Geek Biz Report, week ending 9 May 2010. [Updated]
updates 9 May, 10am: added RBGSX chart and reporting to the news coverage originally posted Friday night
Lead Story:
Apple sells one million iPads. [link]
oooo…. [dr.evil] One Million iPads [/dr.evil]
[Geek Biz Editorial]
Perspective: a scant million is between the total metro populations of Tulsa, OK and Tuscon, AZ — and only half the populations of Vegas, Kansas City, Orlando, San Antonio, or Cleveland. (that is to say, still half as small of any of the five, let alone considering the combined population of 10 Million in the 5 cities cited)
Yeah, yeah, a million is a big number but it doesn’t light me on fire yet — imagine the press release: “Apple sells iPads to just under half of Cleveland, OH”
Internationally, 1 mil is one person in 12 in Beijing or London, one person in 15 in L.A. or Hong Kong, one in 20 in New York, Seoul, or Mexico City, and just one person in 32 in Tokyo.
Dude. iPad hasn’t even cracked local Tokyo fandom numbers yet. More people watch K-On in its native language than own an iPad. The market for Yui, Mio, & Asuza figures is bigger than the whole iPad App marketplace.
Don’t let 6 zeroes distract you. One Million is nothing. An extremely profitable nothing, but the iPad user base is half the size of Cleveland. There’s an Ohio Wal-Mart out there with a larger potential ‘user-base’
##
more trashing the iPad:
Disney Says IPad Owners Played 1.5 Million ABC Shows – translation: toy owners use toy to watch TV. Is this news? What else are they going to use the damn thing for, compiling spreadsheets?
Dude, these aren’t computers. They may be better than computers, for what their target market wants, and I stress again, they will likely prove extremely profitable for Apple, but it seems like people want to slot the iPad into categories where it just doesn’t belong.
I’m calling it: the iPad is the first ‘smart TV’ — it does stuff other TVs don’t, & it’s portable. Bully for Apple. But this is an old market segment: popular entertainment platforms. The iPad isn’t even a netbook, or a gimped computer, or a super smart phone: it’s just a fancy TV. It doesn’t do anything more or less than an internet-linked Wii, PSP or X-Box attached to a normal TV (or even a regular cable box attached to same).
The iPad isn’t a revolution in computers, it’s a revolution in entertainment. Dell shouldn’t be worried; Cox, Comcast, Time Warner, Cablevision, and Charter should be. If Apple announces tomorrow that they’re buying Netflix or Hulu (note: not gonna happen, but if) then your backlist-movie, re-run watching ass is pwned. This isn’t a battle for tech dominance, it’s a new struggle for who has the rights to feed you couch potatoes reruns of Lost and Gilligan’s Island (if the two are, in fact, distinct shows and not just reiterations of the same damn thing)
The sooner we all realize that, the sooner we can move the iPad buzz to TV Guide, where it belongs — and then dedicated Games sites, Tech sites, Book sites, Biz sites, and Geek sites can get back to content — the actual stuff that makes the rest exciting — with only cursory mentions of Jobs’s new TV Walkman.*
* yes, Walkman is a Sony trademark, which only shows that even with a 30-year head start, Sony still managed to drop the ball.
[/editorial]
► Speaking of popular entertainment: One Million Wii users stream Netflix. See? One million isn’t a hard number to get to.
► Gamasutra in depth on GameStop: part one; part two
I’d like to point out that GameStop, before its IPO, was a wholly-owned subsidiary of Barnes & Noble. One could argue that without the influx of outside cash (or Len Riggio’s initial buy-out) they wouldn’t have been able to buy up all their competition & expand internatonally. Which is fair. But there is also an alternate universe where B&N supplimented their music & DVD sales with in-store GameStops (honestly, these things take up ridiculously little square footage) and ended up more like a MediaPlay — except, you know, profitable and less likely to go out of business.
I get the warm fuzzies when I imagine either Riggio waking up in a cold sweat over lost opportunities — at it’s Jan. 2008 peak it was trading at 8 times it’s avg. 2003 price. Of course, the 2004 and 2009 paychecks Riggio got out of the deal certainly means he sleeps quite well. Note, currently [at least according to MSN Money] no one person or entity owns more than 5% of GameStop, so it really is a publically traded company now.
disclaimer: B&N signs my paychecks. But my blogging is neither paid nor authorised by my employer, and in fact is probably a bad idea.
speaking of B&N:
► Ron Burkle sues B&N over dick-move to keep Riggios et al. in control. My gloss on the headline reveals my opinion on the ‘poison-pill’ provision; while I actually appreciate the lack of ‘corporate’ interference in day-to-day operations, and a new profit-minded corporate overlord is just going to make the situation worse, I harbor some animosity toward both Len & Steve Riggio (who still run the company, despite recent cosmetic changes) and change would be good at the ol’ employer. If the fact that B&N signs my paycheck makes you feel I’m biased, you’re welcome to take the above statements in that light.
► News Corporation Reports Third Quarter Revenue Growth of 19% Generating Net Income of $839 Million; $0.32 Per Share. not much to add. The HarperCollins chunk of that is also up.
► Time Warner, home of DC Entertainment [neé DC Comics] also reported quarterly earnings; the “Highest Quarterly Profits in Company History” — all without mentioning anything about either comics or comics-based movies.
Not even Batman. yep.
► CBS also reports quarterly earnings, with a more human touch, “‘I could not be more pleased with how CBS performed in the first quarter of this year, and I’m confident that Leslie and his management team will build on this success as the economy continues to recover,’ said Sumner Redstone, Executive Chairman, CBS Corporation.”
PW has an update on the publishing chunk of that, A slight decline at Simon & Schuster
► Time Warner, CBS, and News Corp. all benefit from a rebound in the advertising market.
► FBI can act like a hero because publishers, finally, ask them to. – Every comic, manga, & anime blogger is all over this story, and you might think I’d chime in with an editorial, but no: neither of my two editorials this week are on the HTML Comics bust. It is what it is. As an isolated incident I don’t think I can label this as either a precedent or as a seed to a trend.
► Dark Crystal gets a sequel. Go Henson
► Seth Godin wants you to rethink your blog as a ‘micro-magazine’. Actually, he said no such thing, but I’m reading between the lines, and thinking there are at least 10 ‘blogs’ I follow that could make that leap, if they wanted to.
► Activision Blizzard is also doing the happy dance
► Borders is soon to launch Kobo Actually, the web site is up, and they’re taking pre-orders for the device itself. This puts them about 6 months behind B&N, and 3 years behind Amazon and its Kindle. Is this too late? Well, the $149 price-point ($110 less than nook and kindle) is certainly a wedge to drive into the market…
But can it also compete with the iPad? You see, even in 6 months the whole market has changed.
Via Publishers Weekly: BISG all gloom-and-doom this year
We’ve been predicting the end of publishing, and by extension book retail, since Gutenburg’s second book
(“well, it certainly didn’t sell as well as the bible. I don’t see this technology going anywhere.”)
[Geek Biz Editorial]
Bookstores don’t sell books anymore [alas]
We sell atmosphere, we provide a commnunity center, a Third Place. We’ve absorbed and subsumed the role of the newstand, the music store, & the coffee shop (though Coffee Shops and even the Diner are still extant and still operate — we demand sweets, grease, and caffeine at a much greater rate than we consume books & other print; our appetite for information isn’t any less voracious, but the internet serves the ‘fast food’-style information needs quite readily. Rarely do most of us feel the need for more substantial books and magazines; and yet the underlying need is still there, and fine, white-table-cloth dining still exists even in an overwhelming world of fast food options.)
The physicallity of a bookstore is in fact something Amazon covets, and has attempted to patent — good luck with that, and of course your not only wrong but *centuries* too late to claim this as an “original invention” — and the actual bookstore — bricks, mortar, coffee, tables, comfy chairs, and books-on-shelves — when taken as a whole is the one thing that can not be pushed to a web site. You might as well think the internet will replace concert halls or sports stadia — yes, for some users, for some uses, a web site is better, but Real Life wins out in almost all cases.
E-books are fine. MP3s are fine. Everything can be had online, more conveniently, more rapidly, more often — and all that is fine. The internet has been around for 30 years, Powell’s & Amazon have been online for 15 years — and all that is fine.
And yet you still come into the bookstore, and no matter what your options, you always will. Yeah, sure, you can buy that on Amazon. But when you can’t even find it on Amazon, where do you go?
You bug me. At your local bookstore.
This is a dynamic even more potent than ‘one-click shopping’ — I just need to sell you a coffee before you leave the storefront to go order it on Amazon, because that’s the only way I will get anything out of you leeches who value a $.56 discount over expertise, knowledge, and enthusiasm for books. Customers suck.
And please, buy a scone with you coffee. It’s the only money we see these days.
[/editorial]
► last note, via the Orange County Local News Network, Comic Con Cage Match, local news edition:
[Geek Biz Editorial]
Most of us don’t care if “San Diego” stays in San Diego, because we can’t afford the badges, travel costs, hotel costs, or (in some cases) can’t even line up five days off in a row because we work for a living
Comic Con International might as well be held in orbit, at L5, and for 99% of the people who read your con reports online, hell, it is held in orbit for all we know. We read about it, we see the pictures, ass else.
It’s not about economic impact, but marketing your city/convention center, and of course, bragging rights. Even if we consider CCI as more of a break-even prospect for the host city for the actual weekend, Comic Con has a business value that extends beyond the con:
This talk of restaurants and hotels and local support is nice I guess, but only pertains to the actual folks who can attend. One eighth of iPad owners, if I can tie the first editorial into the third — and permanently fixed at a mere one eighth of a million so long as the CCI is stuck in San Diego — get to attend the grand geek prom and the rest of us just read about it on the internet.
Once again: 8 times as many people now own an iPad, as opposed to the scant 125,000 who attended last years CCI. Dude.
[/editorial]
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Aggregate prices on the Rocket Bomber Geek Stock Index fell 94.57 points (9.18%) – Despite several major firms all reporting record (or at least, quite profitable) results from the past three months. Fears over Greek Debt, Gulf oil slicks, and just the usual lizard-brain reactions of the market are to blame.
Rolling 10-week RBGSX Aggregate Price
Value at close of markets Friday 7 May 2010: $936.06
& the 25 stocks: CBS Corporation (NYSE:CBS), The Walt Disney Company (NYSE:DIS), News Corporation (NASDAQ:NWSA), Sony Corporation (NYSE:SNE), Time Warner Inc. (NYSE:TWX), Viacom, Inc. (NYSE:VIA), Wiley John & Sons Inc. (NYSE:JW.A), The McGraw-Hill Companies, Inc. (NYSE:MHP), Lagardere SCA (EPA:MMB), Pearson PLC (NYSE:PSO), Scholastic Corporation (NASDAQ:SCHL), Amazon.com, Inc. (NASDAQ:AMZN), Books-A-Million, Inc. (NASDAQ:BAMM), Borders Group, Inc. (NYSE:BGP), Barnes & Noble, Inc. (NYSE:BKS), Hastings Entertainment, Inc (NASDAQ:HAST), Indigo Books & Music Inc. (TSE:IDG), Best Buy Co., Inc. (NYSE:BBY), Netflix, Inc. (NASDAQ:NFLX), Navarre Corporation (NASDAQ:NAVR), Activision Blizzard, Inc. (NASDAQ:ATVI), Electronic Arts Inc. (NASDAQ:ERTS), GameStop Corp. (NYSE:GME), Nintendo Co., Ltd (OTC:NTDOY), and Apple Inc. (NASDAQ:AAPL)
Please note: nothing here is investment advice. full disclaimer
Some interesting thoughts. I think Borders is being smart NOT going for the $250 e-reader, but I tend to think they would have been better off getting in last year.
$150 is nice for an e-reader, but now the bar is closer to $100 with the $120 Avantek (sp?) already out there. I kinda feel like they’re going to get squeezed because there’s going to be low-end e-readers for people like me at about $100 or so, then the $250 kindles for those who want a fancy e-reader, then $500 for those who eat the fruit from the tree of censorship. (I’m so mad at apple, I almost want to stop using my Ipod.)
Is there going to be anyone who wants the middle ground $150-$200 readers by the fall? Can Borders afford to make an error on this? I don’t know.
Comment by Rob McMonigal — 7 May 2010, 22:30 #
I’m a long-time site follower, first-time commenter.
I generally find your insight to be interesting, and you’re right more often then not. Still, I find your analysis of the iPad to be off-base.
First, you mention that selling one million of a $500+-product in a couple of months isn’t a noteworthy event. You cite lots of numbers that are bigger than a million. Okay, whatever. It raises the question, though: At what number threshold do you consider the number of units sold to be a big deal? At what point will they start being something to pay attention to?
10 million? That’s a trivial amount — barely enough to reach the few largest cities in the world combined. Oh, it’s also about how many Blu-Ray players there are, I believe (after four years’ head start) — and, last time I checked, most big-box retailers (book or otherwise) had Blu-Ray sections.
250 million? That’s not even enough to ensure that everyone in the U.S. has one, let alone worldwide. That’s how many iPods have been sold, I believe — and with it has come online audiobook sales, among other retail-affecting developments. To contemplate that the iPod hasn’t been a game-changer in a number of ways is, I think, foolish.
Anyway, I’m curious if you have that internal threshold for what number of iPads would be enough to take notice — or if anything less than seven billion (enough for every man, woman, and child on the planet) is not worthy of contemplation.
Second, I think your analysis of what the iPad is and does is woefully underdeveloped. I have used it to watch videos, but that’s not (in my opinion) the best usage of it… and underestimating this versatility is practically tantamount to dismissing the telephone because all you can use it for is to call your lab assistants.
Last night before I went to bed — in the span of an hour — I read a chapter of a book, played a recreation of the original Dragon’s Lair game, checked my e-mail, and started a game of sudoku. I could’ve watched an episode of something, but I decided against it. None of these would’ve been remotely convenient a year ago.
The people who derided the original MP3s a decade ago were correct but misguided: “Why would I want something that stores less than a cassette player, in worse quality?” They didn’t recognize the benefits (lightweight, long battery life, convenience) nor realize the undercurrent changes in technology that would irrevocably change the music industry. Two decades before that, people derided cell phones for the same reason (“Why do I want something so expensive that is worse than my home telephone?”). Again, same result to the telephone industry.
I believe history is repeating itself, with the iPad. I’m not sure what industries it’s going to revolutionize yet, but calling it a TV Walkman is, I believe, ludicrous and out-of-touch.
It remains to be seen which of us is correct. :-)
Comment by Steven Marsh — 12 May 2010, 15:19 #
Sorry about the double-comment. Your website was amazingly reticent in displaying my comment… until I submitted the second one. Then it decided to show me the first one. (Sigh.)
Comment by Steven Marsh — 12 May 2010, 15:32 #
No problem. I’ve deleted the accidental repeat already.
So, 2 explanations:
1. I tend to be drunk (and occasionally testy) when I write the posts, especially the editorials. In a link- or image-heavy post, where I spend quite a bit of time ‘backstage’ formatting and uploading and the like, I have the opportunity to drink that much more. The further down you go, as you read, the worse I get. I can build up quite a head of steam.
2. The iPad (and quite a bit of other technology) is outside my comfort zone and areas of expertise. That doesn’t stop me from blogging about it, obviously.
I don’t buy into the cult of Apple though I can see the appeal. I think some of it is hype, and much of the discussion is shaped by marketing. Apple makes pretty product, and they’re good at selling it.
So, in my comments on Apple and the iPad (flagged as opinion) I feel free to let rip. I Still Don’t Get It. Nintendo has 140 Million DS units out there, and doesn’t get the hype.
Actually, a million is a nice round number, and is a sustainable user base even if aliens land in San Jose tomorrow and in addition to introducing The Next Best New Thing, also drop a nuke on Cupertino on the flight in.
The iPad is here to stay.
With your permission, Mr. Marsh, I’d like to post your comment to the next Geek Biz Report with an expansion on that thought.
Comment by Matt Blind — 12 May 2010, 19:40 #
You raise an interesting point about the Nintendo DS. I could babble on about the significance of that number and the lack of media attention; it’s especially interesting when large numbers are compared cross-interest. (How many people purchased an iPad, versus watched the #1-grossing movie in the country last week, versus bought the hottest-selling comic this month, versus purchased the most recent Asterix volume, versus watched the highest-rated basketball game last week? I have no idea what the answer to any of those are, nor do I know how much wisdom, if any, can be gleaned trying to compare those numbers…)
By all means, please feel free to quote any of my comments here; proper attribution would be appreciated. :-)
Comment by Steven Marsh — 12 May 2010, 21:07 #
[Bah. I meant to say “the hottest-selling comic in the U.S. this month”… trying to make the larger point that, if I understand right, international sales of popular comics tend to blow U.S. sales out of the water, yet those numbers hardly ever get mentioned over here outside of the occasional “isn’t it interesting that the latest [French graphic album] sold 500 times more than Superman?” comment…]
Comment by Steven Marsh — 12 May 2010, 21:19 #