Sunday, December 28, 2008

Taking stock

This is the end of what has been the worst year of my life. I was out of work for six months, and had to file for bankruptcy last October. I had to euthanize my older cat on Christmas Eve, less than two weeks after we got to Chicago for me to take my new job, and just a week after his 17th birthday. (We had been together since he was four months old.) The good news is that my other cat seems to be healthy, if still a little disoriented by the move from California. I've got a good job with a great company, and I'm working with a wonderful team of people. I'm living in a beautiful condo.

In many ways, this is the start of a new phase in my life. I've come full circle, from going to graduate school in Chicago from 1978 to 1980, to returning 28 years later. I've got a fairly young cat to raise in a new city, with new friends, neighbors and co-workers, and a new area to learn. I'm not sure how relevant this blog is to my new life, since what I'm doing is only tangentally related to what I used to do. Therefore, as we wrap up the holiday season, I'm rethinking what this blog should cover, and whether I should even continue it.

For now, I'm putting the blog on pause, at least until after the first of the year.

Sunday, November 30, 2008

I've got a new job!

As some of you know, I've been looking for a new job for almost six months. Last week, I accepted an offer with a large, privately-held company outside Chicago, IL, USA. I'll be starting in mid-December, so I have to find a place to live, move and get settled in over the next two weeks. As a result, I'll be posting on this blog intermittently (if at all) for a while. Thank you for your patience!
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Is there really a market for IPTV?

Late last week, Tilgin sold off its IPTV set-top box business to Amino in order to concentrate on the IP Residential Gateway business. The initial sale price was 30 million SEK, plus a potential bonus based on sales performance. Tilgin is just one of many second- and third-tier IPTV suppliers that have sold out to bigger competitors, and the list is only going to get longer as the worldwide recession drags on. The residential gateway business isn't exactly a bonanza, either; Pace is struggling to establish a business there, and the business argument for gateways isn't clear for a lot of operators.

The overarching question is whether or not there's really a market for IPTV services. IPTV is doing well in France, Spain and some other European markets, but in France in particular, consumers can get a complete triple-play bundle including IPTV for not much more than what U.S. customers pay for a single service. In Hong Kong, PCCW was the world leader in terms of subscriber count for a number of years, but now PCCW and China Netcom are merging, and the question is whether or not PCCW has finally saturated the market. In Japan, IPTV services have been all but stillborn, even with the country's largest telecommnuications companies (NTT, KDDI and Softbank) behind it.

In most of the first world, IPTV entered the market as the third or fourth choice for video services, after broadcast, cable and satellite. Where IPTV has been really successful, one or more of the following is true:

1) The IPTV services are offered at a dramatically lower price than competitive video services (that's certainly true in France.)
2) Local competitors let the IPTV services take hold with high prices, bad customer service, etc.
3) The IPTV provider offers non-video services that the local competitors couldn't match (in the U.S., Verizon's FiOS data service offered far faster speeds than cable operators, and Verizon used that advantage to sell FiOS TV into those same customers.)
4) The existing local video choices are rudimentary or nonexistent.

Where advanced cable services are available, it remains all but impossible to differentiate IPTV services from cable. The interactive features of IPTV are nice, but there's nothing that the cable industry can't match. Even satellite providers are getting into the interactivity game with Internet connections on their set-top boxes.

I do believe that there is, and will continue to be, a market for IPTV, but it's smaller than most of the analysts have been forecasting, and even smaller than I forecast when I was in that business. We'll continue to see tremendous pressure on second- and third-tier IPTV hardware and software suppliers to merge, discontinue their IPTV product lines or go out of business. We'll also see tremendous pressure on IPTV service providers to differentiate their offerings by price rather than functionality. Ultimately, IPTV will be just one of several video options for consumers.
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Thursday, November 27, 2008

TiVo tanks, Apple breaks third-party apps

Earlier this week, TV By the Numbers reported that TiVo lost 163,000 subscribers in October, and the company has lost subscribers almost every month this year. In its most recent quarter, TiVo only sold an average of less than 500 DVRs a day. The company would have lost money in the quarter had it not received a one-time payment of $105 million from Echostar for patent violations. It's pretty clear that TiVo's situation is getting dire, and the company is not going to survive in the standalone PVR business for much longer.

At about the same time, Blockbuster got into the set-top box business, as I've written about earlier. Also, Apple released a new version of software for its AppleTV STB, which broke third-party software running on those devices, including Boxee, media center software for Linux and OSX that supports Hulu, CBS, Comedy Central, CNN and many other Internet media sites. Boxee was back up and running on the AppleTV a day later.

Is there really a market for third-party set-top boxes? By and large, the answer is "no," although the Roku Netflix player seems to be selling well. What I'd really like to see is a set-top box that's open and that supports multiple services. That rules out Apple and Vudu. You shouldn't have to pay a monthly subscriber fee to use the box, so that rules out TiVo, Microsoft's Xbox 360 and, at least for now, Roku. Blockbuster's new box is still a question mark--there's no monthly fee, and the box, built by 2Wire, runs Linux, but it's unclear if Blockbuster will allow Boxee and similar applications to run on it.

In my opinion, it would be a brilliant move if Blockbuster let Boxee, as well as others, run their software on its box without a long approval process or the fear that the third-party applications would be deliberately broken by Blockbuster. In one step, Blockbuster's offering would move from a me-too product to a market leader.

Experience has proven that consumers simply don't want multiple set-top boxes. Given the choice between a cable operator-provided PVR and a TiVo, they've chosen the cable operators' offerings in droves. This market is dead unless the players start seriously rethinking their strategies to adapt to consumer needs.

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Monday, November 24, 2008

Blockbuster jumps into the set-top box business

According to CNET's Crave website, Blockbuster Video has struck a deal to resell 2Wire's new MediaPoint set-top box, to compete with the Roku Netflix Player and other Netflix-enabled devices, as well as Apple TV, Vudu, etc. The MediaPoint player will sell for $99, but comes with 25 free movies. Additional movies will be priced starting at $1.99, and no monthly subscription is required.

The MediaPoint comes with all the standard inputs and outputs: 802.11g or wired Ethernet interfaces, composite, component and HDMI video interfaces, and both analog stereo and Toslink digital optical audio interfaces. The MediaPoint user interface, as seen on the Crave website, borrows a good deal of its look from TiVo.

On paper at least, Blockbuster's offering could be very competitive with the Roku Netflix player, with a lower net cost and no subscription required. It's not known if Blockbuster is trying to get its service integrated with many different companies' video players, as Netflix has succeeded in doing. What IS clear, however is that Blockbuster is once again playing catch-up to Netflix. Keeping in mind what happened to Blockbuster's Total Access program, which made big progress against Netflix only to lose its momentum when the company chose to pare its financial losses, I wonder whether the company has the stomach to stick with its online service.
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Monday, November 17, 2008

Silverlight: In at Netflix, out at Major League Baseball

Not long ago, I noted that Netflix has adopted Microsoft's Silverlight as its streaming media platform for Apple's Macintosh, but today, Major League Baseball announced that it has switched from Silverlight to Adobe Flash for its live and on-demand video streams, starting in 2009 and for at least the next two years. This comes after the National Football League chose Flash earlier this year to stream its games, including the interactive multi-camera player used by both and NBC. Neither MLB nor the NFL pointed to technical deficiencies in Silverlight as the reason that they adopted Flash, and Major League Baseball's statement that it was adopting Flash "for the next two years" indicates that the reason for the switch may have been based on business, not technical, reasons, and could be revisited down the road.
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Wednesday, November 12, 2008

Pure Digital jumps in with its own HD Flip Video camcorder

File this in the "You knew this was going to happen" department: According to Cnet, Pure Digital has just announced the Flip Mino HD camcorder, with a $229 list price. Pure Digital claims that it's the world's smallest HD camcorder at 3.3 ounces. It records at 720p (1280 x 720) resolution, 30fps. The company also claims that it has improved the camcorder's built-in FlipShare software. The built-in 4GB of flash memory allows one hour of recording. Other than those features, the camera appears to be physically and operationally identical to the existing Flip Mino.

Via Engadget, I learned that the Wall Street Journal has already gotten its hands on one for a test. Here's a video with some test footage, which, for a camcorder that's probably going to be street priced under $200, isn't bad at all. However, before you buy one, you might want to wait for to do its own testing; they found that the Kodak Zi6, a similar HD camcorder that beat the Flip Mino HD to market, had serious image quality problems in the same kind of lighting that most people use in their homes. For now, here's the Wall Street Journal's footage:

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LCD prices were fixed...did you notice?

According to CNBC, the U.S. Justice Department just announced a $585 million dollar settlement of a price-fixing case against LG Electronics, Sharp and Chunghwa Picture Tubes. By far the biggest portion of the fine, $400 million, will be paid by LG. Price-fixing is illegal, of course, but the price of LCD displays has been on a downward spiral for years. I haven't heard anyone complain that LCDs are too expensive recently; if anything, the problem has been whether the prices would stay high enough to keep some of the manufacturers in business.

I can't imagine that resolving this collusion is going to make LCD prices drop any faster than they've already been going down, but it will put a half-billion dollars into the U.S. Treasury. More bailouts, perhaps?

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Tuesday, November 11, 2008

Dish Network's TiVo Killer? (Well, maybe a TiVo wounder...)

From Cnet's Crave comes news of Dish Network's new DTVPal DVR, a $250 (after $50 instant rebate) standalone HD PVR with 30 hours of HD or 150 hours of SD storage. The DTVPal works with over-the-air, cable or satellite sources, has a 7-day program guide, and perhaps most importantly, requires no monthly or lifetime subscription fee. The key is the user interface, but Dish has made great progress with its satellite-based PVRs over the years. (The DTVPal DVR also acts as a digital-to-analog converter, but it doesn't qualify for the $40 Federal coupon, which is why Dish is offering a $50 instant rebate.)

The question is whether or not consumers will be willing to pay for a HD PVR if they can get similar functionality from their cable or satellite providers. Probably not, since they'll still have to pay for a set-top box, but the real target for this device is consumers who want to record over-the-air video. For those users, TiVo is the primary option, and an alternative with no subsciption fees will be very tempting.
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Monday, November 10, 2008

Circuit City files for Chaper 11 Bankruptcy

According to Dealerscope, Circuit City filed for Chapter 11 Bankruptcy this morning. In a written statement, the company said that it plans to reorganize and remain in business. That may be the company's intent, but the odds of successfully emerging from Chapter 11 are increasingly slim for retailers. For example, Sharper Image initially filed for Chapter 11, but within a few weeks the company modified its filing to Chapter 7 and liquidated. Mervyns, a chain of department stores, filed for Chapter 11 last July, and then a few weeks ago, it filed for Chapter 7 liquidation and is now going out of business.

Circuit City may beat the odds, but I think it more likely that we'll see many more than the 155 stores already running "going out of business" sales close their doors before the end of the holiday season.

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Thursday, November 06, 2008

T-Mobile customer service goes kablooey?

Last year, I bought a Samsung mobile phone and prepaid service from T-Mobile exclusively for travel. I haven't left town for several months, but I have to take a trip next week, so I decided to add some money to my account. I did that part online, and it worked fine...but the phone didn't. It said "No Service", even though I was getting a strong signal. So, I called T-Mobile, and got transferred...and transferred...and transferred. I was transferred to seven different people, finally ending up with someone in India on a connection so bad that I could barely hear her.

Ultimately, I found out that the account had expired, the phone number had been given to someone else (possibly not even a T-Mobile customer), and the company keeps no record of which numbers have been given to which customers once an account expires. I ended up having to visit a local T-Mobile store, which sold me a new SIM card and assigned me a new phone number. This number is only good for three months, unless I use up the current balance and add more time, which will buy me three more months. The customer service experience in the store was great; the experience on the phone was horrible.
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Do you need more than a netbook?

I finally got to play with a netbook today, an Acer Aspire One running Windows XP with 1GB of RAM and a 160GB hard drive, and I was impressed. As a travel computer, it would do just about everything I, or most business or personal users, need. There wasn't a live WiFi connection in the store where I was trying the Acer out, so I couldn't test the computer's performance with streaming video, and there's no DVD drive, so I'd have to rip a DVD onto a USB flash drive if I wanted to watch a movie on an airplane. To me, those are relatively minor limitations.

The Aspire One that I was looking at was priced at $399. There were bigger notebooks with much larger screens and keyboards for a couple of hundred dollars more, but for my money, a computer like the Aspire One would be an ideal travel computer, far more cost-effective than either the Mac Book Air or Lenovo X300. The Aspire One and similar computers are so cheap that they're "sacrificial"; so long as you have a good backup solution, if they break, it's often cheaper to buy a new one than to get the existing one repaired.

All that said, I probably wouldn't want to edit a webpage or run Photoshop on a netbook, but that's not what they're designed for. For the kinds of things that you're likely to do when traveling, a netbook is fine.
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CNN's "Holograms": A waste of perfectly good bandwidth

If you watched CNN's Election coverage Tuesday night, you may have seen CNN's "holograms", technology designed to make it look like a person being interviewed is in the same studio with the interviewer, except that it does no such thing. Both reporter Jessica Yellin and musician were turned into "holograms". In fact, they were shot with multiple cameras simultaneously, which allowed them to be viewed from multiple angles, but it still used chroma key compositing technology, which caused fringing around the edges of the images. It looked nothing like a true hologram. More to the point, it added absolutely nothing to the interviews.

Wolf Blitzer could have been talking to faces on a monitor, and none of the content of the interviews would have been lost. In fact, I'd argue that the coolness/creepiness factor of the "holograms" interfered with the content; much of the audience was paying more attention to Blitzer talking to a blob than to what was actually being said.

For most of the night, CNN played it fairly straight, using technology in appropriate ways for the benefit of the audience. The "holograms," however, were nothing more than gimmicks.

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New Canon 5D Mark II HD video sample

I've written about how Canon's new 5D Mark II DSLR has superb HD video capabilities, but this is the first time that I can actually show you video without having to link out to another site. While you're watching, keep an eye out for the camera's superb handling of depth of field, and the flexibility it gets from its interchangeable lenses. This particular video was shot by a single cameraperson (cinematographer?) in Japan over three days, and edited in France on a Mac Book Pro in two days. Akihabara News has more details. And now, the video:

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Tuesday, November 04, 2008

Circuit City to close 155 stores

Yesterday, Circuit City announced that it will close 155 stores in 28 states, and in the process get rid of 17 percent of its workforce. The company will also halt its plans to open new stores in 2009, and will attempt to renegotiate leases on existing stores. The stores that are scheduled for closing will be closed today, November 4th, to put up signs and reprice merchandise, will reopen on Wednesday, and will close permanently no later than December 31st. A complete list of stores to be closed is available here.

I would not be surprised to see Circuit City add stores to the list as the holiday season goes on, especially if the retail season is as bad as many observers fear it will be. 
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Well, the one on the right was on the left, and the one in the middle was on the right, and the one on the left was in the middle, and the guy in the rear used to work for IBM

Lots of job changes yesterday:
  • Tony Fadell left Apple. Fadell was the first member of the iPod engineering team and most recently ran the iPod product line.
  • According to CNET, Fadell is to be replaced by Mark Papermaster from IBM, but IBM is enforcing a non-competition clause in its employment contract with Papermaster, and is suing Apple to keep it from getting trade secrets related to IBM's Power chips and server products. What Power chips and servers have to do with portable media players is anyone's guess.
  • George Kliavkoff, who's been NBC Universal's Chief Digital Officer for the last two years and oversaw NBC's participation in Hulu, the company's online Olympics activities and the growth of and the company's other digital properties, is leaving the company to go do something else.
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Sunday, November 02, 2008

Blu-Ray's BD+ security has been broken

According to Slashdot, BD+, one of the security schemes protecting Blu-Ray content, has been broken and can be removed to make Blu-Ray content freely copyable. Longtime observers of the HD DVD/Blu-Ray battle may recall that BD+ was an additional protection mechanism championed by 20th Century Fox in the event that the Advanced Access Content System (AACS), the baseline security system for both HD DVD and Blu-Ray, was ever cracked. The whole issue probably added a year to the HD DVD/Blu-Ray battle. AACS was broken last year, and now, BD+ is gone.

The consumer electronics companies and movie studios anticipated that both AACS and BD+ would eventually be broken, but they expected it to occur in years, rather than months. Now, the industry has to decide if and when to push out firmware updates for the Blu-Ray players already installed (as well as to slipstream new firmware into production). They also have to agree to the changes that have to be made to AACS and BD+ in order to make them secure again, yet keep them compatible with existing discs that have already been shipped. And, they have to face the fact that they'll probably both be broken again within a year.

My belief is that the industry knew that both methods would be broken, but hoped that they'd stay viable for at least five years, long enough for an orderly transition to downloaded and streamed video. The fact that they've now both been broken, and that the means of both breaks are publicly known and understood, makes them little more than window dressing, no matter how many times the industry updates firmware.
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Saturday, November 01, 2008

Don't cry for me, innovation

Today's New York Times website has an article on the importance of maintaining investments in innovation, even with an economic downturn. My question is, what innovation? I track a variety of technology-related industries, and I've been hard-pressed to find anything recently that qualifies as a real innovation. One of Google's most exciting recent innovations is the ability to read and index text in images of pages, such as in PDF documents. I worked for Palantir, the company that invented most of that technology, 23 years ago. Or how about Google Chrome, which was all the rage a few weeks ago? It's largely based on open-source Webkit technology and a JavaScript compiler that Google acquired, rather than developed in-house. And, it's a browser. I was in the browser business near the beginning as well, at Netscape, 13 years ago.

The problem isn't encouraging innovation in an economic downturn, it's producing true innovation, period. Economic downturns often help, rather than hurt, innovation. Just as forest fires burn away the underbrush that stifles forest growth, so companies are forced to focus on products and services that really matter. The survivors in each product segment become clear, and the people who work for the losers either take their ideas to the winners or go start their own companies. A new wave of start-ups is born, and some of them do really interesting things, rather than merely cloning what someone else is doing with a minor twist.

I say let the big companies batten down the hatches, and let the start-ups without business models die off. The big guys will do what they've been doing for a long time, which is buying their best ideas from others. So long as there's venture capital and engineers & scientists driven to build the next big thing, innovation will take care of itself.
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Thursday, October 30, 2008

Goodbye, Moto?

IDC's numbers for the largest mobile phone global suppliers by volume for the third quarter of 2008 are out, and Motorola has slipped to fourth place, down almost 32% from the same quarter last year. Nokia remains #1, Samsung is #2, and Sony Ericsson, which was once all but given up for dead, has passed Motorola to be #3. LG Electronics is #5 and could pass Motorola soon, and Apple is #6 in shipments and #3 in revenues.

At the same time, Motorola announced that it lost $397 million on $7.5 billion in revenue in the third quarter, and has postponed its plans to spin off its mobile phone business until some time after 2009. They're undoubtedly facing the reality that they won't be able to get any reasonable price for their mobile phone division until the current recession lifts. The only question is whether or not they'll have a viable business to spin off by that time.
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Brightcove positioning itself as a survivor?

Not too long ago, I wrote about which Web 2.0 startups would survive this recession, and one of the danger areas I pointed out was video services. The fallout is already happening, but one of the companies that's likely to survive is Brightcove. In the last few days, both The New York Times and AOL have shifted their video services to Brightcove. Like most video ventures, Brightcove started with a consumer focus, but it shut down its consumer services fairly quickly to focus on being a supplier of services to larger media companies, including Discovery Communications, 20th Century Fox, Showtime and The Wall Street Journal. It recently launched its third-generation platform. While YouTube dominates consumer video, Brightcove has become the arms dealer of choice for video infrastructure. There are other major players out there that are also doing fine, such as Comcast's thePlatform, but the outlook is bleak for consumer-oriented video sites that hope to switch to a business focus in order to ride out the recession.

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Wednesday, October 29, 2008

Netflix "Watch Anytime" to be available on TiVo

According to the New York Times, Netflix's "Watch Anywhere" service will be available on TiVo's HD-capable PVRs starting in December. To use the service, consumers will have to have a TiVo HD ($299.99) and subscribe both to TiVo's service ($12.99/month, less per month with an annual or lifetime plan) and one of Netflix's unlimited subscription plans, which start at $8.99/month. The cost of the two services together, almost $22/month, is as much or more than basic cable in many parts of the country, so this isn't the solution for cost-sensitive consumers. However, it helps TiVo to improve its value proposition against cable set-top boxes that include PVRs.

It's a shame that TiVo couldn't offer Netflix on its Series 2 SD PVRs as well; there are millions more Series 2 boxes in the fields than HD models. It's unlikely that this announcement will spur sales of many TiVo HDs, but it will certainly add utility for people who already have a TiVo HD or are considering purchasing one for other reasons.

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Wal-Mart to discount T-Mobile G1--is the target Apple?

Thomson Reuters reported today that Wal-Mart is going to discount the T-Mobile G1, the first commercially-available Android phone, for $148.88 on a two-year plan, a $30 discount from the $179 price in T-Mobile stores. The top-line news is simple: If you want a G1, go buy it at Wal-Mart, but the real target of this price cut may be Apple. Apple and Wal-Mart are direct competitors in music and video sales, and the iPhone has become Apple's revenue growth engine. If Wal-Mart can impact iPhone sales, it can put Apple in a world of hurt. Also, Apple's and Wal-Mart's stores address very different markets, so the G1 in Wal-Mart could become the iPhone for the rest of us. I'd certainly expect to see the Wal-Mart music store on the G1, and possibly a Wal-Mart shopping application.

Don't underestimate the impact of getting the world's biggest retailer behind Android. Yes, it could be completely opportunistic on Wal-Mart's part, but I think that there's some serious strategic thought behind this move.

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Tuesday, October 28, 2008

Circuit City and Tweeter nearing the deadpool?

A cover article in this week's TWICE (This Week in Consumer Electronics) Magazine examines the impact of possible store closings or even bankruptcy by Circuit City and Tweeter. Together, the two companies represented around $11 billion of consumer electronics sales in the U.S. in 2007. Circuit City is by far the bigger of the two, and is by far the bigger issue. The TWICE article quotes a Wall Street Journal article that speculated that "Circuit City might be forced to close more than 20 percent of its stores and liquidate $350 million in inventory to keep the company afloat through Christmas...".

For consumers, the two companies' problems could be a holiday bonanza, with competitive retailers such as Best Buy and Wal-Mart forced to match Circuit City's and Tweeter's prices in order to sell their own inventories. For competitors, however, a massive restructuring or bankruptcy of either company could turn what's already likely to be a bad Christmas season into a disastrous one. Consumer Electronics manufacturers and distributors are also suffering, since many retailers are cutting back on inventories and even dropping entire product lines. Seasonal employment will also suffer--Circuit City and Tweeter are unlikely to do much seasonal hiring if they're on the brink of bankruptcy.

So, if you're looking for a big-screen TV, iPod or PC, stand by to stock up on bargains that are likely to continue throughout the entire Christmas buying season. If you're in the Consumer Electronics business, stand by to stock up on Maalox.
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The Christian Science Monitor to cease daily publication

In what's likely to be the first of a wave of fundamental restructurings in the newspaper industry, The Christian Science Monitor announced today that it will cease publication of its daily newspaper by April of next year. According to Online Media Daily, the newspaper will shift to a weekly print edition, along with a continuously updated version of its website,, and a daily electronic subscription product. There's been an ongoing debate within the Christian Science church over whether or not to keep the newspaper alive, and this strategy appears to be a compromise that will keep the Christian Science Monitor in business by shifting daily coverage to the web and dramatically decreasing costs.

Weekly newspapers are about the only bright spot in the newspaper industry, and moving from a daily to a weekly will help the Christian Science Monitor capitalize on this trend. I think that this is likely the model that many newspapers will follow--daily coverage on the web and a weekly print version. Whether that will save enough money to keep hundreds of newspapers from failing is anyone's guess, however, especially with advertisers pulling back across the board, including online.

It seems likely to me that in many markets, the job of providing daily local coverage will fall to the websites of television stations, not newspapers. The local newspapers in those markets will either have to survive as weekly lifestyle-oriented publications, or not survive at all. The strategy pursued by The Christian Science Monitor will work best for the national or quasi-national newspapers, such as The Wall Street Journal, New York Times or Washington Post.

In any case, we're witnessing the start of the final transition of print newspapers to electronic distribution, or to history.

Update: According to Advertising Age, only two of the top 25 U.S. newspapers gained circulation in statistics from the Audit Bureau of Circulation for a year-to-year six month period ending September 30th. Those two are USA Today and The Wall Street Journal, and the gains were 0.01% in both cases. Some of the other changes were The New York Times down 3.6%, the Los Angeles Times down 5.2%, The New York Post down 6.3%, the New York Daily News down 7.2%, the Chicago Tribune down 7.8% and the Houston Chronicle down 11.7%. Overall, daily circulation declined 4.64%, and Sunday circulation dropped 4.85%. In both cases, the overall rate of decline increased from the year-ago rate, which was 2.6% for dailies and 3.5% for Sunday. Not an encouraging trend.

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Monday, October 27, 2008

A big win for Silverlight--from the last place you'd expect

Microsoft's Silverlight has played a poor runner-up to Adobe's Flash in terms of player installation and usage ever since it was introduced, even with Silverlight powering NBC's Olympics video last summer. Today, however, Silverlight got another big win, and it's not something that will last for only two weeks. According to Engadget, Netflix just announced that it will finally bring its "Watch Instantly" streaming video service to the Mac, using Silverlight. One reason that Netflix went for Silverlight over Flash is Microsoft's Digital Rights Management platform, called Play Ready. I suspect that another reason is that Microsoft doesn't charge for players or servers, while Adobe still charges quite a bit of money for servers. Having Microsoft software as the preferred streaming platform for Macs is a bit of a shocker, but it apparently makes both business and technical sense for Netflix.

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Sunday, October 26, 2008

Vibratory conveying experience required

As I've mentioned previously, I'm looking for a new job. Like many jobseekers, I've created profiles on just about every job search site (Monster, CareerBuilder, LinkedIn, HotJobs, etc., etc.,) and those profiles generate daily lists of jobs that might fit what I'm looking for. I found an opening for a Product Marketing Manager that looked great, until I came to the following line: "Vibratory conveying experience required." Statistics show that one out of every three people have some vibratory conveying experience, but I'm not one of them. Then there were the next three lines: "This position is in Walla Walla, Washington. Key Technology will cover all relocation expenses and provide a handsome relocation allowance. Are you willing to relocate to Walla Walla, Washington?" I would be, if they didn't require vibratory conveying experience.

Friday, October 24, 2008

Is Sun finally setting?

According to the New York Times, Southeastern Asset Management, a private equity firm, now owns 21 percent of Sun Microsystems, up from 16.5 percent in August. Southeastern is putting pressure on Sun's management to, as they say, "maximize the value of the company." Sun's been losing revenues and market share for a long time, but it's still profitable. At the time of this writing, the amount of cash that Sun has on hand (nearly $3.5 billion) exceeds its market capitalization ($3.26 billion.) Some of that cash could be used for a stock buyback, which would raise the stock price, or for acquisitions that would have the potential of reigniting Sun's growth. It's clear that Sun, as currently constituted, is a cash cow whose best days are well behind it. Sun's management can't remain in a holding pattern; its investors won't let them.
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Wednesday, October 22, 2008

First X-ray vision, now X-ray tape

According to R&D Magazine, researchers at UCLA have discovered that peeling Scotch Tape generates X-rays. Apparently, quite a lot of X-rays, if you're doing the peeling in a vacuum. The scientists built a device that peels Scotch tape from a roll in a vacuum chamber at the rate of 1.2 inches per second, which generates short bursts of X-rays (about a billionth of a second long each) from where the tape is being peeled. Electrons jump from the roll to the sticky underside of the tape that's been peeled away; when they hit the sticky side they slow down and generate X-rays. UCLA has filed for a patent on this technique, which could be used by paramedics to generate X-rays in the field.

Using your office tape dispenser is safe, according to these researchers, but I wouldn't stand too close if I were you.
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Camera Category Confusion Continued

A few posts ago, I wrote about how digital SLRs are taking over from prosumer camcorders, camera phones are replacing point-and-shoot cameras, and under-$200 video cameras are crushing the competition. Now Casio brings us extreme slo-mo video capabilities that cost thousands of dollars just a few months ago, in a--get this--still camera, the EX-FH20. According to Engadget, the EX-FH20 is an awfully good digital still camera that just happens to do slow motion video up to 1000 frames per second, all for $600. It's just one more example of category confusion--still cameras that do video, video cameras that are cheaper than still cameras, and phones that are good replacements for still cameras. It's getting harder for consumers to decide what to buy, but the choices, and the price/performance, are getting better all the time.
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Tuesday, October 21, 2008

Red flags in the distance for Apple?

Apple beat analysts' estimates for revenues and profits in the company's fourth quarter, but there are some red flags on the horizon. Sales of Macs fell below analysts' expectations, only by 100 to 150 thousand units, but enough to question whether the recent MacBook and MacBook Pro refreshes will be enough to get the company's momentum back. Of more concern is good news that could turn out to be bad news. Sales of 3G iPhones smashed analysts' expectations, with 6.89 million sold vs. 5 million forecast by analysts. The potential problem is that Apple records the sales when the phones are shipped to its service provider customers, not when those operators sell them to subscribers. The original iPhone was rolled out slowly to service providers worldwide, but the 3G iPhone went out to mobile phone operators in almost 50 countries at the same time. Operators could have "stuffed" their warehouses with iPhones in anticipation of heavy demand that may not have materialized.

The proof will be in the next quarter, where Apple is already projecting sales considerably lower than analysts' estimates. It may be that Apple's simply managing expectations, or it may be a sign of real problems ahead.
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Saturday, October 18, 2008

Oh Lord, we're in trouble

Fresh from Gizmodo, here's what we have to look forward to at digital conversion time next February. Multiply by a million.

Blu-Ray can't get a break

First it was the Blu-Ray/HD DVD war, then it was overpriced players and software that didn't support all of Blu-Ray's interactive feature. Now, the economy is tanking. Blu-Ray player Christmas sales probably won't hit even the conservative estimates from a few months back, and the Playstation 3, which has been the primary driver of Blu-Ray adoption, remains locked in third place. Last month, despite still having constrained supplies, the Nintendo Wii sold almost three times as many units as the Playstation 3 in the U.S.

More than ever, I believe that Blu-Ray will be a transitional technology, the last physical consumer medium before VOD and downloads take over. Blu-Ray won't knock out DVDs, even with dropping player and software prices. The party is just about over. If you want a Playstation 3 or need to replace your DVD player and can get a good Blu-Ray deal, then by all means buy one, but otherwise, save your money.

Update, October 20, 2008: According to Punchjump, over the weekend, Best Buy cut the price of its least-expensive store-brand Blu-Ray player to $199.99. Target's cheapest Blu-Ray player is $229.99. Neither of these players are Profile 2.0, which means that they don't have all the interactive and Internet features of more recent models, but I'm coming to believe that those features don't really matter. If you want an Internet connection, buy a Playstation 3. However, Blu-Ray player prices have further to drop, especially given the recession. It's not out of the question to see a Blu-Ray player priced at under $100 before the end of the Christmas season; that's the time to buy.

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Nvidia accelerates Adobe CS4 applications

There's been a lot of talk about using the GPUs (Graphics Processing Units) on graphics cards to accelerate applications, not just display, and Nvidia has finally done it. According to InformationWeek, the new Quadro CX not only supports dual displays up to 2560 x 1600 resolution, it can dramatically accelerate Photoshop, Premiere Pro and After Effects CS4 rendering. It can also cut H.264 video encoding time in Premiere Pro by half. Nvidia supplies plug-ins for the applications that execute the processor-intensive code on the GPU rather than the host CPU.

The Quadro CX lists for $1,999, so it's not something that casual users are likely to be interested in, but for serious CS4 users, the productivity gains could pay for the card in a fairly short amount of time. Given that AMD/ATI is now back in the thick of the graphics performance battle, Nvidia's rendering and encoding acceleration could tip the balance in its favor.
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Friday, October 17, 2008

Sirius XM: Load gun, shoot self in foot

Word got out over the last few days that Sirius XM has begun layoffs in XM's Washington, D.C. facilities, covering both off-air and on-air staff. Sirius has long had better talk channels than XM, and XM has had the better music channels. The thinking, when the merger between Sirius and XM was first announced, was that Sirius' talk and XM's music channels would be combined, by and large, into the new service. That's not what appears to be happening. It now looks like the plan is to shut down XM's Washington facility and keep most of Sirius's program structure in place.

That's fine if you're already a Sirius subscriber, but not so great if you prefer XM's music. That in itself should cause a significant drop-off in subscribers once the carnage at XM is complete. Add in the dramatic fall-off in new car sales, combined with hesitancy on the part of informed buyers to install any new satellite radio receiver until models that can support the combined services are available, and you've set the stage for significant net subscriber losses.

Everyone knew that the merged companies had to eliminate duplication and decrease operating costs, but it's beginning to look like the merger of Sirius and XM is going to result in Sirius. There were a lot of reasons why people chose to subscribe to XM rather than Sirius; it was much more than which satellite receiver came with their new cars. Many of those subscribers are going to have to look elsewhere for audio entertainment.
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Thursday, October 16, 2008

Ballmer still has Yahoo! envy

At today's Gartner ITExpo in Orlando, Microsoft's Steve Ballmer said "I still think it [an acquisition of Yahoo! by Microsoft] would make sense economically for their shareholders and ours." He also stated that Microsoft wasn't pursuing a deal, and that he thought that Yahoo's shareholders probably still believed that the company was worth $33 a share. Nevertheless, Yahoo's share price spiked on the non-news, closing up 10.55% and another 3.7% in after-hours trading, to $13.47 as of when I'm writing this entry.

It's clear that Ballmer still wants Yahoo!, and could probably get it for $20 a share. The question is whether he'll actually do something, or as Bill Griffith put it on CNBC today, "keep pining for it like an old high school sweetheart." Steve, please put up or shut up, once and for all. Otherwise, people will keep believing that you've got a crush on Yahoo! that just won't give up.

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Wanna buy TV Guide for $1?

Wanna buy TV Guide for $1? Not a copy of the magazine at the newsstand, the ENTIRE MAGAZINE? According to Multichannel News, that's what OpenGate Capital just did, and Macrovision, the company that owned the magazine, gave OpenGate a $9.5 million loan at 3% interest to take it off its hands. Macrovision got the magazine when it purchased Gemstar-TV Guide International earlier this year for around $2.8 billion, and it's no secret that they've been shopping the magazine to buyers ever since. Circulation has dropped from around 20 million in the 1970s to 3.2 million today, and the magazine is bleeding cash--it's expected to lose from $20 to $23 million this year, and lost at least than much for the last two years.

Even with the losses, I find it hard to believe that another publisher couldn't have integrated TV Guide with its operations and saved a lot of money. The problem could have been TV Guide's publishing model, where they do a unique edition for every television market, combined with national editorial content. Unfortunately, this is probably the beginning of the end of the magazine.
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Wednesday, October 15, 2008

Apple: Good news, bad news and no news

Apple announced its updated MacBooks and MacBook Pros yesterday. Here's my take on the announcements:
  • No news: With very few exceptions, everything that Apple announced yesterday had already been leaked in detail. There was a time when Apple could keep secrets. No more.

  • Bad news: Even with the LED backlit displays, multitouch-enabled touchpads without mouse buttons and cases carved out of a single block of aluminum, there was little in yesterday's announcement to generate excitement. Despite switching to Nvidia chip sets and graphics controllers, the performance of the MacBooks and MacBook Pros still lags behind that of comparably priced notebooks from other manufacturers.
  • Good news: Steve Jobs shared the stage with COO Tim Cook and head of design Jonathan Ive. As I wrote about earlier this month, one way for Apple to avoid manipulation of its stock price through rumors about Steve Jobs's health is to demonstrate that it has a strong management team. The company is starting to do that.
One has to be concerned about the direction that Apple's new product development is taking. There's a real sense of incremental improvement in the iPhone, iPods and now the MacBooks. The last earth-shaking announcement was the original iPhone, which feels like it occurred decades ago. I hope that we'll see something really new, not just improved, soon.
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Monday, October 13, 2008

Identifying the survivors

With the recession in full force, and warnings from multiple venture capitalists to their investments to "batten down the hatches," it's probably time to start think about which Internet companies will survive and which won't. The dot-com collapse left us with a few world-class survivors:, eBay, Google and Yahoo! (I'm focusing on U.S. companies, but there obviously are others, such as Baidu in China.) In the worst case, who would emerge as leaders after a Web 2.0 collapse?

Right now, there are only two that I'd be willing to put good money on: Facebook and MySpace (MySpace is of course part of News Corporation, but I'm looking at them as an independent entity in this case.) Some of the specialty social media networks, such as LinkedIn, are likely to survive through acquisition. The online video space is already turning into a boulevard of broken dreams, as it did in the original bubble. Sites that are already affiliated with an "old media" company will probably make it through, because they have strong capital bases for support, but most standalone sites are dead meat. The costs of streaming bandwidth compared to available advertising revenues are simply too high. Some of the independent blog networks will also make it, because they've always made do with limited capital, and their costs are so low. In short, anything not named Google that's dependent on advertising revenues and isn't already profitable or at least cash-flow positive will be hanging on by its fingernails, if it hangs on at all.

There will also be the e-commerce segment leaders, such as Zappos, that will probably make it, but they're going to have to survive in a market with consumers who spend less and have less credit. There are lots and lots of infrastructure services out there--far too many for the market to support, and most of them will go away.

I'll stop at this point--any suggestions on sites that I missed?

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Sunday, October 12, 2008

I'm looking for work!

You may have noticed an increase in the frequency of my blog posts recently. That's because I'm looking for work. The jobs that I have many years of experience in are:
  • Product Management
  • Product Marketing
  • Market Research/Industry Analysis
  • Writing and Editing
Full-time, part-time, permanent or contract are all fine with me.  I'm located in Silicon Valley, so jobs there are preferred (especially if they're part-time and/or contract). I'd relocate for the right full-time permanent position.

If you've got a job, if you know someone who has a job, or if your last name is Job (or Jobs), let me know! Email me at You can see my LinkedIn profile at, and download my full resume at
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Spam free, as free as the wind blows...

Those of you who visited my other blog "Feldman Off Topic" last week may have noticed a warning from Google: "Danger Will Robinson! Hormel canned meat products ahead! Proceed at your own risk!". Well, an actual human being read the blog and decided that it's spam-free, so it's back in all of its poorly-written glory.
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Thursday, October 09, 2008

WiMax: A little too late?

Sprint officially launched its WiMax high-speed wireless service on October 8th, and now the notebooks with built-in WiMax are streaming out from Acer and Toshiba. WiMax is significantly faster than 3G networks, but for now, it's only available in Baltimore, and Sprint plans to roll it out in seven more cities in the next six months. The problem is that Sprint is bleeding money, and even though Intel, Google, Comcast, Time Warner Cable and Bright House Networks have committed to invest $3.2 billion in the business to be created by the merger of Sprint's XOHM WiMax business with Clearwire, those companies may not go through with their investments given the state of the U.S. economy.

WiMax, with real-world download speeds of 2 to 4Mb/second, is only an appetizer on the way to true 4G service, which will provide speeds upwards of 100Mb/second. Those 4G services will probably not start rolling out until 2012 at the earliest. However, if the current recession delays widespread deployment of WiMax to 2010 or later, WiMax may prove to be only a transitional technology, much as Sprint's earlier wireless broadband service couldn't survive once cable and telephone companies built out their networks.

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Eyespot joins the deadpool

I received the following email this afternoon:

We deeply regret to inform you that Eyespot Corporation will no longer be able to continue serving you.

For our users at, we're no longer allowing you to upload new videos. You can retrieve your uploaded video and mixes by going to your mymedia gallery and clicking the download link below the video thumbnail. 

For our business customers in the eyespot video network, your site will continue operate unaffected for a limited period of time. We encourage you to migrate your video solution to one of our competing providers in the video mixing (e.g. and video publishing space (e.g. immediately. We'll soon be providing you with the means of downloading your community videos from within your dashboard at].

We have spent three years providing over a hundred thousand of you with a unique video experience. We believed that by putting creative tools and rights-cleared media into the hands of influencers and connectors, Eyespot would enable social media and participation culture like no other company. 

After playing over two hundred million of your video creations, we have to stop. After assembling possibly the most potent team in digital media ever, we're now moving on.

Thank you all for being apart of our community over the past three years.

Jim Kaskade 
President & CEO followed the tried-and-true path of first targeting consumers, and when that didn't work, shifting focus to businesses. That didn't work either, so now they're going out of business, and I fear that many others will follow. It's overwhelmingly hard to monetize video on the Internet, and only a handful of sites have the traffic necessary to attract advertisers. In Eyespot's case, according to their email, they claimed just over 100,000 unique users over three years--not enough to make the business attractive to either advertisers or investors.

I hate to see any business fail, and I wish the management and employees of Eyespot well. This is a terrible time to be out of work. I'm afraid that many, many others are going to follow them into unemployment.

UPDATE, October 12, 2008: According to an email that I received last night, Eyespot's service will shut down for good at midnight on October 15th. According to the email, users must retrieve any content that they've uploaded to Eyespot's servers before then, or it will be lost.

Wednesday, October 08, 2008

Where have all the subscribers gone?

Cable operators in the U.S. have been experiencing subscriber losses for the past year or so--nothing terrible, but enough to raise eyebrows. Satellite providers haven't done much better: Dish is losing subscribers, and DirecTV is barely holding even. Verizon and AT&T entered the market about two years ago with FiOS and U-Verse respectively, but their gains don't completely explain the losses from other service providers. And, as I discussed in a previous post, AT&T is literally giving away money to get people to try U-Verse, so its rate of market growth must have tapered down to almost nothing. So, what's really happening?

I've got to admit that I don't know; all I can do is speculate. Television viewing in general is declining, as people find more and more things to do with their time. The increase of video content on the Internet can substitute for programming available on television. DVDs provide an evening of entertainment for as little as a dollar. Video services in the U.S. are relatively expensive relative to many other countries, including most of Europe and Asia. For cash-strapped families, premium packages are simply too expensive for the value they offer.

With all of the other options available, are the video services becoming luxury items rather than necessities? I think that they're becoming just that for many people. The switch to digital broadcasting might actually accelerate the change, if broadcasters aggressively program their subchannels and insure a good signal throughout their coverage areas. I expect to see cable, satellite and IPTV operators all lower their prices significantly, although it might require subscribers to call in order to find out about the better deals. In fact, it could start looking like the long distance telephone market several years ago, when subscribers played one company against the other in order to get the best rates.

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Eric Schmidt: The Internet is a "cesspool"

Image representing Eric Schmidt as depicted in...Image by Eric Schmidt / Google
via CrunchBase
According to this article from Advertising Age, at a meeting with magazine executives yesterday at the Googleplex, "The internet is fast becoming a "cesspool" where false information thrives, Google CEO Eric Schmidt said yesterday." Schmidt's solution is to bring more magazines and other old media sources onto the Internet, where their trusted editors can make the decisions on what is right and wrong, and on what information Internet users are entitled to get.

Schmidt's words might have gone down well with the magazine publishers in the audience, but it runs counter to the Internet serving as a forum for the expression of information and ideas, and it trivializes the ability of Internet users to tell fact from fiction. (And, as anyone who followed the false Steve Jobs heart attack story last week knows, it was CNN that gave the story legs and helped it to do so much damage.)

It is, in fact, this "cesspool" that makes so much money for Google. It's the blogs, websites and email that Google places its AdSense text, banner and video ads on. It's the millions of videos uploaded to YouTube that Google sells advertising against. So what, exactly, is Eric Schmidt saying?

If he wants to put his money where his mouth is, here's what he should do:
  • Drop all AdSense ads from Blogger (the posts there might be incorrect.)
  • Screen all websites getting AdSense or DoubleClick ads on a regular basis for accuracy, and drop those whose content is deemed to be insufficient of Mr. Schmidt's standards.
  • Screen all YouTube postings for accuracy, good taste, and whatever Mr. Schmidt seems to feel is wrong, and delete those found wanting. Better yet, why not save money and shut down Blogger and YouTube altogether?
  • Stop putting ads in Gmail (the contents of the mail might be inaccurate or offensive.)
Schmidt can't do these things because his advertising revenue would drop by half overnight. Google makes most of its money by selling search ads against, hosting and delivering the contents of that cesspool.

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