Future of Media

Go Read This | Tesco’s Blinkbox sees festive sales rise 245% | The Drum

From Tesco's published infographic

From Tesco’s published infographic

So Tesco has sold 400,000 tablets in just three months. The company says it is planning a new edition of its HUDL device and that it could have sold even more tablets before Christmas had they had them in stock. It’s interesting in the context of books and my recent post on Barnes & Noble’s Nook troubles that all of these sales took place without an ebook offering to bolster or encourage buyers (Blinkbox books is to launch in 2014, but is not yet live), cementing the very clear evidence that ebooks are not the biggest motivator for tablets (nor were they ever). Some impressive data on increased sales from Blinkbox itself too:

Tesco’s TV and movie streaming service Blinkbox saw sales spike by a massive 245 per cent year-on-year over the festive period…

New Year’s Day was the biggest day ever for the service with sales up by 266 per cent year-on-year, while mobile sales have increased by 674 per cent and smart TV sales by 465 per cent.

Ahead of Christmas, Tesco launched its own Hudl budget tablet and reported sales of 400,000 in the three months to December. The supermarket brand now plans to launch a second edition of the device later in the year.

via Tesco’s Blinkbox sees record festive sales with rise of 245% while mobile sales rocket by 674% | The Drum.

Go Read This | The publishing industry’s new product categories | Studio Tendra

Another decent piece this from Baldur:

Finally, once you have a set of ideas and aspirational projects, you need to whittle them down, or at least prioritise them. That means you need to look at the cost-revenue balance for each one. And to do that you need to figure out the business model, often from scratch because, unlike print, interactive media doesn’t come with a business model attached.

via The publishing industry’s new product categories | Studio Tendra.

Go Read This | Tesco tablet expected on 23 September

Tesco-LogoIt has been clear for some time that probably only full-scale retailers have the capacity to respond to Amazon, Google, Apple and other digital giants. They have the advantages of scale, access to capital, direct customer interaction and customer inertia working in their favour.

Of course, those advantages are threatened by online retailers like Amazon and by the shift to digital consumption of media. It makes sense then that really forward-looking retailers will attempt to move into the digital distribution and retail space. Many of them have been offering online grocery shopping effectively for some time, long before Amazon or other newer entrants. Tesco has been making what look like smart moves in digital media for a while. It will be intriguing to see if this forthcoming tablet play works.

Success, however, cannot be measured by units sold alone. A good sign of it working would be of the company sells lots of tablets AND signs lots of people up to its digital content services. At the kind of price point the articles on the tablet are talking about, content sales and customer acquisition for the digital services are the goal in the short and medium term.

The question that arises for me is what’s the longer term play for Tesco? How can it build on success in the UK (if it materializes) and can it compete with the giants even if it does succeed in the UK. The costs of such competition can be quite hefty, as B&N has learnt to its cost:

Tesco might be able to hit the £99 price using a cashback-style promotion, Wood suggests: “I can see Tesco using substantial discounts on other services such as bundled media from Blinkbox, or vouchers for discounts on petrol or groceries through its ClubCard loyalty scheme.”

The tablet would take on competitors from the likes of Apple, Google and Amazon, and will be tailored to online shopping and video viewing – both areas where Tesco is looking to capitalise on its position.

via Tesco tablet expected on 23 September – and may be very low-priced | Technology | The Guardian.

Go Read This | iPod eclipse — Benedict Evans

Lurking in a seemingly not related post about how the iconic Apple product is slowly becoming less important to Apple, is a great few lines about the nature of the music business and, more generally, the content business at a meta level:

One could argue that trying to charge a little extra and make more profit is more trouble than it’s worth for Google or Apple (or even profit-hungry Amazon) – better to offer it at cost or thereabouts to enhance the value of the broader platform, which is where the real money comes from (advertising and devices respectively).

The same thing is happening in books and video – content is a condition of entry to the platform game that you provide at cost. This obviously makes life pretty tough for startups – it’s hard to try to build your own ebook store or download-to-own music store right now when any device your customers might use probably already has an at-cost service built-in. The one place this might be different is in video, since in that business it is actually possible to have unique content – but of course this is very expensive.

via iPod eclipse — Benedict Evans.

These issues are of concern to everyone in the content business, from authors to publishers. That doesn’t mean we’ll be impacted equally!

 

 

 

Go Read This | Amazon Is Not A Commerce Company

Fascinating stuff:

One common element ties Amazon’s online retail, cloud services and foray into the tablet market: data. For Amazon, the hardware does not matter. The goal is not to make margins on selling fancy consumer hardware and expensive equipment. Through efficiency, Amazon can experiment in retail, publishing and its enterprise service offerings.

I still have my doubts, though.  AWS is not infallible. Its repeated outages have given its competition plenty of room to differentiate against AWS.  And low margins do not necessarily mean success. It impacts revenues and its overall stock price — factors that can’t be ignored.

via Amazon Is Not A Commerce Company | TechCrunch.

Go Read This | Pearson buys stake in Nook Media | The Bookseller

On the face of it this seems an odd move for a company so keen to unload its trade business into a joint venture with Random House in the driving seat. However, the college stores and the fact that students and their instructors are rapidly moving online are clearly the driving factor on this deal, reminding us just how much Pearson sees education as its future:

Will Ethridge, chief executive officer of Pearson North America, said: “With this investment we have entered into a commercial agreement with NOOK Media that will allow our two companies to work closely together in order to create a more seamless and effective experience for students. It is another example of our strategy of making our content and services broadly available to students and faculty through a wide range of distribution partners.”

Worth noting too is the increased value now being placed on B&N’s Nook business. Seems that their device play has worked even better than might have been expected, even this time last year.

via Pearson buys stake in Nook Media | The Bookseller.