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Posts Tagged ‘Earnings’

Theater chain pushes back on Disney over early DVD release

Tim Burton’s Alice in Wonderland hits the theaters today in London, but it almost didn’t thanks to some DVD release window controversy. But it’s not what most of us would think—the studio, Walt Disney Co., wants to release the DVD earlier than usual, thereby shortening the release window between theater and disc. The theater hosting Alice’s premier, however, is upset about the situation, prompting Disney to strike some last-minute deals in order to appease the lucrative box-office gods.

Disney announced during its earnings call earlier this month that it planned to bump up the DVD release of Alice by a month from the original plan, according to BusinessWeek. This didn’t go over well with the UK’s largest theater chain Odeon, which immediately announced that it would not carry the film “as a result of Disney’s insistence on reducing at short notice the theatrical window for a major 3D title.”

What’s Odeon’s problem? It doesn’t want to lose out on a full month of box office sales—theaters fear that consumers will go straight to Blockbuster or Walmart and skip the movie-going experience altogether. In some cases, they could be right, but box office sales soared in the US in 2009 while DVD sales tanked. Nonetheless, Disney flew to London to strike a deal with Odeon, one of which included a limit on early DVD releases to just two or three per year.

We have always supported smaller windows between theater and DVD release, but it’s clear the studios are trying to pull out all the stops in order to resuscitate dying DVD sales. In this case, they’re trying to move the DVD launch up, but in other cases, studios have worked to push back rental windows to encourage impatient movie fans to buy DVDs. In January, Warner Bros. struck a deal with Netflix to hold off its new releases until 28 days after the DVDs hit the stores, and a month later, a similar deal was made with Redbox.

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The iPad And Chrome OS Netbooks Are On A Collision Course

“We don’t know how to build a $500 computer that’s not a piece of junk.”

“Netbooks aren’t better at anything.”

Those two quotes are both from Apple CEO Steve Jobs. The first was during an earnings call in late 2008 when Jobs fielded a question about why Apple wasn’t cutting prices amid the rising success of netbooks. The second came on Wednesday as Jobs was unveiling the iPad.

Apple has made it clear all along that they had no plans to build a netbook. And true to their word, they haven’t. But that doesn’t mean that Apple didn’t feel there was a need for a device that resided in between a full laptop and a mobile phone — in fact, that’s squarely where Apple is positioning the iPad. With it, they feel that they’ve created a $500 (for the baseline version) device that is superior to every netbook out there.

Meanwhile, Google has decided to target the market in between the laptop and the mobile phone as well. But whereas Apple is anti-netbook, Google is very pro-netbook — they just want to make them better. That’s the reason behind Google’s Chrome OS, as Google clearly laid out during its unveiling event late last year.

And so yes, we once again have Google and Apple on a collision course.

Now, it remains to be seen if people who buy an iPad will do so instead of buying a netbook. At first, I’m not so sure that will be the case. But it stands to reason that eventually, this will happen. And as Jobs’ comments on stage on Wednesday made abundantly clear, that’s Apple’s idea too. In their eyes, you shouldn’t buy a cheap, underpowered PC, you should buy an iPad, their anti-netbook.

Google, which plans to release its first Chrome OS-based netbooks in time for the holiday season next year, can’t like that plan too much. They have promised that netbooks that run Chrome OS will be better than current netbooks because they’re dictating certain minimum requirements (such as big keyboards) to manufacturing partners. But Chrome OS netbooks won’t be able to match the sex appeal of the iPad’s multi-touch screen. However, what they can offer is a familiar experience (much more like a traditional laptop then an iPad), and that will be appealing to a lot of people.

And what’s interesting is that for either of the two to be massive hits, they both will need consumers to continue to feel comfortable moving away from traditional software applications such as Microsoft Office. But their plans to get consumers to do that are very different. Google wants everyone to move towards doing everything on their apps in the cloud. Apple, as they made clear with their overly-long iWork for iPad demo on Wednesday, wants everyone to move towards using iPhone OS-based apps.

And that’s why this battle coming at the end of this year will be interesting to watch. Both Apple and Google are very popular with consumers, but their offerings are very different — while aiming for the same market. And as two companies that were once as close as could be, it’s also fascinating to watch the tension and awkwardness as they now compete in an ever-growing number of areas.

If this market between laptops and smartphones proves big enough, perhaps the two frenemies can once again find a common ground and band together to defeat their common enemy: Microsoft. But the obvious strategy for this used to be that Google would attack Microsoft from the bottom with its Chrome OS netbooks, while Apple attacked from the top with their premium computers, leaving Microsoft squeezed in the middle. With the iPad now clearly aimed at netbooks thanks to its pricing and Apple’s positioning, everything is different.

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Analyst: There’s a market of four to five million iPhones a year in China

Filed under: Apple Financial, Apple, iPhone

I thought Apple sounded a tad bit defensive about China on the conference call Monday, but Morgan Stanley analyst Katy Huberty says there’s nothing to worry about: she expects Apple to sell up to four or five million iPhones in China per year. Apple told us on Monday that they’ve activated about 200,000 iPhones in China so far, but Huberty claims that there’s a market for maybe 50 million iPhones over there, and echoes Tim Cook’s assertion that price is the main issue. “Hardware pricing, service plan pricing and the large up-front payment,” she says in her report, “were cited by 85%, 66% and 56% of respondents respectively, as reasons they were not likely to purchase an iPhone.”

Keep in mind that the four to five million figure is a top end — in the first year, Apple has said that they’re aiming for more like one or two million. But there is definitely a solid market to be found in China, and significant sales there could help buoy Apple earnings reports over here for sure.

TUAWAnalyst: There’s a market of four to five million iPhones a year in China originally appeared on The Unofficial Apple Weblog (TUAW) on Fri, 29 Jan 2010 19:30:00 EST. Please see our terms for use of feeds.

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‘Millions of people’ now own Kindles, says Amazon in its most non-vague sales statement yet
Amazon has been notoriously and aggravatingly mum on releasing concrete sales figures for its Kindle series. Last tidbit we heard was that it was the most gifted item in the retail company’s history. Or maybe there was some indication by AT&T’s note today that 1 million non-phones have been activated, which at this point includes newer Kindles, Nooks, and Sony Readers. At any rate, CEO Jeff Bezos let out the tiniest smidgen of Kindle’s sales today in its fiscal report, saying that “millions of people now own Kindles.” If we’re lucky, next earnings call we’ll get to play a “higher or lower” guessing game. Maybe.

‘Millions of people’ now own Kindles, says Amazon in its most non-vague sales statement yet originally appeared on Engadget on Thu, 28 Jan 2010 19:41:00 EST. Please see our terms for use of feeds.

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Amazon beats analysts, touts Kindle sales

Amazon.com just released its numbers for the fourth quarter of 2008, and it cleared analyst expectations with a healthy margin.

The online retailer had been expected to earn $0.72 per share, but it actually made $0.85 per share. And its revenue rose to $9.52 billion, up 42 percent over the same period last year.

The press release outlining the earnings emphasizes the success of Amazon’s Kindle e-book readers, though it doesn’t actually provide many details. Specifically, Amazon isn’t sharing how many Kindles it has sold, but founder and chief executive Jeff Bezos says “millions of people” now own a Kindle, and that Amazon sells six Kindle books every 10 physical books.

With such emphasis on the Kindle devices, I’m guessing Amazon isn’t going to give up much ground to to Apple’s just-announced iPad without a fight.

Meanwhile, Amazon also completed its acquisition of Zappos during the quarter, and said the shoe and clothing seller contributed $200 million in revenue.

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AT&T activated 3.1 million iPhones last quarter, 1 million non-phones
While Verizon suffers a bit on paper, primarily thanks to a spendy Alltel merger, AT&T has some pretty good news to report on the “money” front. AT&T’s $3 billion in earnings are up 26% over the year ago quarter, and particularly hot on the wireless front with 3.1 million iPhone activations, 2.7 million new wireless customers, and 1 million non-phone devices like e-book readers. While the 2.7 million bests the 2.2 million newbies at Verizon Wireless, AT&T gained less customers on contract thanks to its any-device-goes ways, so it’s hard to say who’s really in the best position here. Still, with devices like the Kindle, Nook, Sony Reader and now iPad in its fold, AT&T is clearly the go-to for getting your not-a-phone onto the internet. Now if only it could do it, um, well.

AT&T activated 3.1 million iPhones last quarter, 1 million non-phones originally appeared on Engadget on Thu, 28 Jan 2010 11:44:00 EST. Please see our terms for use of feeds.

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Jobs On Q1 2010 Results: Apple is now a $50+ billion company — Major New Product This Week

Apple has just announced it’s Q1 2010 earnings, and as expected, they’re very good. I’ll get to the numbers in a second, but perhaps more notable are two Steve Jobs quotes in the release:

“If you annualize our quarterly revenue, it’s surprising that Apple is now a $50+ billion company. The new products we are planning to release this year are very strong, starting this week with a major new product that we’re really excited about.”

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NSFW: Free as in “my publisher will disown me after I pirate my book on TechCrunch”

“So that’s your advice is it? As my agent? On the week my book comes out in paperback, I should produce my own pirated version and give it away free? Why don’t I just punch my publisher in the face? That would be less work.”

My agent rocked back in his chair (a chair bought with 15% of my earnings) and laughed. “I didn’t say it was my advice, I just said there’s nothing they can do to stop you.”

Before our meeting had taken its subversive turn, we had been talking about ebooks: a subject that’s on every publisher and agent’s mind this week after the decision by Stephen R. Covey, author of The Seven Habits of Highly Effective People, to make his books available exclusively on the Amazon Kindle. Covey’s move has caused a highly effective shit-storm because he made it in direct defiance of his paymasters at Simon & Schuster who won’t see a penny from the deal.

‘Seven Habits’ was originally contracted back in the pre-ebook days of 1989 and as such Covey claims that the electronic rights remain with him to do with as he wishes. Simon & Schuster, perhaps unsurprisingly given that they sold 136,000 paperback copies of the book this year, disagree – arguing that Covey’s contract precludes him from publishing any ‘competing works’. “Our position is that electronic editions of our backlist titles belong in the Simon & Schuster catalog, and we intend to protect our interests in those publications.” said an S&S spokesman, ineffectively.

It’s no huge coincidence that Covey’s decision came just a few days after Simon & Schuster, along with several other publishers, announced that they were postponing the ebook release of dozens of titles on the basis that Amazon’s $9.99 price point for electronic titles was cannibalizing hardback sales. Hardback sales – especially of popular titles – are one of the cash cows of publishing, costing just a few cents more to produce and distribute than paperbacks but with a far higher cover price. Ebooks on the other hand sell for less than paperbacks but, by and large, pay a larger royalty to authors: somewhere in the region of 25% of the cover price, leaving even less profit for the publisher. The hardcore book buyers who regularly buy hardback books are also the ones most likely to have an e-reader – meaning that delaying ebook releases should result in more hardback sales. Or so goes the publishers’ logic.

The problem is that book sales are not a zero sum game. Your average Kindle owner, on discovering that a new release is not available electronically, is unlikely to set down his expensive gadget and drive down to Borders to buy the hardback. Instead he’ll simply choose a different title from the hundreds of thousands that are available. Hardcore fans of a particular author might still insist on the hardback, but they would anyway given that it’s much harder to get an ebook signed by their hero.

Meantime, as ebooks become an increasingly important distribution channel for books, authors who aren’t convinced by their publisher’s digital strategy won’t hesitate to take matters into their own hands. New authors will simply choose a different publisher, while veterans like Covey will try to exploit loopholes in their existing contracts to maximise ebook returns.

For Covey, the problem with Simon & Schuster’s digital strategy seems to be largely financial. The company that he has chosen to publish his new Kindle edition – Rosetta Books – has made a big play of the fact that they’re paying him a significantly higher royalty on sales than he was previously making on ebooks. Meanwhile Amazon has promised a huge site-wide promotional campaign for the titles. Other authors choose a publisher because their digital strategy reflects their principles. Cory Doctorow publishes many of his books with Tor Books because they agree to allow him to give away the electronic versions of his books, on the day of publication, without DRM protection. By contrast, when Apple refused to distribute the audio book of his ‘Makers‘ anthology in the iTunes store without DRM, Doctorow walked away from the deal rather than compromise his principles.

I can’t fault my publisher on money: Weidenfeld & Nicolson has paid me not one, but two generous advances to write books about myself, and I’m certain I’ve cost them the same again in lawyers’ fees thanks to the legal threats I seem to attract prior to publication. I earn a decent royalty on ebook sales in the UK and Europe and, because I still own the US rights to my books, I was free to produce my own Kindle edition – limited to US customers – and take 100% of the profits. Equally, I can’t fault W&N on supporting my principles: largely because I don’t have any.

No, the reason I found myself in my agent’s office earlier this week bitching about my publisher’s digital strategy was something even stronger than money and principle: my monstrous ego.

Since moving to the US and started to write for TechCrunch, I now have more people reading my words each week in North America than I do in the UK. Every week I delight in annoying commenters by promoting my war-of-the-worlds-winning book, to the point where people seem genuinely upset when I miss an opportunity to do so. And yet barely a day goes by without someone telling me they tried to find my book in the US, only to be disappointed that – due to publishing’s ridiculous obsession with territories – it’s only available outside North America. “It’s available on the Kindle” I say. “Pft” they reply, “I don’t have a Kindle”. In most cases I end up emailing them a PDF – a distribution model that doesn’t really scale.

The logical solution would be to publish the PDF on my site. The print version of the book has been available for 18 months now – it’s had plenty of time on bookstore shelves and with the publication of the paperback in the UK and no US publisher on the horizon, any future sales are just part of the long tail. There’s already a pirated version available on Limewire – that’s where I got the PDF from in the first place – and the more time that passes, the easier it will be to find an unauthorised digital copy.

By releasing the ebook myself for free at this stage of its life, it would do very little damage to sales but will get my words into the hands of a whole new US audience: readers who might then seek out other things I’ve written or pay me to write new things, or buy the properly-formatted Kindle edition with clickable footnotes – or any of the other myriad benefits that Doctorow cites for wanting to give his books away free.

But that’s where W&N’s digital strategy lets me down. The company has the rights to all digital sales of the book outside North America and their parent, Hachette Livre, has decreed that they will not allow any ebooks to be distributed for free, or without DRM.  If I make the ebook of Bringing Nothing available for free in the US then there’s nothing to stop foreign readers downloading it, which would breach W&N’s contractual rights. As I explained to my agent, owning the US rights to the ebook is pointless if I can’t do anything with them without pissing off my publisher.

It was that point that he made his brilliant suggestion. The kind of suggestion that makes all those 15%s worthwhile…

“Why don’t you do it anyway?”

“What do you mean?”

“I mean, you’re allowed to publish it in the US, so why don’t you just do it? If some people in the UK or Australia download it, then so what? It’s not your fault; it’s W&N’s fault for not having a global ebook strategy. And anyway, they should be delighted at the publicity.”

They really should. So what if a few people outside the US download the free version? If they haven’t bought the book by now they almost certainly weren’t going to. And who knows, if they like the ebook they might be encouraged to buy a hard copy either for themselves or as a gift for a friend. They’re certainly more likely to pre-order the next book – which is what really matters to W&N at this point. The only question was how W&N’s legal department would feel about my agent’s advice.

“I didn’t say it was my advice, I just said there’s nothing they can do to stop you.”

Semantics. I emailed my publicist to asked her, hypothetically, what would happen if I somehow convinced a US-based publication to allow me to give away the ebook of Bringing Nothing – strictly to North American readers, of course – but with no real way to stop anyone else in the world downloading it. Her reply – after speaking to the lawyers – was brilliant: “The consensus seems to be that we can’t exactly stop you. But I’ve been asked to remind you that Hachette policy is not to offer free ebooks and all our ebooks are DRM protected. So there you are. Reminded.” Just another reason why I love my publicist.

All that remained was for me to somehow convince a sufficiently popular US site to act as a patsy for my dastardly, egotistical plan. I sent an email to TechCrunch CEO Heather Harde, setting out my case and asking if TC could be that site. I was expecting it to be a tough sell, and I was right.

“YES!” she argued.

And so here we go. The entire ebook of Bringing Nothing To The Party – True Confessions of a New Media Whore: my egotistical Christmas gift to you, and your reward for enduring my weekly attempts to convince you to buy it.

The main PDF download is here, there’s an HTML version (with linked footnotes) here and an entirely impractical DocStoc version below. The ultimate TL;DR.

It’s published under a Creative Commons (Attribution-Noncommercial) License, so by all means re-distribute it however you see fit, as long as you link back either here or to PaulCarr.com. Also, if you do repost it anywhere, make sure you let me know the link either in the comments or on Twitter so I can say thank you. As an added incentive, I have ten copies of the paperback edition sitting on my desk and this time next week I’ll choose ten random re-posters and send each a specially customised copy.

Finally it’s worth saying that, for all of my ego, the book is actually quite a hard thing for me to give away: its 275 pages tell the story of a very strange few years of my life – years that cost me my career, my reputation, the love of my life, and very nearly my freedom. In other words, it’s a real feel-good Christmas romp.

I really hope you like it.

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