Blue Sky On Mars

Thoughts on Building Software Products
August 24, 2005

A clear sign that manufacturers are counting on not paying rebates

by Kevin Dangoor

This is the most egregious example of why manufacturers use rebates that I’ve ever seen. Outpost has a 120GB hard drive for the insanely low price of $20. Even the regular price of $80 is pretty good, but $20 is just nuts. Even if Outpost runs on super skimpy margins, you’ve got to assume that their gross margin on this will be at least $10 of the $80 price. So, counting the rebates, Western Digital would be getting $10 for this hard drive.

But, the rebates are the trick here. There are two of them, each for $30. What’s unique about this deal is that both rebate forms look exactly the same and are mailed to the same place. The only difference between the forms is that one of them specifies that you send the original UPC, the other specifies that you send a copy. Clearly, WD is planning on:

* some portion of customers will not send in either rebate, or will mess up the paperwork in some way
* some will send in only one rebate, or mess up the paperwork on one
* a small percentage will get through unscathed

At $10 a drive, including shipping to Outpost, I’m sure that WD is losing money. At $40 (my assumed Outpost cost of $10 + one $30 rebate), perhaps they’re breaking even or making a little profit. It would be interesting to know what the statistics are here… how many people do get the whole $60 back?

As long as the companies giving out rebates are not being fraudulent and “losing” rebate forms, rebates are a fine, if annoying, way to get really good deals for people who are diligent about sending in their forms. I just have serious concerns about how willing these companies really are to take a loss like this without gaming the system as much as they can.

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August 24, 2005

Return of the CueCat

by Kevin Dangoor

A few years ago, some insane people gave $100 million to a company called Digital Convergence. The idea? Give away bar code scanners so that people could just scan a code in a magazine ad to jump straight to the advertiser’s website. Oh, and track what all the user scans through a unique ID to build up interesting profiles of people. There were so many things wrong with the idea and implementation it’s a sign of the times that were that they managed to get the thing off the ground and distribute millions of dollars worth of the CutCat cat-shaped bar code readers.

It looks like some of the remaining supply of CueCats has ended up at Surplus Computers. For just $7, you can get your very own bar code reader that was formerly free (Surplus Computers is certainly not going to just give them away!). I actually have one of the original free ones sitting on my desk, with a pleasant red glow coming out of the cat’s mouth.

August 24, 2005

Customers of new UK ISP get to share all Sony music on P2P

by Kevin Dangoor

I’ve been following the sales of music online for years now. I’ve been fairly okay with iTunes Music Service, because the restrictions on the files have not yet caused me grief and I’m certain they are breakable, should I ever find that the restrictions are causing me grief. I have also used AllOfMP3.com from time to time.

Here’s an exciting scoop from Boing Boing: Customers of new UK ISP get to share all Sony music on P2P

Here’s the deal. PlayLouder MSP DSL costs about the same as comparable DSL offerings in the UK (though right now, PlayLouder MSP’s one-meg speeds don’t compare to the high-end offerings from ISPs like Bulldog, who are offering 8-meg DSL). For their money, PlayLouder MSP customers get their regualr DSL lines, as well as:

  • The right to share any song in the Sony-BMG catalog
  • Even if it’s out of print
  • In any file-format
  • Using any file-sharing software
  • At any bitrate

This is some truly amazing news. While I understand the arguments against a scheme like this (everyone is paying, even those who don’t use the service is the primary complaint), the freedom you get with this is fantastic.

Personally, though, I don’t think going this far is absolutely necessary. If Sony is willing to sign a deal like this, they should really just revise their deal with Apple so that Apple can sell unencumbered MP3s or at least unencumbered AAC files. The sad thing is that even if Sony were willing to sign a deal like that right now, Apple might not want to do it because the FairPlay protected AAC files only play back on iPods… and we all know that’s where the money is.

One ironic thing about this deal with PlayLouder is that it was Sony Music that was crippling Sony’s MP3 players, which didn’t even play MP3 files because of piracy fears.

Boing Boing’s article sounds more positive than the Guardian article they’re linking to. I do hope that the Boing Boing version of the story comes to pass and we start to get over the copy protection nonsense that Hollywood has been foisting on us.