Submitted by acohill on Tue, 11/03/2009 - 13:29
MediaMemo reports that Apple has quietly begun to talk to some TV networks about making all their content available on the iTunes Store for $30/month. This might not sound like a good deal for the TV networks, but in fact, it is very bad news for the cable TV and satellite providers. With an economy in the doldrums and millions of households looking for ways to save money, a $30/month Netflix-style subscription for most popular TV content might look very good compared to $50-$60 per month for 500 channels of blah.
When thse schemes come up for discussion, someone always brings up network news and the cable news channels. But who watches that stuff? Not anyone under 30, and even other demographic market groups now often turn to the Web first, rather than TV.
TV on demand is coming, and the cable TV providers are going to be the big losers.
Submitted by acohill on Wed, 10/28/2009 - 09:14
An interesting fight is brewing between the movie studios and the movie rental outfits. And as usual, it is upstarts like Netflix and other Internet movies on demand outfits that are causing the problem.
For the movie studios, selling DVDs is extremely profitable. Renting, not so much, because they sell a few copies to a Blockbuster or a Netflix, and the rental company gets all the rental revenue. Until Netflix got a toehold, the studios were not too worried about the rental business because video stores also sold a lot of DVDs. Who has bought a DVD from Netflix? Answer: nobody. And the whole movies on demand via the Internet is making things worse.
Why spend $20 to buy a DVD you might only watch two or three times over the next year? If you can pay Netflix one monthly flat fee and watch the movie on demand as many times as you want at no extra charge, why buy? And that's the rub. The Internet is killing the DVD business. Movies are not much like music. The iTunes store sells millions of songs every day, because a) you can listen to music while doing something else, and b) most of us will listen to a song many times. Movies require a dedicated block of time, and there are few movies anybody wants to watch more than once.
The traditional movie and TV business is collapsing under the weight of an obsolete business model. The studios and content owners, instead of adjusting their business models to fit the new dynamic, are engaged in an ultimately futile attempt to hold back the tide. Their answer to sagging DVD sales? "We won't let you rent movies--we're going to force you to buy them." The plan is to not allow movie rentals for at least a month or two after the DVD is released for sale, on the theory that people just can't wait, and will buy it. There may be a few movie fans that will go for that, but the rest of us will just wait.
Submitted by acohill on Wed, 09/16/2009 - 07:52
As I predicted many years ago, the video store is on the way out. Blockbuster has just announced it is closing more than 900 stores. Netflix and video on demand over the Internet has taken its toll. Blockbuster has added a Netflix-style ordering system with the supposed advantage of being able to drop movies off at the local store, but that's just a dumb idea that was always dead on arrival. Netflix has a superior service, and even though the quality of video on demand via the Internet is lower than watching a DVD, we're all adjusting our expectations downward because of the convenience of on demand viewing.
More and more TV is being watched in small, low resolution windows on computers rather than via cable and satellite, and no one seems to mind. Blockbuster says they are going to switch to kiosks of DVDs in many different kinds of stores (e.g. supermarkets, quick stops, etc.). Yea, that will make a big difference. The kiosk model may prop them up for a couple of years, but eventually, DVDs will go the way of the CD--the iTunes Store is now the biggest seller of music in the world.
Long term, bandwidth is going to become a big issue for on-demand services, and communities with high performance open access broadband networks will be far ahead of regions still limping along with Internet access via copper (DSL and cable).
Submitted by acohill on Wed, 09/16/2009 - 07:43
The latest Web phenomenon is Animals with Lightsabers, proving once again that no idea is too stupid for the Internet. This particular flash in the pan is not likely to last, as you can be amused by a squirrel with a lightsaber only so many times. The object lesson is that the Web and the Internet continue to dismantle traditional publishing. Once upon a time, this sort of topic was the domain of small, cheaply printed novelty books that tended to be popular as Christmas gifts but actually never got opened past about 2 PM on Christmas Day. They ended up in the remainder bin of the local bookstore three months later for $4.99.
Music stores are nearly dead, bookstores are dying, and the video store is next. Although some have engaged in hand-wringing over the loss of jobs related to these shifts in the industry, the new technology is creating new markets and work opportunities, often for better pay and bigger businesses. Just one example is the enormous new market for software for the iPhone, where one and two person companies are raking in hundreds of thousands of dollars a year working from home, selling software via the Apple App Store for $1.99. This market and these jobs did not exist less than two years ago, and the the opportunities created far exceed dusting records for minimum wage at the local music store.
Submitted by acohill on Tue, 09/15/2009 - 08:12
If you have not tried Microsoft's Bing search service, you may be surprised. Bing seems to do a much better job of delivering relevant search results than Google. On a few queries I tried for topic areas I am familiar with, I found Bing producing fewer results of much higher quality, especially on the first couple of pages. Bing also is trying to integrate information from other Web sites and information sources in a thoughtful way, especially if you are trying to identify how to get to a business. It is nice to see Google finally have some serious competition.
Submitted by acohill on Tue, 09/01/2009 - 14:56
eBay has announced it is selling Skype. The auction giant bought the VoIP phone company several years ago for $2.6 billion, has already written off $1.4 billion and apparently hopes to get $2 billion in the sale--Meaning Skype never made eBay much money. In a related story, Skype has announced it is doubling its rates for international calls, where the firm makes most of its revenue.
Skype calls can be crystal clear or maddeningly noisy, and part of the problem is that Skype carries a lot of traffic across the public Internet, meaning so-so quality as a voice call traverses several different non-Skype networks. It is not a problem inherent to VoIP--done right, VoIP phone systems can be better than traditional copper-based land lines. But Skype has one of those "we'll give a lot of service away for nothing and make it up in volume, or international calls, or subscriptions, or something" business models. Skype's biggest asset is excellent VoIP software--it is an excellent tool that supports text chat, voice calls, and video calls. If they figure out their business model, the firm will do well.
Submitted by acohill on Thu, 08/27/2009 - 08:21
Sony has announced it's $400 ebook. Intended to compete with the Amazon Kindle, the device costs $100 more than the Kindle but works with several open ebook formats, giving users access to a wider range of books.
Both devices are likely to founder. Everyone is sick of lugging around multiple devices, and worse, all the special cables and chargers needed for them. I'm kicking myself for buying a small Nikon camera without checking on the data cable--the camera uses a proprietary cable instead of more common mini-USB cable, meaning I now have to lug around yet another cable.
Enough information is leaking out now that it appears very likely that Apple is going to release a tablet device either this fall or in early winter. When it is released, it will kill both the Kindle and the Sony ebooks. A Apple tablet will support email, Web browsing, and probably thousands of applications, as opposed to the ebooks that do only one thing. We just don't have enough room in our bags and briefcases to lug around a laptop and an ebook device, and for a lot of us, a capable tablet will replace both the relatively heavy laptop and will also serve as a very capable ebook reader.
Book publishers are playing along with Sony and Amazon right now because they have to, and it's a good way to gain some experience with the economics of ebooks. But a more popular device that supports many book formats, not just one or a few, will swamp the competition. It's only a matter of time.
Submitted by acohill on Fri, 08/21/2009 - 12:40
Here is an interesting article about a study of current "cloud" computing services, which "seem to come up short. This really should not be a surprise. Businesses that think cloud computing services are going to be a panacea for their IT problems are going to be very disappointed.
First, cloud computing is just the latest IT industry buzz phrase, and is the latest in what is now a forty year history of selling old wine in new bottles. In this case, we are talking about very old wine indeed. Cloud computing is just the mainframe. And the mainframe was redefined in the early eighties as the mini-computer. And the mini-computer was redefined in the early nineties as client-server computing. And client-server computing became Web applications. And Web applications became Web 2.0. And Web 2.0 became cloud computing.
But all of those buzz phrases were and still are architecturally quite similar. The user is connected at a distance to a central repository of data. However, as the distances between the user and the data have grown, network latency, or how long it takes data to travel across the network between user and repository, has become a big problem. The Internet offers virtually no control over latency, for a whole variety of reasons, including the fact that the Internet was never, in its original design, intended for real-time transaction-based processing (cloud computing).
The answer is robust local, high performance open access broadband networks, which allow two things to happen--you can move the cloud closer to the user, and you can control and limit latency. Distributed cloud computing improves performance and reduces or eliminates the single point of failure that is being designed into some cloud environments. Apple, for example, is building a giant data center in North Carolina. But what happens if that facility loses power in a major storm? Apple and other cloud competitors like Amazon and Google do create redundant data centers, but a few massive data centers can't solve the latency problem the way putting cloud servers on local open access networks can.
Submitted by acohill on Tue, 08/18/2009 - 14:43
Digital music downloads continued to gain a larger share of the music sales in the U.S. While CDs still are the most popular way to buy music, digital downloads increased in the first half of 2009 by 50%, up to 30% of music purchases. The iTunes Store is now the largest retailer of music in the country, with 25% of the total market.
The success of iTunes is due in part to the increasing availability and affordability of broadband--without it, the iTunes Store is unusable. Music downloads are a great example of how broadband creates new opportunities that did not exist just a few years ago. Broadband enables new jobs and new businesses.
Submitted by acohill on Tue, 08/11/2009 - 09:25
File this under "It's about time." Google has promised its new Caffeine search engine will be faster and more relevant. Why are they announcing this now? Probably because Microsoft's Bing must look pretty good to them. Nothing like a little competition to scare the complacent. While Google has gotten better at filtering out dreck, bargain travel sites, and link farm spam in the past couple of years, the search engine still coughs up way too many results that are not especially useful or relevant. Does anyone ever look past the second page of search results? In my experience, the relevant links disappear pretty fast after page two or three, but Google still seems to think returning 50,000 links is a good idea.
Submitted by acohill on Fri, 07/31/2009 - 08:26
Via Boing Boing, the entertainment industry has grandly announced that their customers should not expect to be able to play songs, watch movies, or read books "forever." Instead, you should only be able to do that "for a while." Okay, I made that last quote up, but that is, in effect, what they are saying. It is really is strange that an profitable and successful industry is so contemptuous of its own customers.
Submitted by acohill on Mon, 07/20/2009 - 09:05
Amazon may have inadvertently killed its own Kindle ebook reader over the past week. The company discovered that pirated versions of Orwell's 1984 and Animal Farm were available for sale on the Kindle bookstore. To comply with the copyright protection laws, Amazon removed the ebook versions from the online bookstore. But then Amazon also remotely deleted copies of the book from all Kindles and refunded the purchase price to the Kindle owners. So Kindle users woke up a few days ago to discover that Amazon had been rummaging around their Kindle, deleting stuff.
The outrage is understandable, and the issue highlights the difficulties of ebooks and copyright protection. Amazon was trying to comply with lawful request to remove pirated texts. And the difference between a paper copy of a book that has been printed as a pirated book and the same text as an ebook is that someone with a copy of a pirated ebook could, with some effort, but not a lot, make and distribute additional copies. So Amazon tried to protect the copyright owners but ended up alienating a lot of Kindle owners.
Amazon has since admitted it made a mistake and says it won't do it anymore, but the damage may already be done. It may dampen Kindle sales, but it may also dampen ebook adoption generally. Once unintended consequence: Kindle texts can be annotated with notes--the equivalent of writing in the margin of a paper book. When Amazon deleted user copies of the books, the company also deleted all the user notes, which were the rightful property of the Kindle owner. Oops....imagine if you had just spent hours reading that book and making notes for a term paper, and you wake up to discover all your work gone. You are not likely to buy another ebook for a long, long time.
Submitted by acohill on Fri, 07/17/2009 - 08:23
Google has announced a new service called Voice, which is supposedly a break through because you can give people one number and calls can then be routed wherever you like--home phone, cell phone, office phone, etc. It's a wonderful idea that VoIP telephone providers have been offering for years. Design Nine has used this kind of phone system for more than three years.
Google's promotion of this kind of service will help get more people interested in VoIP, but most people won't take advantage of it until they get better broadband connections that allow true open access networks with a variety of service providers. You can do most of the things Google Voice offers today with Internet-based companies like Vonage, but the quality of the calls varies widely with the time of day and your Internet access provider. The DSL and cable modem Internet providers hate independent phone service providers like Vonage because they siphon customers away from their own voice services. In a well-provisioned open access, service-oriented network, customers would have a choice of VoIP providers and most of them would have excellent voice quality because the network is designed specifically to support multiple providers at high standards of service quality.
Submitted by acohill on Mon, 07/06/2009 - 08:31
Michael Jackson's death crashed Twitter and several other online services, demonstrating the popularity of these things. But Twitter may be about to peak, as one company prepares to sell Twitter followers to advertisers.
Twitter is most interesting as an experiment in computing and social networking, with an emphasis on experiment. Twitter's popularity could diminish just as quickly as it rose if tweets start to be dominated by messages like "Buy Sugar Cola--It's good for you!"
Blogging has already passed its heyday. Blogging is not going away--in fact, it has proved to be an extraordinarily useful method of writing and disseminating news, information, and opinion. But hardly anyone still believes everyone will blog, and most now understand that blogs are just one more writing tool, and nothing more--a good writing tool, but that's it. Good blogs prosper because of good writers--just like every other kind of tool. Owning an expensive paintbrush does not make me Michaelangelo, and thankfully, we've passed through that phase of blogging where people thought a blog made them a good writer.
We're still trying to figure out what the long term purposes and uses of Twitter are--it's an interesting new tool, but not all of us need to tweet all day long.
Submitted by acohill on Thu, 06/25/2009 - 09:02
There are two kinds of spam--the obnoxious stuff that is clearly junk, and then what I call "legitimate" spam, although the word "legitimate" is probably not the right word to describe it.
Every morning, I have to wade through a bunch of email from legitimate firms offering legitimate services--business seminars, webinars, conferences, deals on their products. All real stuff, but also stuff I'm rarely interested in.
Email is a powerful tool that really has transformed the way we work, but we still don't have good, well understood rules for using it. In my view, most of these companies are abusing their email privileges by bombarding me with their email promotional offers. They think that sending one email or a week or even one or two a month is no big deal, but every firm that ever glompfed onto one of my email addresses is doing the same thing, which leads to the daily clogging of my inbox. And what that means is that I rarely bother to read any of them.
And in our personal lives, we also still don't have a good grasp of when and when not to use email. Look at this mess with the Governor of South Carolina. Somehow the private emails between him and his Argentine "friend" became public, and they are barely safe for work. What the heck was he thinking? If you are going to have an affair, at least have the good sense not to document it in electronic missives that often end up being backed up in numerous places beyond your control. If anyone thinks that using a Gmail account with a fake name somehow provides some protection, think again. Any electronic service provided by firms like Yahoo, Microsoft, or Google never throw away anything, because those emails can be mined for marketing info.
I don't know if Sanford was using Gmail to correspond with girl friend, but if he was, I can almost guarantee that ads for cheap travel to Argentina were popping up every time he logged into his Gmail account.
I'm reminded of the crusty old sergeant in "Hill Street Blues," who ended the morning staff meeting with the same admonition every day: "Be careful out there." The Internet is a messy place--businesses that want to attract customers need to be careful about spamming--even if they have the best of intentions, and we need to be careful about whom we correspond with and under what conditions. Email, like diamonds, can be forever.
Submitted by acohill on Fri, 06/05/2009 - 07:57
Each tool is different from each other, and each tool tries to apply analysis to search requests, as opposed to the "old fashioned" search that just dumps a list of unfiltered results in your lap.
Wolfram Alpha comes from the company that developed Mathematica, an extremely powerful piece of software used by mathematicians, scientists, and math teachers and students. Alpha tries to provide quantitative analysis to search requests. This works quite well if you enter things like math formulas or chemistry formulas. But if you enter something like "Blacksburg Virginia" it decides you must be interested in two places: Blacksburg, Virginia and Virginia, Minnesota, and computes the distance and straight line flight time between the two places. Huh?
Google Squared tries to take search requests and turn them into a tabular format. This seems to work quite well if you are shopping for something, but many other search terms I tried seemed to confuse it.
Submitted by acohill on Sun, 05/31/2009 - 07:56
I downloaded and installed Hulu Desktop this weekend, and I have seen the future of TV. The folks that designed this paid careful attention to the user interface, and the overall look and feel of this software is terrific. It is easy to browse, and you can drill down quickly into a specific area (e.g. Movie Trailers, TV Shows). I have a feeling the designers spent a lot of time looking at the iTunes Store and Apple's Cover Flow interface, because there are not only similarities, but improvements.
If I was a cable company senior manager, first I'd spend some time curled up in a fetal position bawling for Mommy. Then I'd call an emergency meeting of my staff and create an emergency task force to find a new business to get into, like becoming an open access digital transport provider. Once I did that, I'd call Hulu and make a deal to carry their "TV" programming.
Other losers: Google. Google senior execs should also visit the curled up fetal position, because Hulu has completed short-circuited the Google game plan. Hulu has cut out the Web browser, meaning Google will never see a single penny of ad revenue from Hulu Desktop. YouTube, which is a Google company now, is also a big loser. Compared to the stunning quality and ease of use of Hulu Desktop, YouTube looks like some old TV show from the sixties in black and white. In other words, YouTube looks old and tired.
Submitted by acohill on Fri, 05/29/2009 - 14:41
Sirius XM has released screen shots of its iPhone app for the radio service. The iPhone software will be free, but there will be a $3/month fee to listen to a select group of Sirius XM channels. In other words, for a very modest $36/year, you get Sirius XM on your phone.
Some pundits are pooh-poohing the development, but the iPhone software opens up new possibilities for Sirius XM subscribers without the requirement to buy the specialized hardware. The most likely new subscriber base will come from home-based listeners who want access to Sirius XM in the house but don't want the bother of buying the radio add-ons. If you have an Internet connection, in home WiFi, and some sort of iPod/iPhone stereo (there are hundreds of them), you can drop your iPhone in the base and listen to your favorite Sirius XM channel. This is already being done, using some of the Internet streaming services, but Sirius XM's paid content brings a lot of content you can't get for free.
This gets Sirius XM out of the car and into homes, at a reasonable cost. And it begins to move the company away from dependence on the satellite distribution model, which has always been a limiting factor.
Submitted by acohill on Fri, 05/29/2009 - 13:19
Hulu continues to push the envelope. The popular streaming video site has a lot of TV shows on it, and it just released a Macintosh application so that you can watch TV shows on Hulu without the bother of using a Web browser. It means a better viewing experience with higher quality.
It also means that the disintermediation of the TV business is well underway. The Internet is forcing out costly middle man businesses that were vital and necessary parts of the distribution chain in the old days, ten years ago, but are no longer needed. The rise of broadband and Apple's iTunes store was the end of the music store on Main Street--there are hardly any left.
In the TV business, the cable and satellite TV companies are the middle man. They don't own the content, they just pass it along. But if you can watch American Idol on Hulu via your Internet connection, why pay $60/month for cable TV service? We've been here before. The Internet is relentless, and the new is forcing out the old. The cable TV companies could remain viable, but they can only do so by changing their business model and becoming an open access transport system. They could actually make more money by doing so. But so far, none of them seem willing to even consider it. So they will likely go the way of the music store. In ten years, cable TV will be completely gone.
Submitted by acohill on Thu, 04/23/2009 - 14:15
A new report by Nielsen says time spent watching video online has increased in the past five years by 2,000%. And the number of people watching video online is increasing by 10% per year, meaning in about seven years, everyone will be watching video on the Internet. TV is dead, dead, dead.
And as I have been saying for years, the Internet business model being used today by the incumbents and smaller providers is upside down and unsustainable--bandwidth by the bucket does not work when users are asking to refill the bucket faster and faster each day, week, and month. And charging to refill the bucket does not scale up, as the bandwidth quickly becomes unaffordable when watching lots of video.
The solution is to change the business model. It's not hard, and the incumbent providers would actually make more money after the conversion. But some of them are going to go bankrupt rather than admit they need to change.
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