Submitted by acohill on Mon, 10/10/2011 - 09:12
Netflix has announced that it has abandoned plans to split its business in two and make customers to two different sites, depending on whether they want to rent a DVD or watch something instantly via the Internet. It was actually much worse than that, as they were also going to make customers have two different and separate billing accounts. The invisible hand of the market, when left alone, usually fixes stupidity like this, and it did. The aborted Netflix split will be the fodder of business school case studies for a long time, ranking right behind the "New Coke" introduction as one of the dumbest business decisions ever.
Submitted by acohill on Thu, 10/06/2011 - 12:32
True story. I discussed the possibility of eliminating our family cable TV subscription and just sticking with Internet. The response was, and I quote exactly, "Okay. Can we get Hulu Plus?" That's the state of cable TV today. It doesn't even merit a 30 second discussion of its value.
Submitted by acohill on Mon, 09/26/2011 - 13:40
According to the LA Times, eighteen years after the commercialization of the Internet, folks in Hollywood have determined that their might actually be something to that InterTubes things.
What brought about that revelation? A 40% decline in the sale of DVDs, a Hollywood cash cow, caught their attention, many many years after I and probably hundreds of other people predicted that Blockbuster was not going to turn out well. But after I read the article in its entirety, I came to the conclusion that the Hollywood moguls probably still don't really get it. The article goes on in some length to describe the horribly complicated schemes for trying to extract every last dollar from a movie. Boiled down, it tends to go something like this:
Nothing like a lack of respect for the customer. Here's an idea: Two months after the theatre run, make it available for 5 bucks on every streaming service on the planet. And watch the cash roll in.
Submitted by acohill on Sun, 09/25/2011 - 07:50
Passafire is a Savannah, Georgia based band with some roots on the Eastern Shore of Maryland. Their most recent album, Start from Scratch, has zoomed to the top of the iTunes reggae charts to take the number two spot behind perennial number one Bob Marley. What is interesting about this is that the band does not have a contract with a major record label (and "record" is an anachronism these days). Passafire has their own Web site, sells CDs online, but relies primarily on iTunes for their music sales. Oh, yes, and they actually play music in affordable venues. In short, these guys love music, and are able to make a living doing it, because the middle man, the record labels, have been cut out.
Even ten years ago, the members of Passafire would all have been working day jobs and loading a beat up van on Friday and Saturday nights to play a few local gigs. It is only Apple, with its visionary iTunes music store, that has allowed the band to connect with millions of fans in a way that was impossible just a few years ago.
And while some moan about the loss of jobs due to disintermediation, what the whiners forget is that iTunes has created tens of thousands of new jobs, and I would bet that the net jobs in the music industry has increased, and is spread far more equitably around the country, starting with what must surely be thousands of jobs at Apple just running the iTunes store. Then you have all the musicians that can actually market to a worldwide audience via iTunes, increasing their income and for some of them, turning their love of music into a full time job.
Bring the disintermediation on; it creates more opportunity by decentralizing economic power. Next up: the disintermediation of the TV and telephone industries.
Submitted by acohill on Fri, 09/23/2011 - 07:59
Facebook rolled out an updated interface and a bunch of new features yesterday, and I spent some time yesterday evening looking at what they had did. There is much buzz about a new music-sharing service, but to me, the most significant change is the addition of "lists," which is the equivalent of Google+ "circles." The concept is identical: you can group your friends and contacts into sets, and you can look at only what is going on in that set of contacts, rather than having to plow through every item that gets posted to your wall.
If you have lots of friends, this is a major improvement in usability. And it probably would not have happened if Google+ had not built a better mousetrap. Facebook was forced to respond, and they did. I have seen some grousing about how long it took Facebook to add the new feature, but as an old applications programmer, I'm impressed that Facebook rolled it out in just about three months, to 750 million users. That's good software and version control management.
Facebook has also changed the way you set your privacy options, and to me, it is also a big improvement--it's much easier to understand now who can see what.
Submitted by acohill on Thu, 09/22/2011 - 09:06
Executives at Coca-Cola headquarters in Atlanta are probably breaking out the bubbly (2 liter bottles of Coke) and toasting themselves. No longer will the New Coke be considered the dumbest, most asinine product roll out in history. Netflix will now be a source of business case studies in MBA programs for the foreseeable future.
Not only did Netflix hike prices dramatically without warning customers or explaining their rationale in any, um, rational way. To "fix" the problem they created with the price hikes, the president of Netflix, Reed Hastings, wrote the most condescending letter in the history of commerce, managing simultaneously to look stupid, imply that his customers are stupid, AND make the problem much much worse by splitting Netflix in half and creating two completely separate services (Netflix for streaming, Qwikster for DVDs through the mail).
The split of Netflix into two completely separate companies requires customers to now have two bills, maintain two accounts, and completely destroys one of the best things about Netflix--the ability to browse the entire Netflix TV and movie catalogue and effortlessly move titles back and forth between your streaming queue and your DVD queue.
But I say, "Good for Netflix." Netflix has been the 800 pound gorilla in the living room of video on demand, and they just shot themselves, not in the foot, but in the head. Customers are already fleeing for the exits, and new video companies suddenly have marketplace opportunities that did not exist two weeks ago. Competition is a wonderful thing. We will all benefit with better service options, better pricing options, and more choice.
Submitted by acohill on Fri, 09/09/2011 - 11:07
The San Diego power outage may be responsible for the Microsoft Office 365 service (a "cloud computing" offering) being down. Other Microsoft cloud services like Hotmail and Live were also affected. The company is not saying what actually caused the problem, but the article notes that as many as 365 million users were affected.
You can't put all your data eggs in one cloud basket. Cloud services are terrific when they work, but what is your plan B when they don't work? Community-owned broadband facilitates the growth of local cloud service offerings that allow businesses to host data nearby, where they could actually get physical access to the data if they needed it.
Submitted by acohill on Wed, 09/07/2011 - 08:10
Rich Swier of Startup Florida has a nice short article on Google+ and why he thinks it is a big improvement over Facebook. Google+ is still mostly a geek/early adopter phenomenon, but is probably the only competing service that has any chance of unseating Facebook.
Swier makes the point (and I agree) that a key advantage of Google+ is the ability to designate certain content only for certain folks in your network--the "circles" concept. You can create circles and put friends and family in them, and then when you post stuff, you can tag which circle or circles it is for. So instead of blasting everything to everyone (the Facebook approach), Google+ allows targeted posting and cuts down on the dreck.
Submitted by acohill on Tue, 08/30/2011 - 14:32
I was driving to work this morning, listening to the news on the car radio. The local station used the CBS syndicated news feed, and during the news break, there was an ad for the CBS iPhone/iPad app that "delivered all the breaking news from CBS," or something like that.
If I can get news feeds and programming directly on my computer or mobile device, why do I need an overpriced cable TV subscription. Netflix and Hulu provide virtually all of the movie and TV show programming, and a few iPad apps fill out the requirement for breaking news.
Cable and satellite TV are dead.
Submitted by acohill on Tue, 08/30/2011 - 14:28
I had a conversation last week with a new college grad who had just started a new job and had moved into a new apartment. The young woman had a couple of questions about her Internet connection, which she had purchased from the local phone company (DSL). I asked if she had considered a cable TV/cable modem package.
She said, "No, I never watch TV. I can get whatever I need from the Internet."
In a nutshell, the customer base of the cable TV industry is getting old and dying, and they don't have a plan to attract younger customers.
Submitted by acohill on Wed, 08/17/2011 - 07:34
The Harvard Business Review says that Groupon is failing. The half price coupon service has apparently burned through nearly a billion dollars in venture capital and needs just a measly three-quarters of a billion to keep going. Apparently there were some VC folks and business managers who learned nothing during the dot-com era. Groupon apparently spent on growth without attending to a fundamental business requirement: you actually have to make money. So they outspent their revenue by a large margin in the naive belief there is no top to their market opportunity.
Submitted by acohill on Mon, 08/08/2011 - 12:47
Skype has rolled out HD videoconferencing for Macs--it's been available on the Windows platform for a while. Here at Design Nine, we just upgraded our own business videoconferencing software to include multi-party video. We use Skype videoconferencing daily for internal communications in our three geographically distant locations, which saves us money on our landline phone bill. We use Go To Meeting for client meetings, and find the screen-sharing particularly productive when trying to discuss something like a spreadsheet financial model. If you are interested in making more use of IP video, don't scrimp on the Web cam. We have found that the better cameras, with integrated, high quality lenses and microphones perform much better--plan to spend $80 to $100. You won't regret it.
Required broadband comment: If you want to make good use of the HD quality, you'll need symmetric bandwidth of at least 1.5 megabits. What does that mean? It means it won't necessarily work as well with asymmetric services like DSL and cable modems.
Submitted by acohill on Wed, 08/03/2011 - 17:07
Here in Virginia, Roanoke County and the City of Salem are struggling with the same problem that many other localities in the country have: cable companies that won't renew franchise agreements. Comcast purchased an aging cable system from Adelphia a few years ago when Adelphia went bankrupt. At the time, Comcast promised the localities it would upgrade the old system so it could support improved Internet access. But the upgrade never happened, and so there is little competition, high prices, and poor service for broadband in Salem and parts of Roanoke County.
One of the problems that the cable companies have is that both their physical plant and their business model is obsolete. The fifty year old business model does not generate enough revenue to justify replacement of the old analog copper/coax infrastructure. So the companies are understandably reluctant to continue to make franchise payments and/or to make expensive upgrades.
To make matters worse, companies like Netflix, Amazon, and Apple are all eating away at the cable company customer base with better services that are not based on "500 channels and nothing to watch." If Apple, which has only been dabbling in streaming video, decides to throw the full weight of the company behind a serious streaming service, Amazon and Netflix will finally have some real competition. Apple did not build a 1 million square foot data center in North Carolina just so Apple users could back up their iPhoto baby pictures.
If the cable companies embraced the open access business model, they could turn things around very quickly, but so far, the cable industry has been unwilling to listen. Not so with some phone companies, who could also make a lot more money embracing open access; I've at least been able to have a conversation with some incumbents, but mid-level managers at the companies are still digging in their heels and refusing to change. So senior staff are stuck with a corporate culture that would rather have the company go bankrupt than change and prosper.
Submitted by acohill on Wed, 07/20/2011 - 13:17
Apple released the latest version of its Macintosh operating system today (OS X Lion). The software is available only via a download right now, and you better have a good, high capacity broadband connection if you want it, as the download is four gigabytes. Apple also announced that it will sell a version of the software on a USB thumb drive next month. In other words, no DVD version, not now, not ever. Apple has consistently led the way in media, including the 3.5 inch floppy, the CD drive, the DVD drive, USB ports, and Firewire, among others. If Apple is dropping the DVD, expect other computer makers to follow.
But note also that this shift to encouraging downloads of major pieces of software also highlights the need for homes and businesses to have adequate and affordable broadband connections, or be left behind.
Even more interesting, new Macs come with the ability to install the latest operating system from an entirely blank hard drive--as long as you have an adequate Internet connection.
Submitted by acohill on Thu, 07/14/2011 - 09:54
Netflix has raised prices. I got my notice via email yesterday. They have unbundled streaming from the traditional DVD via mail, and you now can buy one service, the other, or both. The DVD service is still more expensive than streaming, which suggests that the cost of mailing DVDs remains significant compared to the cost of buying bandwidth to drag streaming content across the Internet. The pricing change also suggests that many customers have largely transitioned away from DVDs to streaming content, and Netflix is giving those customers, that don't care about getting DVDs, a break on price.
Services like Netflix, Roku, and Hulu are going to continue to put tremendous pressure on the providers of "little broadband:" the DSL, cable, and wireless providers. These old systems are running out capacity, and it's a race to the bottom for these firms. They can keep trying to upgrade the old systems, but the more they spend, the faster their customers use up the bandwidth.
Don't believe that? Take a look at the cellular data services market. AT&T and Verizon have abandoned their unlimited data plans and have put bandwidth caps on their services because they can't keep up with customer bandwidth usage otherwise. This makes the concept that rural communities will all get their broadband via the cellular providers rather silly, unless you subscribe to the notion that rural folks should be relegated to what amounts to the 21st century version of dial-up.
Submitted by acohill on Thu, 07/14/2011 - 08:32
I just got an invite to Google+, the new Facebook-like offering from Google. So I created an account, and at first glance, I would say Facebook and LinkedIn have a lot to worry about. Note, however, that Google has a very mixed track record of success outside search and mapping. Anyone remember Orkut? It never caught on the U.S., although it has been successful in some other countries like India. If Google can do a better job of supporting business-oriented uses of Google+, both Facebook and LinkedIn will have to work very hard to keep their customer base.
Submitted by acohill on Mon, 06/20/2011 - 13:47
Take a look at this blood pressure cuff that connects directly to an iPod Touch, an iPhone, or an iPad. The data is stored and displayed on your own device, but the data is also sent to the manufacturer (Withings), where it can be shared with a health care professional. I'm not too excited about sharing my health information with a software firm, but what is important is that many of the standard diagnostic tools available to health care professionals are about to make managing your own health much easier, as well as giving you the tools to give your doctor much better information about your health. Doctors may be subscribing high blood pressure medicine based on just a few BP readings taken days apart, in the office, where the "white coat" effect on blood pressure is well known (your blood pressure is typically higher in the doctor's office, where you may be nervous about negative results). Compare that approach to health care to being able to easily take daily BP readings over a period of weeks or months to give a much better look at overall blood pressure. Couple this cuff with devices that reads blood sugar, heart rate, blood oxygen levels, and some other blood tests, and it will be possible to spend much less on doctor visits while actually getting better diagnoses.
Submitted by acohill on Tue, 06/14/2011 - 15:50
Facebook growth has fallen dramatically, signaling that nearly everyone who is likely to have a Facebook account has one. The U.S., Canada, Russia, Britain, Norway, and Russia all posted lower numbers of new users and higher numbers of closed accounts. Like the blogging bubble of a few years ago, a lot of people have tried Facebook and have found they don't have much use for it. That's not meant as a criticism--I use Facebook for family stuff and like it--but it is a reality of online services going all the way back to the early growth of email. No online service can sustain double digit growth forever, and AOL learned this the hard way. What will be interesting to watch is if Facebook can institute internal cost and staff controls that keep the company in the black as their subscriber base stabilizes.
Submitted by acohill on Thu, 06/09/2011 - 09:00
Tennessee legislators just passed a law making it illegal to transmit an image that could "..frighten, intimidate or cause emotional distress" to someone who sees it." And the person who suffers "emotional distress" does not have to be the person you sent it to. Suppose you send out a picture of a cat hanging desperately from the branch of tree to a friend. That friend forwards it on. Twenty forwards later, some cat lover sees it and is emotionally distressed that the poor cat is in danger. They look at the original sender of the email, report it to Tennessee law enforcement, and bingo, you are put in jail for a year and fined $2500 (you would have to be a resident of Tennessee).
Who writes comes up with these laws? Did they even think to ask a lawyer who specializes in constitutional law for an opinion?
Submitted by acohill on Thu, 06/09/2011 - 08:46
PCWorld calls what Facebook is doing with facial recognition "creepy." The social networking site has rolled out facial recognition software that tries to tag photos with your face in them without asking permission.
How many times do we have to keep going through this? I think I'm going to start a list of "Nerds Gone Wild" where time and again, some nerd at one of these companies decides it is really cool to violate everyone's privacy just because they stayed up late, drank a lot of Red Bull, and whipped up some crappy code. If you are interested, here is how to turn the, uh, "feature" off.
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