Archive for Business News
American restaurant chain Applebee’s has purchased 100,000 tablets that will allow the public to order and pay for food. The company plans on keeping staffing levels the same and will not fire anyone due to the tablets being setup at each table.
Instead of going with the Apple iPad like most companies, Applebee’s has decided to go with Presto, which is similar to the Point-of-sale software that the servers use. The tablets will also be outfitted with a standard credit card reader as well as NFC to link up to mobile wallet apps. These are going out to 1,800 Applebee’s locations in the US by the end of 2014. The company also says it plans to add other features like streaming music, video, and even tools that will let you share what you’re eating with Facebook buddies.
During initial beta testing, Applebee’s management discovered that the tablets encourage more orders of appetizers and desserts during a typical meal. For families, the tablets will include a variety of video games that can be accessed through a modest fee. A trivia game, for instance, would likely cost $1 to play, fairly identical to microtransactions on consumer owned smartphones and tablets. Conceptually, Mom and Dad can keep the kids entertained with the tablet while waiting for their meals to arrive.
Amazon has officially opened a series of pop-up stores in retail malls in San Francisco. This is the first time the online e-commerce giant opened a physical location. There are a number of Kindle e-Readers and Tablets on display to give transient shoppers the ability to play with the devices and buy them on the spot.
Walmart, Target and a number of other big box retailers in the USA have dropped the entire line of Amazon branded devices because they did not want to become “showrooms” for the company. The only retailer to stock the Kindle is Best Buy, but Amazon is very concerned with the ability of customers to play around with the hardware. When you sell tablets in an online environment it is hard to get that tectonic visceral experience.
An Amazon spokeswoman said the temporary stores are in a handful of malls as part of a marketing campaign. The majority of them are only in operation for two weeks.
A few years ago we broke the news that Amazon had firm plans to open a retail store, once their new corporate headquarters was completed in Seattle. Architecture draft plans had a cafe and bookstore, where it is thought that the books Amazon publishes with their New York imprints will be available to purchase. It is unlikely we will see a full on retail store until 2015.
The Justice Department came down hard on Apple for the agency pricing model where it established they colluded with major publishers to create a fixed price for digital books. When everything was all said and done the court appointed a monitor to insure Apple was complying with the antitrust settlement. Today, Apple is blasting the monitor that is charging them $1,100 per hour and saying they had no choice in finding someone better.
Former US Justice Department inspector general Michael Bromwich was the man selected by the courts to keep tabs on Apple. In the first two weeks of work, Bromwich invoiced the Mac-maker $138,432. That number includes not only his own hourly fee, but that of a number of legal assistants brought in to support the role, and a 15% “administrative surcharge” on top.
Apple said they were left hamstrung with the choice of monitor, given the role was filled by judge Denise Cote. “Mr. Bromwich appears to be simply taking advantage of the fact that there is no competition here or, in his view, any ability on the part of Apple, the subject of his authority, to push back on his demands” Apple wrote, Bloomberg reports.
One of the biggest complaints that Apple has is the fact Bromwich is demanding interviews with Apple CEO Tim Cook, board member Al Gore, and Jony Ive (“whose sole and exclusive responsibility at Apple is to perfect elegant product designs,” according to an Apple attorney.
Bromwich has fired back at Apple by saying “You people seem to think I’m working for you. Apple has sought for the last month to manage our relationship as though we are its outside counsel or consultant,” he wrote in a letter to Cook and his board last week. He Continued “My fees are reasonable, and you have no idea what a reasonable fee looks like. Also, it doesn’t matter if you think my fees are reasonable, because you don’t get to negotiate them: You just pay them. The court will approve them.”
If you are into digital newspapers you are likely familiar with PressReader. The company has over 3,000 newspapers in over 80 different countries and has dedicated reading apps for iOS, Android, Windows 8 and Blackberry. The apps have always simply been known as PressReader and today the company is undergoing a rebranding campaign to gravitate away from Newspaper Direct and simply be known as PressReader.
PressReader is mainly known on the consumer level by offering a monthly subscription to read all of the newspapers you want. If a subscription isn’t your thing it is quite easy to just buy them on a singular basis. PressReaders success can be attributed to preserving the traditional printed newspaper experience in digital format. You have your Sunday funnies, crosswords, obituaries, localized adverts, and trading corner. Many people find its easier to gravitate towards the digital medium that mirrors print. This is PressReader’s core strength: not to simply give you a PDF, but to add its own twists to each issue. Users have the ability to augment text sizes, comment on articles, Tweet, or just strip away all of the CSS elements to give you raw text, which is easier on the eyes on smaller screen devices.
One feature about the app that many people are really digging is called “smartflow.” It basically allows you to endlessly scroll from article to article by simply using the standard page turn mechanism. When you are done reading an article the next one is immediately visible and often starts as the one you are currently reading is done. Most newspapers only show you the article you clicked on and then forces you to exit the story and pick a new one out.
PressReader continues to focus on the average end users that are hungry for news, but has been quite aggressive about getting their content distribution system into hotels, cruise ships and airlines. In recent weeks they signed a deal with Trump Hotels to have newspapers available to their guests on any device they have. They also got River Cruises to give customers a chance to read their local paper when trailblazing all over Europe.
The name change makes sense, the vast majority of iOS, Android and Blackberry users have always thought their name was PressReader anyways, because its the name of their flagship app. They have updated their main corporate website and it actually looks fairly slick with HTML5 and CSS3 elements. Their entire fleet of apps will be similarly updated in Q1 2013 and will give readers a better experience.
Barnes and Noble has just released their 3rd quarter financial results and things are not looking good. The company has seen a decline of 41.3% in Nook e-Reader, Tablet and Accessory sales and the entire division only brought in $51 million dollars. eBook sales were also down 21.2% due to the lower average selling prices of books and total sales were $57 million.
Part of the reason Barnes and Noble is seeing huge declines with their hardware is because of the price slashing. If you look at their portfolio of tablets last year they were making 20% to 30% more on each device sale. In Q2 ’13 the NOOK device prices were $99 for the Nook Simple Touch, $139 Nook Simple Touch with Glowlight, $199 for the NOOK Color, and $249 for the NOOK Tablet. Those were some very solid profit margins, but if you look at the prices this year you can get a Nook Simple Touch for $79, which is a 20% loss. Or you can purchase a Nook Simple Touch with Glowlight for $119 at a 15% loss, or a Nook HD $129 -35% loss or finally the Nook HD+ for $149, -40% loss.
As you can see, Barnes and Noble is trying to remain competitive in the hardware sector but it is no surprise that their sales are significantly down. They are trying to still make a go out of selling Nook devices in the hope that digital book sales will make up for the diminishing returns.
If you look at the recent decline in eBook sales, this is partly attributed to the abolishment of the Agency price model of selling books. For the longest time book retailers could charge what they wanted for eBooks and then Apple and the six major publishers came together to even the landscape and charge a unified pricing model for books. Needless to say after about a year in court this pricing model was axed and all contracts had to be renegotiated. This is a win for customers, but B&N is now making a few dollars less for each digital book sold.
eBook prices are one thing, but we have not seen any runaway success stories this year that have been getting people out in droves to buy it. 50 Shades of Grey and the Hunger Games have been critical success stories and those 2 trilogies comprise of the highest grossing eBooks of all time. The lack of 2013 bestseller to capture everyone’s imagination is also a big part of the decline.
Last month the UK arm of AudioGO went into administration, which is a fancy way of saying it is officially bankrupt. The assets are being sold off to eliminate the debt and to monetize their audiobook catalog. Audible has announced that they have purchased 5,000 audio editions from the now defunct company.
AudioGO, formerly known as BBC Audiobooks, “owned about 10,000 audiobooks published by the broadcaster, including works by Graham Greene, Arthur Conan Doyle and J.K. Rowling,”
Licensing rights for the titles will transfer to Audible in February, pending approval from affected authors and publishers.Mark Shaw, partner of accountancy firm BDO and a joint administrator for AudioGO, said: “This will ensure continued access to a large portion of the AudioGO library for the consumer, and continuity of royalty payments to authors and publishers.”
Coby Electronics bet big on the budget tablet market since 2010 and pushed products into big box stores all over the US. Over the course of the last few years the company often would release six new devices and tried to market them under $200 to be appealing towards the price conscious crowd. The company and all of their assets have now been sold for an undisclosed sum and key executives have all been let go.
The Gordon Brothers Group purchased a number of Coby assets a few months ago. GBG specializes in purchasing defunct companies and try to turn them around. In recent years they purchased Polaroid and The Sharper Image, two other companies that have a track record of shoddy products and abysmal customer support.
One of the big losers of this sale are the customers. Coby devices continued to be sold at Walmart, Big Lots, Toys R US and a myriad of other retailers. GBG has no intention of honoring product warranties, as the transaction was structured as an asset purchase, not an outright acquisition. Customer calls to Coby’s support line go unanswered and their main 1-800 number has been shut down. Most troubling of all, products sent in for warranty service in the last few months were never returned or replaced. Presumably, then, there is a big pile of warrantied Coby stuff sitting in one of the company’s warehouses somewhere. Many customers had to actually spend money to have their tablet devices fixed, in addition to having to ship it out. This entire situation has spawned a litany of posts on Facebook and other social media channels about faulty units and no way to repair them.
Why did Coby go out of business when it had an extensive line of consumer electronics and high visibility in the US? A source told us that they tried to aggressively expand too quickly with expensive executive hires, investments into factories and the costs of manufacturing the products. They bet the farm on Android tablets and customers did not embrace their line of products as anticipated.
Rogers Media is likely the largest magazine publisher in Canada and they have pulled all of their digital editions out of Zinio. Rogers intends on launching their own Netflix-like app, called Next Issue magazine that will provide access to all of its magazines as well as dozens of high-profile American titles for a monthly fee. Rogers insists the decision to pull its titles from Zinio was not their own, and referred inquiries to trade association Magazines Canada.
Zinio has been inroads in distributing their digital magazines all over Canada and the US by way of Recorded Books. Recently Zinio started offering back-issues available to be purchased, instead of just the most recent issue. The Toronto Public Library trumpeted their relationship earlier this fall, saying the digital magazines were extremely popular, with about 55,000 copies checked out in since June. Many libraries are voicing their disdain about the whole situation.
Next Issue grew out of a joint venture started in 2009 by U.S. publishers Condé Nast, Hearst, Meredith, News Corp., and Time Inc. It provides subscribers with access to around 100 monthly magazines for $9.99 a month or both monthly and weekly publications for $14.99. Rogers’s Next Issue Canada service has adopted the same pricing as the U.S. service: $9.99 a month for monthly publications and $14.99 a month for monthly and weekly publications.
Libraries may not have the large selection of Canadian titles via Zinio as they had before, but there is silver lining. In January, Magazines Canada is rolling out Canada’s Magazine Store, promoted on its website as a “one-stop shop for all member titles.” The association states that its “relationship with digital circulation suppliers is changing, including our Zinio-based program.” It sure looks like Zinio is starting to get phased out and their one time allies are turning into direct competitors.
e Ink Holdings, the company chiefly responsible for developing the screen technology found on Kindles, Kobos and Nook e-Readers just released their financial earnings from the last quarter. The company has garnered over 15.5 million in profit, which is a bright turnaround from recent quarters where they last over 33 million. e Ink has turned their fortunes around with digital signage and major vendors are turning to them for their low-powered needs.
E Ink invested millions into research in development and developed a number of new technologies such as Carta, Regal and Mobius. They recently shuttered their corporate headquarters and RND centers, electing to put everyone under one roof.
e-Readers still represent the lions share of the companies profit and their customers are confident about the growing popularity of e-readers ahead of the Christmas season, as a survey by the US Pew Research Center showed an increase in e-reader penetration from 19% to 24% this year, with the trend likely to spread to other parts of the globe. New devices such as the Paperwhite 2, Kobo Aura and Nook Glowlight 2 are predicted to sell very well in international markets.
All eyes are on the new Flexible Sony e-Reader due to be released in Japan on December 3rd. This stems from a year long partnership between Sony and e Ink who worked on the technology together.
Aside from all the new hardware coming out, e Ink is is bullish about digital signage, smartwatches, phones, luggage tags and price displays in the local grocery store. There isn’t much profit from this yet, but their goal is to have 1% of the worldwide signage market by next year.
Harpercollins has just reported their latest quarterly results, which are the first ones produced since News Corp spun off their publishing division. Total eBook sales rose 30% in the quarter and accounted for 22% of revenue in the most recent period compared to 15% in the first quarter of fiscal 2013.
The big titles contributing to HC’s success was The Ocean at the End of the Lane by Neil Gaiman, The English Girl by Daniel Silva, and Divergent and Insurgent by Veronica Roth.
Overall at the company, their entire book division has seen a sharp decline. Their big bet is with new projects, such as selling eBooks directly to customers and launching their own dedicated e-Reader app for Android.
If you have dreams about working for Apple, Microsoft, Amazon or Yahoo, there are many barriers in place to prevent employees from moving up in the organization. Microsoft pioneered a concept called stack ranking, which lumps employees and managers into three distinct categories. These are the superstars, people you want to hang on to, or people that need to shape up, or ship out. Amazon, Yahoo and a myriad of other companies are starting to adapt this mentality into their internal systems.
Kurt Eichenwald commented that “Every current and former Microsoft employee I interviewed—every one—cited stack ranking as the most destructive process inside of Microsoft, something that drove out untold numbers of employees. The system—also referred to as “the performance model,” “the bell curve,” or just “the employee review”—has, with certain variations over the years, worked like this: every unit was forced to declare a certain percentage of employees as top performers, then good performers, then average, then below average, then poor. For that reason, executives said, a lot of Microsoft superstars did everything they could to avoid working alongside other top-notch developers, out of fear that they would be hurt in the rankings. And the reviews had real-world consequences: those at the top received bonuses and promotions; those at the bottom usually received no cash or were shown the door.
Kurt went to directly quote an engineer who said “The behavior this engenders, people do everything they can to stay out of the bottom bucket. People responsible for features will openly sabotage other people’s efforts. One of the most valuable things I learned was to give the appearance of being courteous while withholding just enough information from colleagues to ensure they didn’t get ahead of me on the rankings.” Worse, because the reviews came every six months, employees and their supervisors—who were also ranked—focused on their short-term performance, rather than on longer efforts to innovate.
Many industry experts have claimed that this promotional system is toxic, creates an air of distrust and many people have said that this method has contributed to the companies overall decline in the last ten years. This has not stopped other companies from trying to emulate it.
Dreams about working at Facebook? Molly Graham who used to work in Facebook HR said “Then there is a two week period of calibration where managers meet to look at the assessments of everyone on their team and ensure that people are rated correctly relative to their peers. Facebook has seven performance assessments as well as a guideline for what % of employees should be at each level, however it is explicitly not a forced curve, particularly for small teams. The curve exists to ensure that extraordinary performance is rewarded (I believe the distribution is such that only 2% or less of employees are given the highest rating every cycle) and that if hard conversations need to happen, they happen.”
Molly went on to say that “Calibration happens at the team level and at the senior management level , and all of their direct reports look at the numbers for the whole company, lists of the highest performers and lists of the lowest performers. Performance Assessments are final and they are used to determine compensation like raises, bonuses, and additional equity grants. Facebook gives out raises and additional equity once a year but they do promotions and bonuses twice a year. Compensation at Facebook is almost entirely formulaic with multipliers (based on the Performance Assessment) for bonuses, raises, and additional equity grants.
Brad Stone recently released a new book about Amazon and the research he did gave him unparalleled access to hundreds of employees. In his book, he mentioned “In a meeting held usually in September or October, the leaders talk about who’s getting a promotion, and talk about who is doing well and who is doing poorly. Amazon’s managers group employees into three tiers: The top 20%, who are groomed for promotions, the next 70% who are kept happy, and the bottom 10%, who are either let go, or told to get it together.
This system, which was created by Jeff Bezos, is supposed to cut down on politics and in-fighting. Unfortunately, Stone says it has the opposite effect.”Ambitious employees tend to spend months having lunch and coffee with their boss’s peers to ensure a positive outcome once the topic of their proposed promotion is raised in [the meetings],” says Stone.
Stone also notes that promotions are very limited at Amazon, so if you fight for your employee to get a promotion, it means someone else’s employee gets snubbed. And anyone in the room can nuke someone else’s promotion.
Most of the companies outlined above all have curves for employee promotions and knowing who the dead-weight is. It is very difficult to excel and thrive at these companies because there are so many different factors holding you back. These companies may be stable, but they don’t employ the best methodologies to rise up in the ranks.
One company that buckles the trend of stack ranking is Google. A former employee at the big G, said it is all about peer based reviews. “Promotion and work performances is entirely reliant on peer reviews. In other words, to get ahead at Google and to get a positive performance review, you must get positive reviews from your fellow co-workers. Your manager might love you, but if your co-workers don’t like you, you have some work to do. Managers are also required to seek peer review from those they manage. Senior level employees from other fields are also encouraged to seek peer reviews from people in other departments. For example, engineers need reviews from people other than engineers in order to advance. For this reason, a culture of cooperation is endemic at Google. This is great because the percentage of “cowboys” that seems common at other high tech companies is quite low at Google. It also fosters an awareness of the type of contribution made by people outside your department, since everyone reviews people in other fields, and therefore must learn a bit about what others do outside their sphere.”
In the end, it looks like Amazon and Facebook have fairly similar performance review structures as Microsoft much-lambasted system while Google seems to have a performance that seems to trade one set of problems for a different set. The Stack system for promotions is not working and Amazon is ranked second in the US for having the least loyal employees. Worker bees at Microsoft only have a shelf life of four years at the company before they get disillusioned and move on.
Kno has had a rocky road since they burst onto the tech scene in June 2010 when the company announced their 14 inch dual screen tablet. It never ended up hitting the market and in early 2011 the company gravitated towards software development. They reached agreements with 75 publishers and has over 200,000 interactive and digital titles their library. Habitual investor of the company, Intel, has just announced they have acquired majority ownership of Kno.
John Galvin, the GM of Intel Education said in a statement “The acquisition of Kno boosts Intel’s global digital content library to more than 225,000 higher education and K-12 titles through existing partnerships with 75 educational publishers. Even more, the Kno platform provides administrators and teachers with the tools they need to easily assign, manage and monitor their digital learning content and assessments … We’re looking forward to combining our expertise with Kno’s rich content so that together, we can help teachers create classroom environments and personalized learning experiences that lead to student success.”
Most of KNOS team will be moving to Intel to try and kickstart their fledgling educational unit. There will be a series of Intel branded tablets being released soon that will have all of Kno’s software bundled on it.
Kno has never been known for making a ton of money and their investors have been lobbying for an exit strategy to make their cash back. Babur Habib is one of the co-founders of Kno and has been a fixture at tech events all over the world, talking about big data. It is unknown if he will be moving to Intel, but the other co-founder Osman Rashid will not be moving in, due to a conflict of company ideals with Intel.
Indie bookstores in the US and UK are expressing a massive amount of trepidation about the new Amazon Source program. This provides bookstores with a 10% commission on Kindle and eBook sales. If a customer buys a Kindle, the bookstore will earn a small % of each book sold for the first two years. Many stores and their organizational bodies are not reacting to this new program in a positive light. Today, we look across the web for industry responses to Source.
Most indie bookstores in the USA belong to the American Booksellers Association, which assists them in marketing materials and ideas for seasonal themes. The CEO of the ABA, Oren Teicher, commented “Given Amazon’s aggressive corporate tactics and their longstanding strategy to avoid the collection of sales tax, we don’t see this new program as being at all credible.”
“If Amazon thinks indie bookstores will become agents for the Kindle, they are sorely mistaken,” says Suzanna Hermans, co-owner of Oblong Books & Music in Rhinebeck, N.Y., and president of the New England Independent Booksellers Association. “There is no way I will promote Amazon products in my stores after the havoc they have wreaked on our industry as a whole. Sorry, Jeff. I’m not buying it.”
Tim Walker, owner of Walkers bookshops in the UK, said: “One would have to ask the question ‘Why would Amazon want to take that step? Where is the motivation?’ Because at the end of the day, they haven’t really ever given a shit about everyone else in the book trade . . . My worry would be that by selling Kindle devices, we would be converting customers to using Amazon for their physical book sales as well as e-books. I would be very reluctant to jump in.”
Carole Horne of the Harvard Book Store commented “Hmmm, let’s see. We sell Kindles for essentially no profit, the new Kindle customer is in our store where they can browse and discover books, the new Kindle customer can then check the price on Amazon and order the ebook. We make a little on their ebook purchases, but then lose them as a customer completely after two years. Doesn’t sound like such a great partnership to me.”
The entire staff at Skylight Books in California weighed in, “This offer seems clearly disingenuous and is obviously a Trojan Horse style attempt to gain access to our customers. As independent booksellers, we don’t have the negotiating power of Amazon, or their market share, or the luxury of losing money each year while being propped up by worshipful investors. What we do have is our own stores—physical spaces that are each unique (and many, like us, already offer e-readers), that serve as a center of their communities, that are frequented by passionate book lovers and supported only by their purchases. On the other hand, Amazon has always proved itself to be an opponent of ‘e-fairness’ at every turn, has done grievous harm to communities of readers across the country by driving booksellers out of business and leaving many cities without a bookstore at all. Therefore, our convictions tell us that Amazon, no matter how much they try to bully and encroach, will not be allowed access to our stores. We are not Amazon franchises. We don’t want 10% of a Kindle sale or anything else from Amazon.”
Christine Onorati of WORD Bookstores in New York expressed “No surprise here, it’s not for me. From a purely dollars and cents point of view I’m sure some booksellers somewhere will see value in this. Especially the ones who dwell in the gray areas of buying deeply-discounted books from Amazon to resell in their stores or those who charge authors who publish through CreateSpace a fee to stock their books on their shelves. I know they exist, and I know they think they are ‘sticking’ it to Amazon in some way. But I have no desire to sell my customer info to Amazon or send more of my customers to them. I’m happy keeping completely separate from them. I also said no when I was approached by Audible (owned by Amazon) to sell them my customer data by sending my customers to them. So Amazon is obviously interested in us indies right now. Let’s hope that’s an optimistic sign that we’re making a difference.”
Michael Tucker, president and CEO of Books Inc., a 12-store indie chain based in San Francisco, described it as more or less a form of suicide. “In the long term, for anyone who gets into it, they would be losing their customers for what would end up a very small return.”