I purchased a book tonight for my Kindle with Amazon’s One-Click delivery, a service that makes buying a book literally a one-click operation.  However, the credit card that was associated with my account was expired.

Amazon delivered the book to my Kindle anyhow.

After I received the book on my Kindle I received a separate note (and an email) explaining there was a problem processing my credit card.  Amazon asked me to log into my account within the next 5 days to pay for the book…that they already delivered to my Kindle.

“Though your order may have already been delivered to you, it is important that you visit the following page within 5 days to update the payment information for this order.”

This is a pretty amazing customer service policy.  Frankly, I’m still a little shocked. Amazon actually delivered a product to a customer even though there was a problem with payment.

I happily paid for the book and would love to thank the Amazon employee who came up with this service policy.

Has anyone else experienced this with other companies selling digital products online?

UPDATE: The Oatmeal has explained this in a comic better than I could in a blog post. You can read the comic here (thanks to Leonardo for the heads up.)

Netflix announced plans today to spin off their DVD rentals into a new company called “Qwickster” that will include video game rentals to compete with companies like Gamefly, GameStop, etc.

Last week Netflix announced subscriber losses that caused some investors to sell their NFLX stock. Dan Frommer made a good observation that most of the subscription losses they announced came from the DVD rentals and not the streaming service.

I think it’s safe to say the future of the entertainment industry is in streaming content online, not mailing DVDs. We’ve reached the tipping point where high speed internet access has penetrated enough households to make streaming a more viable distribution channel than mailing physical DVDs through a financially troubled US Postal Service.

According to an email sent to all subscribers (and posted on the Netflix Blog) by Reed Hastings, Co-Founder and CEO, of Netflix:

So we realized that streaming and DVD by mail are really becoming two different businesses, with very different cost structures, that need to be marketed differently, and we need to let each grow and operate independently.

A few thoughts on this statement:

• Marketing one company is much easier and cheaper than marketing two companies. Seems like a weird choice to use “marketing” as one of the reasons to make this change.
• “Qwickster” sounds like the name of a cheesy 2001 internet startup selling chocolate milk online, not a profitable, well-established, 14 year old company. As Gruber suggested, why not Mailflix? It keeps the branding consistent and sounds far more professional.
• Creating a separate company for their DVD business (and naming it something COMPLETELY different) makes it a lot easier to sell off that part of the business if they ever wanted to.
• Forcing their customers to go to two different websites to search for a single movie is not a user-friendly experience. When I search Netflix for a movie, my first preference is to stream the movie. If the movie is not available for streaming, I’ll put it in my DVD queue and get it mailed to my home. Right now, this can all be done from single webpage. In the future, it appears that I will have to visit two different websites to search for a movie (one for streaming and one for the DVD).

John Wilker made a funny (because it’s true) statement on Twitter this morning about the changes:

For the record, I still think Netflix is a great service for the cost.  Basically for the price of a couple lattes, I can stream an unlimited number of movies to my home in a month and alternatively have DVDs mailed if I choose. That’s a pretty good deal.

However, by making things a little more difficult for the customer, I may drop the DVD service altogether. I haven’t decided yet.

And maybe that’s what Netflix wants in the long run anyhow.  There is more profit in streaming movies digitally than mailing physcial DVDs anyhow.

If you are a current Netflix DVD subscriber, will you keep the service after they make these changes or will you go streaming-only?

As a side note, newspapers are dealing with similar issues in transitioning from an old distribution channel (print) to a new one (digital).  Gigaom has an interesting comparison between the challenges Netflix faces and the ones newspapers are facing now too.

I just realized that I haven’t posted much of anything to this blog for nearly 6 months.  Wow.  To end my dry spell I thought I’d talk a little about paywalls currently being considered by several large news organizations.

Let me start by saying that I don’t want newspapers to JUST survive.  I want them to prosper and grow.  I love newspapers. However, in order to prosper, they will have to make radical changes to their current business and operational models.

It’s no secret that newspapers are in an unpleasant predicament right now.  Business models that should have gradually evolved over the last decade to adapt to the current climate have instead stagnated in the last decade.  The only real changes newspapers made to their business models over the last dozen years was to raise their advertising and subscription rates.  Paywalls are certainly a radical change from that stagnation, but perhaps not the best solution available.  Putting the genie back in the bottle is a lot harder than letting him out.

Here are a few thoughts surrounding newspaper paywalls:

1. Exclusive and utterly fantastic content.

All parents think their children are unique, brilliant and precious.  However, without sounding mean, the vast majority of those children are probably pretty average.  (I know, that sounded mean, but hear me out.)

Newspapers think the same thing about their own content.  Each section of the newspaper is a precious child with perfect teeth and above average grades.

But what I think they don’t understand is that it’s nearly impossible to charge for content that can be found elsewhere on the internet for free.  If the content isn’t unique, then it has to be the best example of that content available.

Are you covering your technology section better than Tech Crunch?

Are your photo galleries more interesting than Flicker?

Are you covering your local dining section better than the dozen passionate food bloggers in your city?

Are your podcasts and videos more compelling than YouTube?

This is your competition…and they’re all free.

If a newspaper can’t answer “yes” to these types of questions, then perhaps that content isn’t a good candidate for subscription services.

2. Enterprising local bloggers

Several outcomes are inevitable when a local newspaper begins charging for specific categories of content.  For example, if the Boston Globe began charging for access to their Red Sox content, you would probably see 3 outcomes.

1. People would pay for access because they love the Red Sox so deeply, not even a paywall would stop them.  Web traffic would drop to that particular section, but the true fans would remain.
2. People would stop reading Red Sox content at the Boston Globe, but seek it out via bloggers, or other reliable news agencies.
3. Seeing a ripe opportunity, people would begin to blog about the Red Sox themselves and become competition for the Boston Globe in that category.

How many enterprising bloggers would cover niche news categories if your local newspaper decided to charge for content?  Are they any good?  Should you recruit them instead of compete against them?

This will not be a big deal in smaller communities, simply because smaller populations foster fewer bloggers.  However, larger metropolitan areas will be filled with bloggers writing in the exact same niche the newspaper covers.  And sometimes, covering it better than the paper (remember those unique and precious children?).

3. Run the numbers, it may (or may not) help

The New York Times launched their “TimesSelect” subscription service in September 2005 and filled it with unique and exclusive content that could only be read with a TimesSelect subscription.  Two years after its launch, the Times determined they could make more money by removing the subscription paywall and running advertising on the site.

By some accounts, TimesSelect didn’t fail (it was projected to make $10mil in revenue).  It just didn’t live up to its financial goals using that particular business model.  TimesSelect was conceived before the explosion of traffic that search engines like Google and Yahoo began delivering to news sites.  It was impossible to capitalize on that increased search engine traffic through a closed system that requires a subscription to participate.  The New York Times wasn’t able to foresee that explosive search engine growth.

Under normal circumstances, a newspaper will need to dig deep into the traffic and financial metrics and try to forecast how many loyal visitors they have available for subscriptions?  How many of these visitors will pay to return?  Is it enough to compensate for the drop in traffic?

Implementing simple registration walls caused about a 20% immediate drop in traffic when registration was all the rage a few years ago.  I can imagine the drop in traffic for requiring payment would be even greater.

The New York Times is currently building a paywall in which visitors “will be allowed to view a certain number of articles free each month; to read more, the reader must pay a flat fee for unlimited access.” This system will be in place by January 2011.

It will be interesting to see how this works for the Times in 2011.

In closing, I will leave you with this quote from Stewart Brand on the cost of information.  Hopefully newspapers can find a happy medium…

On the one hand information wants to be expensive, because it’s so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other. – Stewart Brand

(Also…my disclosure, I work for a company owned, in part, by Media News Group and they’re not responsible for any craziness I may spew on this blog. Nor am I representing them in any way.  Yadda yadda yadda…)

(Images from viZZZual via Flickr, ThinkGeek, Robot in Disguise)

Send fewer emails.

Yep, that’s it. That’s the entire secret rolled into one sentence. For every email you send out, there is a good chance you will receive a reply. If you’ve copied multiple people in your outgoing email, you will probably receive numerous replies.

We live in a world with numerous forms of communication, yet most companies disproportionally rely on email for the majority of their contact throughout the working day. Depending upon the situation, email could be the worst form of communication to use with your coworkers, clients and business partners.

Here are some alternate forms of communication you should consider before firing up your email program: face-to-face meeting, collaboration tools (wiki, BaseCamp, Salesforce.com, Google Docs, etc), instant messaging (AOL, GTalk, Yahoo, MSN, ICQ, Skype, etc), social networks (Facebook, Twitter, LinkedIn, etc.), phone call, text Message, video conference, video chat, blog, fax and last, but not least a good old fashioned hand-written note.

Here are a few instances when email is NOT the best tool for the job.

1. When you need a simple yes/no answer. Use an instant messenger, text message or Twitter direct message. You’re in and out and nobody loses much time in the process.

2. When multiple colleagues need to edit and/or approve a document. Use collaboration tools like Google Docs, BaseCamp, a wiki, etc. Emailing a Word or Excel document to six of your coworkers to edit is shear insanity. Stop the madness. Seriously.

3. You sent an email to several colleagues and you got a reply from someone who clearly confused. Unless you are absolutely sure one simple email reply will clear up the confusion, pick up the phone and call this person. Chances are, one 10 minute phone call will prevent 3 or 4 more emails.

4. You need to sell something. Whether you’re selling a product to a client or an idea to a supervisor nothing beats a face-to-face meeting.

5. Someone just emailed you the funniest joke along with a hilarious photo of a kittens. I beg of you. If you really need to tell the world just how funny this joke is, post it to your blog. Please, under no circumstances should you forward this joke email to your entire address book.

So tell me, are there any communication tools you use (other than email) throughout the day?

Let me know in the comments.

I recently realized that we have quite a few fans of social media here at work. So, here is a list of some Twitter users working at the Houston Chronicle. You may even find your favorite writer or editor in this list…enjoy.

Web operations (designers, developers, system admins, etc):
@cmason
@wiredrogue
@sevatt
@elegantmachines
@big_dead_fish
@glove
@tes735

Editorial (writers, reporters, editors, content producers, etc):
@dsilverman
@LauraWeisman
@deanbetz
@houstonbands
@rjustinchan
@scifirantergirl
@lsteffy
@mcberkowitz
@rickdunham
@matt_stiles
@joeyguerra
@juliemason
@SydKearney
@howarddecker
@sbuggs
@corilyns
@kyriememo
@nick_anderson_
@mrglenn

Sales / Marketing (account executives, marketing specialists, etc)
@linafuh
@krmichell

If you know of anyone missing from this list, please post their user name in the comments and I’ll update the list. Also, here are a few Houston Chronicle Twitter feeds so you can keep up with local news via Twitter:

@TechBlog
@ChronSports
@TubularTV
@HoustonChron
@traffichouston

(Oh yeah, and you can find me at @davidherrold)

Have fun meeting some Chronicle folks!

- Dave

Microsoft’s decision to walk away is the latest chapter in a three-month-old standoff that began when Microsoft made an unsolicited offer to acquire Yahoo in an effort to compete more effectively with Google in Web search, advertising and services.

Yahoo rejected Microsoft’s offer repeatedly, saying it undervalued the company. Microsoft at times threatened to lower its offer, originally valued at $44.6 billion, or $31 a share.

In a letter to Mr. Yang that Microsoft released Saturday evening, Mr. Ballmer said that it would not make sense for Microsoft to pursue a lengthy proxy fight. “Our discussions with you have led us to conclude that, in the interim, you would take steps that would make Yahoo undesirable as an acquisition for Microsoft,” he wrote.

I can’t say I’m disappointed in the outcome. I was a little pessimistic about old media meeting new media and the potential impact of Microsoft owning properties like Del.icio.us and Flickr. I use both sites pretty frequently and wouldn’t want to see them squandered or misused by Microsoft in any way.

That might sound pessimistic, but I still view Microsoft as mainly an old media company and Yahoo and a new media company. One existed before the birth of the internet, the came after.

Hopefully this is put to rest so I can get back to posting cat photos on Flickr.

Google released their Website Optimizer platform last week for general use. It has only been available to sites using Google AdWords in the past, but now can be used by anyone to enhance site performance. This is great news for web analytic junkies, usability testers, developers and designers alike.

In a nutshell, Google’s Website Optimizer allows you to test multiple versions of content (ie. marketing messages, logos, icons, copy, etc) in a live environment to determine which combination of content yields the best results.

Based upon what you are testing, this “result” could mean higher click-throughs, increased product sales, increased product downloads, increased ad revenue, higher traffic to internal pages, etc.

This eliminates the guesswork of testing ad placement, site designs, product purchase flows, etc. You can simply release multiple versions of your content and look at the analytics to determine which one is yielding the best results.

There are certainly other tools to do the same job; but not many are free or this simple. We could certainly do the same thing at the Chronicle, however we would have to use several systems to make it happen. This simplicity of using one system appeals to me.

Here are some links to get you started with Google’s Website Optimizer:

Google Website Optimizer
Google Website Optimizer blog
Website Optimizer press release

(via Web Worker Daily)

According to a recent Wired article VC firms are having a difficult time finding start-ups that need their money. Simply put, there are not enough start-ups out there in need of large cash injections.

As companies become cheaper to launch, fewer entrepreneurs need the kind of cash infusions that VCs provide. And angel investors are encroaching on VCs’ turf by throwing more money at early-stage companies; in 2006, angels pumped a total of $26 billion into 51,000 startups, up from $18 billion in 2003. At the same time, large companies are snapping up Web businesses before these startups ever see a second or third round of funding.

The article mentions several reasons for this huge pile of unused cash, but never mentions the possibility that modern start-ups are being run more efficiently than the mythical champagne-soaked, Ferrari-fueled start-ups of yore.

Angel investors, marketing via social networks, affordable hosting and distribution have certainly made things much cheaper for entrepreneurs to create and spread their product or service. However, I think start-ups have become more efficient than they used to be.

Am I imagining this?