told that they are buying a new copy of the game, and they pay full price as a result.

Though some managers offer “Shop Worn” discounts for games that have been gutted or checked out, this is specifically against company policy, which says these discounts should not by applied to “new, used or checked out games.”

GameStop won’t comment on the matter, and the FTC won’t say whether it is getting involved.

Personally, I’ve never had a problem purchasing new games from GameStop (it’s their used game trade-in prices that set me off), but a glance through Kotaku’s comments section turns up several customers who swear they’ve bought new games that don’t look untouched.

The graceful solution for GameStop would be to start selling any unsealed games as used, even if they’re at a lesser markdown than typical used prices. After all, the customer can’t return a game as new once the plastic comes off, even if the disc never leaves the case. If GameStop can’t assure that an unsealed game is unused, the company should treat itself the same way.

CompUSA Makes a Comeback

After Circuit City bit the dust earlier this year, you probably thought that Best Buy would pretty much be on its own in the electronics super-retailer category. Think again — an old name is making a comeback. CompUSA has now opened 30 locations — mostly in Florida — with a new outlook on retail.

Company execs call their effort “Retail 2.0.” According to Wired, Systemax is bringing back the brand through stores with better lighting, more inviting stores, aggressive pricing and in-store web access. The web access is intended to allow customers comparison shop right from the store to ensure they’re getting the best price.

No doubt CompUSA is also using its connection through Systemax to Tiger Direct, its sister company, to help it be more competitive in this retail environment. Tiger has generally been competitive when it comes to price as well. In fact, whether you go to Tiger or the retail store, the prices on products will be the same.

CompUSA will not restrict the Internet either — so a user could just as easily jump on Amazon and see if they can get what they’re looking at cheaper there. It’s somewhat of a risk, but the company feels that it will give consumers more confidence and thus lead to a sale.

With Circuit City gone, if this concept works well it could be an opening for CompUSA to re-emerge as a competitor on a national level to Best Buy. It could also be a plus for consumers — Best Buy would not have free reign on setting prices.

Would You Buy a CrunchPad?

The history of technology journalists getting into the computer business isn’t full of success stories (remember Adam Osborne?). But TechCrunch’s Mike Arrington and a bunch of co-conspirators have been noodling on the idea of a CrunchPad, a really cheap, simple tablet computer for surfing the Web. Yesterday, a bunch of photos “leaked” out, including some of CrunchPad that looked suspiciously close to final–in fancy boxes, yet. Then Arrington chimed in and gave an update on the project, but said he’s not ready to talk about details on availability. We still don’t know whether the CrunchPad would be a TechCrunch-branded product, or a design that other companies could license, or, for that matter, whether there are any plans to bring it to market at all.

I’m not saying I’m itching to buy a CrunchPad, but I’ve long been interested in the idea of a hunk of hardware that was designed for Web browsing and not much of anything else. I still think I want one with a real keyboard–I’ve yet to meet an on-screen substitute that I can love unreservedly–but I’m open to being convinced that I don’t need one. (I’m also intrigued by the idea of an Apple tablet, but for some mysterious reason, nobody at Apple is talking about whether it’s really working on one.)

So does the CrunchPad, or something like it, interest you?

5Words for April 10th, 2009

Good Friday? This one’s GREAT!

CompUSA is back. And better.

Twitter as tool for revolution.

Getting ready to sell Pres.

Microsoft scales back Live Labs.

Apple patent: unibody for iPods.

Apple discontinues some .Mac tools.

I wanna buy this surge protector.

Time Warner’s unlimited broadband: $150.

Conficker continues to cause trouble.

Sad: D&D co-creator passes away.

Sony puts features on YouTube.

How Lisa and Jackson Really Spent Their $1500

The secret outtake Microsoft doesn’t want you to see from its new commercial…

(April Fools’ Day lasts for a month, right?)

Microsoft’s New “Apple Tax” Charts: Hey, They Look Familiar!

After I finished writing about the oddities and errors in the white paper Microsoft released today about the so-called “Apple Tax,” I read a post on the same topic by Joe Wilcox over at eWeek. He said the charts in the paper, which is credited to Roger Kay of Endpoint Technologies, looked vaguely familiar. They did to me, too. So I dug through my e-mail to find the stuff Microsoft had sent me in the past about Windows PC and Mac pricing,

Here’s a chart that a Microsoft representative sent me back on October 24th, comparing the MacBooks against Windows laptops (sorry it’s so small):

And here’s the laptop comparison chart in the new white paper:

This is a chart on Mac and Windows desktops that Microsoft sent me on January 5th, when it and the world thought Apple might announce one or more cheap new Macs at Macworld Expo (it didn’t):

And here’s the desktop chart in the white paper:

Both charts have gotten updates–for instance, the new laptop one has the $999 MacBook with a DVD burner (which is right, even though it’s not the $999 MacBook configuration you’ll buy today) and some of the PCs are different.

I’m not saying there’s anything fishy going on here–maybe Microsoft hired Endpoint to create the charts and analysis it sent out earlier, but didn’t credit it that time.  But it’s worth noting that the new charts aren’t really new–they’re updates (albeit insufficiently updated ones) to ones that Microsoft was distributing under its own name several months ago. And Kay’s argument that the cost of Apple-brand networking equipment and a Sony Blu-Ray player is a penalty Mac owners must pay is also repeated from another round of materials that a Microsoft representative sent me on October 13th.

Bottom line: The white paper is a rehash, not a revelation…

Good Grief, Even More Laptop Hunters!

Microsoft has posted another commercial in its “Laptop Hunters” campaign, this one starring Lisa (mom) and Jackson (kid):

Same template as the earlier two ones: Show that Windows laptops come in all shapes and sizes, emphasize basic specs (and one cool feature in this case–Blu-Ray), pause to make the point that Macs lack substance, then show the happy shopper(s) with free laptop (a Sony this time–sorry, HP). And don’t even acknowledge the existence of Windows on the computers.

I’m tired of analyzing commercials, so I’ll just point towards my posts on the earlier ads: Lauren and Giampaolo. Most of my thoughts apply to this one too–but if you’re less tuckered than me, I’d love to hear yours.

Microsoft Does the Math on the “Apple Tax.” Badly.

As I said in my post last Sunday on Microsoft’s “Laptop Hunter” ads, it’s unrealistic to expect TV commercials to contribute to a thoughtful discussion of anything. An exercise in comparison shopping between Windows and PCs that takes place in a sixty-second Microsoft commercial just isn’t going to be fair and balanced, any more than an Apple commercial is going to explain that it’s possible to get respectable Windows laptops for a whole lot less than the cheapest Macs.

But Microsoft’s latest salvo in the Windows-vs.-Mac war isn’t a commercial–it’s a ten-page white paper by veteran analyst Roger Kay (a friendly acquaintance of mine, and, like me, a former IDG employee). Roger is independent and knows the personal computer market as well as anyone on the planet, but his paper was sponsored by Microsoft, which means that even if it’s a third-party take on things, it’s going to be one that the company is comfortable with. But the whole point of vendor-sponsored white papers is bring an independent expert’s analysis and data into a discussion in hopes that it’ll be taken more seriously than mere marketing materials.

Roger’s paper includes a bunch of tables that compare Windows PCs and Macs–sort of like what I’ve been doing, although in less excruciating detail–and an analysis of the cost of ownership of the two platforms that concludes that a family than buys two Macs instead of two Windows machines will pay a cumulative Apple tax of $3,367 over five years.

In his laptop section, Roger compares the white MacBook, new MacBook, and 15-inch MacBook Pro against various notebooks from Dell, HP, and Sony, and finds, unsurprisingly, that the Macs cost more. He shows, for instance, that the $999 MacBook comes with a skimpy 1GB of RAM, a bare-bones 120GB of hard disk space, and Intel’s uninspiring x3100 integrated graphics. For hundreds of dollars less, the chart proves, you can buy a Windows laptop with double the RAM, more than twice the disk space, and better graphics.

Pretty compelling. Except that the $999 MacBook doesn’t come with 1GB of RAM. (It has 2GB.) It doesn’t have a 120GB hard disk. (It’s 160GB.) And it doesn’t have X3100 graphics. (It has the considerably more potent NVIDIA GeForce 9400M.) Here, look for yourself. The analysis is based on the old MacBook configuration that Apple refreshed more than two months ago, but the white paper talks about it in the present tense.

Continue reading this story…

Is Twitter Overhyped? A Debate. (Please Join It!)

[A NOTE FROM HARRY: Introducing a new Technologizer feature--T-Debates! In this inaugural one, Dave Worthington and I have at it about the value of Twitter--he's doubtful it has much at all, while I'm a Twitter optimist. But we're mainly doing this in hopes that you'll continue the conversation in comments, whatever your stance.]

David Worthington begins:

The Twitter fad is so oversaturated that someone has to say “enough already.” Twitter must either make money and prove that it has a viable purpose, or accept a fair market valuation to be acquired and become a part of something that’s more interesting.

There are times when Twitter is useful, and it unquestionably has millions of users who do like it. It is a handy tool for journalists who cover events, it helps companies and celebrities connect with people, and can wrap multiple parties into a conversation.

Beyond those few use cases, I question what’s the point? It solves a question that nobody asked, and feeds the narcissism that pervades our culture.

Twitter has been over extended and over used. George Stephanopoulos’s gimmicky Twitter “interview” with former U.S. Presidential candidate John McCain was especially pointless.

Continue reading this story…

Telephone, Internet Outage in Silicon Valley

Wire services are reporting that a massive telephone and Internet outage is affecting Northern California, including portions of Silcon Valley. Telephone and Internet is out for Verizon customers in Santa Clara and Santa Cruz counties, NBC News reports. This does appear to be a case of deliberate vandalism: as many as five AT&T fiber-optic cables have been severed, and a Sprint cable was severed hours later.

The incident occurred around 1:30 am PT (4:30am ET) this morning. Verizon is sending technicians to the scene to assist AT&T in repairing the damage, although at this time it is not known how long the repairs will take. In the meantime, AT&T has begun to take steps in order to reroute traffic.

ZDNet were affected by the outage, with slow page loading times and time outs. 911 and other emergency services in the region have also reported some connectivity issues.

Who’s the vandal? AT&T is currently involved in tense negotations with the CWA over contracts for landline workers. The CWA has issued a statement, denying that its members have any involvement, and condemned “vandalism.” More on this as we get it…

Just How Easy is it to Get Pirated iPhone Software?

You might remember Brian Chen at Wired’s reporting on iPhone App Store piracy. That got us to thinking, is it really an issue, or just an exaggeration of a minor problem? To test our theories, we decided to attempt to install a pirated app on one of our own iPhone 3G’s here at Technologizer.

We’d like to apologize ahead of time to the developer whose apps we have used in this experiment. Your app wasn’t singled out or anything, it was merely selected to show the process. It has since been deleted: Technologizer has no interest in participating in this activity.

Anyways, back to our test. The first step in the process was to use the website Mr. Chen sourced, The Monkey’s Ball. We found that from a perspective of actually searching for sources say via Google and the like, easy-to-use sources for average Joe Pirater are not readily found. Yes, the searches will uncover places to download apps, but you’re pretty much on your own to figure out how to use them.

We surfed around TMB and found that there wasn’t any download links to use when looking through the applications, so we moved on to Appulo.us. Success. Within minutes I had surfed to find MLB At Bat 2009.

The next part absolutely floored me. I clicked on one of the apps and Firefox detected the .ipa extension as executable by the iTunes app. Fair enough, I selected “open.” Within moments, the full version of At Bat 2009 was in my list of Applications. That’s scarily easy.

We hit a road block however — MLB could not be installed because iTunes could not verify them. So we moved on to Capcom’s Mega Man II. Same error. So we did some searching, and found out why. To install cracked apps you need to have a jailbroken phone, and the application IPA Prep installed.

So, for the most part, developers can breathe easy because a majority of us are running non-jailbroken phones. But for those who have jailbroken phones, all you need is an app and a web browser, and just about any application you can imagine is well within your reach.

Apple has just made it too darn easy.

Thanks Amazon, For Doing What the Xbox 360 Doesn’t

Amazon has been dipping its toes in a few new video game ventures lately. The latest from the online retailer, in addition to trading used games and offering downloadable computer games, is the sale of Xbox Live Arcade downloads.

The new service allows customers to purchase a download code for games like Braid and Marble Blast Ultra, which is then redeemed on the Xbox 360 console. Visitors can also purchase games as gifts and send the codes to their friends.

Cool stuff, but why buy this way instead of on the console itself? Simple: Microsoft has a silly download policy that doesn’t let you pay exact change. Packages start at 500 “Microsoft Points,” equal to $6.25, and since most games come in $5 or $10 increments, buying a game through the Xbox 360 sticks you with unused points. This is supposed to encourage future downloads, I imagine, but it strikes me as underhanded. What other retailer requires you to pay extra for a product in exchange for store credit?

All online game stores do this, but to a lesser extent. The Wii Shop Channel requires purchases in $10 increments, but some games actually cost that amount (more often than not, you’re stuck with extra, though). The Playstation Network lets you pay exact change, but only for purchases greater than $5. Sony’s plan is the most justifiable, in the same way that some store owners require minimum credit card purchases to cover the transaction fee.

Kotaku has a rumor that Amazon will duplicate the service for the Wii and Playstation 3, but the retailer won’t comment. Customers should be able to pay the exact amount for their downloadable games, but it’s too bad they’ll have to jump through Amazon’s hoops to do so.

5Words for April 9th, 2009

Sorry this is kinda late-ish:

Apple: cornering the flash market?

Bluetooth hits the big 3.0.

It’s Wall-E as a PC.

Time Warner caps broadband use.

Ten worst operating systems ever.

Gmail figures out time zones.

4GB Eye-Fi cards start shipping.

Moxi box adds media features.