What’s Behind the Kindle with Special Offers?

April 26th, 2011 No comments

Amazon has released a new version of the Kindle this week priced at $114, lower than the regular price of $139 by some $25. This less expensive Kindle with Special Offers is so named because the price is reduced in exchange for display ads that appear on the Kindle screensaver and at the bottom of the home screen. Amazon has suggested that some ads will come from partners like Buick, Chase, Olay, and VISA and some offers will be from Amazon itself for things like a $20 gift certificate for only $10. These offers do not interrupt reading as they are restricted to screensavers and the home scree and are not visible in books themselves.

The price reduction approach seems odd at first glance. Why not make this offer to all Kindle owners with a special firmware update that would also come with a $25 credit to your Amazon account? I don’t have any inside knowledge of the economics of the Kindle, Amazon has been tight-lipped about such things, but a few reasons for adopting this strategy do seem to present themselves.

Limited Trial

If Amazon were to open up the “Special Offers” part of the Kindle with offers to every existing Kindle owner, it seems likely that many customers would gladly update their device with new firmware to display the ads in exchange for a $25 credit with which to buy more digital content from Amazon. The immediate benefit to limiting the roll-out is to avoid straining the new ad system and have some means of control over how many Kindles with Special Offers are in the field. A limited trial period gives Amazon time to work out the kinks. It also provides a way to reduce the impact should they decide to kill the product later.

Price Elasticity of Demand

Amazon would actually profit more if they offered a $25 credit against future Amazon digital content purchases rather than an immediate $25 price reduction. However, there is one benefit to reducing the price of the Kindle itself. Amazon is able to gather information about how customer demand for the Kindle reacts to a change in price. This reaction is called the price elasticity of demand and it is the kind of market information that is invaluable to Amazon.

Try Google at Their Own Game

Some see a showdown coming between Amazon and Google (and then Apple) over tablets. Amazon recently opened an appstore for Android tablets and could be contemplating releasing their own Android-based tablet. If Amazon were to pursue such a strategy, their own Android tablet with Kindle reading software running on it configured to use the Amazon appstore, they might as well take the rest of the pages from Google’s playbook and develop an advertising capability. Google receives about 90% of their revenue from advertising and the Kindle with Special Offers provides Amazon a way to grow their technical prowess in running an ad platform, grow their ad sales team, and further develop relationships with advertisers.

Amazon’s new AdMash voting system allows users to chose the screensavers they prefer. The most popular screensavers will then become sponsored screensavers visible to all customers. This type of customer preference information will help Amazon become an even more formidable marketer and retailer.

Means to an End

I’m not convinced that moving the entire Kindle product line over to an ad-supported model is Amazon’s ultimate aim. However, the new Kindle with Special Offers does afford Amazon the opportunity to learn more about their customers and to learn more about competing with Google in the tablet space. I wouldn’t be surprised at all if the product is discontinued before a year has gone by, but I will be very surprised if Amazon does not emerge as an even stronger competitor in both the e-reader market and the larger tablet market.

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The Lala and Quattro Acquisitions are All About the Apple Tablet

January 26th, 2010 No comments

There has been a lot of speculation about what the LaLa acquisition could mean for a future cloud-enabled version of iTunes. Similarly, the recent Quattro acquisition has spurred a lot of conversation about what Apple might be doing with an advertising platform. While reading an article about Disney’s plans for digital content on NewTeeVee.com earlier this month, some new [no pun intended] thoughts struck me. On the eve of the event announcing a “major new product that [Apple is] really excited about” these ideas have only been reinforced by some details emerging in other rumor reports.

Disney Matters to Apple

At CES, Disney announced that they are developing a DRM technology called “KeyChest” that will allow customers to purchase a piece of digital content and unlock the ability to access that content in multiple ways. The goal is truly “anywhere, anytime” access to digital content that could be on a computer, mobile device, the web and even third-party services.  One of the possibilities touched upon by Ryan Lawler at NewTeeVee is that a purchase of a Disney DVD would unlock immediate access to stream that content to a computer or mobile phone.

Steve Jobs has made a personal fortune through Disney/Pixar entertainment. iTunes currently sells digital downloads of Disney movies and even provides the free Disney File downloads through codes that come bundled with a physical DVD or Blu-ray disc.

Is there any scenario in which Steve Jobs, as a Disney board member and the largest private stockholder, is not briefed on Disney’s plans to use this new technology to control the distribution of their media? Is there any scenario in which Steve leaves that briefing and does not decide that iTunes needs to be involved in these KeyChest transactions, including full support for streaming protected content purchased online?

Lala was not Acquired for the Lala Service

Lala was all about engineering talent and expertise. The Lala acquisition makes perfect sense if Apple wanted to bring in a team of engineers with a lot of experience in streaming content. I think that Apple is less concerned with Lala’s existing business model of syncing your own content to the cloud than it is with making sure that iTunes can still be involved in Disney’s plans to make both download and streaming protected, purchased content available online.

If this “Major New Product” (MNP for short) is a tablet, wouldn’t it be great if you could buy a movie on iTunes and immediately start streaming it to the MNP while iTunes is downloading it to your computer?

Quattro is not About iPhone Apps

When Apple purchased Quattro, there was a lot of talk about how this might impact iPhone developers who were looking to integrate ads into their products. Most arguments hinged on the idea that Apple wanted to grab a piece of the action in mobile advertising. I think Apple has bigger revenue opportunities and iPhone developers were doing just fine at putting ads into their products with some existing third-party services or even rolling their own. There’s something else going on here.

Looking at the rumors this week that Apple has been meeting with publishers like the New York Times to brief them on the “major new product” to be launched on Wednesday, what comes into focus for me is that these are the people that need help with an advertising management system. Apple is building a comprehensive platform for traditional print publishers to move online.

Newspapers and magazines were built on advertising revenue and this is a business model that print people understand. They want to hold on to their advertisers and keep that slice of the pie in the digital era. I believe Apple is courting papers like the New York Times with the message that they can offer a full service solution. AdKit (or maybe CoreAds?) will be an important piece of iPhone OS SDK 4.0 so that publishers can easily integrate advertisements into their digital content like ebooks and digital magazine editions.

Beyond the AdKit API’s, expect Apple to offer ad tracking and metrics directly into iTunes Connect so that publishers have a dashboard to track all the revenue from their products, both direct sales and display advertising within the product.

Is all this infrastructure in place after Apple acquired Quattro on January 5th? Absolutely not. But just like the Lala acquisition, Apple has bought a team that can get them a big leg up in this effort. Expect to see AdKit and the iPhone OS 4.0 SDK announced tomorrow with availability of the service to launch later in the year (think iPhone 3.0 SDK and the push notification service).

Both Acquisitions are About the “Major New Product”

Streaming media content and mobile advertising for content publishers are perfect for a tablet device. You have something to watch without requiring onboard storage of your whole library and ebooks and digital magazines have an easy way to transition content including interactive advertising. If all reports are on target, media and digital publishing are going to be big on this “MNP” to be announced.

Here’s another idea… why not show you an ad while you are waiting for Toy Story or Wall-E to stream to your MNP?

Categories: Apple, Technology Tags: , ,

Cool Use of ZFS and VirtualBox

July 6th, 2009 No comments

I ran across this very cool use of ZFS and VirtualBox on blogs.sun.com. The author made a snapshot of virtualbox VM’s and then used the cloning feature to instantly create new copies of the VM for testing or other uses. All the common bits are shared by the different clones so this setup saves gigs of disk storage. Very clever.

Backing up and Restoring a RAIDZ Array

February 20th, 2009 No comments

Last week, I replaced a drive in my RAIDZ that was starting to report errors. To be clear, I was actually getting errors on 2 or 3 drives, but most of them were on c7d0. When I was trying to see if I could hotswap out c7d0, I unplugged c8d0 and almost crapped my pants. When I realized how loose the SATA cables were in getting c8d0 back up and running in the array, I decided I better do this with the power off.

Here are the steps I took to make a backup and then rebuild my array. I decided to build the arrays a little differently, so these steps aren’t needed if you are just replacing a drive. “zpool replace storage c7d0″ with a new drive connected to controller 7 would have sufficed in my case.

To make a backup, I plugged in a 1TB USB drive and used fdisk to clear it into one big partition. I used the device driver manager in the Gnome GUI to tell me that it was sitting on c9t0d0. I created a ZFS filesystem named “backup” on it and then used “zpool send storage | zfs receive -f backup” to copy the filesystem to the other drive. This worked beautifully and only 12 hours or so later, I had a complete copy of all 900GB of data.

This points out the futility of backup for these large arrays. Even if you do have the drives, tape, or whatever, it’s hard to get more than 1 or 1.5GB per minute. That’s only 60GB to 90GB per hour. It takes a long time to backup a TB of data.

Once the backup was done, I used “zpool destroy -f storage” to break the array. I did this because I wanted to rebuild it as one 4 drive array with SATA drives and a single drive array with the other IDE drive in it. This way when I eventually upgrade to 1.5TB drives, I can just use four instead of the five drives that are in there now. With the drives ready to go, I created the new array and filesystem with the command “zpool create raidz storage c5d0 c6d0 c7d0 c8d0″. I also created a “movies” zpool for DVD rips that didn’t have to be redundant with the command “zpool create movies c4d0″.

Now that I had the two new arrays ready, I just used “cp” to copy the data back to the new arrays and put the folders in the right places (rips to /movies and everything important to /storage- the raidz array).

Categories: Project, Technology Tags: , ,

My RAIDZ Storage Pool is Degraded

February 13th, 2009 No comments

And no, this isn’t a comment on my server’s self-esteem. My RAIDZ pool is reporting that it’s got problems. It figures it happens on Friday the 13th. Weird, huh?

Actually I first saw the warnings a couple weeks ago when a scrub returned several errors in the zpool. The data was still good though because of checksumming in ZFS. I was getting a little anxious because I keep my iTunes library on the server along with raw footage from home movies. Important stuff to our family that I wouldn’t want to tell my wife that I had lost.

Most of the errors were on C7D0 (one of the four SATA drives in my setup) so I spent a week or two debating about whether I wanted to just upgrade the four 250GB drives to 1TB or 1.5TB drives. In the end, I decided on hoarding cash and I ordered a 250GB drive for $40. I’d still like to upgrade the array to 1.5TB drives when they hit $99 each, but I can wait to see if this new stimulus package will include free drives for homeowners along with the kickbacks to Wall St executives and help for stupid people who bought homes they can’t afford. I can only dream, right?

When the new drive arrived, I thought I would see if I could hot swap it. Smart, right? In hindsight it makes perfect sense that I would try testing out the resilency of ZFS and RAIDZ on a live array holding precious memories of my children’s births and early years when it was already starting to fail. Living life on the edge is what I like to do. Of course, when you try this on your own home file server, you might want to be a little more careful about tracing the SATA cables to make sure you actually pull the right one.

Panic. This was going to be a Friday the 13th for the ages.

There were a couple minutes there when I was literally sweating bullets. I was lucky though that the array wasn’t being used and so no data was lost. I brought c8d0 back up and cleared the zpool and all looked good.

Once I get everything up and running, I’ll write up the steps I used to make a backup, recreate the arrays, and copy my data back.

Categories: Project, Technology Tags: , ,

OpenSolaris 2008.11 Upgrade Finished

December 20th, 2008 No comments

That was pretty easy. Here’s what I did…

  • downloaded OpenSolaris 2008.11 Live CD
  • burned ISO file to a CD
  • booted fileserver from Live CD
  • double-clicked “Install OpenSolaris” on desktop of Live CD
  • answered the install questions (time zone, username, etc.)
  • ran “Add More Software” which launches the package manager
  • installed the “nas-server” collection
  • rebooted (apparently some of the nas-server config files don’t load properly until a reboot)



Then from the command line, I did some magic to get my existing 5-drive RAIDZ pool mounted on the new OS. My zpool has the unimaginative name of “storage” which you will see in the following commands.

  • zpool import -f storage
  • zpool upgrade storage
  • zfs upgrade storage



Now that my zpool was mounted and ready for the cifs service, I had to enter a few more commands to get cifs running.

  • svcadm enable -r smb/server
  • smbadm join -w <workgroup name>
  • zfs set sharesmb=on storage
  • sharemgr show -vp (just to check)



And that was that. I just love how simple these commands are now. A lot simpler than SAMBA, but we’ll see if the new cifs service is as stable and fast.

I still had to do a little chown and chmod work to get permissions right, but then everything was perfect. The mapped network drive on my PC fired right up without any changes, and the saved “connect to server” favorite on my Mac worked immediately as well.

I have iTunes set up so that its “iTunes Music” folder is on the fileserver. So now all is well there and I can continue to manage my library from my Mac laptop, but store all the music files on the server. I feel a little better knowing that RAIDZ is protecting all those media files from bitrot, but I still need to get some backup in place for my 500+GB media folder.

Next project will be to see if I can get Firefly running to share out my movies folder to the AppleTV.

Moving to OpenSolaris

December 19th, 2008 No comments

We had a power outage last night and the interruption has created some errors on disk0. I tried to fsck, but there’s not much use unless I boot from a live CD and umount the filesystem first. I decided that maybe this was a good time to go to Solaris 10 10/08 anyways.

But then I thought, if I’m going to reinstall, why not try OpenSolaris? The new 2008.11 has some nifty features and all I really care about is getting my ZFS pool shared out via SMB/CIFS anyways. Hmmm, and doesn’t OpenSolaris have built-in CIFS support? That could be fun to try…

So 30 minutes later, I’ve got the OpenSolaris ISO downloaded and the CD has been burned. Booted into the CD, and I’m immediately greeted (well not, immediately – booting from CD is slow) by a desktop with Firefox, etc. all ready to go. This is nice.

There’s a “Install OpenSolaris” icon on the desktop. I click that and it recognizes my 6 drives. I wiped the boot drive and now it’s chugging away. It’s about 50% done after what seems like 15 minutes or so (I’m catching up on Twitter while I wait, so who knows how long it’s really been). Can’t wait to see it in action and get my zpool mounted and CIFS working.

Here’s what I’m really excited about… Apparently there are a few people that have Firefly Media Server running on OpenSolaris. This is going to be great!

Categories: Project, Technology Tags: ,

LEGO robots are awesome!

December 10th, 2008 No comments

Check this thing out…

Yep. It actually solves the Rubik’s Cube using the light sensor. Awesome.

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Macy’s Parade Gets Rick-Rolled

November 27th, 2008 No comments
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Coldplay’s Prospekt’s March EP is $0.99 at Amazon.com MP3 Store

November 25th, 2008 No comments

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