Category Archives: Amazon

First Look: Amazon Flexible Payments Service

I was interested in the announcement of the Amazon Flexible Payment Service; I browsed their documentation on the couch on Sunday night.

I haven’t gotten through it all yet, but at first glance this seems like it’s going to suffer from the same big problem as Google Checkout — it’s only available in the United States, which is not going to cut it for most internet businesses (even if that business happens to be based in the U.S.). Of the thousands of Approver.com users we’ve signed up in the past year, maybe a third seem to be located outside the U.S. and about 10-15% of our paid users are outside the U.S (we think).

I’d be embarrassed to turn away international customers by pulling the plug on PayPal. Doing an online payment system is hard, but getting the banking systems of 160 countries around the world to let you do a payment system is much harder, so I don’t imagine that either Google or Amazon will catch up to PayPal in this area anytime soon. But if Amazon were able to get the EU, Japan and Brazil covered it would go a long way toward making me feel warm and fuzzy about adopting their payment system.

Amazon’s pricing seems comparable to PayPal (2.5% of the transaction plus US$0.30 for transactions over US$10 with special pricing for "microtransactions" so you could do something similar to what PayPal does with iTunes).

Support for recurring payments is handy (we use PayPal’s comparable feature, which they call "subscriptions," on Approver.com today). The ability to co-brand the payment page is also vital for us (and again, PayPal also has this feature).

It *appears* as if you can kick off the payment flow with a SOAP or REST web service API call, something that PayPal has never permitted. I haven’t tried this myself yet but if it works as advertised, this is what Amazon is talking about when they call their service "flexible". In contrast, PayPal flows can only be initiated using a HTML form, which is an enormous pain in the ass for a variety of reasons (particularly so with ASP.NET because of the way it takes over standard HTML form functionality).

The big disruptive thing I see here is the ability to create payment flows where you are neither the sender nor the receiver of money, you’re just facilitating the transaction. This would give you the ability to create marketplace applications (a feature that PayPal doesn’t facilitate for obvious reasons). Unfortunately this feature doesn’t make sense to for us since Approver.com is not a marketplace of documents; I’m not sure it’s going to make a thousand marketplaces bloom, but you never know.

Amazon Will Enter the DRM-Free Music Market

Hooray.

This is exciting not just because DRM blows, but because having more than one major DRM-free vendor in the market will serve as a market counterweight to iTunes’ "OK, we’ll take off the DRM, but charge you 30% more" calculus.

A lot of my opposition to DRM stems from not from some high-minded principle, but the simple fact that I use a lot of different devices to listen to music. I have a desktop machine, a laptop with a virtual machine running inside of it, a couple of iPods, a couple of car CD players, and our Tivo, and I want to listen to my music on all of them. I don’t care to have to have a debate with all those devices over whether I have permission to listen the music I paid for on them.

These days I’m getting most of my music from eMusic, sans DRM. I have the plan that lets you download 50 songs per month, which I originally thought would be too much for me but I’m discovering is just about right for my habits. The 50 song plan is US$14.99 per month, which works out to about US$0.30 per DRM-free song — an incredible value compared to iTunes. (eMusic has monthly plans as cheap as $9.99/month, and you can buy "booster packs" that let you download additional tracks if you run out of downloads for the month, which I did last month. The nice thing about the booster packs is that unlike your monthly downloads, you can download booster pack downloads whenever you want.)

After two years of subscribing to Yahoo Music Jukebox I did unsubscribe from that service yesterday. Dwindling usage combined with an unfortunately-timed price hike made me realize that continuing to pay for this wasn’t a terrific idea for me. I still like the concept of renting music, though, I’m just not wild about the execution in this case. If I jump back into a music rental service it’s going to need to be much cheaper than purchasing tracks and it’s going to somehow need to provide me with a dramatically better discoverability experience than anything else that’s out there today.

I did buy the new They Might Be Giants CD on iTunes yesterday, but only because I couldn’t get it anywhere else. Were it not for the fact that some magic anti-DRM faeries descended upon my PC and converted the DRM-crippled iTunes music to MP3 so I could listen to it on my Tivo, I’d have waited until the album came out somewhere else.

If Amazon applies what they know about discoverability to their music store, I could see myself buying a lot of music there. Hopefully it’ll be better than their initial stab at movies — I’m not seeing a lot of Amazon recommendations for Unbox movies from Amazon today, and their browse experience still isn’t as good as Netflix’s, but it’s early days. Hopefully this will get better over time.

Sold on eBay, Shipped by Amazon.com

Link: Sold on eBay, Shipped by Amazon.com

"Fulfillment by Amazon, in development for the last three years, is one of the oldest efforts in the company’s stable of Web services. Unlike S3 and other recent initiatives, Fulfillment by Amazon involves the movement of physical goods instead of digital information."

I am sure that the Times’ writer is wrong here about the age of the service and they sure as heck aren’t shipping molecules via the web, although that would be a neat trick.

Both Sales and Earnings Rise Sharply at Amazon

Link: Both Sales and Earnings Rise Sharply at Amazon

One initiative that has not yet yielded measurable results is Amazon Web Services, in which the company rents out parts of its infrastructure, like its storage computers, to smaller companies that do not want to develop skills that Amazon has honed over the years. Mr. Bezos said it was still too early to judge whether Web Services could generate the same revenue as retail sales. "The market sizes are potentially very large," he said. "How large it can be over what time frame, we’ll have to wait and see. But we are going to keep inventing in that area."

Amazon killed their earnings numbers yesterday and today their stock has popped by 22%, good for them. It was great to see Jeff Bezos specifically call out their web services program on the earnings call.

I am sure that their platform initiatives will be a money-maker for them in time, but it takes a while to build up this kind of business (particularly since so many of their services are totally unique). But Amazon has shown in the past that it’s can build a new business with patience and discipline so I’m sure they’ll get there in a reasonable timeframe.

Amazon Unbox: Day 2

We’ve watched our second free Unbox movie on Tivo and I have to say I’m warming up to it. I still don’t think it’s a better value than Netflix (we’re particularly missing DVD special features, which we enjoy mightily and Unbox doesn’t provide). But when I am sitting at my desk at 2pm and I think I want to watch a movie that night, waiting for the postman to deliver the next Netflix movie isn’t gonna cut it.

As I browsed their list of movies that you can download to the Tivo, I was surprised to see some recent releases priced at $14.99. Holy crap — who would pay $14.99 for a movie with a 24-hour expiration date when you could buy the DVD (or actually go to the movies) for about the same price? I was surprised to see that that price point is even there, but I suspect that this pricing is a studio thing and not Amazon’s choice. (Update: As my pal Marc points out in comments, the $14.99 price point is for movies that you can download indefinitely — so that’s better, but nowhere near as good as just buying the DVD outright so you can get the special features and play it on different devices.)

The second movie we rented was Accepted, about a guy who doesn’t
get accepted to any college so he and his friends invent their own. It was pretty funny,
but not quite as good as my two favorite tales of college life, Animal
House
and the very underrated Porn ‘n Chicken.

Accepted did evoke some of my favorite warm and fuzzy feelings about college (we are now college-age adults so let’s get a six-pack and go sit by the ocean) and I kept thinking "this movie is about how the UCSB College of Creative Studies must have been invented."
But it also seemed to reflect the emerging DYI culture in general. Maybe this was intentional: I’m not sure
how much of Accepted was informed by stuff like Bar Camp, but when the students
put up a board listing the classes they wanted to take (like "Walking Around
and Thinking About Stuff" and "Rocking Your Face Off 202", they self-organized
in the exact way that Bar Camp does.

Amazon Unbox for Tivo

I tried the new video-on-demand service Amazon Unbox for Tivo yesterday, mainly because of the $15 free credit. Linking the Tivo to my Amazon account was easy as was the download. Amazon’s web site has a long way to go to beat Netflix in terms of discoverability of titles, though. They should really create a separate portal specifically for movies that you can download to Tivo.

My initial reaction is that the service is a teensy bit too expensive and the terms are too restrictive. (You have to watch the movie you download within 30 days and it evaporates off your Tivo 24 hour hours after you watch it.) Because of this, Netflix (or Blockbuster, for that matter) seems like a better value to me.

Still, as an Amazon fan and Tivo stockholder, I have high hopes for this. I think it will take off when the price comes down a bit, and it probably wouldn’t kill them to let you keep the movie on your Tivo for a week or a month, although that would matter much less to me than the price point. It seems like they should be able to bring the price down to less than $4 per movie for one day of viewing since I’m paying for so much of the infrastructure required to get the movie to my house. Maybe that will happen when there are more than one movie providers for Tivo.