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Amazon Reinstates California Associates

On Monday, October 3, 2011, sent an e-mail to thousands of their Californa Associates to inform them they may now re-enroll in the Amazon Associate Program.  Amazon had terminated their relationship with the California-based Associates on June 29 after Callifornia lawmakers passed new legislation that required Amazon to collect state sales tax on purchases made by California residents.  More recently, Amazon had reached an agreement with California lawmakers and Governor Jerry Brown whereby Amazon would be allowed to delay the collection of state sales tax until September 2012.  Amazon has also agreed to built several distribution facilities in California.

In Monday's e-mail to its Californa Associates, Amazon provided a link to allow the Associates to quickly re-enroll using their original Associate IDs.  Unfortunately, Amazon will not be giving California Associates credit for referrals their sites have generated between the end of June and October 3.

In the meantime, Amazon has agreed to lobby the federal legislature for a national policy on the collection of state sales tax.  Some have incorrectly assumed this will be some form of federal sales tax.  In reality, Amazon will be lobbying for the adoption of the Main Street Fairness Act which deals with leveling the playing field among participating states on how state sales taxes are collected.

Sponsored by Senator Dick Durbin and introduced in August 2011, the Main Street Fairness Act would allow states, provided they have met certain conditions, to require large internet and mail-order retailers to collect state and local sales taxes. 

To exercise this authority, a state must sign on to the Streamlined Sales and Use Tax Agreement (SSUTA) and adopt legislation implementing its provisions. This multistate agreement requires states to, among other things, adhere to uniform product definitions, adopt uniform requirements for filing sales tax returns, administer both state and local sales tax collection through a single state office, and allow retailers to register through a centralized, one-stop multistate registration system.

If the federal legislature is unable to pass the Main Street Fairness Act by July of 2012 Amazon will be required to start collecting sales tax on California residents' purchases in September 2012.  If the Main Street Fairness Act becomes law by July 2012 then the federal law will become the guiding document regarding the collection of state sales tax by retailers such as Amazon.

Some California Associates have expressed concern that Amazon will again terminate their relationship once September 2012 rolls around.  Those fears are unfounded.  Amazon originallly terminated those Associate relationships to eliminate the indirect business presence (a "nexus") Amazon had in the state.  Under the new agreement with California, Amazon has agreed to build the aforementioned distribution facilities in California. Once the first distribution facility opens Amazon would have a direct business presence in the state.  At that point, terminating their relationships with California Associates would not gain them anything with regard to the collection of state sales tax.


Kindle Fire First Real iPad Competitor?

At a press event in New York this morning, Amazon unveiled their new line of Kindle tablets.  Amazon's successful E-reader line with black and white screens has been expanded to five models; Kindle, Kindle Touch, Kindle Touch 3G, Kindle Keyboard, and Kindle Keyboard 3G priced from $79 to $139 with on-screen advertising.  Without the on-screen advertising the five models are priced from $109 to $189.

The big news, however, is Amazon's announcement of the new color Kindle Fire!  The Kindle Fire features a 7-inch 1024 x 600 pixel multi-touch IPS display, dual-core processor (speed not specified), 8GB of internal memory, Wi-Fi, up to 8 hours of battery life for reading and up to 7.5 hours of video playback with Wi-Fi turned off.

The new Kindle Fire isn't exactly a surprise.  Developers have had them in their hands for awhile now.  What is rather surprising is Amazon's selling price for the new color tablet: $199!  Analysts were expecting the Kindle Fire to be priced at $249.

The sub-$200 price seems to be a sweet spot for American consumers when it comes to tablets.  Remember the HP Touchpad?  Touchpad sales were extremely disappointing until HP dropped the price to $99 (16GB) and $149 (32GB).  Then retailers couldn't keep Touchpads on the shelves.  And that was for a dying product.  The Kindle Fire is brand new, with a promising future, and price under $200!.  I'm confident the new color Kindle will be a huge success for Amazon.

But is the Kindle Fire the first tablet that can truly challenge the iPad?  More to the point, will Amazon's new tablet steal sales from Apple's wildly successful iPad 2?  The iPad 2 has a larger screen, longer battery life, two built-in cameras, at least double the memory and 3G models available.  The iPad 2 also starts at more than twice the price of the Kindle Fire.

The next few months are going to be very interesting!



Amazon to add 2,000+ FOX Titles to Prime has inked a deal with FOX which adds over 2,000 movies and TV shows to Amazon's Prime Instant Videos streaming service.

Dear (Amazon) Customer,

I have big news for Amazon Prime members - we've just signed a deal with FOX to add a broad selection of movies and TV shows to our unlimited instant streaming service later this fall.  The new additions from the FOX library include 24, Arrested Development, The X-Files, Ally McBeal, Buffy the Vampire Slayer, and - available on digital video for the first time - The Wonder Years.  We now have deals with CBS, NBCUniversal, Sony and Warner Bros, and adding FOX will bring the total to more than 11,000 movies and TV shows available for unlimited instant streaming.

Amazon recently added some additional CBS TV shows to Amazon Prime Instant Videos streaming, including a variety of Star Trek series episodes.

Amazon Prime membership costs $79 per year.  Prime members get free two-day shipping on the majority of Amazon products with no minimum purchase requirements.  The unlimited Amazon Prime Instant Videos streaming is included for no extra charge.


Amazon to Relaunch California Associate Accounts

On June 29, 2011 California Governor Jerry Brown signed a tax bill that forced out-of-state retailers to collect sales tax on purchases made by California residents if those retailers had a "nexus" within California.  Upon the signing of the bill, Amazon immediately terminated its thousands of California-based Associates, thus elminating the "nexus."  Shortly thereafter, Amazon began a referendum process to allow California voters to overturn the new law.

More recently, Amazon extended an olive branch to Governor Brown and the California legislature and a compromise bill was introduced.  Assembly Bill 155 requires Amazon to start collecting sales tax on purchases made by California residents starting in September 2012 if Amazon is unable to come up with a federal deal in which a uniform online sales tax policy is adopted by Congress by next July.  On September 23, 2011 Governor Brown signed AB 155.

With this compromise in place I was curious if Amazon would reinstate their California-based Associate accounts so I shot off an E-mail to Amazon to ask that very question.  Here is the reply I recieved from Amazon on September 25, 2011:

Hello Mark,

As you may have heard, California Governor Jerry Brown has signed legislation repealing the law that forced us to terminate our California Associates.

We're working to relaunch the Associates Program in California as soon as possible.  In the next few days, we'll reach out to all affected past Associates with information how to re-open their accounts.

We look forward to seeing you again soon.

Good news, indeed!  Perhaps Amazon will go the extra mile and give California Associates credit for purchases made through their sites since June 29, 2011?  Time will tell.


Apple's Cloud-Based Music Service?

Here's video shot during the construction phase of Apple's new $1 billion data center in North Carolina.


The data center is reportedly finished and was rumored to go online in the spring.  To date, Apple hasn't explained what the data center will be used for.  Speculation has revolved around a cloud-based music and/or video service.  That speculation seems more and more likely as time passes.

All Things Digital is reporting that Apple is close to finalizing agreements with the four big music labels regarding cloud-based music storage.

"And sources tell me that Apple has already procured deals from at least two of the big four labels (Universal Music Group, Warner Music Group, Sony and EMI) within the last two months. One source tells me Apple content boss Eddy Cue will be in New York tomorrow to try to finalize remaining deals."

If true, Apple could have a significant advantage over rival Amazon's recently debuted cloud-based music service.  Reports indicate Amazon has yet to reach any agreements with the music labels.

Similar to Amazon's service, Apple's service will reportedly allow users to upload their existing music library to the cloud and then access that music on multiple devices.  This will likely include music that users have ripped from CDs.  The All Things Digital article reports that music executives are claiming Apple's service could be a more "robust service" with a better user interface thanks to proper licensing.

One thing we can expect:  A cloud-based music service from Apple will surely feature industry-leading design and excellent integration with iTunes, OS X, and iOS!  I'm betting that Steve Jobs and company will have a few surprises up their sleeve.  We might even see a nice "one more thing" moment.  Apple fans are due for one of those!