E-commerce Takes a Hit as U.S. Supreme Court Rules in Favor of Sales Taxes on Web Merchants

The U.S. Supreme Court June 21 in a 5-4 decision ruled that states can levy a sales tax on products sold by e-commerce merchants regardless of a physical presence in the state. The decision is a multibillion-dollar windfall for states.

The ruling overturned a 1992 decision that held the Constitution barred states from collecting taxes on businesses with no physical presence within their borders.

That ’92 decision helped spawn e-commerce, which, spearheaded by Amazon and others, has hamstrung a brick-and-mortar retail ecosystem that is required to collect sales tax.

But in 2015, Justice Anthony Kennedy questioned the decision involving a North Dakota business. South Dakota responded by imposing a tax on all merchants that had more than $100,000 in annual sales or more than 200 individual transactions in the state.

The state then sued online retailers Wayfair, Overstock.com and Newegg for violating the rule. The case ultimately wound its way to the U.S. Supreme Court.

The decision is seen as major hit to e-commerce behemoth Amazon, which charges sales tax on items it sells directly, but not on those sold by third-party retailers. In 2017, Amazon reportedly generated nearly $32 billion in revenue from third-party sellers — more than it generates from Amazon Web Services.

 

Amazon Echo Speakers Outselling Fire TV Devices

Wireless home audio is big business — driven in part by voice recognition software that enables speakers to do more than deliver sound.

New data from Futuresource Consulting found that Amazon’s Echo speaker sold more units worldwide in 2017 than Amazon Fire tablets and Fire TV media devices.

With almost 20 million units sold globally last year, Echo’s installed base stood at 28 million, marginally ahead of Fire tablets at 27 million, with Fire TV also close behind, at 26 million.

Indeed, Echo commanded 90% market share at the end of 2016, a percentage that dropped to 72% in 2017 following the arrival of competing wireless speakers from Google Home, Harman Kardon, JBL and Sony, among others.

The closeness of Amazon device installed bases highlights that, despite the hype surrounding Echo, Amazon isn’t focusing all its device efforts on its smart speakers.

London-based Futuresource says the Alexa voice assistant software is now also standard on its Fire TVs and tablets and last week’s announcement of the Fire TV Cube is the latest development in the Seattle-based firm’s multi-device strategy to position itself as the key “go-to” facilitator in the smart home.

Meanwhile, data shows that while Amazon is the category leader globally, Echo sales are still heavily skewed toward the United States — with only 13% of its 2017 sales international. As a result, Fire tablets outsold Echo speakers internationally in 2017 by a ratio of over 4 to 1. Fire TV sales are partly facilitated by Amazon Prime (over 40% of global Prime members are outside of the U.S.).

Futuresource said Amazon’s “boldness and risk-taking” in both consumer technology and the media space is further emphasized by its recent Premier League rights deal in the U.K., where there are now over 7 million Prime members.

“This was an expected step, but unusual for Amazon given it is a U.K.-only deal,” said the research firm in a release. “Its wider in-home strategy continues to be more developed in the U.S., recently focusing on home security through a dedicated ‘home services’ division.”

Regardless, Futuresource said Amazon’s drive to create an installed base of voice-activated devices in the home will not only fuel e-commerce sales and Prime subscriptions, but will also serve to ramp up use of third-party smart home applications and potentially position Alexa at the core of the home entertainment hub.

Amazon Alexa is now able to facilitate the control of more than 4,000 smart home devices from 1,200 unique brands, including Whirlpool, GE Appliances, LG, Samsung and smart oven manufacturer June Life.

Amazon’s pace of innovation continues to impress, but it will continue to encounter challenges. Citing a consumer survey, Futuresource 38% of non-adopters of smart speakers “can’t see a use for smart home devices”, with a third citing privacy concerns.

“Amazon may well need to prioritize such consumer concerns if it is to ultimately achieve success in the smart home in the wider international markets,” said Futuresource.

Dish Bows New Amazon Alexa Voice Features on Hopper

Dish June 12 introduced new Amazon Alexa voice capabilities that give customers the ability to set recordings, launch apps and navigate menus on Hopper family set-top boxes.

This update enhances the Hands-Free TV experience by building on Dish’s existing Alexa voice functions, including the ability to play, pause, fast-forward, rewind and search content.

“We are working to create the best Hands-Free TV options for our customers, and these new voice capabilities are an important step in that direction,” said Niraj Desai, Dish VP of product management, in a statement. “Dish customers already love the convenience that our Alexa compatibility brings to their home, so we’re continuously identifying popular voice commands to enhance that experience.”

In April 2017, DISH became the first pay-TV provider to offer direct compatibility with Amazon Alexa, according to the company. In October 2017, the company unveiled whole-home Hands-Free TV by extending Alexa support to all Joey clients, according to Dish.

Dish customers can ask Alexa to navigate, play, pause, fast-forward, rewind and search content based on channel, title, actor or genre. With the newest update, customers can also use Alexa to set recordings, launch apps such as Game Finder, Netflix, Pandora and YouTube, and access the Home, Guide, DVR, On Demand, Settings and Help menus.

All Dish customers with an internet-connected Hopper DVR (all generations), Hopper Duo, Joey (all models) or Wally can ask Alexa to control their TV content after pairing with an Amazon Echo, Echo Show, Echo Dot, Fire TV Cube or another Alexa-enabled device. Each Dish set-top box must be paired with its own Alexa device.

For more information, visit www.dish.com/AmazonAlexaIntegration.

Amazon Introduces Voice-Controlled Fire TV Cube

Amazon June 7 announced Fire TV Cube, a hands-free 4K Ultra HD streaming media player with Alexa, allowing consumers to control their TV “from across the room,” according to the company.

Fire TV Cube uses multi-directional infrared technology, cloud-based protocols and HDMI CEC, that—combined with Alexa—let viewers control their compatible TV, sound bar, A/V receiver, and cable or satellite box. Consumers can use voice commands to turn the TV on and off, change the volume, switch to different inputs, and change the cable channel. Even with the TV off, consumers can ask to watch a show and the Fire TV Cube powers on the TV and starts playback where consumers left off.

Amazon Fire TV Cube gives consumers access to the catalog of content currently available on Fire TV, including tens of thousands of channels, apps, and Alexa skills, as well as more than 500,000 movies and TV episodes and thousands of 4K Ultra HD and HDR titles, according to the company. Consumers can use voice commands to access services such as Netflix or to switch the cable channel.

“We believe voice makes it easier for customers to control their entertainment systems and watch the TV and movies they care about,” said Marc Whitten, VP of Fire TV. “And, it’s just the beginning. Amazon Fire TV Cube will only get better over time with the Alexa service always getting smarter.”

With the Fire TV Cube, consumers can also use voice commands to find the movies and TV shows by such categories as genre, director and actor.

WIth Fire TV Cube, many Alexa responses are optimized for the big screen and accompanied with rich visual information, allowing consumers to view smart home camera feeds, watch video flash briefings, view sports scores, see extended weather forecasts, and watch trailers for movies playing in nearby theaters, according to Amazon.

Amazon Fire TV Cube is available for pre-order starting June 7 for $119.99 and ships with an IR extender cable and Ethernet adapter beginning on June 21. As an introductory offer, Prime members can pre-order Fire TV Cube on June 7 and 8 for a special price of $89.99 — a $30 savings. For a limited time, customers can pre-order Fire TV Cube and Amazon Cloud Cam together for $199.98 — a $40 savings. Customers who purchase and register their Fire TV Cube by July 1, will also receive a $10 credit for Prime Video. Starting on June 21, Fire TV devices are eligible for unlimited access to tens of millions of songs with Amazon Music starting at just $3.99/month.

For more information visit www.amazon.com/firetvcube.

Theater SVOD Service Ups Stage Play Slate

Cennarium, the over-the-top video service streaming performing arts productions, is expanding distribution to include Amazon, in addition to pay-TV and partnerships with other vendors.

The stage performances, which include musicals, drama, opera, ballet and dance, magic and comedies recorded live in high-definition, are available to rent on Amazon for $1.99 or purchase for $4.99.

“We are increasing our distribution to include other streaming services to give audiences more options for viewing theatrical productions,” CEO Themis Gomes said in a statement. “Making our content available for streaming on Amazon will help us reach out to and engage with Amazon buyers so they can gain access to some of the best theatrical content from around the world.”

Performances available to stream include:

Cyrano de Bergerac (Comedy, France); Romeo and Juliet (Drama, Brazil); Martha Graham Dance Company (United States); Dangerous Liaisons (Musical, Germany); Blithe Spirit (Comedy, Brazil); Popcorn (Drama, Brazil); The Whipped Cream (Dance, Germany); The Day Sam Died (Drama, Brazil); The Seagull (Comedy, Russia); Fuensanta La Moneta (Dance, Spain); Smoke and Mirrors (Magic, United States); A Year Later (Drama, Italy); A Happy End (Drama, United States); Battlefield (Drama, Brazil); Punishment Without Revenge (Drama, Spain); The Liar (Comedy, Italy) and The School of Scandal (Comedy, Portugal).

Walmart Launches Text-Message Shopping/Delivery Service

Walmart has launched a subscription service in select markets that enables members to order items via text message and have them delivered the same day to their home.

Dubbed “Jetblack,” the platform bowed May 31 in New York City boroughs of Manhattan and Brooklyn targeting time-strapped affluent shoppers willing to pay $50 monthly for the service.

Subscribers can order anything (including movie DVDs) except alcohol from Walmart.com and Jet.com will receive reminders when frequently-purchased items in the home might need to be replenished.

“Through its curated shopping recommendations … Jetblack can deliver time-strapped urban parents everything from birthday gifts to household essentials,” Walmart said in a statement.

Walmart acquired Jet.com in 2016 for $3 billion in cash and stock, looking to jumpstart its ecommerce strategy and better compete with Amazon.

Internal research found that Jetblack test members purchased 10-times more than the average shopper, according to Walmart.

“The goal is to think about game-changing technologies that will change the way people shop,” Jenny Fleiss, co-founder of Jetblack, told Reuters.

Amazon offers its Prime subscribers same-day deliveries (via Prime Now) of assorted household products as part of its $99 annual membership fee.

FCC Commissioner Sends Letter Asking Amazon and eBay to Help Stop Sale of Fraudulent Set-Top Boxes

FCC commissioner Mike O’Reilly May 25 sent a letter to Amazon chairman and CEO Jeff Bezos and eBay president and CEO Devin Wenig asking them to help stop the sale of fraudulent set-top boxes, many of which can be used to illegally view content.

“I am writing because certain manufacturers of video television set-top boxes are either failing to comply with Federal Communications Commission equipment authorization requirements or falsely using FCC branding on their devices,” O’Reilly wrote. “Although sufficiently disturbing on its own, these devices are particularly problematic as they are perpetrating intellectual property theft and consumer fraud. While the Commission has obligations on our end to prevent unauthorized set-top boxes from being available no matter their use, I seek your partnership in helping to remove these illegal products from the stream of commerce.”

FCC logo

O’Reilly noted that manufacturers using the FCC logo have demonstrated compliance with the commission’s regulations and that the logo’s use is required to market products such as set-top boxes in the United States.

“Disturbingly, some rogue set-top box manufacturers and distributors are exploiting the FCC’s trusted logo by fraudulently placing it on devices that have not been approved via the Commission’s equipment authorization process,” O’Reilly wrote. “Specifically, nine set top box distributors were referred to the FCC in October for enabling the unlawful streaming of copyrighted material, seven of which displayed the FCC logo, although there was no record of such compliance. Many of these sellers are attempting to distribute their non-compliant products through online marketplaces such as yours. Although outside the jurisdiction of the Commission, it is equally troubling that many of these devices are being used to illegally stream copyrighted content, exacerbating the theft of billions of dollars in American innovation and creativity.”

While recognizing the eBay and Amazon have taken steps to remove devices marketed as facilitating piracy from their websites, he asked for “further cooperation in assisting the FCC in taking steps to eliminate non-FCC compliant devices or devices that fraudulently bear the FCC logo.”

He also noted that many of the devices contain “harmful malware.”

Trans World Entertainment Ups Q1 Loss

Trans World Entertainment Corp. May 29 reported a first-quarter (ended May 5) loss of $8.1 million, which was 56% higher than the $5.2 million loss reported in the previous-year period. Revenue dropped nearly 5% to $96.6 million.

The company cited much of the loss on continued challenges in its f.y.e. (For Your Entertainment) mall-based home entertainment retail chain.

Revenue at one of the country’s last entertainment retail chains dropped nearly 17% to $54 million from $65 million during the previous period.

Comparable f.y.e. store sales declined 8.5%, as a comp increase of 2.8% in lifestyle and electronics categories was offset by a 16.8% decline in video, music and video games.  The lifestyle and electronics categories represented 49.5% of revenue for the first quarter as compared to 42.6% in the same period last year.

The chain recorded an operating loss of $5.4 million, compared to an operating loss of $4.4 million for same period last year.

f.y.e. operated 253 stores – mostly mall-based – in the period compared to 273 stores last year. With malls under siege from e-commerce, f.y.e. faces a duel threat from changing consumer consumption of video entertainment and shopping habits.

“Although in the midst of continued structural and external challenges [at f.y.e.], we are focused on efforts to differentiate our entertainment merchandise towards creating a unique specialty retailing experience of choice for families and fans of popular culture and fun,” CEO Mike Feurer said in a statement.

Indeed, Feurer preferred to highlight the company’s overall fiscal health, in addition to etailz.com, the company’s ecommerce subsidiary selling merchandise on Amazon. Revenue increased 15% to $42.5 million, while operating loss increased to $2.8 million from $821,000 last year.

“As we work through the assortment changes needed to stabilize the f.y.e. business, we have maintained focus on the balance sheet, ending the quarter with $15 million and no debt,” Feurer said.

 

 

 

#MeToo Stain Follows Netflix

NEWS ANALYSIS — When allegations of sexual harassment and misconduct resulted in Jeffrey Tambor (who has denied the allegations) being fired from Amazon’s original series “Transplant,” Netflix hoped the backlash against the award-winning actor wouldn’t affect one of its prized shows, “Arrested Development.”

They were wrong.

In what was supposed to be a star-studded media campaign promoting the fifth season of the quirky comedy launching May 29 on Netflix, a May 22 cast interview with The New York Times — featuring Jason Bateman, Jessica Walter, Tambor, Tony Hale, Will Arnett and David Cross — exploded into allegations of harassment against Tambor by Walter — and some cast members defending Tambor.

“In like almost 60 years of working, I’ve never had anybody yell at me like that on a set,” Walter told The Times through tears.

Walter, who played Clint Eastwood’s femme fatale in his 1971 directorial debut, Play Misty for Me, said it was hard to deal with, but that she was “over it now.”

Bateman, whose own wife was allegedly groped by Hotelier André Balazs, made the decision to defend Tambor’s boorish behavior as a byproduct of on-set creativity.

“Not to belittle it or excuse it or anything, but in the entertainment industry it is incredibly common to have people who are, in quotes, ‘difficult,’” Bateman told The Times.

Hales then added fuel to the fire, saying, “I will say, to Jason’s point, we can be honest about the fact that — and not to build a thing — we’ve all had moments.”

To which Walters interjected, “Not like [Tambor’s harassment].”

The backlash on social media was swift and piercing.

“I had to stop reading after the ninth time Jason Bateman interrupted a crying 77-year-old woman (Walter) to say that she was over-reacting to what an entire room of people agreed was abuse,” tweeted Katlin Menza.

“One small but very striking thing from that nyt arrested development interview: Jason Bateman essentially explaining ‘how the industry works’ to Jessica Walter, as if she isn’t an accomplished veteran of the same industry,” wrote David Bynch.

“I feel like Jason Bateman is talking a little too much and [Arrested Development cast member] Alia Shawkat not enough here. You can see a marked difference between men and women and between generations in this interview and how they’re dealing with the allegations against Jeffrey Tambor,” added April Wolfe.

Bateman, who also stars in Netflix original series, “Ozark,”  later apologized on social media, saying, “I’m incredibly embarrassed and deeply sorry to have done that to Jessica. This is a big learning moment for me.”

But Netflix had seen enough. The SVOD behemoth, which this week was briefly valued more on Wall Street than The Walt Disney Co., canceled a planned PR blitz for “Arrested Development” in the United Kingdom.

“At this time, we have decided not to move ahead with promotional activity in the U.K., but hope to bring the cast back at another time,” Netflix said in a statement.

Cannes-Lauded ‘You Were Never Really Here’ Due on Digital July 3, Disc July 17 From Lionsgate

You Were Never Really Here, starring Joaquin Phoenix, will come out on digital July 3 and on Blu-ray (plus digital), DVD and On Demand July 17 from Lionsgate.

Based on Jonathan Ames’s novella of the same name, the Amazon thriller won Best Actor (Phoenix) and Best Screenplay (director Lynne Ramsay) at the 2018 Cannes Film Festival. Phoenix plays a traumatized veteran, unafraid of violence, who tracks down missing girls for a living. The film also stars Ekaterina Samsonov, Alessandro Nivola and Judith Roberts.