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Friday, December 22, 2006
Thursday, December 21, 2006
美国在中国网络上撤退和缩减
Yahoo to:
- Purchase 201mm ordinary shares of Alibaba for $250mm cash
- Purchase Softbank share of Taobao for $360mm cash and transfer to Alibaba (Alibaba to own 100% of Taobao)
- Contribute Yahoo China business and ops to Alibaba
- Purchase additional shares of Alibaba in secondary offering for $390mm cash. Will own 40% of Alibaba (fully-diluted)
Click here for SEC doc.
- New site to be launched (Tom Eachnet). Ebay Eachnet customers will be offered option to transition to new site.
- JV formed with ownership 51% Tom Online, 49% Ebay, incorporated in British Virgin Islands with limited liability.
- 6 BOD seats, 3 from Ebay and 3 from Tom.
Tom to provide:
- $20mm shareholders' loan to JV
- Leadership and management services
- Marketing to Tom user base (drive traffic to JV site)
Ebay to contribute/license
- trademark and domain names to venture
- $40mm initial funding to JV
- transfer all equity in EENIS* to member of JV
If initial funds consumed, additional funding to be made in form of shareholders' loans from Ebay and Tom (equal proportions) up to $10mm
New JV platform to be launched called Tom Eachnet
On the "event of default" certain put and call options based on third-party equity valuatio of JV would be invoked
*EENIS is a wholly owned foreign enterprise incorporated in the PRC owned by Ebay. 2005 loss was RMB68mm (~$8.5mm), and net assets were RMB144mm (~$18mm).
Click here for SEC doc.
Sunday, December 17, 2006
Silly Pipe
I like Keats's comments on his poem Endymion, after it had been thrashed by the critics. It's possibly Keats's best known poem (first line "A thing of beauty is a joy forever"). He wrote to his publisher in October 1818:
In Endymion, I leaped headlong into the Sea, and thereby have become better acquainted with the Soundings, the quicksands, & the rocks, than if I had stayed upon the green shore, and piped a silly pipe, and took tea & comfortable advice. -- I was never afraid of failure; for I would sooner fail than not be among the greatest.
Economist Oct 12, 2006: Now we are 300,000,000
Bullets:
Soundbite: “Problems of growth are easier than the problems of decline”
US=2.1 kids/HH, steady-state rate. Growth due almost entirely to immigration.
Most other dev’d countries have lower kids/HH. Reason for difference: 1) US more religious (more hope=more kids), 2) US child-rearing more evenly shared bt husband and wife vs patriarchal countries, and 3) US lower incremental cost of land (more new families can move out to exurbs, compared to JP)
Case study Houston: People who live in areas actually pay for infrastructure, rather than public subsidy of exurbs and suburbs. Greater diversity (prob due to immigration driving growth) positive for more globalized local economy
America's rising population will solve more problems than it creates
Falling birth rates are linked to prosperity
People in very poor countries tend to have lots of babies because they expect some of them to die in infancy, and because they need help in the fields and someone to care for them in their old age. The fertility rate in Niger and Mali, for example, is over seven children per woman.
As countries grow richer and women get educated, they have fewer children and invest more in each one. Whereas peasants in Mali cannot afford not to have kids, many Westerners fret that they cannot afford to have them. University is expensive, and if Mum (or Mom) decides to stay home, the household must forgo the salary she used to earn. Add to this the sudden halt to a life of carefree first-world hedonism, and it is no wonder that birth rates have plummeted in all rich countries.
But much less so in America. Why should this be? Religion plays a role, argues Mr Klineberg. Americans are more devout than Europeans, if church attendance is any guide, and their faith colours their worldview. Don Iloff, a spokesman for Lakewood Church (and Victoria Osteen's brother), agrees. Faith begets hope, he says, and if you have hope for the future, you are more likely to want to bring children into the world.
Polls certainly suggest that Americans are more optimistic than people in most other countries. Philip Morgan, a sociologist at Duke University, and Miles Taylor, a population expert at the University of North Carolina, cite several other possible factors. Birth rates are lower in more patriarchal rich countries, such as Japan and Italy, than in places where the sexes are more equal, such as America and Scandinavia. Perhaps the knowledge that Dad will help with the housework makes women more willing to have children.
America's wide open spaces also make child-rearing more attractive. Bringing up a large family in a tiny Japanese apartment is a struggle, even if you can fold away your bed during the day. The world's lowest fertility rates are in super-crowded Hong Kong (0.95), Macau (1.02) and Singapore (1.06). In America the average family-home has doubled in size in the past half-century, from 1,000 square feet (93 square metres) in 1950 to 2,100 square feet in 2001.
America's coastal areas are fairly densely settled, but families who cannot afford a spacious home with a garden in Connecticut or California can move somewhere cheaper. They often do, one reason why the mean centre of America's population—ie, the point at which an imaginary, flat United States would balance if only the people on it weighed anything—keeps moving south and west. In 1800 it was still near the eastern seaboard, in Maryland. By 2000 it was in Phelps County, Missouri, and heading for Oklahoma.
Houston, we have lift-off
Can America cope with a relentlessly expanding population? A look at Houston suggests it can. The city is one of America's fastest-growing. The population of Harris County, which includes Houston, grew by 21% in the 1990s, to 3.4m. The surrounding counties are booming, too. Since Houston has no zoning laws, developers can build wherever they think there will be demand. Rather than waiting for the city to extend sewers and power lines to outlying areas, they can issue bonds to pay for such services themselves, and pass the cost on to the people who buy the houses they build.
At the Woodlands, a 28,000-acre (11,300 hectares) planned community north of Houston, you can buy a three-bedroom family home on a quiet wooded street for $130,000. By comparison, the median house price in San Francisco is over $700,000. The Woodlands has good schools, 145 miles (235km) of hiking trails, golf courses designed by the three greatest retired golfers in the world, and a cluster of oil and high-tech firms.
It is also safe. “Police salaries are paid by the community, not the county, so we have more of them,” says Roger Galatas, who used to run the Woodlands operating company. The community makes its own rules. Restrictive covenants prevent anyone from uprooting too many trees, or building eyesores. Several houses share each mailbox, so neighbours chat when they pick up the mail.
Houston was 70% white in 1960, but is now a mix: 57% white (of which 42% are Hispanic), 24% black and 6% Asian. “Where you grew up is irrelevant in Houston,” says Tim Cisneros, a local architect whose mother came from Mexico. “Everyone is so busy making money they don't have time to worry about race.” Polls suggest that the picture is not quite so rosy—79% of blacks think blacks are “often” discriminated against in Houston. But 69% of Houstonians think the city's ethnic diversity will become a source of strength. It is easier to deal with a globalising world if your citizens have roots in many countries.
America's future could look something like Houston's present, argues Joel Kotkin, a writer on demography. As the nation's population surges, it will become more ethnically mixed and especially more Hispanic. Houston suggests that that will be just fine. Rapid growth may cause environmental problems, but it will greatly slow the pace at which America ages. Whereas in the EU by 2050 there will be fewer than two adults of working age for every person over 65, the proportion in America will be less scary, at almost three to one. The problems of growth, says Mr Klineberg, are easier to deal with than the problems of decline.
Can the world cope with a relentlessly expanding America? Many non-Americans will shudder at the prospect, but which alternative superpower would they prefer? China? If demography is destiny, they will not have to find out what a Chinese hyperpower looks like: the fertility rate in China is only 1.7, and there are almost no immigrants.
Soundbite: “Problems of growth are easier than the problems of decline”
America's rising population will solve more problems than it creates
THE Lakewood Church in Houston has a space, complete with cartoon murals, for parents to leave their children while they attend a service. There is room for 5,000 children. Lakewood's size may be unusual—it occupies a refurbished basketball stadium, and Pastor Joel Osteen's televised sermons are watched by 7m people each week—but its focus on the family is not. “I love children because they are so pure,” says Victoria Osteen, Mr Osteen's wife and co-pastor. “For myself, [having children] has been an awesome, wonderful, full life.”
When Europeans hear the words “America”, “religion” and “family values”, they think of brimstone preachers raging against unconventional domestic arrangements. They often forget the more positive role American churches play in nurturing conventional families. Lakewood's ministries, for example, teach married couples how to communicate better and give them practical advice on how to bring up children and put the family finances in order. In such a mobile society people often have nowhere else to turn for friendly counsel. Hillary Clinton once said that “it takes a village to raise a child.” Often in America “the church is the village,” says Stephen Klineberg, a sociologist at Rice University in Houston.
These are only projections, of course. Lifespans will no doubt continue to stretch and immigration rules may change. What is striking, though, is the gulf between the fertility rate in the United States and other rich countries. American women today can expect to have an average of 2.1 children. That is the number needed to keep a population stable, so observers sometimes take it as a given and say that America's population growth is entirely due to immigration. This obscures the point: for every big advanced country besides America and Israel, the alternative to “replacement rate” fertility is a baby bust.
The fertility rate in the EU is 1.47—well below replacement. By 2010, deaths there are expected to start outnumbering births, so from that point immigration will account for more than all its growth. And that average hides countries that have seen an astonishing collapse in the willingness of their citizens to breed. The fertility rate in Italy and Spain is 1.28, which, without immigration, would cause the number of Spaniards and Italians to halve in 42 years.
Falling birth rates are linked to prosperity
People in very poor countries tend to have lots of babies because they expect some of them to die in infancy, and because they need help in the fields and someone to care for them in their old age. The fertility rate in Niger and Mali, for example, is over seven children per woman.
As countries grow richer and women get educated, they have fewer children and invest more in each one. Whereas peasants in Mali cannot afford not to have kids, many Westerners fret that they cannot afford to have them. University is expensive, and if Mum (or Mom) decides to stay home, the household must forgo the salary she used to earn. Add to this the sudden halt to a life of carefree first-world hedonism, and it is no wonder that birth rates have plummeted in all rich countries.
But much less so in America. Why should this be? Religion plays a role, argues Mr Klineberg. Americans are more devout than Europeans, if church attendance is any guide, and their faith colours their worldview. Don Iloff, a spokesman for Lakewood Church (and Victoria Osteen's brother), agrees. Faith begets hope, he says, and if you have hope for the future, you are more likely to want to bring children into the world.
Polls certainly suggest that Americans are more optimistic than people in most other countries. Philip Morgan, a sociologist at Duke University, and Miles Taylor, a population expert at the University of North Carolina, cite several other possible factors. Birth rates are lower in more patriarchal rich countries, such as Japan and Italy, than in places where the sexes are more equal, such as America and Scandinavia. Perhaps the knowledge that Dad will help with the housework makes women more willing to have children.
America's wide open spaces also make child-rearing more attractive. Bringing up a large family in a tiny Japanese apartment is a struggle, even if you can fold away your bed during the day. The world's lowest fertility rates are in super-crowded Hong Kong (0.95), Macau (1.02) and Singapore (1.06). In America the average family-home has doubled in size in the past half-century, from 1,000 square feet (93 square metres) in 1950 to 2,100 square feet in 2001.
America's coastal areas are fairly densely settled, but families who cannot afford a spacious home with a garden in Connecticut or California can move somewhere cheaper. They often do, one reason why the mean centre of America's population—ie, the point at which an imaginary, flat United States would balance if only the people on it weighed anything—keeps moving south and west. In 1800 it was still near the eastern seaboard, in Maryland. By 2000 it was in Phelps County, Missouri, and heading for Oklahoma.
Houston, we have lift-off
Can America cope with a relentlessly expanding population? A look at Houston suggests it can. The city is one of America's fastest-growing. The population of Harris County, which includes Houston, grew by 21% in the 1990s, to 3.4m. The surrounding counties are booming, too. Since Houston has no zoning laws, developers can build wherever they think there will be demand. Rather than waiting for the city to extend sewers and power lines to outlying areas, they can issue bonds to pay for such services themselves, and pass the cost on to the people who buy the houses they build.
At the Woodlands, a 28,000-acre (11,300 hectares) planned community north of Houston, you can buy a three-bedroom family home on a quiet wooded street for $130,000. By comparison, the median house price in San Francisco is over $700,000. The Woodlands has good schools, 145 miles (235km) of hiking trails, golf courses designed by the three greatest retired golfers in the world, and a cluster of oil and high-tech firms.
It is also safe. “Police salaries are paid by the community, not the county, so we have more of them,” says Roger Galatas, who used to run the Woodlands operating company. The community makes its own rules. Restrictive covenants prevent anyone from uprooting too many trees, or building eyesores. Several houses share each mailbox, so neighbours chat when they pick up the mail.
Houston was 70% white in 1960, but is now a mix: 57% white (of which 42% are Hispanic), 24% black and 6% Asian. “Where you grew up is irrelevant in Houston,” says Tim Cisneros, a local architect whose mother came from Mexico. “Everyone is so busy making money they don't have time to worry about race.” Polls suggest that the picture is not quite so rosy—79% of blacks think blacks are “often” discriminated against in Houston. But 69% of Houstonians think the city's ethnic diversity will become a source of strength. It is easier to deal with a globalising world if your citizens have roots in many countries.
America's future could look something like Houston's present, argues Joel Kotkin, a writer on demography. As the nation's population surges, it will become more ethnically mixed and especially more Hispanic. Houston suggests that that will be just fine. Rapid growth may cause environmental problems, but it will greatly slow the pace at which America ages. Whereas in the EU by 2050 there will be fewer than two adults of working age for every person over 65, the proportion in America will be less scary, at almost three to one. The problems of growth, says Mr Klineberg, are easier to deal with than the problems of decline.
Can the world cope with a relentlessly expanding America? Many non-Americans will shudder at the prospect, but which alternative superpower would they prefer? China? If demography is destiny, they will not have to find out what a Chinese hyperpower looks like: the fertility rate in China is only 1.7, and there are almost no immigrants.
Friday, October 13, 2006
Thursday, October 12, 2006
Balmer's thoughts on competitors
Guys who can touch us in multiple places probably matter more than guys who can touch us in any one place. And actually we don't really have our big competition from any one company. Any one company, we know how to compete with. It's alternate business models that we will have to embrace or compete well with. You give me any enterprise software company, O.K., and I'll say c'mon. We know how to go do that. We do do that. And we're really pretty good at it. We haven't gotten any worse at it. Boom. Boom. Boom. We know how to keep coming.
Open source is not a new technology area. It was a new business model. In the last three or four years, we have competed very well by extending our value. Open source never goes away as a business model or competitor. We have learned how to compete with open source, and we will compete with it for the rest of time. But competing with open source will have to be something that's burned bright on the foreheads of our senior people.
The second big competitive force is advertising as a business model. Typically, people just want to reduce that to Google, and if you want to do that, you can. But it's do we embrace advertising fully enough as a business model? Because at the end of the day, anybody who comes at you with a cheaper-to-the-customer proposition, you got to worry about. And advertising looks cheaper to a consumer than something you pay for.
In the case of open source, we couldn't adopt the business model. We adopted a competitive approach that so far has worked very well. In the advertising case, we can embrace that model. We don't have to sit here and say it's that bad.
A third model I could sit here and write down on this list is that there are cases where software gets monetized through hardware. That's what an iPod is. iPod is a software thing. You just happen to collect the money on the hardware. You could say in China and India, it's unclear whether classic software will get paid for as much as advertising, hardware, subscriptions, etc.
So our ability to embrace and benefit from or compete with new business models—and I would say ad-funded and open source, more than this hardware thing—is more the way to categorize the key competitive dynamic for us.
Does Zune fit into the hardware piece of this?
Sure it does. Because the value of Zune, if we're successful, is all in the software. It's in community [the ability to share music and pictures with other Zune users]. I want to squirt you a picture of my kids. You want to squirt me back a video of your vacation. That's a software experience. The truth is, though, if it makes money, it will be built into the gross margin on the hardware. We'll figure out how to make money on the community perhaps later though advertising or other means.
How much money will you lose per Zune?
None. Apple (AAPL) put the hammer down there, dropped the price down to $249. If they had been $299, it would have been nicer. They have the advantage of scale. So we're at $249, too. We don't make a lot of money, not to start out.
Open source is not a new technology area. It was a new business model. In the last three or four years, we have competed very well by extending our value. Open source never goes away as a business model or competitor. We have learned how to compete with open source, and we will compete with it for the rest of time. But competing with open source will have to be something that's burned bright on the foreheads of our senior people.
The second big competitive force is advertising as a business model. Typically, people just want to reduce that to Google, and if you want to do that, you can. But it's do we embrace advertising fully enough as a business model? Because at the end of the day, anybody who comes at you with a cheaper-to-the-customer proposition, you got to worry about. And advertising looks cheaper to a consumer than something you pay for.
In the case of open source, we couldn't adopt the business model. We adopted a competitive approach that so far has worked very well. In the advertising case, we can embrace that model. We don't have to sit here and say it's that bad.
A third model I could sit here and write down on this list is that there are cases where software gets monetized through hardware. That's what an iPod is. iPod is a software thing. You just happen to collect the money on the hardware. You could say in China and India, it's unclear whether classic software will get paid for as much as advertising, hardware, subscriptions, etc.
So our ability to embrace and benefit from or compete with new business models—and I would say ad-funded and open source, more than this hardware thing—is more the way to categorize the key competitive dynamic for us.
Does Zune fit into the hardware piece of this?
Sure it does. Because the value of Zune, if we're successful, is all in the software. It's in community [the ability to share music and pictures with other Zune users]. I want to squirt you a picture of my kids. You want to squirt me back a video of your vacation. That's a software experience. The truth is, though, if it makes money, it will be built into the gross margin on the hardware. We'll figure out how to make money on the community perhaps later though advertising or other means.
How much money will you lose per Zune?
None. Apple (AAPL) put the hammer down there, dropped the price down to $249. If they had been $299, it would have been nicer. They have the advantage of scale. So we're at $249, too. We don't make a lot of money, not to start out.
Thursday, August 17, 2006
A little online levity
I'm cleaning out the inbox, and Kari forwarded these to me way back. They're worth keeping in the blog rather than the inbox.
Will Ferrel as Dubya: R&R in Crawford
Mahna Mahna
Office Space: Gary Cole Lumbergh Sound Board
Homer Simpson
Lazy Sunday
Will Ferrel as Dubya: R&R in Crawford
Mahna Mahna
Office Space: Gary Cole Lumbergh Sound Board
Homer Simpson
Lazy Sunday
Friday, July 14, 2006
Roe-Willettes in SEA
Thursday morning at Pike Place Market
Exploring in Discovery Park
Found squishy animals called "rough piddocks".
Bored in traffic on way home from Ballard Locks
At 232 Belmont resting
Windy dinner at Ray's
Exploring in Discovery Park
Found squishy animals called "rough piddocks".
Bored in traffic on way home from Ballard Locks
At 232 Belmont resting
Windy dinner at Ray's
Why does Vancouver seem bigger than Seattle??!
I am beginning to collect some statistics about Seattle and Vancouver, BC (of course, not WA) to figure out why one seems so great to live in and one seems so ... not so great to live in. My first piece of data is population. After slogging around for 10 minutes in the government websites, I went to Wikipedia and found the same information but better organized and all in one place.
Seattle pop: 578K
Seattle land area: 217 sqkm (excludes 152 sqkm of water)
Seattle density: 2,663 people/sqkm
Greater Seattle pop: 3.8MM
Greater Seattle area: 21,202 sqkm
Greater Seattle density: 179 people/sqkm
Vancouver pop: 545K
Vancouver area: 114 sqkm
Vancouver density: 4,780 people/sqkm
Greater Vancouver pop: 2.0MM
Greater Vancouver area: 2,879 sqkm
Greater Vancouver density: 694 people/sqkm
So Seattle city is half as dense as Vancouver city, while Greater Vancouver is 3-4x denser than Greater Seattle . This supports my unscientific observation that Seattle has more sprawl than Vancouver.
Seattle pop: 578K
Seattle land area: 217 sqkm (excludes 152 sqkm of water)
Seattle density: 2,663 people/sqkm
Greater Seattle pop: 3.8MM
Greater Seattle area: 21,202 sqkm
Greater Seattle density: 179 people/sqkm
Vancouver pop: 545K
Vancouver area: 114 sqkm
Vancouver density: 4,780 people/sqkm
Greater Vancouver pop: 2.0MM
Greater Vancouver area: 2,879 sqkm
Greater Vancouver density: 694 people/sqkm
So Seattle city is half as dense as Vancouver city, while Greater Vancouver is 3-4x denser than Greater Seattle . This supports my unscientific observation that Seattle has more sprawl than Vancouver.
Monday, July 10, 2006
Richmond 夜市
我们在Richmond区离温哥华二十分钟玩一玩。
Video of us wandering
我们吃了
蔬菜饼
烧鱼章
秘制香辣鱼蛋
豆花
红豆pastries
芋头西米露
Oyster pancakes
日式海鲜烧饼
臭豆腐
Video of us wandering
我们吃了
蔬菜饼
烧鱼章
秘制香辣鱼蛋
豆花
红豆pastries
芋头西米露
Oyster pancakes
日式海鲜烧饼
臭豆腐
Wednesday, June 21, 2006
DVD rental data from Rentrak
Click here to see article.
Rev-Share Still Lives
Author: KURT INDVIK (HomeMediaRetailing.com)
Sept 16, 2005
The time for sharing is hardly history. Revenue-sharing may have flourished in the heyday of the high-priced rental cassette. But even though the business has shifted to low-priced DVDs, the concept of suppliers getting a percentage of rental proceeds in return for cheaper up-front costs hasn't faded away completely. Studio involvement is mixed — and evolving.
The major rental chains, including recent convert Movie Gallery, still aggressively use direct rev-share deals with the studios to manage cash flow and inventory.
Smaller retailers, on the other hand, are a lot more selective in their use of revenue-sharing because their cost of goods has plummeted from around $65 for a rental-priced cassette to around $17 for a new DVD. [nb: This is for new releases, rather than back catalog]
On average, rentailers involved in revenue-sharing acquire anywhere from 40 percent to 60 percent of their rental inventories through the practice, according to industry sources. [nb: NFLX reports 30/70 front/back, vs 70/30 for BB]
"If you are in a cash crunch, as Blockbuster apparently is, then [revenue-sharing] becomes more important," said analyst Dennis McAlpine, of McAlpine & Associates.
He estimates Blockbuster has upped revenue-sharing to about 70 percent in the latest quarter.
"At any one time, we may have about 70 percent of product coming into our stores through revenue-sharing agreements," Blockbuster spokesman Randy Hargrove confirmed. "We continue to believe revenue-share and copy-depth programs are useful for providing the movies that customers want and maximizing revenue on a title by title basis for both Blockbuster and the movie studios."
Movie Gallery, McAlpine said, revenue-shares about 50 percent of its rental inventory, although the recent merger with Hollywood Entertainment Corp. makes estimates problematic. Movie Gallery did not respond to requests for comment.
Netflix, the online rental giant, brings in about 60 percent of its new releases through revenue-sharing, said chief content officer Ted Sarandos. "Revenue-sharing is a way to maximize customer satisfaction in a margin-neutral way," he said. "Direct wholesale purchasing of rental units puts the rentailer in the position to manage margins by regulating access to what a customer wants and when they get it." [nb: if, as they report, 30% of their catalog is front catalog, and none of the back catalog is rev share, then around 18% of their overall catalog is rev share]
Marty Graham, COO of Rentrak's PPT division, said with consumers having more entertainment options than ever, video stores can't afford to run out of hot titles. Revenue-sharing, he said, allows them to pump up their inventories without investing too much cash in advance.
"The majority of studios offer product on output deals, so they're taking in more, but in exchange the retailer is getting more attractive terms," Graham said. "Revenue-sharing is the largest piece of our business today, and we don't see that changing any time soon."
Rentrak also offers programs for independent suppliers, aimed at smaller retailers who might balk at spending even $17 on a relatively (or completely) unknown film.
Industry analyst Tom Adams of Adams Media Research said the low price of DVD has diminished the rentailer's need for revenue-sharing.
Many independent rentailers are reluctant to take on rev-sharing deals, largely because of restrictions in selling previously viewed titles. The average is 30 days, and with the short legs of new hits, that's simply too long, rentailers say.
"We recommended a year ago to our members that if they were doing revenue-sharing to get out," said Ted Engen, president of the Video Buyers Group (VBG), which reports about 1,800 storefronts in its membership. "When your cost is under $20 for a DVD, there isn't any reason to take on a partner." In a recent VBG poll of members, 68 percent said they typically began selling off rental titles within 30 days of street date.
"Under revenue-sharing, you lose the flexibility to start selling off those titles when you need to," Engen said.
Rentrak's Graham doesn't see studios budging much on selloff restrictions, since they don't want to risk cannibalizing their new sellthrough.
On the studio side, sources say three of the six majors — Buena Vista Home Entertainment, Universal Studios Home Entertainment and 20th Century Fox Home Entertainment — have opted not to enter into any long-term deals with the chains.
All the major studios have PPT deals with Rentrak, with variations. Most offer output deals for DVD and videocassettes, with Buena Vista's and Universal's PPT involvement limited to VHS. Upfront fees ranging from nothing to $1.50 (Universal and Buena Vista charge $3.75 and $6.75 for VHS). On average, retailers then keep 60 percent of the rental proceeds, and all but $1.25 to $3.80 of the selloff take.
Last March, Warner Home Video tweaked its revenue-sharing program to include a back-end minimum guarantee back to the studio.
Rentrak also has deals with a variety of smaller suppliers, including Wellspring, Ardustry and MTI. PPT programs also are available for some video games, with upfront fees averaging $8.50 to $12.50 and participating retailers getting 54 percent of the rental proceeds.
Rev-Share Still Lives
Author: KURT INDVIK (HomeMediaRetailing.com)
Sept 16, 2005
The time for sharing is hardly history. Revenue-sharing may have flourished in the heyday of the high-priced rental cassette. But even though the business has shifted to low-priced DVDs, the concept of suppliers getting a percentage of rental proceeds in return for cheaper up-front costs hasn't faded away completely. Studio involvement is mixed — and evolving.
The major rental chains, including recent convert Movie Gallery, still aggressively use direct rev-share deals with the studios to manage cash flow and inventory.
Smaller retailers, on the other hand, are a lot more selective in their use of revenue-sharing because their cost of goods has plummeted from around $65 for a rental-priced cassette to around $17 for a new DVD. [nb: This is for new releases, rather than back catalog]
On average, rentailers involved in revenue-sharing acquire anywhere from 40 percent to 60 percent of their rental inventories through the practice, according to industry sources. [nb: NFLX reports 30/70 front/back, vs 70/30 for BB]
"If you are in a cash crunch, as Blockbuster apparently is, then [revenue-sharing] becomes more important," said analyst Dennis McAlpine, of McAlpine & Associates.
He estimates Blockbuster has upped revenue-sharing to about 70 percent in the latest quarter.
"At any one time, we may have about 70 percent of product coming into our stores through revenue-sharing agreements," Blockbuster spokesman Randy Hargrove confirmed. "We continue to believe revenue-share and copy-depth programs are useful for providing the movies that customers want and maximizing revenue on a title by title basis for both Blockbuster and the movie studios."
Movie Gallery, McAlpine said, revenue-shares about 50 percent of its rental inventory, although the recent merger with Hollywood Entertainment Corp. makes estimates problematic. Movie Gallery did not respond to requests for comment.
Netflix, the online rental giant, brings in about 60 percent of its new releases through revenue-sharing, said chief content officer Ted Sarandos. "Revenue-sharing is a way to maximize customer satisfaction in a margin-neutral way," he said. "Direct wholesale purchasing of rental units puts the rentailer in the position to manage margins by regulating access to what a customer wants and when they get it." [nb: if, as they report, 30% of their catalog is front catalog, and none of the back catalog is rev share, then around 18% of their overall catalog is rev share]
Marty Graham, COO of Rentrak's PPT division, said with consumers having more entertainment options than ever, video stores can't afford to run out of hot titles. Revenue-sharing, he said, allows them to pump up their inventories without investing too much cash in advance.
"The majority of studios offer product on output deals, so they're taking in more, but in exchange the retailer is getting more attractive terms," Graham said. "Revenue-sharing is the largest piece of our business today, and we don't see that changing any time soon."
Rentrak also offers programs for independent suppliers, aimed at smaller retailers who might balk at spending even $17 on a relatively (or completely) unknown film.
Industry analyst Tom Adams of Adams Media Research said the low price of DVD has diminished the rentailer's need for revenue-sharing.
Many independent rentailers are reluctant to take on rev-sharing deals, largely because of restrictions in selling previously viewed titles. The average is 30 days, and with the short legs of new hits, that's simply too long, rentailers say.
"We recommended a year ago to our members that if they were doing revenue-sharing to get out," said Ted Engen, president of the Video Buyers Group (VBG), which reports about 1,800 storefronts in its membership. "When your cost is under $20 for a DVD, there isn't any reason to take on a partner." In a recent VBG poll of members, 68 percent said they typically began selling off rental titles within 30 days of street date.
"Under revenue-sharing, you lose the flexibility to start selling off those titles when you need to," Engen said.
Rentrak's Graham doesn't see studios budging much on selloff restrictions, since they don't want to risk cannibalizing their new sellthrough.
On the studio side, sources say three of the six majors — Buena Vista Home Entertainment, Universal Studios Home Entertainment and 20th Century Fox Home Entertainment — have opted not to enter into any long-term deals with the chains.
All the major studios have PPT deals with Rentrak, with variations. Most offer output deals for DVD and videocassettes, with Buena Vista's and Universal's PPT involvement limited to VHS. Upfront fees ranging from nothing to $1.50 (Universal and Buena Vista charge $3.75 and $6.75 for VHS). On average, retailers then keep 60 percent of the rental proceeds, and all but $1.25 to $3.80 of the selloff take.
Last March, Warner Home Video tweaked its revenue-sharing program to include a back-end minimum guarantee back to the studio.
Rentrak also has deals with a variety of smaller suppliers, including Wellspring, Ardustry and MTI. PPT programs also are available for some video games, with upfront fees averaging $8.50 to $12.50 and participating retailers getting 54 percent of the rental proceeds.
Friday, June 16, 2006
Tuesday, June 13, 2006
DVD stats
From NYTimes "As DVD Sales Slow, Hollywood Hunts for a New Cash Cow" 6/13/2006:
- For movies that gross more than $100 million at the box office, 84 percent of DVD sales are in the first six weeks after their release
- Comcast, the country's largest cable company, lets its subscribers view 7,500 free movies and programs, and since 2004, they have watched them two billion times.
- Studios earn $17.26 for each DVD they sell, but only $2.37 for movies on demand and $2.25 per DVD rented, according to Tom Adams, the president of Adams Media Research. [NB-I think $17.26 is for front-catalog discs]
Monday, June 12, 2006
Excerpts from Kevin Kelly's "Scan This Book!" (NYTimes)
"From the days of Sumerian clay tablets till now, humans have 'published' at least 32 million books, 750 million articles and essays, 25 million songs, 500 million images, 500,000 movies, 3 million videos, TV shows and short films and 100 billion public Web pages."
"Nearly 100 percent of all contemporary recorded music has already been digitized, much of it by fans. About one-tenth of the 500,000 or so movies listed on the Internet Movie Database are now digitized on DVD. But because of copyright issues and the physical fact of the need to turn pages, the digitization of books has proceeded at a relative crawl. At most, one book in 20 has moved from analog to digital."
"The 15 percent of the world's 32 million cataloged books that are in the public domain are freely available for anyone to borrow, imitate, publish or copy wholesale. Almost the entire current scanning effort by American libraries is aimed at this 15 percent. The Million Book Project mines this small sliver of the pie, as does Google. Because they are in the commons, no law hinders this 15 percent from being scanned and added to the universal library.
The approximately 10 percent of all books actively in print will also be scanned before long. Amazon carries at least four million books, which includes multiple editions of the same title. "
"Nearly 100 percent of all contemporary recorded music has already been digitized, much of it by fans. About one-tenth of the 500,000 or so movies listed on the Internet Movie Database are now digitized on DVD. But because of copyright issues and the physical fact of the need to turn pages, the digitization of books has proceeded at a relative crawl. At most, one book in 20 has moved from analog to digital."
"The 15 percent of the world's 32 million cataloged books that are in the public domain are freely available for anyone to borrow, imitate, publish or copy wholesale. Almost the entire current scanning effort by American libraries is aimed at this 15 percent. The Million Book Project mines this small sliver of the pie, as does Google. Because they are in the commons, no law hinders this 15 percent from being scanned and added to the universal library.
The approximately 10 percent of all books actively in print will also be scanned before long. Amazon carries at least four million books, which includes multiple editions of the same title. "
Monday, February 27, 2006
Saturday, February 11, 2006
Poetry
Poetry
I didn't know what to say,
my mouth could not speak
my eyes could not see.
And something ignited in my soul,
fever or unremembered wings?
And I went my own way deciphering
that burning fire.
And I wrote the first bare line
pure foolishness, pure wisdom
bare, without substance
pure foolishness, pure wisdom
of one who knows nothing.
And suddenly,
I saw the heavens unfastened and open!
-Pablo Neruda
Love After Love
The time will come
when, with elation
you will greet yourself arriving
at your own door, in your own mirror
and each will smile at the other's welcome,
and say, sit here. Eat.
You will love again the stranger who was your self.
Give wine. Give bread. Give back your heart
to itself, to the stranger who has loved you
all your life, whom you ignored
for another, who knows you by heart.
Take down the love letters from the bookshelf,
the photographs, the desperate notes,
peel your own image from the mirror.
Sit. Feast on your life.
- Derek Walcott
I didn't know what to say,
my mouth could not speak
my eyes could not see.
And something ignited in my soul,
fever or unremembered wings?
And I went my own way deciphering
that burning fire.
And I wrote the first bare line
pure foolishness, pure wisdom
bare, without substance
pure foolishness, pure wisdom
of one who knows nothing.
And suddenly,
I saw the heavens unfastened and open!
-Pablo Neruda
Love After Love
The time will come
when, with elation
you will greet yourself arriving
at your own door, in your own mirror
and each will smile at the other's welcome,
and say, sit here. Eat.
You will love again the stranger who was your self.
Give wine. Give bread. Give back your heart
to itself, to the stranger who has loved you
all your life, whom you ignored
for another, who knows you by heart.
Take down the love letters from the bookshelf,
the photographs, the desperate notes,
peel your own image from the mirror.
Sit. Feast on your life.
- Derek Walcott
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