The DVD rental business is certainly not what it used to be. 10 years ago, there was Blockbuster Video, Hollywood Video, plus local shops all over the country. That concept is long gone, put out of business by the original idea of Netflix - DVDs by mail for one low price.
Since then, a bizarre hybrid has emerged, and somehow maintained their existence: Redbox. If you are unfamiliar with the concept, they are vending machines in locations like CVS where you can rent a DVD without interacting with a person. Most of their business process is identical to that of Blockbuster: they purchase special versions of the DVD in bulk from the distributor for a special price, especially for rental.
The only distributor that doesn't offer this option to Redbox is Disney, which means that Redbox purchases retail packaging for their Disney DVDs. We are all intimately familiar with the digital download code that comes with Disney DVDs, which allows you to download a copy to your phone, computer or tablet as part of the purchase price. This is intended to prevent people from trying to break the encryption on the DVD to watch the movie on the go, which they were going to do anyway.
Redbox has decided that it would make good business sense to take the digital code and sell it through their kiosks. The problem, of course, is that this is completely against the law. The code is licensed to stay with the DVD, not to be sold or transferred separately. Because of this, Disney has filed suit against Redbox, claiming copyright infringement. This is a case that will be very easy for the company to make, as the licensing information is included with every DVD sold.
Disney is asking for all revenue generated from illegally selling digital copies of Disney films that it does not own the rights to, often undercutting Disney's own digital distribution prices on platforms like iTunes or Amazon. If the company refuses to turn over the ill-gotten revenue, Disney will ask the court for $150,000 for every instance of copyright infringement. That number, assuming they have sold even a dozen codes, could potentially cripple Redbox, who must already be seeing revenue issues if they took this desperate path.
We have seen companies in the past try creative licensing avoidance. There was Zediva, which
streamed DVDs for $2, but their business model of individual DVD players per user was ultimately defeated. Then there was Aereo, which tried to stream local over-the-air programming, but their business model of renting individual antennas and streaming their tuner was ultimately defeated. These companies were startups, though, and flew under the radar for a while before paying the ultimate price. Redbox has money, employees, customers, distribution and notoriety, not to mention a legal team, all of which should have clued off the company that this was a VERY bad idea.
2017 has been quite the year for Bitcoin, and this week has been especially significant. The day after Bitcoin hit its highest trading value of $10,000 per coin, it was trading at $11,000 per coin. Quickly following the massive gains, the judge in a court case involving Bitcoin and the IRS released her ruling, and it was not the result many people were expecting.
At the beginning of the Bitcoin craze, some people discovered that it was a way to potentially hide money from the IRS. People would translate their cash into Bitcoin and then not report the revenue to the IRS. As time went on, and Bitcoin's value got stronger, it turns out that some Bitcoin owners were having some massive capitol gains, and also not reporting them to the IRS.
Obviously, after discovering the trick, the IRS requested from Coinbase, the largest Bitcoin trading platform in the US, information on its users transaction history. Coinbase refused, and the request inevitably ended up in court. This week, US Magistrate Judge Jacqueline Scott Corley ruled that Coinbase must turn over some of the requested records, but not all.
If you have ever had a year in which you have traded at least $20,000 worth of Bitcoin on the platform, the IRS is about to know. Hopefully, if you fall into this category, you are one of the three known tax filers who reported this information. If not, expect an IRS audit and possibly a tax evasion charge in your future.
Since Nintendo announced their intention to
enter the mobile market with their games, the company has launched 3 Nintendo-branded and 1 partner title. The most recent mobile game to come out of Nintendo is Animal Crossing: Pocket Camp, a game that, theoretically, follows the path set before it by other games in its family.
The big difference, of course, is in the game's revenue model. While other
Animal Crossing games are a particular price for the game and you play it to your heart's content, this game is free to download. And download people have. In the first 6 days the game was available, it received over 15 million downloads worldwide, placing it right behind Super Mario Run.
But downloads don't always translate into revenue, as Nintendo is finding out the hard way. While a lot of people seem to be playing, few seem to be paying. In fact, of the 3 Nintendo-proper titles, it has generated the least amount of revenue in the first 9 days - by A LOT.
Fire Emblem Heroes, the lowest downloaded of the 3, had generated the most revenue at this point, with $33 million. Second was Super Mario Run with $24 million. Lastly, we have Pocket Camp with only $10 million. In addition, the global distribution of spending is definitely not even, with Japan representing over 40% of all revenue, and the United States representing just over 1%, at about $120,000 total.
The problem for Nintendo comes from the fact that there is just no real urgency present in the game. The in-game purchases are Leaf Tickets, a resource present in other games as well. These tickets are used to speed up processes or compensate for missing resources for crafting items. There is no real benefit in this type of game to spending money to speed up the process, though. You're not trying to defend territory, you're not trying to amass armies, you're not even trying to fight Pokémon - you simply don't have any reason to purchase Tickets.
The company seems to have recognized this issue, either before launching the game or immediately following launch. A timed event was launched shortly after the game, with a Christmas theme, which includes limited-time items. This generates an urgency for new items, which could potentially generate revenue, as people rush to get the items that can only be crafted before Christmas itself.
The long-lasting image of a company is not built upon how they handle themselves when things are going well, but instead is built upon how they handle a crisis. For example, a year from now, people will only have one image of Equifax: the recipient of a preventable data breach. The image of Yahoo was so damaged by the revelation of several breaches that Verizon almost canceled
their planned purchase of the company.
This week, a new company has been added to the list of massive failures during a crisis: BLU Products. The Miami, Florida based company designs and builds low cost Android phones, and previously built Windows Phones as well. A firmware update released this week to their Life One X2 handset had an unexpected side effect: complete handset failure. Customers have been posting complaints on the company's
Facebook page, as well as their BLU SubReddit.
Unfortunately, the company has not done anything to deal with the problem. Instead, there is a canned response that BLU support has been using in reply to every comment, on every Facebook post regarding the issue. It reads,
Hi **person's name**, we are aware of the issue with the Life One X2, and currently working on it. We apologize for the inconvenience.
This is as close to a public statement as we have received from BLU. The latest post under their
News section on their website is from Halloween, announcing their first Sprint phone. On Facebook, there has been no statement aside from the canned response, but there have been a number of new posts since the incident began. Several posts about the soccer team they sponsor, a few advertisements about their rewards program, and one general advertisement for BLU phones in general.
What's worse than the company's complete lack of a public response has been their private response. Apparently, the company has absolutely no contingency plan in place for a flawed firmware release. In the case of companies like Microsoft or Samsung, if a firmware update goes sideways, there is a process in place to revive the phone without losing data, or at least retrieve data before resetting the phone. With BLU, there is nothing; if you trusted your data to the company's phone and you received the flawed firmware update, your data is gone. To get the phone working again, your only choice is to do a full reset.
This is one of the sacrifices you make when you decide to go with a low-cost provider for any product or service. No one goes to Wal-Mart expecting good customer service; they go for the price. The same is true here - the choice was made for price, not because the company is a powerhouse.
YouTube has once again come under scrutiny for its automation processes. Just a few months ago, the company's
advertising automation caused a massive advertiser boycott, including large companies such as AT&T, Enterprise Rent-A-Car, Johnson & Johnson and Verizon. Now they are having trouble with parents who have noticed some incredibly inappropriate content appearing in the YouTube Kids platform.
The company's algorithms began allowing adult-oriented content to appear in the family-friendly Kids platform. For example, Mickey Mouse in a pool of blood, or a Claymation animation of Spider-Man urinating on
Frozen's Elsa. There has also been an influx of sexual comments on videos of children, particularly on newer "challenge" videos, such as the yoga challenge or the ice pants challenge. Buzzfeed recently revealed a number of videos in the platform showing children being abused or in vulnerable situations.
Because of these issues, YouTube has put new policies in place to try and eliminate, or at least slow, the problem. The highlights of the new policies are,
Tougher application of community guidelines and faster enforcement through technology Removing ads from inappropriate videos targeting families Blocking inappropriate comments on videos featuring minors Providing guidance for creators who make family-friendly content Engaging and learning from experts
On the surface, these measures sound reasonable, but there are a few issues. Chief among them, the definitions of "inappropriate" and "targeting families" are incredibly vague. The company's only example is a 5-month-old guidance on using family-oriented characters in violent or sexual situations. However, the terminology could be applied to content, such as videogame videos, that include a player swearing. For example, if you have ever watched a
Super Mario Maker speed-runner, you know that they can get verbally abusive to the game. Even though the videos are not aimed at children or families, this definition could demonetize said videos for no real reason.
If YouTube really wants to deal with the content on YouTube Kids, they should implement an opt-in on video uploads. Then, the algorithms could scan that content to ensure it meets the regulations, rather than assuming that every video could be a potential match for the service. For example, we are aware that not all of our shows would be entirely appropriate for kids, so we would not opt-in on those episodes. This would, of course, limit the number of videos in the service, so adversely, they could allow an opt-out for those videos that could get caught in the filter.