Tuesday, January 27, 2009

Amazon’s Kindle 2 Will Debut Feb. 9

The next generation of Kindle is coming out in a few weeks and hopefully Amazon has stocked up. "The device has been out of stock since November, after Oprah Winfrey touted the device on her show. The announcement seems to confirm our suspicions that the original Kindle has been obsolete since that time and that everyone who purchased the device over the holidays from — or put their name on a waiting list — will receive the newer version." There continues to be chatter about what the new features will be, most likely better graphics and faster refresh. According to reports, "the new device corrects some of the design flaws of the first model, adding round buttons instead of those strange angular ones, and smaller side buttons to avoid accidental page turns."

Sony will ultimately respond with their next version of its Reader. So where is Apple and why have they not responded with a product in this space? The Iphone can't do everything; it's screen size is not large enough to replace the book/newspaper/magazine experience. A larger device is required. Still Apple has the advantage over Sony of the infrastructure through itunes to download and save content. It could compete with Amazon's site on day one. Apple could be poised to take and lead this next niche. But until they do, Kindle will surely prosper.

Why Ad Rates Are Plummeting And What It Means For Publishers

In economics, we call it supply and demand. Add the price elasticity component and well, that is explaining the state of ad networks and new media today. This article clearly explains the path we are headed. As content publishers look at monetization tools, from ad revenue to subscription, how they earn their revenue is being affected by glut and cheaper alternatives. For advertising, their CPM is being hurt when ad networks are discounting their own ads in the remnant, or secondary market. Why buy an ad directly, if it can be bought for less by an ad network. "Agencies and advertisers can't resist the discount and begin to buy their way onto premium sites through ad networks only. This drives down the amount of inventory publishers can sell on their own and increases their reliance on ad networks. The vicious cycle continues."

And does specific content matter. For agencies using demographics to reach a particular audience segment, does it matter whether they are reading a premium site or "stocks r us". Same audience and reach at a lower cost with more frequency. "Why pay a $25 CPM to reach that wealthy, 50-year-old, Boston-area living, Mercedes Benz-owner on when you can pay a $.60 CPM to reach the same guy five minutes later when he's reading a five-year-old article on's archives?" This economic model ultimately leads to more price wars and lower pricing.

And so, content publishers will need to offset this loss of revenue by restricting ad networks from re-selling their content, marketing the value of the content and the brand, and perhaps even charging a subscription fee for access. At the same time, the internet continues to increase the amount of accessible content; how it is controlled and managed within web sites will bring more control back into the advertising model.

Actor's Strike Unlikely

I guess SAG had to wait till after their awards show to make changes. No use stirring the pot before the big televised event. And so they waited till the day after to fire their national executive director and chief negotiator, Doug Allen. At the same time, SAG will be joining forces with the other actor's union, AFTRA, to renegotiate their advertising agreements.

"The negotiating committee for the union, which has been working without a contract with the Alliance of Motion Picture and Television Producers since last June, will now shrink to a 10-member task force, according to the Associated Press." I have a better idea, accept the AFTRA agreement with AMPTP and move forward. It's time to move forward, not waste more time or money, when a legitimate deal with actors has been already struck.