Tech Retail In The Dumps
-- Best Buy shares fell 15.5 percent Tuesday on heaving trading (five times the daily average) after the company released disappointing sales figures for its fiscal third quarter ending Nov.26, 2011. Revenue dropped 2 percent to $12.1 billion but operating income sank 54 percent to $178 million and net income dropped 29 percent to $154 million.
Comp store entertainment revenue - which includes music and video - fell 9 percent in the quarter. It was the deepest drop of the company's six revenue categories but wasn't was bad as the 13.9-percent decline experienced in 2010's fiscal third quarter. As a percent of Best Buy's total revenue mix, entertainment fell to 13 percent from 15 percent in the same quarter in 2010. Computing and mobile phones increased its share of revenue to 40 percent from 37 percent after an 8.8-percent increase.
The technology retail sector had a gloomy Tuesday. Amazon.com sank 4.8 percent - a Goldman Sachs research note argued Wall Street's 2012 estimates for the company is too high. Radio Shack hit a 52-week low after dropping 7.2 percent. And Conn's fell 7.4 percent.
( Press release)
Pandora's Stock Swings
-- Pandora has increased its listenership in each of the country's top ten radio markets, according to new Edison Research numbers covering October 13 through November 9. The news sent the company's stock up 6.5 percent on Tuesday.
In terms of average quarter hour (AQH) in the 18 to 34 age group, Pandora rose to 0.9 from 0.7 in September in New York, 1.2 from 1.0 in Los Angeles and 1.2 from 1.0 in San Francisco.
Edison Research puts Pandora's weekly cumulative audience (for the 18 to 34 age group) at 19.9 percent or greater in each of the top ten markets. It had a 19.9 share in New York while reaching 26.2 percent in San Francisco, 26.1 percent in Washington D.C. and 25.1 percent in Los Angeles. For the 18 to 49 age group, the service attained over 1 million unique listeners in both New York and Los Angeles.
Watching Pandora's stock swings is like seeing a tug of war between good and bad news. Spotify's announcement last week of improved radio functions coincided with a two-day Pandora tumble that sent the company's shares down about 10 percent. Tuesday's good news sent shares upward. See the trend here? Investors are eager for news that Pandora is capturing more of terrestrial radio's market share. But they are wary of indications that Pandora won't be able to maintain its lead over digital competitors when barriers to entry are low and subscription services like Spotify are building a very large audience of active listeners. Expect news of both kinds to trickle over time - and expect Pandora's stock to swing accordingly. Internet radio will grab market share while the competitive landscape will become more and more active.
( Press release)
Louis CK Goes Digital DIY
-- What's good for music is good for other types of entertainment. So comedian Louis CK has gone the DIY route in releasing "Live at the Beacon Theater." The video is available as a stream or DRM-free MP4 file. Buyers get two streams from the website or two downloads of the file. Fans can purchase from anywhere in the world and pay the $5 fee via PayPal.
CK explains at his website that he made the video as easy to use and buy as possible - "against well-informed advice" - so fans wouldn't have to deal with restrictions typically levied by corporations. "Please bear in mind that I am not a company or a corporation," he continues. "I'm just some guy. I paid for the production and posting of this video with my own money. I would like to be able to post more material to the fans in this way, which makes it cheaper for the buyer and more pleasant for me. So, please help me keep this being a good idea. I can't stop you from torrenting; all I can do is politely ask you to pay your five little dollars, enjoy the video, and let other people find it in the same way."