In an interview with GeekWire, Reller says that the $1,000 price tag of the Surface represents a value to the typical Apple buyer who spends that much on a MacBook Air alongside an extra $500 for an iPad:

Compare it to a typical Apple buyer, who is going to get a MacBook Air, plus an iPad. That’s a more interesting comparison. … If you’ve got a buyer who needs both a computer and a tablet, Surface Pro is $1,000, vs. $1,000 plus $500 (for the MacBook Air and iPad). I think that’s the interesting comparison.

She goes on to say that the Surface Pro represents a better value over the competition because it’s a touch-based system. It means the device is a tablet and an Ultrabook – it’s everything the modern technology user wants in a single system.

Microsoft will probably not have any luck in attracting the hardcore Apple users who are perfectly content with throwing money at multiple devices every year. The value that Surface Pro presents to those users is negligible. The company needs to focus on the PC user that will most likely skip the Surface Pro and opt for a similarly specced notebook. To those consumers, Reller says they have to look at the big picture:

You have to look at design, pen, touch performance. You look at it and you say, OK, I’m getting Ultrabook-class PC with the added benefit of a tablet package. It’s all I need. $899 plus a keyboard of my choice, I’m into the $1,000 category, and I have all I need, in a premium package.

Are consumers going to be swayed by that argument? It’s legitimately hard to say. Many people say that they plan on purchasing the Surface Pro after skipping on the Surface RT last year. These consumers want the full Windows 8 experience, and the Surface Pro mostly delivers if its largely positive reviews are to be believed.

Regardless, that starting price of $900 is a pretty scary proposition for consumers. For $100 less, consumers can get the 128GB Retina Display iPad. Is the newness of Windows 8 able to win out over the familiarity of iOS? Microsoft certainly thinks they can, but consumers may not be as adventurous.

Despite being affected by the same print downturn that affects all other newspapers, the NYT is still the third-largest print newspaper in the United States. The Times is available online free for “light” users, those who read 20 or fewer articles per month. There are smartphone apps available for iPhone and Android that channel Times content.

This latest price increase is yet another move by the old-school media titan making its way in the digital age. Back in 2002, The Times bought a fifteen percent stake in the Boston Red Sox, not because they had an interest in Red Sox baseball, but to get a piece of the New England Sports Network television channel that came with the team.

Indeed, many newspapers are changing their old business model for one that can remain profitable as more and more people get news via smartphone, tablet and laptop. Managers look for profit centers outside of the normal advertising sales and cover price that sustained papers throughout the 20th century.

For example, local papers may produce an entire insert for a single advertiser with a significant event, such as a job fair or grand opening. They may even assign writers to adorn the ad space with pseudo-articles that highlight topics that dovetail with the advertiser. This is one of many new approaches that smaller papers feel forced to take to keep their presses running. Others have turned to online video of news events, becoming de facto online television producers, with mixed results.

Finding ways to make these endeavors pay, via pay subscriptions, etc. has been the real challenge. So much news is available for free online that readers are loathe to pull out the plastic. Price increases like this one are sure to keep coming until the fateful day that paper is no longer viable, however far off that may yet be.

Gamestop issued a press release, announcing their plan to give cash/store credit for iOS devices. They’ve provided generic information and have left out some important details. For instance, will they plan on selling these devices?

Here’s a quote from Gamestop president, Tony Bartel, “By trading in iOS devices, GameStop customers have yet another source of funds to put toward the purchase of new and pre-owned games, DLC, digital PC games and more”

One important statement comes from their official iOS trade-in page: “You also release GameStop from any claim for loss or unauthorized access, use or disclosure of any personal or private data or information stored on the iPod, iPhone or iPad.”

So be sure to completely empty out your device’s memory before taking them in, if you plan on trading anything in.

Looking around on their site, there’s no information as of yet if they have plans to sell their purchased devices. Digging a bit further, I gave my local Gamestop a call for further information. Was able to find trade-in values for these devices:

iPod Touch 3rd Generation 32 GB: $100 Store Credit/$80 Cash

iPhone 4 16 GB: $135 Store Credit/ $120 Cash

iPad 2 32 GB Wi-Fi: $300 Store Credit/ $240 Cash

I asked the gentleman if they planned on selling the devices and how much they would be, here’s his response (paraphrasing), “Umm, let me ask my manager…He said there are no plans right now, but probably in November”

So take that for what you will. Not that I suspected the store managers to have the information, but you never know what internal memos Gamestop sends to their employees.

To put the figures I listed above in perspective, here’s the cheapest (realistic) prices I could find for the devices above in used condition:

iPod Touch 3rd Generation 32 GB: $125 – From a random classified ad in Tennessee

iPhone 4 16 GB: $300 – Another random classified ad, device has cracked screen

iPad 2 32 GB Wi-Fi: $407 – From a site called Electronics Emporium

If Gamestop were to sell at these extremely low prices, they’d still be making a lot of money from every trade-in. Will be interesting to track the price point they actually sell them at, if they get around to it.

Their decision to buy these devices is perplexing, because they’ve simply been about buying and selling video games and systems. It wasn’t too long ago that they offered the same trade-in system for DVDs and Blu-Rays, but they ended up doing away with it, focusing solely on video games. If they don’t plan on selling the devices from the outset, then where is the profit coming from? Perhaps they just want to build their stock first, before they actually sell them. Only time will tell.

Gamestop has taken a lot of heat from gamers, who complain that their trade-in values are too low and are simply taking advantage of desperate people. Not only are the game values low, but their system hurts video game developers and publishers. The used market does nothing for the people who actually create these games; the profit is enjoyed by Gamestop only.

It will be interesting to see how the iOS community responds to this news. Would you sell to Gamestop for the trade-in values I posted above? Will there be a response from Apple, who like the developers/publishers will see no returns on their items sold as used?

He says “people will pay for things” on the Web and anyone that’s worried about upsetting the Internet community is a fool.

If you look back just eight years, says Diller, you’d see everyone writing off the music business as dead and gone, since all music was going to be free, illegal downloads. Now there’s iTunes a good business with smart pricing, and billions in revenue.

Diller’s contention is that the pricing model for this movement is the key element for unlocking the flood gates. Once that is figured out then all bets are off. There was no prognostication as to how quickly this could take place but there is a “the sooner the better” situation in the online publishing world. We don’t need Mr. Diller to tell us that one.

Of course, there’s so much more to talk about in the online world and Mr. Diller didn’t disappoint. He continues

• There’s no business model for Web video, but he points out that when he suggested pre-rolls for Web video years ago, “it was like a cross to a vampire.” Now they’re everywhere.
• Not a fan of the banner ad. Display ads are just the first stage, there’s a tremendous amount of time to improve.
• Bing is a “good product” but it’s “real foolishness” to challenge Google head-on.

So Pilgrims, what’s your take on Barry’s bits of wisdom? Will you pay for your content that up until now has been free? I for one am a bit baffled by the parallel drawn between music and published content. While I may listen to a song a hundred times I won’t revisit content the same way. A song at less than a buck is a great value. An article at any price? Not so sure. Then again Barry wouldn’t be the first person to call me a fool!

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So who are the new owners?

The investment group is likely to include Andreessen Horowitz, a new venture capital firm headed by the Netscape co-founder Marc Andreessen, these people said. One of the people added that Index Ventures, a London-based venture capital firm that was an early investor in Skype, and the private equity firm Silver Lake Partners were also involved. A price was not disclosed, but eBay has said it wants around $2 billion for Skype, which is on track to take in more than $600 million in revenue this year.

Skype has been surrounded by speculation of a public offering in 2010, possible sale back to its founders Niklas Zennstrom and Janus Friis via investment firms and the Times even reports that Google was involved with talks regarding the service as recently as a month ago. Google got cold feet, however, regarding the possible legal actions against Skype could expose the search giant to some serious financial hits. In addition,

Google also worried that owning Skype might alienate wireless carriers, which offer their customers phones running Google’s Android software, the person said.

The Times article wraps up with the idea that maybe the founders are involved in this deal in some way which would make the legal concerns go away but that is not clear at this time. One has to think that if that were a possibility it would certainly be worth the effort to make happen.

So we don’t know what will happen to Skype. I would be upset if it changed significantly or was forced to change by the courts. One thing I have learned though as of late is that nothing, and the heavy emphasis on nothing, stays the same for very long in this world. The Internet space proves that every day.

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What Do You Think Of The New Napster?

I’ve spent some time on the new Napster service over the last few days, and aside from a less than intuitive interface, I can’t find much to dislike.  At just $5 a month for unlimited streaming of a deep catalog along with 5 mp3′s monthly, the service is effectively free.  And if I’m in Napster previewing a track or album (and since they’ve already got my credit card), why not just buy it there instead of jumping over to Amazon or iTunes?

Reports are that Napster got a special deal on streaming licenses from the labels…

This month, another survey says that price is the most important factor.

In November, WebProNews’s Mike Sachoff covered Nielsen’s survey, which had overwhelmingly high percentages citing the ability to shop any time and the time-saving aspect as their main reasons for shopping online (81% and 77% respectively).

Ease of comparison shopping was cited by 61 percent.

Low prices was their fifth concern, behind ease of finding the items they sought, with just 46 percent naming low prices as their primary reason for shopping online. Just 24 percent cited low shipping costs.

Nielson Online’s Ken Cassar suggested consumer preferences for convenience spiked during the holiday season, as shoppers sought to avoid crowds at brick-and-mortar locations.

These findings are in sharp contrast to market research firm Synovate of Chicago for Guidance, who says America’s uncertain economy is driving an increase in bargain hunting.

Guidance’s poll suggests the opposite of Nielsen’s, as 67 percent chose price as their first or second most important factor in online shopping (43% 1st, and 24% 2nd), and 59 percent (18% and 41%) of respondents chose free shipping as their first or second choice.

By comparison, only small percentages chose convenience factors like speed/efficiency of checkout (8%) or in-store pickup/returns (3.5%).

Also interesting about this survey is that those with higher incomes (above $75,000 annually) favored special promotions or coupons more often than those from lower income brackets.

So which is it? Price or convenience?

I imagine we could hold our own poll and come up with a third set of numbers. But it may pay off if online retailers can focus on a combination of both to maximize sales.  

When the same respondents were asked to choose their second most important factor, 41 percent said free shipping, and 24 percent named price. Only 8 percent cited special promotions or coupons as the most important factor, 7 percent said recommendations or product reviews, and 4 percent said a speedy checkout is most important. Just 1 percent said that in-store pickup/ returns were the most important factor.

Close to 19 percent of the total sample said they do not make any purchases online (22%of men and 16% of women.) An important finding since all of the 1,000 participants in the survey are online. Those in the highest income brackets were more likely to cite price as their top priority. Fifty-three percent of those earning $50,000 to $75,000 said price was most important, while just 37 percent of those making less than $25,000 agreed.

Concern about price is largely tied to age, the younger the respondent, the more price becomes a factor. Price is most important to those 18-24 (53%) and less important to those 65 and over (30%). Those who are 25 to 34 are the most likely to make a purchase online (only 9% do not). Those over 65 are least likely to buy online, with 30 percent saying they don’t.

"Clearly, the economic climate is driving bargain hunting," said Jason Meugniot, Guidance president and CEO.

"The Internet has opened a vast new world of low-cost purchase options for online buyers. While the online buying experience has improved markedly in recent years, at the end of the day – especially a day of financial uncertainty — price matters."

Just three months after they started the experiment, Radiohead is going back to the traditional way of selling albums – in stores. The band let their fans decide what to pay for their new album. Some fans thought free was a great price. Radiohead didn’t give out numbers, though comScore took a stab at it. They estimated that 62 percent of those who downloaded In Rainbows didn’t pay for it.

It seems like they could sell the album on the site (which could use a redesign of the shopping process) and create a model where you had to pay a set price. But for now there are no downloads.

The music industry keeps taking one punch after another as they try to figure out something that works. Free downloads are plentiful and just like Web 2.0 business models, ad-supported seems to be the buzz. But is it sustainable?

Too bad they skipped Christmas for in-store sales. The CD/vinyl and download won’t be at stores until December 31st. No official word on if they’ll be back on iTunes. You can buy the Discbox online.

What is known (according to Wikipedia) is that they aren’t signing back on with EMI. They will go with indie labels XL Recordings in the UK and TBD Records in North America.

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All the standard, non-interactive stuff is present – show and ticket info, cast and crew bios, and a store.  There are also video clips, and these feature new host Drew Carey as well as “Classic Moments” with Bob Barker (though the label on such moment incorrectly identifies a man named “Michael” as a female).

What’s supposed to be the biggest draw, however, is likely the new “Community”; this has many of the features you’d expect from a social network.  Its user count isn’t especially high – only 314 people are being shown on a list of members – but that could change as word of the network’s existence spreads.

In the meantime, we’re left with a decent-looking “The Price is Right” site that doesn’t really stand out in any way.  But if it gets even a fraction of the audience that the show has managed to attract, the companies behind it – FremantleMedia and DAVE Networks, instead of CBS – will have every reason to get as excited as some of those crazy contestants.