According to Forrester analyst Sucharita Mulpuru, Amazon could be converting on-site recommendations into sales at a rate as high as 60 percent in some cases.
Fortune suggests the recommendation system likely played a significant part in Amazon’s 29 percent sales increase for the second fiscal quarter this year.
“At root, the retail giant’s recommendation system is based on a number of simple elements: what a user has bought in the past, which items they have in their virtual shopping cart, items they’ve rated and liked, and what other customers have viewed and purchased,” the article explains.
In addition to featuring recommendation panes throughout the purchasing process (from search to checkout), Amazon sends users recommendations via email. To keep the volume of Amazon emails down, the company only sends out emails from product lines that have the highest average revenue-per-mail-sent. Simple, but when the customer qualifies for mail across multiple product lines (books, video games, etc.), it makes a difference and it also maximizes the purchase opportunity.
But there are still areas where Amazon could expand its system. “Already, the company has begun selling items previously sold in bulk that were too cost-prohibitive to ship individually like say, a deck of cards or a jar of cinnamon,” notes Fortune.
“Customers may buy them, but only if they have an order totaling $25 or over. But the company could actively recommend these add-on products during check-out when an order crosses that pricing threshold, much like traditional supermarkets have impulse-purchase items like gum and candy bars at the register.”
Amazon has released a promising Netflix challenger, bringing an Amazon Instant Video app to the iPad.
The app is available on iTunes for free — but as of now, there are no iPhone or iPod Touch versions.
“It has access to streaming Prime Instant Video for subscribers, as well as downloaded or streamed video on-demand,” Engadget reports. “Other key features include access to the Watchlist/queue, and automatic access to any shows subscribed to with a Season Pass the day after they air on TV.”
The post suggests that Amazon’s app could be bad news for Netflix: “The app runs smoothly, and while the video player itself gets just the bare bones iOS treatment, every other part of the app seems polished, including the Watchlist.”
“Add in the fact that you can watch things via subscription and seamlessly jump to fresher/premium content available for purchase or individual rental (with the notable caveat that you can’t actually browse the VOD content, or purchase or buy it from within the app itself) and there’s a serious competition going on,” notes Engadget.
Thanks to a $800,000 grant from the Knight Foundation, a new YouTube channel called “The I Files” will bring hard-hitting investigative journalism to the video aggregation site, adding to its professional content offerings.
YouTube is helping to launch the channel with the Center for Investigative Reporting (CIR). The channel will feature videos from local citizen journalists and content partners, like The New York Times and Al Jazeera, who will share revenue with the Knight Foundation.
“The YouTube project is part of the Knight Foundation’s push for philanthropically-funded local investigative journalism, which has been hit especially hard by the financial downturn of traditional media,” reports TechCrunch.
“Last year, the FCC released a report on the decline of journalists covering local politics, and speculated about the possible corruption and negligence going unnoticed. YouTube could potentially offset this problem with user-generated content and by incentivizing the CIR’s national partners, such as the BBC, with some added viewership,” notes the post.
The extent of YouTube’s long term commitment is unknown, but according to a company spokesperson, “we highlight all kinds of news content from time to time on the site, and often highlight new channels — so you can expect that in the first few weeks after launch we’ll look for opportunities on YouTube and social media to tell more people about it.”
Through its $400 million investment in the YouTube Original Channel Initiative, Google has launched premium content featuring stars such as Amy Poehler, Chris Hardwick, Tony Hawk and Madonna. And its attempt to become a digital content creator has paid off with advertisers paying up to $10 million for spots in the shows.
SourceFed is one premium channel that made it big, hitting 500,000 subscribers and 158 million views. But you won’t find any prominent celebrities on their YouTube posts.
“Despite the star power, so far, the top-performing shows have been created by people who initially built their audience on YouTube. This shouldn’t come as a surprise: These young Web celebs understand the online video space, and some of them have grown up there,” ReadWriteWeb explains. “It is only fitting, then, that the first premium content channel to hit a major milestone of success would be one created by a YouTube mega-personality.”
SourceFed was created by experienced YouTuber Philip Defranco. The channel’s producer attributes its success to two main factors: “easily consumable” short videos accessible on mobile devices and fan interaction that has developed a strong online community.
“Our viewers treat us like we’re their best friends,” producer James Haffner says. “We get to have fun every day, but at the same time, we inform people.”
Hollywood is discovering new ways to leverage social media. When Universal Pictures was getting ready to release its summer comedy “Ted,” for example, the marketing department set up a Twitter account for the film’s teddy bear.
Screenwriters Alec Sulkin and Wellesley Wild were paid extra to help create social buzz about the film, including authoring Ted’s (often foul-mouthed) tweets.
In addition to the Twitter account, Wild was commissioned to blog via “Ted’s Fuzzy Thoughts.”
Mark Wahlberg even changed his Facebook cover picture to a banner that read “ted is here” (followed by content such as a NSFW video message that Wahlberg’s 600,000 fans could share).
“It worked spectacularly,” notes the Wall Street Journal. “Tracking polls, which movie executives rely on to guide box office expectations, suggested an opening-weekend gross of $35 million to $40 million for the film, which was co-written and directed by Seth McFarlane, creator of ‘Family Guy,’ who also provided the voice for Ted. Instead, ‘Ted’ generated $54 million, catching the industry by surprise.”
Studios are looking beyond Facebook and Twitter as just promotional tools. “They are now developing elaborate social media campaigns early on, sometimes as soon as a film gets greenlit,” notes the article.
“Researchers are conducting deep numerical analysis on posts and tweets to guide marketing decisions, sometimes predicting box office revenue with pinpoint accuracy,” adds WSJ. “They’re looking not just at opening movies, but sustaining their word-of-mouth through subsequent weeks.”
Ted’s Twitter account now has 400,000 followers and the film’s Facebook page has more than 2.7 million fans. “Talking Ted,” now the top entertainment app on iTunes, has been downloaded 3.5 million times.
“Excluding sequels, ‘Ted’ is now the most successful R-rated comedy of all time and this weekend should surpass $200 million in domestic box-office revenue,” concludes the article.
The Jet Propulsion Laboratory (JPL) in Pasadena, California streamed a live link as the Curiosity rover landed safely on Mars and began transmitting images from the planet.
The Mars Science Laboratory (MSL) is managed for NASA’s Science Mission Directorate by JPL, a division of the California Institute of Technology.
According to the MSL update page: “NASA’s Curiosity rover has landed on Mars! Its descent-stage retrorockets fired, guiding it to the surface. Nylon cords lowered the rover to the ground in the ‘sky crane’ maneuver. When the spacecraft sensed touchdown, the connecting cords were severed, and the descent stage flew out of the way.
“The time of day at the landing site is mid-afternoon — about 3 p.m. local Mars time at Gale Crater. The time at JPL’s mission control is about 10:31 p.m. Aug. 5 PDT (early morning EDT).”
Launched from Cape Canaveral Air Force Station in Florida on November 26, Curiosity is scheduled to spend one Martian year (687 Earth days) analyzing samples drilled from rocks or scooped from the surface of Mars.
“Curiosity will carry the most advanced payload of scientific gear ever used on Mars’ surface, a payload more than 10 times as massive as those of earlier Mars rovers,” notes the NASA fact sheet. “Its assignment: Investigate whether conditions have been favorable for microbial life and for preserving clues in the rocks about possible past life.”
Just two years ago, 24 percent of consumers used Google to begin researching potential online purchases, while 18 percent started with Amazon.
A new survey from Forrester Research shows the tables have turned. Today, Amazon sees 30 percent of online buyers researching on their network, doubling the number Google attracts.
Last year, Amazon accounted for 19 percent of all online sales in the U.S., amounting to $48 billion. The company has even larger growth internationally, with nearly half of its revenue coming from sales outside the U.S.
Although the site is known for books and other media such as music and video, non-media products have accounted for more than half of Amazon’s total revenue since 2010.
With its competitive pricing and popular price comparison app guiding shoppers directly to Amazon, “other online retailers may feel the need to establish a sales channel on the site, or risk losing out on exposure,” reports Mashable.
Amazon’s secret? Forrester identifies several key strategic differentiators: “a ‘rentless obsession’ with customer experience; a willingness to invest heavily in customer acquisition and retention through low prices and programs like Lending Library and Amazon Prime; its investment in technology, which is more than double the average retailer, as well as logistics; and a willingness to play ‘legal hardball,’ going after Apple for fixing prices of e-books and fighting against states’ attempts to levy taxes against the retailer,” the post states.
A new report from BI Intelligence suggests that mobile devices are playing an increasingly significant role in commerce, including multiple uses of phones by consumers for shopping and research.
“An analysis by Deloitte estimates mobile will influence $158 billion of in-person retail sales this year,” reports Business Insider, noting how mobile users are increasingly comparing prices at brick-and-mortar retailers with e-commerce competitors. But that is just one way mobile is changing the way consumers shop.
The use of mobile devices to buy items directly has also risen. The mobile sales on Cyber Monday last year doubled the percentage of the previous year. Additionally, Forrester Research predicts mobile commerce will hit $10 billion this year, a sizable jump from $6 billion in 2010.
Mobile users are also frequently accessing email on their phones to get discounts and coupons as well as using their devices for in-store payments.
“NFC probably won’t be the solution that powers this change though, but new apps like Pay with Square and Apple’s Passbook are promising,” the post states.
There is one unique financial difference between a design patent and a utility patent and it’s one word: apportionment. In the case of Apple v. Samsung, that difference means $2 billion in damages.
“‘Apportionment’ basically means that the patentee only can recoup profits associated with the patented feature, not the entire profit from the sales of the accused product,” writes Christopher Carani, a patent attorney at intellectual property law firm McAndrews, Held & Malloy, Ltd.
Carani sent reporters an email explaining the key foundation to Apple’s $2.52 billion damages claims, with $2 billion-worth related to design patents.
“The no apportionment language (i.e. disgorgement of infringer’s ‘total profits’) was placed in the Patent Act in 1887 in response to a 1886 U.S. Supreme Court case regarding infringement of a design patent on a carpet design, whereby the Court said the design patentee was only entitled to 6 cents in damages — the portion of the damages attributable to the design,” Carani explains.
“In response to that holding, a holding that members of Congress felt was a miscarriage of justice, the 1887 Patent Act was enacted and provided a remedy for ‘total profit’ without apportionment for design patent infringement,” he adds.
According to Carani, the Court’s decision will likely have a major influence on cellphone design in the coming years. If Apple wins, new designs will flourish; “…despite Samsung’s cries, there are many different ways to design these devices. Young, creative and hungry industrial designers the world over will no doubt rise to the challenge of designing non-infringing devices.”
“However, if Samsung prevails,” Carani says, “we can expect the market (including Samsung and others) to coalesce around the minimalist design embodied in the iPhone, iPad and Galaxy devices for at least 2-3 years.”
“At root, the judges of the Federal Circuit appear confused about how computers work,” and, “it’s making a mess of patent law,” reports Ars Technica, explaining how the definition of “computer” has judges making conflicting decisions.
In order to receive patent protection, inventions cannot have “abstract ideas” or “mental processes.” However, the United States Court of Appeals for the Federal Circuit seems to be having a hard time drawing that line, according to the article.
The Court supported a patent protecting Alice Corporation’s idea of using a computer to do a specific kind of financial transaction. A few weeks later, Bancorp Services was denied its patent for “using a computer to manage a particular type of life insurance policy,” the article states.
The Court explained the discrepancy: “…the use of a computer in an otherwise patent-ineligible process for no more than its most basic function — making calculations or computations — fails to circumvent the prohibition against patenting abstract ideas and mental processes.”
“To salvage an otherwise patent-ineligible process, a computer must be integral to the claimed invention, facilitating the process in a way that a person making calculations or computations could not,” the court continued. “The computer required by some of Bancorp’s claims is employed only for its most basic function, the performance of repetitive calculations, and as such does not impose meaningful limits on the scope of those claims.”
In contrast, computer use was considered an integral part in the Alice Corp. invention, which was therefore upheld.
“This doesn’t make much sense,” Ars Technica argues. “Every computer application, no matter how sophisticated, consists of nothing more than ‘the performance of repetitive calculations.'”
Warner Bros. is targeting several unnamed users of Amazon.com’s resellers market, filing at least 16 separate lawsuits in California.
The complaints claim the defendants have been selling counterfeit DVDs ranging from “Harry Potter” films to various HBO original shows.
Amazon’s e-commerce platform, which enables third parties to sell products, is protected by the first sale doctrine. However, a 2010 9th Circuit Appeals Court decision set the precedent that the original vendor could limit resale by “crafting the terms of use for media content to define the purchase as a ‘license’ rather than a strict ‘sale,'” notes The Hollywood Reporter.
However, a source told THR that the lawsuits aren’t concerning issues of used merchandise.
“If Warner Bros. is suggesting that illegally downloaded or camcorded copies of shows and movies are being passed off as new or used items on Amazon, the lawsuits launched Monday suggest a different sort of problem,” the article states. “Namely, the lack of internal controls in the Amazon Marketplace to deal with such ‘counterfeits.’ Amazon has been known in the past to suspend the accounts of counterfeiters, so the litigation raises the question of why not this time.”
Warner Bros. is seeking damages and attorney costs (Amazon is not a named defendant) and that “the defendants be restrained from offering unauthorized copies of their works for sale as well as marketing, advertising and promoting such copies,” explains THR.
In the year of the failed SOPA and PIPA legislation, a recently leaked report indicates that the RIAA’s Deputy General Counsel did not believe those bills would have been effective in dealing with music piracy.
RIAA CEO Cary Sherman wrote and spoke out in support of SOPA and PIPA at the time: “legislation that if passed would have removed infringing websites from the United States Internet,” according to TorrentFreak. “But quietly behind closed doors earlier this year one of the RIAA’s most senior lawyers admitted that the legislation would not have been effective against online piracy.”
In the leaked presentation document, RIAA Deputy General Counsel Victoria Sheckler admits that because of the viral online opposition to the bills, they were “essentially dead.”
But the document said more. According to TorrentFreak, “perhaps of most interest is the confession that even if they had passed, SOPA and PIPA would have been of little help to the music industry.”
The RIAA is instead focusing on the “six strikes” copyright enforcement, believing it is “robust enough to have a positive effect with its ‘consumer friendly’ approach.”
“Evidence exists that most users would modify their behavior if alerted to the risks associated with using certain P2P services and/or made to believe they will face consequences if caught infringing,” writes Sheckler.
According to a “Memorandum of Understanding, the RIAA is clearly aware that if they’ve issued infringement notices against an account holder six times, then that user has a good chance of being viewed as a ‘repeat infringer’ by their ISP — at least if prompted to do so by the RIAA” and could therefore suffer penalties including a slowed connection, possible disconnection, etc.
Consumers are faced with a dizzying array of options to catch up with TV viewing as the cable business struggles with windowing strategies across multiple digital platforms.
One frustration for viewers is the inconsistent manner in which their favorite shows are offered online and on-demand.
“What is delaying the multichannel TV world is a complex web of vested interests ranging from the cable and satellite operators that dictate most of the distribution parameters for programming to the studios that hold onto some of the rights to the content they license to the networks,” notes Variety. “Then there are the varying off-air marketing strategies, not to mention just old-fashioned indecision.”
Programmers are faced with ad revenue challenges when considering premiere telecasts, reruns, DVR playback and more.
“Cablers also need to protect their relationships with operators that pay them a fortune in carriage fees,” explains the article. “On the other hand, programmers want to maximize the exposure of their shows in ways that can drive ratings back to on-air, dilute the appeal of piracy and capitalize on the momentum of online video in general.”
The industry’s lack of uniformity has evolved during the dawn of the TV Everywhere era, enabled by over-the-top products and services (and impacted by consumers’ changing expectations).
“What we’re really trying to do as an industry is to get a point of consistent time-shifted product available on all devices and platforms to pay TV subscribers,” said Mike Hopkins, president of distribution at Fox Networks.
“Even as cable/satellite TV carriers like Comcast and DirecTV squabble over dollars and cents with broadcast and cable networks like NBC and Viacom, the very structure of their decades-old business model is under attack from new Internet technologies and services, as well as new government regulations,” reports ReadWriteWeb.
“At stake is the future of how people watch and pay for television and video — and who controls the experience,” notes the article.
The dominance of cable and satellite TV providers is being chipped away by Internet video services like YouTube, streaming Internet TV boxes such as Roku and Boxee, online media distribution venues including Netflix and Hulu, smart TVs and related over-the-top (OTT) platforms.
“The other half of the squeeze on the cable TV industry comes from the ossified business practices of the industry itself,” suggests the article. “Cliffhanger battles for carriage rights that lead content creators to pull their programming from cable and satellite systems if they can’t get a deal they like is shooting the industry in the foot.”
Frustrated consumers (and some lawmakers) are pushing for change to the current bundling model, for example. “Programmers like Viacom typically won’t allow anyone to buy their channels individually, but we hope to change that,” said DirecTV recently.
Some analysts suggest the impending changes do not signal a death toll for cable TV, but rather a transition where mobile devices will be used in conjunction with TVs. We should expect the growth of second screen apps to be a significant influence in this space (and may even help save cable).
“Cable TV’s ratings may fall as OTT becomes more popular, but don’t cancel cable’s season just because the plot is getting a major rewrite,” comments ReadWriteWeb.
Following its initial victory in federal court in mid-July, Aereo has announced changes to its financial model that could further enrage TV broadcasters who continue to battle the company on claims of copyright infringement.
“TV streaming start-up Aereo has unveiled a more flexible pricing structure that includes a $1 day pass, $8 and $12 monthly passes, and an $80 annual plan,” reports VentureBeat.
“Aereo lets New York City residents view live streams from major TV broadcast networks (including ABC, CBS, NBC, and Fox) on a variety of Internet-connected devices, such as smartphones, tablets, and desktops,” explains the post. “There’s also a DVR in the mix that allows users to record up to 40 hours of content that can be streamed later. Ultimately, it’s a great solution for cord-cutters that still want to enjoy local content.”
In addition to updating its original $12/month subscription, the company is offering “Aereo Try for Free,” an introductory trial that allows NYC residents to watch one continuous hour of TV everyday without paying.
“We know that one size does not fit all, that’s why we’ve designed our new pricing structure to work for a wide variety of lifestyles,” explains Aereo CEO Chet Kanojia. “Whether you want a day pass to watch the ‘big game’ on your mobile device or an annual membership that provides you with 40 hours of DVR storage, we have a plan that works for you.”
Aereo is currently available only to TV viewers in NYC, but the company has plans to expand. “We’re going to really start marketing,” said backer Barry Diller last month following the court decision. “Within a year and a half, certainly by 2013, we’ll be in most major markets.”