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Kindle 2 price plunge signals e-book reader competition

Editor’s Note: The following article is reprinted from PCWorld.com.

Amazon quietly lowered the price on its Kindle 2 e-book reader Wednesday. That didn’t take long: The Kindle 2 became available only about five months ago. And the price cut is a significant one: Amazon cropped $60 off the top price of its second-generation e-book reader, which now carries a more reasonable price tag of $299.

Amazon never subjected the original Kindle to a price cut of this magnitude. Then again, the original Kindle’s only viable competition in the beginning was the Sony Digital Reader—and the Reader lacked an integrated store.

Now, however, the fledgling e-book reader market has reached an interesting crossroads. Reports say that the price drop reflects an increase in manufacturing volume and a decrease in production costs. Though such changes often occur, this cut comes a bit too soon in the life of the Kindle 2 to make sense as a standard volume-production price reduction. Rather, I suspect that it marks a strategic decision: Amazon knows that it must push its price down fast in order to establish itself as a leader in the category going forward and to remain competitive as competing models emerge.

The e-book reader category is trying to establish itself in an increasingly crowded gadget marketplace. No longer is the Kindle the only practical option for reading digital books, and if Kindle doesn’t quickly achieve iPod-like traction and even dominance, more-splintered approaches to digital reading may gain ground.

True, the Kindle remains light years ahead of the competition both in its interface quality and in its integration with an online storefront. But now it has company: the Sony Digital Reader PRS-700 ($350) and the Sony Digital Reader PRS-505 ($280), as well as lesser-known alternatives like the Interead Cool-er Books ($249) and the Astak EZ Reader ($270). Though the latter two products aren’t as well implemented, they cost less than even the reduced-price Kindle 2; and their very existence as low-end alternatives challenges Amazon’s stranglehold on the e-book market. In addition, they work with PDB- and ePub-based books, which opens the market up beyond Amazon’s walled-off Kindle garden.

Wednesday’s price drop makes the Kindle 2 more enticing, but by itself it's far from enough to light a fire under the e-book market. I agree with NPD analyst Ross Rubin, who says that the new lower price “lowers the barrier a bit, but certainly not enough to significantly expand the e-book market.”

The bigger question remains, Is there a market here worth expanding? A dedicated e-book reader may enjoy a niche audience, but the question remains whether a separate device for reading digital books will be viable in the long term. Already, we have a Kindle for iPhone reader and a slew of iPhone e-book apps; and so-called smartbooks and other portable, connected devices are coming soon.

The way I see it, as nice a luxury as Kindle is, if I can get similar functionality using the same device that I use for other tasks, I'd rather consolidate the functions in fewer devices, instead of adding another piece of hardware to the fray. And a lot of people must agree with me--you don't see too many dedicated PDAs coming out these days.

Admittedly, the Kindle’s single-purpose approach has served its design well; but in the end, it just becomes one more thing to keep track of, one more thing to charge up, and one more thing to carry. Like many other Kindle users, I often find myself reaching for my iPhone 3GS to read Kindle content—even more often than I do the Kindle itself. The more frequently I do so, the more I wonder about the future of the e-book I have sitting at home.

Music pirate mom deserves a new trial

Editor’s Note: The following article is reprinted from the Today @ PC World blog at PCWorld.com.

Attorneys for Jammie Thomas-Rasset, a Minnesota mother of four slapped with a $1.92 million fine by a federal jury last month for illegally downloading 24 songs, have filed a request for a new trial.

They're right to request one because the judgment against the music-sharing mom was ridiculous.

The award for damages-which comes out to $80,000 per song-"shocks the conscience and must be set aside," Thomas-Rasset's lawyers wrote. They're asking the U.S. District Court of Minnesota to take one of three actions:

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Cheaper music royalties pull Internet radio back from brink

Editor’s Note: The following article is reprinted from the Geek Tech blog at PCWorld.com.

The future is looking bright for various Web-based radio services such as Pandora, Blip.fm and CBS-owned Last.fm. A new long-term solution for music services, such as Pandora, includes the reduction of more than 40 percent in the royalties formerly paid by such music-streaming sites to the record industry.

The previously high royalty rates had been widely blamed for the looming collapse of Web streaming services, many of which faced possible shut down for the past two years. Pandora is now safe from the threat of closure, after reassuring users that long term agreements and acceptable royalty rates are now in place.

However, for free users of Pandora's services, this new measure comes at a price. Any free user that now listens to 40 hours of music per month will now be asked to pay 99 cents to keep listening. If they agree, they can then listen to unlimited music for the rest of the month. Currently, this will only affect 10 percent of Pandora's user base.

The U.S.-only agreement between all parties involved will be in effect until 2015, when the future of Web-based radio services can be analyzed once again.

 

Apple, Sony, Nintendo sued over patent infringement claims

Three industry giants, Apple, Sony and Nintendo, are being sued in a new patent infringement lawsuit.

California-based Shared Memory Graphics claims the Apple iPod, Nintendo’s motion-controlled Wii, and Sony PSP and PS2 game consoles make use of two graphic accelerator systems patented by the company.

The two patents, originally owned by Alliance Semiconductor, describe ways in which microprocessors fine-tune graphics by balancing the flow of data from various sources.

The Wall Street Journal reported that the suit was filed at the U.S. District Court of Arkansas and demands unspecified monetary damages.

The plaintiff’s attorneys are fighting for a “reasonable royalty” from Apple, Sony, Nintendo, along with enhanced damages from Sony.

Apple had no comment to make on the lawsuit filed late last week.

Audio-Technica intros improved noise-canceling headphones

Audio-Technica announced Wednesday the ATH-ANC7b QuietPoint Active Noise-canceling Headphones, an update to the company's older ATH-ANC7 model.

The ATH-ANC7, introduced several years ago, has been one of Macworld's highest-rated noise-canceling headphones. The company says the ATH-ANC7b incorporates a number of improvements that allow the newer model to provide "better sound quality, comfort, and convenience." Specifically, the electronics have been upgraded, the earcups have been redesigned for better comfort, the battery are more-easily accessed, and the package now includes both short and long connection cables.

Other accessories include a hardshell carrying case, a 1/4-inch headphone-plug adapter, and an adapter for two-prong airline-seat audio jacks. The ATH-ANC7b folds flat for travel.

The new model will be available in August for a suggested retail price of $220.

Music: Then, now, and tomorrow

I was taking a car trip a few weeks ago, driving from the village where I live in the French Alps to Aix-en-Provence and back, about a 6-hour drive round-trip. As always, I brought my 160GB iPod classic along for company. While rolling down the autoroute, I started thinking of road trips I had taken with friends, back when I was younger, in the late 70s. We never traveled very far—maybe an hour or two to go to the beach, a concert, or a party—but we always had music to accompany us. Back then, it was cassettes or 8-track tapes: I especially remember Jon’s Mercury Marquis, which had an 8-track player and a shoebox of tapes in the back seat. (“Baby you were born to ka-chunk run.”) That was a gold-mine of music; maybe 10 hours worth to choose from. Later, other friends would keep little attache-case cassette carriers in their cars, stocked with dozens of Grateful Dead concerts or home-made mixtapes.

Today’s choices are almost limitless compared to those days. I can easily match my iTunes library against the record library of my friend Stu, who worked in a record store (think of Rob Gordon, the character played by John Cusack in the movie High Fidelity). What stands out most, however, is the amount of space the music takes up.

Back in the day of the LP—those round things that came before CDs—music took up a lot of space, and portability was especially limited. While you could have a big music collection—like Stu’s 3,000 LPs—it would cover an entire wall of your apartment more than a foot deep. And you had to come up with a system to classify your records. There was no search box to help you find a specific song among a thousand or more LPs; good memory was the only way to find something.

What struck me most during my road trip was that I decided I wanted to listen to Bob Dylan, and could choose any of his music: I had his entire catalogue with me. (It took up a mere 7 GB, far less than the 20 GB of Grateful Dead music or 10 GB of lieder by Franz Schubert on my iPod). The morning of the trip, in fact, Dylan’s latest album, Together Through Life, had just been released, and I was able to download it from the iTunes Store and sync it to my iPod before leaving. I listened to that album, then listened to a number of other Dylan songs at random from a smart playlist for much of the rest of the trip. (Dylan has always been great driving music.)

So we’ve gone from limited portability (starting with portable record players that played singles and going through portable tape players) to total portability as music has changed from an analog to a fully digital commodity. We’ve gone from the ability to carry a handful of tapes to the entire recorded output of an artist. What’s next?

Coming soon: the cloud

Today we carry music on our portable devices, but when you think about it, this makes no sense. Why should we have to worry about the capacity of our music player; why should we have to come up with strategies for syncing only part of our large music libraries? Why shouldn’t we have access to all the music we want?

Tomorrow’s way of listening to music will likely be different. We’ve recently taken our first steps toward keeping data in a “cloud”, remote servers accessible from any device, with services such as Apple’s MobileMe and Google Docs. Why can’t we do this with music? Either with our own music—imagine a way of sharing your iTunes library so your portable device can stream music from it anywhere—or a central server via a subscription service. No longer will we have to worry about which music we carry with us, and iPods will be little more than receivers with screens that tap into wireless networks.

As Chris Breen has written, Apple could easily set up a system so we could have a subscription to all the content of the iTunes Store to listen to at home. It’s a logical next step to make all this music available via portable devices that tap into the cloud.

The way we listen to music changed when, after decades of coming from needles in grooves, it went digital. Now that digital music is mature, the next step is to disembody it entirely and stick it on central servers somewhere. No more will we need to worry about what to put on our iPods; someday soon, we’ll have an unlimited choice of music—for a monthly fee—wherever and whenever we want it.

[Senior contributor Kirk McElhearn writes about more than just Macs on his blog Kirkville.]

Rumor: Next-gen iPods to sport video cameras

The following article is reprinted from the Today@PC World blog at PCWorld.com.

What could possibly knock the super-popular Flip Mino off its pedestal? Why, an Apple-made video camera, of course. According to rumors trickling in over the blogosphere, Apple may embed cameras similar to those found in the iPhone 3GS—therefore capable of capturing video—into its line-up of iPods.

Most likely the iPod touch and iPod nano will receive the cameras, as earlier rumors have suggested. Cameras in the iPod touch are a no-brainer—the device is already so similar to the iPhone, it only makes sense that Apple mirrors the two. And though I have my doubts that something as small as the iPod nano could handle the energy- and memory-sucking power of capturing and storing video, a digital camera is certainly feasible. It's unlikely the iPod classic would get one, and the iPod shuffle is out of the race for obvious reasons.

So where did these rumors come from? One comes from TechCrunch. According to its sources in Asia, Apple has purchased a massive number of camera modules just like the ones in the iPhone 3GS. Due to the substantial size of the order, it is assumed that these cameras are meant for the iPod line.

Another rumor comes from MacRumors in the form of protective iPod cases. Leaked cases are actually a pretty reliable indicator of what’s happening with iPods; it is exactly how the latest version of the iPod nano was revealed ahead of its time. These supposed cases for the iPod touch and iPod nano sport a little hole where a camera eye could peek out.

If these rumors are true, the Flip video camera is in for some heavy competition. Everybody wants an iPod, and if they come packed with cameras, consumers seeking an all-in-one media device need look no further. The Flip Mino stands a chance if it lowers its price-point (currently hovering around $180) or incorporates additional features. Flip Mino aside, if Apple puts its weight behind the video recording market, you’d better believe it’s going to dominate, and competitor innovations are going to come fast.

Hulu officially begins adding ABC content

As was foretold many moons ago, television content from the ABC family of networks has begun to make its way to video-streaming site Hulu. In a blog post on the company’s site, Hulu’s Rebecca Harper announced on Monday that hit series Grey’s Anatomy would be the first ABC show to appear on the site, with five complete episodes.

The episodes are all from the most recent season, but the selection is spotty: it includes the two-part season opener, two episodes from the middle of the season, and two episodes from towards the end of the season—so don't expect to just dive right in. More shows from the network should soonfollow, as Hulu is adding new content each weekday during the summer.

ABC's parent company, Disney, and Hulu struck a deal in April after months of speculation, adding a third major player to Hulu owners Fox and NBC. In exchange for its content, Disney gets a 30 percent stake in Hulu, putting them on roughly even footing with the other two networks. The remaining broadcast networks, CBS and the CW (itself half-owned by the CBS), are still pursuing their own video streaming agendas, with CBS streaming episodes of its shows on Hulu competitor TV.com.

Still, it’s another move towards one streaming site to rule them all and the free availability of ad-supported time-shifted content for all of our favorite shows, past and present, and that's something I can tune into.

First look: Zinc Internet video browser

Those wishing to unplug from expensive cable and satellite TV services are increasingly turning to video content streamed across the Web. Media center applications such as Boxee and Plex provide this content in a unified interface. ZeeVee Inc., makers of the ZvBox (a device for channeling Internet video from a computer to an HDTV) has recently shoved its oar in as well by releasing a Mac-compatible version of its Zinc Internet video browser. I’ve spent some time with Zinc and here are a few impressions.

Not just a video browser

Unlike Boxee and Plex, which are based on the open-source XBMC project, Zinc is a web browser that’s been rejiggered to look like a media center application. Peer inside the thing and you find a heaping helping of Firefox 3.0.10. To make this relationship even more obvious, launch Zinc, place your cursor where the menu bar should be, and click the Restore button in the upper-right corner of the menu bar. Suddenly the Firefox interface appears—complete with address field, navigations buttons, and History, Bookmarks, and Tools menus. At this point you’re welcome to use it as you would any other web browser. When you’re ready to return to the Zinc interface, just click the Zinc button in the toolbar.

Within the Zinc interface you find navigation commands arrayed along the left side of the screen and 25 large icons representing content channels to the right. The navigation commands include Zv Presents (a view of the main channels offered by Zinc), Favorites, New, History, ZvHDTV (tutorials about using the company’s go-between box), Settings, Help, and Exit. The channels include such old favorites as Netflix, Fox, CBS, ABC, Hulu, MTV, Nickelodeon, and ESPN. Internet-only channels such as YouTube, Yahoo, Revision 3, and CollegeHumor are also represented.

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Joost unplugs Web TV service, concentrates on selling tech

Web video site Joost is restructuring, abandoning its hopes to be a successful ad-supported Web TV provider. Instead it will sell its video-serving technology to other media companies.

Joost, created by the same developers as Internet telephony application Skype, blamed an economy that has made it “increasingly challenging to operate as an independent, ad-supported online video platform,” CEO Mike Volpi wrote Tuesday on a company blog. “In order to position ourselves well for the future, we began investigating additional lines of revenue for Joost,” he said.

That investigation has led the company to shift its operations to providing white-label video platforms for companies interested in publishing Web video, including cable and satellite companies. Joost said it can help companies build video portals cheaper, as it is an expensive and difficult proposition.

Volpi implied impending layoffs: “Unfortunately, as a part of this change, we will say good-bye to many of our colleagues and friends.”

Joost representatives in London and Leiden, the Netherlands, could be reached for immediate comment.

As part of the changes, Matt Zelesko will take over from Volpi as CEO, while Volpi will remain chairman of Joost’s board. Zelesko was senior vice president of engineering. Joost said Stacey Seltzer, senior vice president of international business development and content acquisition, will run Joost's business operations.

The company didn't provide more details on its online video platform, but the changes move Joost from one highly competitive environment—Web TV—to another. Several other major companies specialize in different aspects of delivering online video, such as Brightcove, Adobe and Akamai.

Joost’s withdrawal narrows the field of major players in online video. Google’s YouTube continues to lead the pack, with its mix of consumer-generated video and sponsored content. For U.S. viewers, Hulu.com, backed by major TV studios, is also a strong player.

Joost did not feature user-generated content but instead had struck deals with content providers such as CBS and Viacom to deliver high-quality video through peer-to-peer technology. Last December Joost modified its site to deliver streaming video using Adobe Systems’ Flash technology, which didn’t require people to download Joost’ desktop application, which the company then shut down.

In May Joost had 643,365 unique visitors, a nearly 23 percent gain over April, according to Compete, a Web analytics firm that offers a free comparison tool on its Web site. But Joost lagged far behind its competitors. YouTube.com had 76.4 million unique visitors and Hulu.com had 8.2 million.