Amazon Makes Move into Digital Music Storage

Amazon is working on giving its digital consumers more. After offering on demand media service and an official app store, Amazon is now starting an online digital music storage service. According to “Amazon Steps Up Digital Music Rivalry” by Stu Woo and Ethan Smith, 

“the new service, called the Cloud Drive, gives users five [gigs] of free storage on Amazon Web servers for any kind of digital file, including music. There are also paid plans; the cheapest offers 20 [gigs] of storage for $20 a year”

With the service, consumers will be able to play the music with any media device with Internet service, with the exception of the iPhone. The announcement of the service is a big move as Amazon is steadily placing themselves as fierce competition with others. This service competes with supposed planned similar services from Apple and Google, while their app store competes with Apple and their on-demand service competes with Netflix.

The only hurdle Amazon faces is if licensing negotiations with labels don’t go well. Lack of licensing could halt the service and could leave Amazon in the same position as Google. According to the article, Google previously announced a music service that never came to fruition because of failed negotiations with labels. 

Eminem Sued UMG, Ruling Could Give Veteran Artists More $

Eminem has sued his record label, the Universal Music Group. The issue is whether digital music is considered a licensing of his music and if so, he should be paid 50% in royalties as his contract stipulates. According to Ben Sisario in “Eminem Lawsuit May Raise Pay for Older Artists”, the contract is from 1995 and gives 50% of royalties for license and 12% of royalties for sales. So far, the lawsuit has ended with a ruling stating, “digital music should be treated as a license”. This is based on the argument that…

“…record companies’ arrangements with digital retailers resembled license more than it did a sale of a CD or record because, among other reasons, the labels furnished the seller with a single master recording that it then duplicated for customers.”

The significant point of the lawsuit is before digital music most music contracts gave artists large percentages of royalties for a license. Contracts did not evolve to include digital music until it’s rise in the 2000s. The lawsuit doesn’t affect new artists or contracts within the 21rst century. But for contracts that did not evolve, Eminem’s lawsuit could mean that many artists could reap more in royalties. This includes the vast amounts of artists with contracts, as the article suggests, before the mid-90s.

Universal Music Group responded: “The case has always been about one agreement with very unique language… As it has been made clear during the case, the ruling has no bearing on any other recording agreement and does not create any legal precedent.”

Daily Deals Over-Saturate the Market; Postal Service Laying Off Thousands

“Today’s Daily Deal? Who Cares.” By Jessica Dickler reports…

Daily deal websites have done well for themselves. But according to cnnmoney.com, the excitement might be over. Gilt Groupe (provides flash sales for major fashion brands) traffic is down is 22% and Groupon down 13% since the beginning of this year.  Overall traffic across the daily deal community is down.  The solution seems to be websites, such as Savings.com, which can aggregate deals into one email so consumers are not overloaded with emails. The overkill could be consumers annoyed by daily emails or the over-saturation of deals from copycat companies.

“Postal Service: 7,500 Workers, $20,000 Buyouts” by Charles Riley reports…

The US Postal Service is trying its best to lay off 7,500 workers. For workers over age 50 and 20 years with USPS or any age with 25 years, has been offered $20,000 to leave.  According to the article, seven district offices will be closed and there are plans to close about 2,000 postal offices.  The Postal Service has stated that “its net loss totaled $8.5 billion in 2010” and the cuts should yield $750 million in savings. It’s no secret that dependence on viral communications has dealt a mighty blow to the Postal Service.

Netflix Might Lose a Friend as Starz Delays Content for Netflix Users

 Since 2008, Netflix and Starz have enjoyed an amicable relationship. For about $25 million a year, Netflix has been able to stream immediate content from Starz. Things are changing. Yesterday, Starz announced there would be a 90-day delay, as in 90 days between the release of an episode and its availability on Netflix. “Starz to Delay Release of Shows on Netflix” by Brian Stelter reports the delay “would begin on April 1, the day its new show ‘Camelot’ plays for the first time.”

This is a significant move considering two things: 1, the deal was seen as the dumbest deal on Starz part and became one of the main reasons the cable industry did not like Netflix; and 2, Netflix recently announced it would start having its own exclusive content, thus competing directly with cable channels.

I previously wrote about the cable industry hating Netflix due to the belief that Netflix was the chief motivator behind people “cutting the cord” with cable. The source article for that post is “Time Warner Views Netflix as a Fading Star” by Tim Arango. In that article, a few harsh remarks were made about the Netflix - Starz deal:

“The original deal from 2008, in which Netflix paid an estimated $25 million annually… is now seen as a major coup for Netflix, and a major mistake by Starz”

"...probably one of the dumbest deals ever. Starz gave up valuable content for tens of millions of dollars”

                                                      - Michael Nathanson, a media analyst at Nomura

“Why should anyone subscribe to Starz when they can basically get the whole thing for about nothing?”                                                                                                                                                                                 

                           - Jeffrey Bewkes, CEO of Time Warner, and Netflix’s biggest critic

AT&T + T-Mobile = Biggest Cell Carrier

News broke Sunday that AT&T is buying T-Mobile. I read “AT&T to Buy T-Mobile USA for $39 Billion” (New York Times) by Andrew Ross Sorkin, Jenna Wortham, and Michael J. De La Merced and I also read “AT&T to Buy T-Mobile: Here’s Why” (Wall Street Journal) by Shira Ovide. Both articles have significant information about the deal but I will write about a few points.

This will make AT&T/ T-Mobile the biggest Cell Carrier

Both T-Mobile and AT&T have 42% of the market. This would obviously reduce competition that could ignite regulators to try to prevent the merger. According to New York Times (NYT) “the deal requires approval from both the Justice Department and the Federal Communications Commission. It is unclear how regulators will react, but the companies clearly know the deal faces serious regulatory hurdles”. AT&T and T-Mobile will have to fight off theories that they are “monopolizing” the market.

“Wireless service will be awesome”

As Wall Street Journal (WSJ) reports, the assumption is the wide range of coverage both companies have will combine to give better service than current AT&T and T-Mobile service. But it has been previously reported that AT&T is the worst carrier in the U.S. The plan should be for AT&T to become better but the fear amongst people so far in news outlets and blogosphere is that it will make service worse for T-mobile consumers. NYT reports some expect higher prices from the merger considering T-mobile has “some of the lowest rates in the country” and mergers usually don’t result in lower prices, especially if it is a consolidation of services with little competition. NYT also reports AT&T will “honor current contracts” but “T-Mobile Customers may have to pay higher rates once those contracts expire.”

Netflix Licenses Exclusive Content, Competes with Cable Networks

Now, the cable industry has another reason to hate Netflix. Netflix has is now licensing exclusive content. According to Brian Stelter’s “Netflix Gets Into the TV Business”,

“Netflix said on Friday that it had licensed the exclusive rights to ‘House of Cards’, a show that is to be directed by David Fincher, the director of ‘The Social Network’, and to star Kevin Spacey”

This deal means Netflix is competing directly with cable networks.  The benefits of the licensing agreement is exclusivity, availability of the show for consumers at any given time, and more episodes for consumers considering it has been picked up for two seasons. The biggest caveat is the show is in pre-production; the release of the show on Netflix is essentially its test, no pilot. If it is successful, subscribers will be able to consume the show at a faster pace than if it was premiered on a major network, such as HBO, one episode per week.  Ted Sarandos, the chief content officer for Netflix, noted that the on-demand nature of the show gives it a better chance to become successful; the time slot, which plays a critical role in most shows’ success/failure, isn’t relevant because there isn’t a time slot.

Million Dollar Listing: The Art of Great Negotiating

Is Real Estate Agent Josh Altman writing a book? He should. Last night on “Million Dollar Listing”, I got to see his hard negotiating style. It was great. Let me break it down…

Beautiful Mansion in Beverly Park, CA on the market for $19.5 million. Altman is representing a buyer. The buyer’s initial offer is $15 million.

Seller counters with $18 million

Altman’s client states the highest they will go is $17 million. Altman instead counters with $15.8 million

Seller counters with $17 million

Altman counters with $16.5 million and gets it

I am astounded. Despite his client approving more, Altman still came in lower. Then, on re-counter, Altman got the number he wanted but still came back with a lower offer. And why? He stated because he always like to save his client some money. In this case, the client saved $2.5 million. This is the negotiating style I hope to have when I get into business. I don’t find it cheap or sneaky because if the client rejected $16.5 million, Altman would have been able to agree with $17 million.

This is the reason clients should not be in the room when making offers. The other agent on the show, Madison, has done this twice and the offering got a little heated. If the client were present, Altman’s negotiation could have gone wrong for the client. Think about it, the client would have stated $17 million and the seller’s broker would have taken it. Instead, the property got sold, Altman’s client got a house, and Altman was part of one of the biggest house sells in L.A. County. Seriously, this guy needs to write a book; I would read it.

Note: I call him Altman because there is another Josh on the show. To differentiate between the two, I refer to Josh Altman by his last name. 

Million Dollar Listing: a Career Saboteur in Action

Be very wary of career saboteurs. As in, people in your life who try to prevent you, with no valid reason, from moving up in your career. Last night on “Million Dollar Listing”, I saw first hand the creation of one. In the second to last episode, Madison’s assistant Heather, decided she was ready to move up. She has her real estate license, wanted to work as an agent, and wanted to do so in the West Hollywood, CA. She has been assisting Madison for two years and works in Malibu, which is a distant drive from West Hollywood. She approached Josh Altman, another agent on the show and the guy she’s dating, for advice; his advice was she should definitely take the step if she wanted to.

Heather approached Madison with a proposal: to regionally extend Madison’s Malibu agency, adding her on as an agent in West Hollywood. If Heather couldn’t work as an agent, she would quit as his assistant. Madison was pissed.

On last night’s episode, Madison decided to confront Josh Altman for giving career advice. Let me state this again: Madison is mad at Altman for giving career advice. To Madison, for Altman to give advice to a real estate agent on her next career move was Altman’s way to sabotage Madison. According to Madison, Heather is possessed and Altman has no position to give career advice, even if Heather asks for it, considering Altman and Heather have just started dating,

NFL Players In a Lockout

As of this weekend, NFL Players are in a lockout. With labor contract extensions as a hope to successful negotiations, such negotiations have failed. I am not a hardcore NFL fan, but I’m writing about the labor negotiation from an economic perspective. After all, the NFL is a business, owners are employers and players are employees. This tends to get lost amongst the sports fanaticism and “celebritization” (it’s not a word but you know what I mean) of players. According to Matthew Futterman in “NFL Girds For Fight, Says Loss is Covered”, a lockout means

“[end of]  all off-season workouts and off-season pay immediately. The drafting of college players will still take place next month, but without a resolution, training camps won’t open in July and the season won’t start on schedule in September.”

While the distribution of $9.3 billion in revenue is the issue of the dispute, the article has stated that NFL owners are financial stable to handle a season cancellation. Unfortunately, the dispute has brought to the light the reality that some NFL players don’t make the millions of dollars that their celebrity image suggests. Some players may not be financially ready for an unemployed season.

Million Dollar Listing: When Being Nice Comes Off as Less Confident

Bravo has a show called “Million Dollar Listing”. I was not inspired to watch the show because the previews made the show out to be this playboy dramatic show. But I have been watching the show since the last three episodes. I must say… I am hooked. For the hour, you will be exposed to amazing properties, client/ agent drama, and the ways in which the agents work to sell, buy, negotiate, and run their business.

I am writing this post to talk about Madison. He is a young real estate agent on “Million Dollar Listing” and he sells in Malibu. He tends to wear business casual clothing to sell his properties, which I find annoying because I believe you should look presentable for your million-dollar property. Aside from that, Madison is very nice. In fact, he is too nice. In the episodes I’ve seen, Madison has come across a pushy buyer who fired him, a seller who would not accept that his property was not worth the price it should be listed as, a seller who expected Madison to sell a property in a month, and a prospective buyer whose very low offer was barely contested. In almost all situations, Madison would make a statement or two about the reality of the deal in today’s market, but he would do it with a “kind of” tone. He barely would put the client in check (respectfully). On the other hand, the other two agents, Josh Altman, and Josh Flagg, would boldly inform clients of the reality of the market. Generally, if a client insists on selling a property at a too high price, you can’t stop them, but the other two agents, make their point that it is delusional.

Groupon Inspires Emulators: The Phenomenon of Fast Following

Regardless of the way you feel about Groupon, one positive effect of the company are many startups emulating their model. According to Jessica Bruder in “In Groupon’s $6 Billion Wake, a Fleet of Start-Ups”, the effect is called fast following. Fast following is “the idea that copying a blockbuster start-up yields fewer risks and potentially great rewards”. I consider this “fast following” positive because the examples given in the article are start-ups that expand on the Groupon model. As a reminder, the Groupon model is “team up with a local merchant, send out an e-mail blast pitching a discount coupon for the merchant’s product or service, and keep half of the revenue that comes in”.

These are the examples given by Bruder:

Emulators who send out deals based on your demographic.

From sexual orientation to race to food choices, you can receive deals based on your demographic from emulators representing that group. Jodi Samuel and Allen Ganz, created Jdeal. The sight is focused on deals for the Jewish community and by Jewish centered businesses. They have 8,000 subscribers and are expected to make $500,000 in revenue for their first year. There split is 60-40, 60 for the merchant.

Those representing local, often ignored, locations.

Last year, Rob and Wendy Jaffe, brother and sister, started Conejo Deals. They were inspired from the lack of deals within their region of Conejo Valley, CA. Their company focuses on their community, reaching out to local customers and local merchants. They have 10,000 subscribers, and have made $700,000 revenue so far. Their split is 50-50.

If You Don't Have a Job, Create One?

During CNN's Ali Velshi's "Your Money" segment today, the topic was the rate of start-ups. He reported the rate of start-ups is at its highest in 15 years, giving the tagline of the topic "if you don't have a job, create one". Some of the figures given: 

• 565,000 businesses created per month in 2010 
• of those 0.1% hired employees 
• the demographics most likely to create a business: age group 25-34, high school dropouts, and immigrants

Velshi gave two quick interpretations of the figures, 1. a significant amount  of the unemployed are taking matters into their own hands and creating their own job and 2. unfortunately, they are not creating jobs for others. His correspondent on the topic (forgive me, I don't remember her name) stated for these businesses to start hiring they would need more funding.

About 3 weeks ago, I was reading an advice column in a Elle magazine and a single mother asked how can she get a job when she has been unemployed for about a year and most jobs only hire people who do not have gaps in their work history. The response from E. Jean, the advice writer was for the reader to create a business. Just like that... create your business if you don't have a job. It doesn't sound realistic to me. Clearly, Velshi's segment shows that those who can start businesses have gone out and done so. To advise a reader who may not have the resources or funds to start a business to go out and do so is not advice.  

It's great that some have taken the sole proprietorship route. This is a great time to become self-employed, if you can, but not everyone has the resources to do so. Lack of resources is also the reason why some of new businesses can't hire others. Although, realistically, if you create a business for yourself because you couldn't find a job, your top priority is turning a profit and making up for lost income.

If you don't have job, but have the resources and dedication to create a business, make your own job. For those who lack resources or who have no interest in starting a business, I would say to look for advice from someone who can realistically advise you on your next move. Ali Velshi can give you the facts, but writing into fashion magazines might be a bad move. 

p.s. sorry for the lack of posts, my mac is in the apple store so my resources have been limited

Steve Jobs Surprises Everyone at iPad 2 Event

How great is Steve Jobs? He goes on medical leave and then shows up today at the unveiling of the iPad 2. It shocked everyone. Many people were standing by for any news of the event. At the appearance of Steve Jobs, it became breaking news, and apple’s stock rose by $3. Why did Jobs show up? According to the New York Times, Jobs responded “We’ve been working on this product for a while and I just didn’t want to miss today”

His appearance is significant as he adds power to the iPad 2’s unveiling. Considering other tablets have entered the market, Apple is facing competition this time around. Jobs, who is amazing at promoting his products, wanted to aid his product in the fight to be at the top. While Jobs might stay on medical leave, it's clear that he’s thinking about his company and products.

Steve Jobs is a great example of a CEO and innovator passionate about his business. The most important image of a business is its leader. A leader passive about its brand will never have a brand as good, powerful as one with an active, supportive leader behind it. The lesson from Jobs: Know your product, love your product, and stand by your product. 

Bad Publicity is Good Publicity? A Study Says Maybe

In light of the Charlie Sheen fiasco in the news, I thought BrandMakerNews.com post on bad publicity was inspired by it. It turns out their article was a repost of “Better to be reviled than ignored” by the Economist. The article begins with examples of bad publicity for well-established entities that barely bounced back from it. But Alan Sorensen, an economics professor, did a study looking at the New York Times book reviews and the effect on sales. The results:

“…well-known authors who earned glowing reviews for a new book could expect to sell 42% more copies, whereas a negative review caused sales to drop by 15%. For unknown authors, however, it did not matter whether a book was panned or lauded. Simply being reviewed in the Times bumped up sales by a third”

The study concluded that unknown brands benefit from bad publicity because the name is out and bad publicity won’t be remembered considering the brand isn’t well known. Simply put, consumers only remember the publicity. The article gave an example: Kazahstan whose tourism went up even after it was ridiculed on “Borat”. The article also gave an antithesis example: Vitaly Borker, the online eyeglass seller who purposely provided bad service to increase his online complaints and thus boast his Google search ranking. He was exposed after gloating about his strategy to the New York Times (I wrote about the article in “The Definition of Anti-Salesmanship”). He was eventually arrested for harassment and Google dropped his rank.

Taco Bell Launches New Campaign to Remind You of Their Lawsuit

Have you seen Taco Bell’s new commercial? In the commercial, employees of Taco Bell speak “candidly” into the camera about how they use real seasoned beef, consisting of 88% beef and 12% seasoning. Then the commercial ends with a request to visit their website to know the exact ingredients of the food. But wait! The commercial included a promotion for one of the quesadillas for 88 cents. The commercial is a response to a lawsuit against the company claiming they don’t serve real beef in their food.

First, the lawsuit was about 1 month ago. Within that time, Taco Bell hadn’t done any major public campaign to “tell their side”. Either consumers have forgotten, decided to not go to Taco Bell, or still go but won’t eat their beef. This commercial is late and for those who have forgotten, it has reminded them of the lawsuit. Even if viewers don’t think about the lawsuit, the overemphasis on proving they use beef makes people wonder, “Were they not using beef before?”

Second, if the message is to completely focus on proving the beef is real and “setting the record straight”, why was a promotion thrown in. Granted, business is business, but promotions shouldn’t be combined with public campaigns in response to lawsuits. Either way, the choice to still eat at Taco Bell will most likely not be persuaded by an 88 cents quesadilla (after all, they have $1 items).

Good luck to Taco Bell considering they have made such a great effort to remind us of their problems while also promoting cheaper food.

Daniel Gross: 19-Year-Old Creates a Service thats Indexes Online Life

I discovered a new service by reading about its creator. The service: Greplin, a search tool on all-things-you online. The creators: 19-year-old Daniel Gross and 27-year-old Robby Walker. I specifically read about Daniel Gross who was interviewed by Christine Lagorio of Inc.com in article “How This 19-Year-Old is Taking on Google”. Both creators are from my generation and I love reading stories about young entrepreneurs. Daniel was interviewed because of his age; he hasn’t gone to college and joined Y-Combinator, a start-up funding program, right after high school. Within the last two days of the program, Gross and Lagorio created Greplin. The idea received support and now it has $5 million of funding and the site launched last week.

According to the article and the Greplin website, the service provides an account in which all social media is indexed and users can search for anything within the index. Example: you can search “Inception” and the results will include the word mentioned in all of the your social media from email to Facebook. Gross’s inspiration for the service:

“I had this very long list of things I thought would be cool. Greplin was always near the top…Greplin was the one project idea I had for which I was the target audience…if you look at a product like this, it’s useful. There’s a need. And the question is why hasn’t someone built it already?”