Friday, January 7, 2011

Morning Brief: CES brings tablet announcements, but few tablets; Disney Publishing hits 1 million app downloads; Internet retailers raise hell over new Illinois tax legislation

Writing on CNN's website, Mark Millan complains that while CES has had plenty of new tablet announcements, very few of the new devices can actually be handled by the public or the press, and few have solid launch dates.

So far, we've seen plenty of iPad rivals but have gotten to touch only a few. Various breeds are on display at conference booths, some of which we in the tech media expect to get our hands on this week.

But some of the most anticipated tablets are so far apparently too precious for CES attendees to play with in person.

Many of these devices are encased in glass and not touchable yet -- a potentially a distressing sign for the development progress of these devices, industry experts and analysts say.

Look, but don't touch!

Well, he certainly has a point. While some of the new devices announced, such as the Motorola XOOM, seem to have impressive specs, the fact that few of these devices will be seen in retail stores soon is a bit of a disappointment. What must make Apple haters even madder is knowing that it is only a matter of weeks before Apple announces that it is ready to hold an event to introduce iPad 2.

Lost in the rush of CES news was a press release put out by Disney Publishing stating that the book division had reached the one million mark in Disney Book Apps downloaded from the iTunes App Store for the iPad, iPhone and iPod touch.
Disney currently has nine book apps available: Cars Lightning Was Here: My Puzzle Book, Disney Epic Mickey Digicomics, Mickey’s Spooky Night Puzzle Book, Princess and the Frog Read-Along, Princess Dress-Up: My Sticker Book, Toy Story Read-Along, Toy Story 2 Read-Along, Toy Story 3 Read-Along, and Winnie the Pooh: What’s a Bear to do? Puzzle Book. Disney Publishing also has a couple of other apps available that are not in the Books category such as Toyhopper for iPad and Disney Epic Mickey Digicomics.

The Disney Publishing apps range from Free (Toyhopper for iPad) to $8.99 (Toy Story 3 Read-Along), though most are between 99 cents and $3.99, meaning total revenue driven so far is only a couple million dollars -- virtually chump change for the entertainment giant.

Finally, last night I received an interesting email from Amazon that warns that because of a bill passed by the state of Illinois legislature Amazon would be terminating its Associates Program with any Illinois residents taking part. Here is part of that email:
We regret to inform you that the Illinois state legislature has passed an unconstitutional tax collection scheme that, if signed by Governor Quinn, would leave little choice but to end its relationships with Illinois-based Associates. You are receiving this email because our records indicate that you are a resident of Illinois. If our records are incorrect, you can manage the details of your Associates account here.

Please note that this not an immediate termination notice and you are still a valued participant in the Amazon Associates Program. But if the governor signs this bill, we will need to terminate the participation of all Illinois residents in the Associates Program. After that point, we will no longer pay any advertising fees for sales referred to, and nor will we accept new applications for the Associates Program from Illinois residents.
As the letter states, the issue here is a bill that passed the Illinois legislature Thuyrsday that would force online retailers to collect a 6.25 percent tax if those same online businesses have commissioned affiliates in the state.

For Amazon the solution is clear: cut ties with those people in their associates program who live in Illinois. For online business that actually reside in Illinois, it gets a little trickier and several companies have begun to howl.

"I feel like I've been completely flipped the bird," Tim Storm, chief executive of FatWallet, based in Rockton, illinois told the Chicago Tribune yesterday. "Essentially, 30 to 40 percent of our revenue gets shut off instantaneously."

"Our customers don't care whether we're in the state of Illinois," Storm warned.

Currently, only online business that have brick and mortar stores in Illinois, such as Apple and Barnes and Noble, must collect sales tax on web-based sales. The new law changes the definition of a physical location to include affiliates residing in the state.

Not surprisingly, the Illinois Retail Merchants Association supported the bill. A similar bill friendly to Illinois retail merchants was passed in 2009 that forbade out of state liquor retailers from shipping into the state. The law is easily bypassed by using third party shippers, however.

The Illinois Retail Merchants Association endorsed Republican Bill Brady in the recently contested governor's race. Pat Quinn, the Democratic incumbent, won the election, however. Now this new bill now goes to the governor's desk for signing.