I have avoided Black Friday every year. Somehow, the idea of baying, greedy crowds fighting for $100 off some piece of electronica seems like the equivalent of searching for stray wax in a stranger's ears.
But there's a Best Buy opposite the greatest Starbucks in the world--at Marin City, Calif. (one-time home of Tupac Shakur). And, struggling after an interesting Thanksgiving meal of, well, too much good food, wine, and secrets told after the good food and wine, I parked outside my Starbucks and was drawn by the fascination of the blue and yellow.
A large sign outside Best Buy read: "Line starts here," but there was no one standing there. Had people simply ignored the sign, smashed down the doors, and stormed the building, in search of the weekend's dream of a larger, flatter screen?
I walked gingerly toward the front door, fearing I would immediately see tense bodies and twisted faces fighting over the last box with Samsung written on it. Instead, a chap in the blue polo shirt bid me good morning. Inside, it seemed like any other day at Best Buy.
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My receipt, complete with markings from the Best Buy magic marker.
(Credit: Chris Matyszczyk)People milled around with seemingly little purpose. Best Buy employees stood around, one or two stifling a little yawn, a couple of others not bothering with the stifling.
A few people hovered over the MacBook display. Should they buy the MacBook Pro, or the little white MacBook, on offer for less than $1,000?
Most of the aisles had no more than one person in them. Wandering around was as simple and comfortable as a Wednesday stroll on the beach. But finally I saw a line. What was it that was drawing so many people (at least 15) to one place?
Ah, yes, these were the excited folks trying to line up an appointment with the Geek Squad. Names were being called out. Satisfaction was being doled out.
Then I remembered I needed some ink for my printer. I wafted over to the aisle and noticed that the price of an Hewlett-Packard double pack of black ink and color had actually gone up since I'd last bought some. There didn't seem to be any special offer on this one.
Should I buy it anyway? Wouldn't it be a pain to stand in line?
Then I looked up and saw that the line at the cash registers consisted of precisely three people. Two of them were together. As I paid my $34.87, the clerk had particularly bleary eyes.
"Crazy day, huh?" I said to him.
"No," he said, in an entirely friendly way.
"Is this usual?" I asked, somewhat confused.
"Oh, yeah. I'm happy," he replied.
After he'd taken the time to tell me that the man in front of me in line had enjoyed precisely the same security code on his Amex card as mine, and after another Best Buy employee had marked my receipt with a special marker, I disappeared to Starbucks.
One of the great baristas of our time, Kershina, told me that she'd opened the store at 5 a.m. and there had been around 200 people outside Best Buy at that time.
Now, just after 9, there was no one. It was just another day in the Marin City firmament. How typical this was of the rest of America, I have no idea. However, as I took my lattes back to my car, a couple were piling their own two-pack of boxes, both with an LG logo, into theirs. They seemed strangely relaxed.
Online video service CinemaNow and Best Buy are planning to launch a movie download service this summer, according to a published report.
Variety, a film industry trade magazine, quoted unnamed sources in its report about how Best Buy is talking to CinemaNow, as well as other Web movie services, about offering film downloads.
The magazine noted that Best Buy is advertising job openings for digital-movie executive positions on such sites as PaidContent.org.
Why Best Buy would partner with CinemaNow is still unclear. The service was eclipsed by much more influential services, such as those of Apple's iTunes and Amazon.com, long ago. Variety reported that Best Buy had previous plans to open an online video store, but those apparently fell through. Representatives from Best Buy were not immediately available for comment. Spokesman for CinemaNow declined to comment.
The news comes as a swarm of services attempt to deliver films via the Web. Some, including Hulu and YouTube, offer films to the public free of charge and support their offerings through the sale of advertising. Netflix charges a subscription fee for users to view films, while Apple's iTunes charges for digital downloads.
Best Buy lowered its fiscal-year earnings forecast on Wednesday, citing fears that consumers will keep their wallets under lock and key during the holiday-shopping season.
president, Best Buy
Best Buy, which saw its archrival Circuit City file for Chapter 11 bankruptcy on Tuesday, said uncertainty surrounding consumer spending has made it difficult to project revenue for the rest of fiscal 2009, which ends February 28, 2009.
Uncertainty usually scares investors, who pushed Best Buy's shares down a steep 10.85 percent to $21.29 a share in early morning trading.
Best Buy CEO Brad Anderson sized up the current situation with this statement:
Since mid-September, rapid, seismic changes in consumer behavior have created the most difficult climate we've ever seen. Best Buy simply can't adjust fast enough to maintain our earnings momentum for this year.
We're beginning to adjust our cost structure to restore earnings momentum and still gain market share.
The electronics retailing giant cut its fiscal-year revenue guidance to between $43.7 billion and $45.5 billion. It lowered its estimates for earnings per share to $2.30 to $2.90. And sales at stores opened at least a year, or comparable sales, are expected to drop between 1 percent and 8 percent for fiscal 2009.
Back in September, Best Buy was projecting fiscal year revenue of $47 billion and earnings per share of $3.25 to $3.40. It also previously predicted that comparable store sales would rise 2 percent to 3 percent for the year.
But with its September same store sales falling 1.3 percent over the same period last year and its October same store sales dropping 7.6 percent year over year, the first two months of its fiscal third quarter are expected to put a drag on the electronic giant's holiday season.
For the remaining four months in its fiscal year, Best Buy is expecting comparable sales to drop anywhere from 5 percent to a whopping 15 percent.
Best Buy President Brian Dunn put the situation in historical perspective:
In 42 years of retailing, we've never seen such difficult times for the consumer. People are making dramatic changes in how much they spend, and we're not immune from those forces. That's why it's critical that we manage our spending, while preserving key growth initiatives.
Best Buy's acquisition of Napster is likely to mean RealNetwork's Rhapsody music service will wave goodbye to more than just one of its biggest partners.
Rhapsody of course powered Best Buy's digital music store. Two music insiders told me on Thursday, while I was reporting a story about whether Apple is wise to get into music subscriptions, that the Napster acquisition will almost certainly mean Best Buy will sever it's relationship with Rhapsody. This means that RealNetwork's CEO Rob Glaser would no longer have the muscle behind him to demand electronics companies make their players compatible with his service.
As the largest electronics retailer, Best Buy could lean on electronics makers (all except Apple) to make sure their devices worked well with its music service, Best Buy Digital Music Store, powered by Rhapsody. There's a story behind this tortured name and I'll get to in a sec.
"The acquisition news was just announced so we are still in discussions with Best Buy about our longer-term relationship," a Rhapsody spokesman said in an e-mail.
The situation illustrates a major headache for music subscription services. Napster and Rhapsody have had to cater to the host of digital music players on the market. When those devices made changes to their software, it could cause serious glitches in how the music service performed on them.
Considerable expense and effort went into looking for problems each time a device was upgraded.
One of the questions raised by the Best Buy-Napster deal is whether the retailer intends to battle Apple. That seems unlikely. According to one source close to RealNetworks, what Best Buy has complained about for a long time is not having enough control over its music service. Best Buy began offering the Rhapsody service in 2003. Two years later, Best Buy cut a deal with Napster and also bought a 10-percent stake in that service.
In 2006, Best Buy execs went back to Rhapsody and said that it wanted to offer a branded music service. That's how the Best Buy Digital Music Store powered by Rhapsody was born.
Losing Best Buy won't mean the end of the world to Rhapsody, said the source. Yahoo Music has encouraged former customers to join Rhapsody. Best Buy was a healthy driver of subscribers and of course, there was the strategic value. But overall, the outlook for stand-alone subscription services doesn't look good.
Electronics retailer Best Buy is acquiring the Napster music service--its entree into the hot online-music sector.
The two companies on Monday announced a merger deal in which Best Buy is to launch an all-cash tender offer for outstanding Napster shares at $2.65 apiece, with the full acquisition valued at $121 million. That total value represents $54 million net of approximately $67 million in cash and short-term investments in Napster as of June 30.
In Napster, retail heavyweight Best Buy is getting itself a one-time contender in the field of online entertainment. A decade ago, Napster was virtually synonymous with digital music--a notoriety that earned it the wrath of the music industry. That contributed to its demise, along with the rise of alternatives such as Kazaa and LimeWire.
Napster eventually reinvented itself as a subscription service, and it says it now counts 700,000 subscribers.
Best Buy plans to use both Napster's technological capabilities and its subscriber base to reach consumers looking to explore digital music and other forms of entertainment "beyond music subscriptions" over a variety of electronic devices. The acquisition, Best Buy contends, will give it extra oomph in dealing with record labels, movie studios, and hardware makers.
But the digital-music stage is already crowded with stars ranging from Apple's iTunes powerhouse to Amazon MP3. In the very near future, meanwhile, the social-networking scene is expecting not one, but two, big debuts: the likely arrival this week of MySpace Music and the possible unveiling of a music strategy for Facebook.
Los Angeles-based Napster has 40 employees. For its fiscal 2008, which ended in March, it reported a loss of $16.5 million on revenue of $127.5 million.
The deal is expected to close in the fourth calendar quarter. Napster CEO Chris Gorog and other senior managers have signed deals that will keep them with the company after the acquisition is completed.
Move over Geek Squad, AT&T is launching a new in-home support service that will do everything from setting up home computers and Wi-Fi networks to installing home theater systems.
On Thursday, the phone company announced the new service called AT&T ConnecTech, which will be in select markets across all 50-states. The company described the service as an "all-encompassing home services care program that is designed to take customer service, and the company's own support capabilities, to the next level."
The service, which is available only to residential customers, provides customers with a slew of services from home theater planning and consultations to new hardware installation and notebook repair. Specifically, AT&T technicians will be available to mount flat-panel TV's on walls, install and set-up new PC or Apple computers, including setting up email and virus protection; repair computers, including parts and hardware replacement; and install and trouble shoot home networking issue. The service will be offered both in-home and over-the-phone with next next-day service installation available seven days a week.
And you don't even have to be an AT&T customer to take advantage of the support service. Anyone can call and use the service, if it's offered in the area.
Sounds great, right? But all this extra help and support comes at a price. To get a computer and network set up, it will cost customers $99. Throw in some in-home support to fix whatever problems ail your PC and it will cost you $179. If you just want phone support for the computer, it will cost $69. And set up for a TV and home theater costs $149.
All of these prices are on a per visit basis. Once on site, these prices include two hours of technical time. "Additional charges may be incurred for multiple trips, extended distance (beyond standard metropolitan areas as determined by AT&T) -including rural or limited access areas, or extended time," the fine print on the company's web site says.
Compared to Best Buy's Geek Squad prices, AT&T's services are a bargain. The Geek Squad charges around $170 to set up a wireless home network. And it charges another $160 to set up and customize a new Mac or PC. And to install a flat screen TV it costs anywhere from $350 to $800.
As home networks and home entertainment systems get more complex, it makes sense for consumers to turn to professionals for help. Clearly, there is money to be made. And AT&T isn't the only network provider to take notice. Verizon Communications also offers beefed up support for its Verizon DSL and Fios customers.
Device Protection provides repair or replacement coverage for eligible computers, TVs - regardless of age, brand or place of purchase - and telephones for a monthly fee of $19.99. The plan also covers original equipment such as remote controls, modems, keyboards, mice, monitors and FiOS backup batteries. Additional plans are also available.
The Premium Technical Support service is managed for Verizon by Firedog, and it includes telephone and online support for such network issues as virus and spyware detection and removal; virtual private network problems; help with firewalls; problems with computer operating systems; and gaming connectivity. It costs $14.99 a month.
In June, Verizon started offering in-home support for such things as installing and configuring a new computer or setting up a home network. At this point the service is only available to Verizon DSL and Fios customers, but the company is looking to expand the offering to non-Verizon broadband customers.
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