Kindle books have now overtaken paperback books as the most popular format on Amazon.com, according to the quarterly results just released.

• For every 100 paperback sold, Amazon sold 115 Kindle books
• For every 100 hardcover sold, Amazon sold 300 Kindle books
• The Kindle store has over 810,000 ebooks
• 670,000 ebooks are priced at $9.99 or less

In just 3 years, Amazon has taken the eBook from nothing to mainstream. Amazon has managed to take the book transition to digital without suffering the pain the music labels went through with mp3. How did they do it? First, with a great device, the iPod of the ebooks. Second, no fear to cannibalize their own business. Third, force publishers to accept the $9.99 price policy. Same recipe as the iTunes ”take it or leave it” $0.99 a song.

Amazon and Apple set the example of companies taking advantage of technology to drive new business models that are changing industries. The Netflix $7.99 a month all-you-can-stream is another bold proposition for consumers, that is shaking the Pay-TV industry.

The right offer for digital content at the right price is not only changing industries in US. It is also driving piracy down. Meantime countries like France, UK and Spain struggle with nonsense laws that not only are useless against piracy, but that are also stopping the development of a legal digital content market.

Legislators in Europe should stop making laws to preserve the status quo. Else US companies will have total domination of digital media by the time old Europe reacts.

Mark Zuckerberg, CEO of Facebook, predicts that “social” will rethink industries such as TV, news, music and film.

The clip is a bit long.This is my summary of his key points:

Facebook started their photo product after big names like Flickr were established. Facebook first photo-sharing service was very simple and lacked features like high resolution or sorting, that were available elsewhere. However, you upload a photo and all your friends get it. That is powerful and engaging.

Facebook realized that ”the social feature was most important that all the other features put together.” [...] ”Social rethinks the whole space.”

That is why Facebook makes the platform open for others to build on. Zynga, Playfish and Playdom are examples of gaming companies built entirely on Facebook. Surprisingly, Zynga’s market value is larger than EA’s!

In Zuckerberg’s words, “gaming is just the first vertical to tip” as it happened in many platforms before. Game apps on iPhone and iPads are the most popular. Even for the early PC, one of the things that got PCs to homes were games.

What are the next verticals to come? TV, music, news, movies. Zuckerberg predicts “In 5 years some of these verticals will be completely rethought and their business rebuilt.”

Zuckerberg did not mention Telecom, but hasn’t Facebook already changed the way we communicate? Will “social” transform telecoms even further?

Video found via the Silicon Alley insider.
It is a one hour clip. See minute 16:50 for the topic in this post.

It is the first time ever that Pay TV loses subscribers quarter on a quarter, as the Business Insider chart shows.

A previous post on “spotting disruption before it happens” shows the 3 phases that can be spotted before a disruption actually occurs, exemplified with the postal service.

A lot have been said about how Internet TV offers like Hulu can lure people to cut the cord and drop their Pay-TV subscriptions. Still data so far only showed that Pay-TV rather than declining was actually growing. Up to Q2 2010. For the first time ever, Pay-TV loses subscribers. Does it resemble the 3-phase pattern of the postal service fall?

Is the drop just due to the recession? or are the cord-cutters finally here?

We can call it the “delayed” disruption. It has 3 phases, that can be illustrated in the chart above showing the decline of postal mail volume.

1. Hyped Prediction. End of 90s with the Internet boom, people predict that the end of mail will soon happen.
2. False Reality. A few years later in 2005, people say mail will never die, all the opposite Internet is increasing the use of postal services, as the growth in mail volume shows.
3. Disruptive change. The hyped predictions become a reality, and mail drops in free fall.

The same can be said of CD sales, newspaper and magazines, and soon will be said of  ebooks.

And the same is happening on TV and Internet TV, as the recent debate on the Future of TV shows, when voices say that TV is weathering the Online Video storm better than Music or Newspapers. The good news for TV is that hey have some precedent cases they can learn from and adapt. But the disruption will come… only maybe a bit later.

Read the port: The Key to Spotting Disruption Before It Happens

A few days before the iPad is out I am ready to make my bet. It  will be a revolution.

The iPhone was a revolution for mobile handsets.  Nokia laughed at Apple when they launched a new phone in what was a “mature” market. Now, no one doubts that Steve Jobs was actually right when he said  ”Today Apple is going to reinvent the phone” in January 2007.

David Pogue’s review of the iPad is worth reading. “It is basically  a gigantic iPod Touch”, it could not be described in less words.

I would take from his review the insight that the iPad is no substitute for a laptop for tasks to create content, like writing docs, presentations, coding software, not to mention any more sophisticated content like photo or video editing. But it IS a great device to consume content, like reading, web browsing, watching video or gaming. And for that purpose, the experience is even better than a laptop.

The lack of Adobe Flash is an issue, but  looking at the speed that video sites  and video platforms like Brightcove or Oolaya are preparing for the iPad, it might not be a show-stopper; specially if Hulu launches an iPad application as rumored.

If after reading Pogue’s review still in doubt, BBspot.com offer a decision flow chart. Not that I agree with it, but it’s funny…

TechCrunch announces more reviews hitting the net.

Internet and the Digital Revolution has transformed Media… and this is just starting. If not convinced, see the clip above.

I guess that by now, all music labels have already realized that music downloads and subscriptions are the only way forward to distribute music. CDs are dead, and rightly so.

Maybe because we just finished unpacking the shipment from KL in our new home in Shanghai, I just happen to realize how I hate CDs. I have hundreds of CDs purchased before the MP3 era, and while unpacking them, I could only feel  how useless was the task of putting them on the shelves in my study room.

For my next move I only hope I will have already got rid of all the CDs after ripping them all to my music library, (or alternatively legally download private copies of them with Bittorrent).

I do not think I will ever buy a Music CD again. The last music CD I bought was played only once while ripped to my library. 

R.I.P. Music CDs.

Laptops are killing the Desktop PC at home as they already did in the office.
It is more and more common that each member of a family has his/her own laptop. Specially now that netbooks become an affordable choice for the first personal laptop of a child.

Soon home NAS will become popular as a cheap and green common storage for  songs, pictures and movies accessible by all family member laptops, and also by other devices such as a HTPC or a game console connected to a TV screen. Apple Time Capsule is a nice first try for a combine NAS/Wireless router in the Mac orbit.

Except for hard-core PC gamers, not allured by PS3 or the Xbox 360, there is no clear application that justifies the slight extra performance of a desktop versus a laptop. And the increasing move of apps to the cloud, does not help the desktop cause either.

As I read from Stacey Higginbotham, of GigaOM, quoting a research group:

TBR believes the combination of a stationary display, keyboard and mouse with a mobile PC is the ideal configuration for many users.

Why would you want to buy a desktop PC for home these days?

Some are already starting to predict even the death of the laptop… see picture of device projecting a keyboard on the table (and why not  a screen on a wall too)

It is already one year since Sony signed with the four big movie studios and knocked out Toshiba in the war for the high-definition video format. Seagate’s CEO said then “Blue-ray won the battle but lost the war”, referring to hard-drives as the end winners that will store HD movie downloads. Time is predictably confirming his point, as broadband speed grows, movie downloads gain popularity and storage costs drop.

As NYT writes in Blu-ray’s Fuzzy Future, DVD was a big step forward compared to VHS, but Blue-ray quality improvement versus a DVD is not enough to compel consumers to invest into it, less in the middle of a recession. And time plays against Sony’s format. A Blu-ray disc (BD) has 25 GB capacity,or 50GB for two-layers BDs. By next year memory cards of 32GB will be available, and that will kill the adoption of BD-ROM units in computers. The Mac Air and all netbooks already said good-bye to DVD-CD discs. The popularity of external Terabyte drives makes the use of a 50GB Blu-ray disc irrelevant for back-up too.

Not even Microsoft is considering anymore to include Blue-ray in the Xbox 360. Why would they make it more costly when the 360 already has an Internet connection to download movies and games?

With the growth of  broadband speed and cheap storage, do not be surprised if Blu-ray is not in the picture(s) in ten years. As flash get cheaper, even SanDisk could venture into SlotMovie to distribute movies in micro-SD cards, as they did with SlotMusic.

Mike Manos, Microsoft Data Center Chief, has unveiled in his blog the design of future “Generation 4″ Microsoft data centers. With the mission to provide massive easy-to-scale computing infrastructure to power the Cloud, Microsoft envisions pre-assembled containers equipped with a few thousands of servers each and its associated cabling and cooling system.

Microsoft is already using the flexibility of “containerized servers” in their Generation 3 Data Center under construction in Chicago. Generation 4 pretends to take the concept of building block even further with a central spine infrastructure for mechanical, electrical and security components, to which the pre-assembled containers are connected in a plug-and-play mode. The containers are designed for high efficiency, minimizing both footprint and the use of water or air for cooling.

The target is to achieve an average power usage effectiveness (PUE)* of 1.125 by 2012. Taking into account that current average data centers have a PUE of almost 2, that would be a huge achievement in green IT, even though Google alreadly claims to be at a 1.21 PUE in some of their facilities.

Microsoft modular container-based design is ideal for a scalable cloud infrastructure that can adapt computing capacity to demand. On top of that, not only operation costs are reduced due to the optimized footprint and cooling, but also CAPEX is improved with server containers assembled in a single manufacturing plant for far less cost than deploying the servers on-site.

Watch Microsoft video illustrating the Generation 4 Data Centers. An interesting approach to counter attack Google’s thought leadership earned with their patent filing for floating, wave-powered data centers.

Microsoft is taking Cloud computing seriously, as Allan Leinwand of GigaOm writes today:

“… in conjunction with announcements of the Azure Services Platform and Office Live, there is no doubt that the giant in Redmond is aggressively focused on delivering enterprise cloud computing. ”

*Definition of PUE extracted from Google corporate site:

PUE is defined as the ratio of the total power consumed by a data center to the power consumed by the IT equipment that populate the facility:

For example, a PUE of 2.0 indicates that for every watt of IT power, an additional watt is consumed to cool and distribute power to the IT equipment.