Content and services

It's always about the bandwidth (or lack of it)

Submitted by acohill on Fri, 08/13/2010 - 17:06

In this article that speculates about an Apple TV upgrade, there is an interesting tidbit that validates what I and others have been saying for a long time: HD content chews up bandwidth:

"...In turn, consumers would see a similar increase in streaming requirements. Xbox Live can stream 1080p video, but it requires 8-10meg broadband, which leaves an awful lot of people out in the cold. It has the option of downloading instead, but if you're out in the sticks on a 2meg stream you're looking at more than eight hours to download your film at 1080p. You'd best plan your Friday night viewing before leaving for work on Friday morning."

The discussion about the Apple TV is whether or not Apple will include the ability to show movies in HD 1080p format. The short answer is, "Not likely," because streaming 1080p movies and TV shows over the Internet requires a massive chunk of bandwidth--8-10 megabits. And that's REAL bandwidth, not the marketing happy-talk that always begins with "....up to..."

Notice that if you wanted to download that movie over your average 2 megabit connection, it would take more than 8 hours! And if you are on a cable modem connection with a few of your neighbors also trying to do the same, it would take a little longer, like never (ditto with a wireless connection).

The answer is simple: we need to switch to open fiber.

Why Bing is winning

Submitted by acohill on Fri, 07/16/2010 - 14:27

Bing has grabbed almost 13% of the search engine market share in the past year, and the Microsoft search engine appears to steadily getting more users. There are two or three reasons, I think. In my own experience, Bing returns fewer and better results, with less link farm clutter. The interface is better, and Bing is willing to send you other search engines, which suggests a certain confidence in their own results and/or a focus on helping you complete your search rather than stick as many ads as possible in your face.

Recent upgrades to two popular browsers, FireFox and Safari, also allow you to set the default search engine to Bing instead of Google. This simple one time change for users makes it much easier to hit Bing every time when you do a search.

Link farming: The perniciousness of Web ads

Submitted by acohill on Tue, 07/13/2010 - 08:54

I just spent a few minutes clicking around trying to find the Web site of a particular business. After four or five attempts to click through on links that I *thought* would go to the actual Web site of the business, I gave up. Every link took me to another link farm or worse, actually just clicked back through to the same page I left. Of course, each time I clicked, another list of Web ads got loaded into the page I landed on, and that's what much of the Web has become--just a snarled mess of link farms. The link farm sites don't have to be well-designed or particularly useful, because it costs almost nothing to build these sites, and even if only one person out of a hundred clicks on an ad, you can make money with it.

All those ads you hear on the radio and see on TV about making money on the Internet--there are really only two scams. One scam makes you a dealer for cheap, over-priced junk that you try to get friends and relatives to buy, and the other is building link farms.

And it is not just "I hope I get rich on the Internet" link farms that are part of the problem. There are a lot of well-financed commercial ventures that engage in this circular linking as well.

It had to happen: Facebook newbie phase is over

Submitted by acohill on Mon, 07/12/2010 - 12:42

Like all popular Internet services, Facebook has enjoyed rapid growth over the past three or four years, as the service added many hundreds of thousands of users a week (or more--millions in some past months). But that growth has finally stalled out, as everyone who wants to be on Facebook already is. Geometric growth is a wonderful thing, but there was always a finite limit to that growth. Even more telling, the amount of activity by registered users has also dropped.

Facebook is a handy tool for staying in contact with friends and family and for organizing groups for things as mundane as a family reunion or scout troop. The service also gets wide use for causes (Friends of Calico Cats, Save Lindsay Lohan from Herself, etc.). But I have observed this growth phenomena repeatedly with other services, dating back to the early nineties and the first "killer app," email. Eventually everyone that wanted one got an email account, and that was the end of the email boom.

Facebook is vulnerable to competitors and perhaps the biggest danger is not managing internal costs; the company must now trim costs and manage budgets closely, and this does not always happen in time following a rapid and prolonged growth phase.

Death of TV, Part XXII: Hulu Plus

Submitted by acohill on Tue, 06/29/2010 - 13:58

Hulu has announced a new subscription and ad-based service called Hulu Plus for $9.99 per month that will provide access to the full season of many "TV" shows. That's a heck of a lot less than the Apple iTunes Store, which sells shows for one or two dollars. Think of Hulu Plus as an alternative to paying for a cable or satellite subscription.

Is the age of blogs over?

Submitted by acohill on Mon, 06/07/2010 - 08:16

Lately, visiting some of my regular "regular read" blogs, I'm finding not only fewer posts but notes from the bloggers that after five or six years, they are turning the blog off or just posting a lot less. The comments all seem to run in the same direction: "I've said everything I have wanted to say." And regular readers of this blog may have noticed that I am posting a lot less than I was three or four years ago. Part of the change is due the the growth in Design Nine; we're planning and building more networks in more places around the country than we were three or four years ago. But the technology of broadband has also matured, and there is less to write about. But I'm not turning the blog off yet. There is plenty of broadband news, and lots of other interesting technology. Nor do I think the age of blogs is over, but I think the "newbie" phenomenon of blogs has peaked. As I have written in the past, good bloggers are good writers, and there are few good writers. Anyone can post a few odd items to a blog, but only a love of writing will sustain a blog over a longer period of time. The fact that some blogs are slowing or shutting down is a sign that this particular medium is maturing. Fewer, higher quality blogs are, all in all, a good thing.

More evidence TV is dead

Submitted by acohill on Wed, 06/02/2010 - 07:50

Here is an article that says the median age of traditional TV viewers has moved up to nearly 51 years old. For an industry that covets the 25-44 year old demographic, that has to be bad news. It explains why you see so many laxative,Viagra, and arthritis ads on TV--nothing but creaky and cranky old folks watching. A massive wave of tablet computers, optimized for video, are going to accelerate the trend away from sitting in front of the "TV." Indeed, the term "TV" is rapidly becoming an anachronism, as more and more people are going to be saying, "What's on the pad?"

Newspaper sells out iPad ad space

Submitted by acohill on Mon, 05/24/2010 - 13:48

The Australian, a major paper in Australia, has sold out the ad space on its iPad version of the newspaper. At least one paper intends to stay ahead of the news game and make the new medium work for its business. Good for them.

Google Music Store kicks Apple iTunes Store in the teeth

Submitted by acohill on Fri, 05/21/2010 - 12:53

Google has announced that the next version of its Android operating system will have something much like the Apple iTunes software and a companion music store.

Google TV kicks Apple TV in the teeth

Submitted by acohill on Fri, 05/21/2010 - 12:49

Google has announced the fall, 2010 availability of Google TV, which is a set top box but may also be built in to some new TVs. The little video that is embedded in the linked article shows an interface that looks remarkably similar to the interface used by the Apple TV appliance, which is also a set top box. Either Apple nailed the interface design for this kind of device, or Google could not come up with anything better, or both.

The problem I suspect I will have with Google TV is that I"m pretty sure the Google TV device will send everything I watch or anyone in my family watches to Google, where they will add it to the massive dossier they have already collected on me and everyone else in the country. Google TV will also conveniently, I'm sure, provide handy connections to other Google services like Google Docs. Google is going to take over your life, one little "free" service at a time, until you can't do anything on the Web without touching some kind of Google service. Google could easily build in an "opt in" feature that only allows them to collect personal information if you expressly agree, but their general tendency for other products and services is to collect first and ask later, or worse, include a requirement to let them have all your personal information in return for the "free" service. It's a Faustian bargain.

Microsoft sides with Apple, supports HTML5 and H.264

Submitted by acohill on Tue, 05/04/2010 - 08:11

Microsoft has announced that for Internet Explorer 9 (IE9), the company has a preference for HTML5 and the H.264 video codec. Flash plug-ins will continue to be supported, but IE9 will only have native support for H.264. This follows on the path blazed by Apple, which decided a while back not support Flash at all on the iPhone and iPod. The controversy has heated up with the release of the iPad, which continues the Apple strategy of no Flash support at all. With both Apple and Microsoft coming out against Flash, Flash is essentially dead, and Adobe has lost this battle. Some years ago, Adobe elected to "win" by buying up competitors and killing off their products rather than competing on price. As a result, professional graphics designers and Web designers have fewer pro-level tools to choose from and much higher prices. Adobe is now beginning to pay the price for its monopoly-style attempt to control the marketplace.

Will the iPad save the publishing industry?

Submitted by acohill on Mon, 04/05/2010 - 13:27

This article from Cory Doctorow is similar to a couple of other contrarian articles that have come out in the past week--they all complain about the perceived "closed" nature of the iPad and/or say that the iPad is not going to save the publishing business.

Doctorow complains that there is little opportunity to hack the iPad; he is coming at this criticism from a hardware perspective. He wants to be able to open it up and do stuff with innards, and talks about how great the Apple II was because you hack that to your hearts content. But I remember those days, and did a fair amount of hacking myself. While it was fun, hackers back then were still a minority, and they still are today. It is pretty hard to make something that weighs a pound and a half that you can hold in your lap AND take apart and mess around with. If Doctorow wants to hack stuff, well, that's what the Arduino is for. I would have killed for an Arduino back in the Apple II days. I don't really get his complaint here, as there is plenty of stuff that can be nicely hacked, but that's not the market Apple is going after.

But I would argue that the iPad is very open--from a software perspective, and one only need look at the three thousand plus applications that already run on the iPad. Most of these apps are being written by small, wrote it in my bedroom, software outfits--the very kind of "hacker" types that Doctorow claims are locked out by Apple. Before the end of 2010, there will be tens of thousands of apps for the iPad, because Apple has created great software development tools that make it really easy to write software for the iPad.

Doctorow, like Jose Vargas and many others, also insists that the iPad is not going to save "traditional" magazine and newspaper publishers. I agree, but I think they are missing the point. The iPad is not going to help magazines like Time and Newsweek. But Apple's end to end publishing model that includes the iPad and the iTunes Store makes it possible for almost anyone to go into the publishing business. And so the big traditional media rags like Time and Newsweek and many newspapers will continue their slow decline toward irrelevance. But in their place, a host of new publications, with new pricing models, new editorial and writing models, and more relevant content will take their place.

The iPad is not going to save traditional media, unless traditional media wants to change to adapt to the times. Instead, the iPad is going to be a boon to new media, in many forms--the written word, the drawn image, the video, the TV program, the game. We will not know the full extent of the iPad's influence for at least a couple of years, but I think its effects will be more far-reaching than the iPod.

Apple forces Amazon to change pricing

Submitted by acohill on Thu, 04/01/2010 - 14:01

Earlier this week, I wrote how Apple is forcing publishers to move away from Adobe's buggy Flash plug-in, which is used for multimedia content display. Today, this article comes out about how Apple's pricing for books in the new iPad bookstore has forced Amazon to change its pricing model. Amazon was telling book publishers what they could charge for ebooks using the Kindle distribution system. Publishers didn't like that, and Apple took a different approach, giving publishers more flexibility in setting the price of a book, and taking a straight revenue percentage for distributing.

Apple gets criticized for using its muscle to make deals, but the deals it makes usually end up benefiting both buyers and sellers. And the overall lesson is that Apple's general approach--open access to markets achieves success--is lesson that is slowly gaining headway in the broadband world.

iPad Content Ready to Roll

Submitted by acohill on Mon, 03/29/2010 - 15:45

MacRumors reports that National Public Radio (NPR) and The Wall Street Journal are already getting ready to roll out Web sites designed specifically for the Apple iPad. Expect many more newpapers and magazines to announce iPad versions of their content over the next several months, with the iPad set to ship to buyers in the next 30 days. One of the interesting side effects--Adobe may have lost the Flash war. The content providers are beginning to report that they are creating "Flash free" sites. Apple has long contended that Flash, used for many kinds of multimedia content on the Web, is buggy and slow compared to using Java and some other video protocols.

Is pay for content doomed?

Submitted by acohill on Tue, 02/23/2010 - 09:07

This article suggests that pay for play is doomed, because no one (according to the data) wants to pay for content.

The problem I see is not paying for content, but pricing. Newspapers and magazines have not adjusted their cost/pricing models to adequately reflect the new distribution costs, which are effectively zero. The Apple revenue share model that is being delivered with the iPad is going to fix this, as it provides a worldwide distribution network for news and magazine startups.

For example, which is better? A million subscribers paying $5/year for an iPad delivered monthly magazine, or 50,000 subscribers paying $20/year? I think it is the former, because the barrier to making the next sale is 75% lower. I'm pretty sure I could produce a pretty nice magazine with a lot of original content on an editorial and writing budget of $5 million/year. Online music took off when Apple changed the pricing structure by creating a low cost distribution system that let the little guys compete with the big guys. The same is about to happen with print, but the big winners will be start-ups.

Community perspective: Guess what? Magazines delivering their content via the Apple Store don't have to be produced in New York any more. Writers and editors can live anywhere in the country with good broadband on Main Street and good broadband at home. But work from home writers, editors, and graphic artists will want business class services, with symmetric bandwidth. That means DSL and cable modem services won't draw these kinds of knowledge workers to your community. Open access fiber, designed right, will attract them.

What a surprise: Higher prices dampens sales

Submitted by acohill on Tue, 02/09/2010 - 14:55

In a shocking discovery, music publishers have found that the law of supply and demand works. Apple loosened up pricing rules for music on the iTunes Store last year. Record companies immediately raised prices. Buyers immediately bought less music. The record companies are shocked, shocked that buyers don't want to pay more. What could have gone wrong? Higher prices signal less supply, and in turn, demand tends to drop. Record companies might want to send a few of their high paid execs back to high school to retake an economics class.

Agency model = Revenue share

Submitted by acohill on Sun, 02/07/2010 - 12:08

Apple, as the company has in the past, has begun to upset, er, apple carts. With the announcement of the iPad, Apple also announced a book section in the iTunes Store, with a business model that is exactly the same as the hugely successful music model they use. For both books and music, Apple will collect 30% of the sales price of the item, and the publisher/seller collects 70%. The seller of the item sets the actual price. This is called the "agency model."

Whose apple cart is upset? Well, it is Amazon, who has insisted on setting prices for publishers that sell books for the Amazon Kindle. This has irritated publishers, who think that popular and fast selling items ought to be priced differently, and conversely, slow moving items should be able to be reduced in price. It is a simple, time tested model that helps keep supply and demand in balance.

Amazon got away with it for a while because they had the only popular ebook reader. But now that Apple has announced the iPad, publishers are likely to abandon the inflexible Amazon. Look for the Kindle to appear in supermarkets in a few months, mixed in with those remainder books for $4.99.

What does this have to do with community and municipal broadband? Well-designed open access, open services networks let providers set prices, and simply take a revenue share that helps pay for network operational costs. This approach encourages innovation and competition among providers. Insisting on fixed prices (the Amazon model) drives service and content providers away.

Apple's iSlate (or iTablet) is going to transform publishing

Submitted by acohill on Tue, 01/05/2010 - 10:15

Here is a roundup of rumors about the new Apple tablet. Apple has announced a media event late this month, but is not saying what the announcement is about. Until very recently, most pundits were guessing Apple's table computer would not be announced until June of this year, but I think the increasing interest in the Google Android phone may have caused Apple to move up their announcement to suck all the oxygen out of the room and take the media focus off Android.

If that is Apple's strategy, it is likely to work. The iTablet or iSlate (nobody really knows what the final name will be) will relegate the Amazon Kindle and other bookreaders to strictly second tier status, much like the iPod put all other MP3 music players into a permanent also-ran status, and completely transformed the music industry.

There is still much debate about whether the new device will have an iPhone style interface or a Mac style interface, with the conventional wisdom betting on the iPhone. But what a lot of people forget is that it probably does not matter very much, because the iPhone is a Macintosh underneath. Every single iPhone has the full power of a desktop or laptop Macintosh. So the iSlate may look more like an iPhone, but as it evolves, Apple can easily and quickly add more functionality just by peeling away the cover on the hidden power.

Why is this device going to be revolutionary? It won't be just the technology--Microsoft has a tablet operating system for years. What Apple is likely to unveil along with the iTablet is a new section of the iTunes Store, stocked with magazines and newspapers. iSlate owners will be able to subscribe to a wide variety of publishing content and get the content wirelessly on their iSlate. This will save the rapidly collapsing magazine and newspaper businesses, which have been unable to find or build their way out of the two century old paper-based distribution model. With the cost of distribution of a newspaper or magazine slashed to nearly zero, papers and magazines will be able to focus on high quality writing and reporting, which is always in short supply.

As with other breakthrough Apple technologies, new kinds of opportunities will emerge quickly, creating new businesses and jobs where none existed before. One big sea change will be in higher ed, where colleges and universities that are smart will simply issue every student an iSlate on the first day of freshman year. Faculty will be able to provide their students with very high quality (book quality) class notes, multimedia presentations, and even administer tests via the iTablet. Can't they do all that now? Sure, but not with the kind of high quality interface and superb usability that the iSlate will bring. And textbook prices should come down, although some textbook publishers will resist.

The iTablet will allow new college textbook writers to enter the marketplace quickly and easily, just the way the iPhone App Store has created thousands of new software publishing businesses. Writing a textbook will no longer require years of negotiation with publishing houses still operating on a business model developed during the era of Charles Dickens. Instead, textbook writers will be able to market directly to faculty at colleges and universities, with the textbook distributed at very low cost via the iSlate Textbook Store.

The big, sheet of paper size screen of the iTablet will allow colleges and universities to create "virtual registrar" interfaces that will give students the ability to fill out and submit forms quickly and easily from anywhere, with much better interfaces and ease of use than Web forms (because of the direct input pen interface).

The iSlate will also boost TV show and movie sales, with the existing iTunes TV/movies section all ready to send video content directly to a large, comfortable, easy to watch screen.

Apple has been planning this for years. Note that Apple has had wireless keyboards and mice for some time, and continues to roll out improved wireless devices like the popular Magic Mouse. Prop the iTablet up on a desk, start typing away on your wireless keyboard, and you have most of the functionality of a laptop.

If the first decade of the 21st century was dominated by Apple and the iPod, the second decade will be dominated again by Apple with the iSlate. Stand by and watch the fun begin as the publishing world is turned upside down.

Blockbuster stores to close

Submitted by acohill on Tue, 12/29/2009 - 15:05

The recently announced Blockbuster store closings will cut about 20% of the firm's stores. Blockbuster plans to replace them with kiosks and smaller stores in more densely populated urban areas. Blockbuster also has a Netflix-style subscription service, but will only one-fifth the customer base of Netflix.

Based on my own experience, Blockbuster may have alienated too many customers with their outrageous late fees. They "eliminated" late fees two or three years ago, but replaced them by billing you for the full retail cost of the DVD if it was late. Once you returned it, they credited your account for the DVD, less a "restocking" fee, which, of course, is a late fee by any other name.

In practice, the service being sold (watching a movie) is identical no matter which company you get the movie from. So the movie rental business is based 100% on the quality of service. And so this is why Blockbuster is losing--Netflix does not have the late fee baggage of Blockbuster, and Netflix service is great--so great, you don't even think about it.

Watching movies may not seem to have much to do with economic development, but communities that don't have their eye on this ball will be losers later, in two different ways. High performance community-owned broadband is the only way some communities are going to get to watch movies over the Internet. Cable companies are just barely keeping up with the bandwidth demands now, but as more homes dump driving to the video store in favor of watching movies on demand, legacy cable and DSL networks are going to begin to influence where people WON'T live. That's right--young professionals don't want to live anywhere now where broadband is not available, and within a couple of years, they won't want to live in communities that only offer "little" broadband--that is, the low performance cable and DSL services.

So attracting and keeping the right kind of workforce is a community broadband issue. The second issue is how broadband is changing retail. Video stores have served as anchor tenants in retail shopping districts, as the stores provide a steady and predictable flow of people to a shopping area. As the video stores disappear, what happens to those retail buildings? What happens to the rest of the stores nearby that relied on that traffic?

In our broadband planning work, we continue to see too many communities clinging to a 1960s style of retail planning and economic development. Retail is going away entirely, but the combination of big box stores and the Internet has changed it drastically, and few places can lead with retail as an economic revitalization strategy--perhaps none can. Instead, communities need to think more broadly about how to put empty retail locations to new uses, including office space for entrepreneurs, start ups, and established white collar businesses. And the way to start that process is to begin placing duct and fiber in commercial and retail areas. Call Design Nine if you want help with thinking about your retail and economic development strategies.

Does Google want to run everything?

Submitted by acohill on Thu, 12/10/2009 - 14:08

This Forbes article is illuminating, as it neatly describes the Google vision for taking over and dominating every minute of our lives. Google provides a lot of good and even great tools, but the question is, "At what point does Google get so big and so powerful that it sucks all the oxygen out of cyberspace?"

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