Sunday, October 31, 2010

The first Feldman File videoblog is live!

I've posted the first episode of the Feldman File videoblog to YouTube! Let's put it this way: It can only get better from here. I should have taken that scholarship to the Columbia School of Broadcasting when it was offered to me.

This week's episode covers the following news:
  • Barnes & Noble's NOOKcolor eBook reader (and Android tablet wannabe)
  • Sprint, T-Mobile and Verizon have all set prices and availability dates for their versions of Samsung's Galaxy Tab Android tablet
  • News from Adobe's MAX Developers' Conference
  • Sencha Animator, a timeline tool for animation using HTML and CSS3, goes into beta
  • Roku licenses the hardware and software behind its Internet set-top boxes to consumer electronics companies
  • IDC reports that Apple has become the world's fourth-largest mobile phone manufacturer, passing Research in Motion

Enhanced by Zemanta

Friday, October 29, 2010

The Kickstarter Revolution

Anyone who's run the gauntlet of trying to get funding for a creative project from foundations, or investments from angel investors or venture capitalists, knows how grinding the process can be. Kickstarter was started in April, 2009 as a service that helps writers, artists, musicians, filmmakers and entrepreneurs to get funding for their projects from individuals, rather than from foundations, corporations or professional investors. Kickstarter has two important provisions: Every project has to set a funding target and a deadline. If the project reaches the funding target on or before the deadline date, the project gets funded and the sponsors have to live up to their commitments. If the project doesn't meet the funding target by the deadline date, the funding commitments are canceled and no money changes hands.

When Kickstarter launched, it was far from certain that enough interesting projects would surface to fund, or enough people would provide funding to make it work. However, word spread about the service very quickly. There are no official statistics on the number of projects that have been funded or the number of people who have participated, but hundreds, if not thousands, of projects have been funded in the 18 months that Kickstarter has been operating.

One of the things that makes Kickstarter unique is that sponsors aren't investing in a business--they're buying a product or service. For entrepreneurs, that means that they don't have to give up equity in their company to get funding. There's no problem with securities sales. In addition, the risk to sponsors is dramatically limited, since unpopular projects don't get funded and the sponsors never have to pay.

I've purchased a set of prototyping icons and a tripod mount for my iPhone 4 through Kickstarter. The iPhone 4 tripod mount project is still underway, and it's impressive to see the effort being made by the two developers to manufacture the mounts. Many of the projects submitted to Kickstarter will be one-off efforts, and the artists and entrepreneurs will go off to do other things, but some of the projects will result in long-term businesses and artistic efforts.

Kickstarter is already taking over the role of book publishers by paying author advances and the costs of editing, designing and printing books, record companies by paying musicians' advances for recording, producing and mastering music, and angel investors by paying design and manufacturing costs for hardware, software and services. It represents a true revolution in the way that individuals and businesses can raise money to work on projects that they care deeply about.

There are already a number of other groups following the Kickstarter model, and more are sure to come, especially considering that Kickstarter's transaction partner, Amazon, only works with creators and sponsors with U.S. bank accounts. The Kickstarter model could work very well in Europe, Asia, Africa, South America and Australia--anywhere where some people have creative ideas and others have the money to fund them.
Enhanced by Zemanta

Wednesday, October 27, 2010

Roku to license its platform: The low-cost alternative to Google TV?

Engadget reports that Roku has begun licensing its hardware and software to consumer electronics companies. Its first licensee, Netgear, essentially repackaged the new Roku XD and is selling it at Best Buy, Radio Shack and Fry's. To date, Roku's market penetration has been limited by its distribution--prior to the Netgear deal, the only way to purchase a Roku set-top box was to buy it from Amazon or direct from Roku.

If you're a consumer electronics manufacturer, you can license the Google TV platform for free, but the hardware necessary to make it work is expensive: Consider that the least expensive Roku box sells for $59.99, while the Logitech Revue Google TV-compatible STB retails for $299.99. Even with a substantial licensing fee to Roku, consumer electronics manufacturers could add Roku capabilities to their HDTVs or Blu-Ray players for a fraction of the cost of the Google TV architecture. Shaving a few cents off the manufacturing cost of a product can make a big profit difference, and a Roku-based device has the potential to be much more profitable than one based on Google TV.

Even for manufacturers like Vizio who have developed their own Internet video capabilities, it may make sense to license the Roku platform and take advantage of its off-the-shelf ability to access Netflix, Amazon Video-on-Demand, Hulu Plus, Pandora, Major League Baseball, Vimeo, Sirius XM and many other content providers. Negotiating deals with content providers takes time and money, and licensing the Roku platform would allow these manufacturers to focus on manufacturing and marketing, not content acquisition.

Could Roku end up in as many devices as Netflix currently does? It's a real possibility.
Enhanced by Zemanta

T-Mobile to sell Samsung's Galaxy Tab for $399

T-Mobile announced today that it will match Sprint's price and sell its version of Samsung's Galaxy Tab Android tablet starting November 10th for $399 with a two-year contract and data plan. Its 200MB plan will cost $29.99/month, while the 5GB plan will cost $49.99/month, with discounts for existing T-Mobile customers. Prepaid mobile broadband plans are also available, but they're not cost-effective, and T-Mobile hasn't said that it will sell an unbundled version of the Galaxy Tab.

According to eWeek, Sprint's data plan options for its version of the Galaxy Tab are $29.99 for 2GB/month or $59.99 for 5GB/month. Verizon will only sell an unsubsidized version of the Galaxy Tab for $599.99, with a month-to-month 1GB data plan for $20/month. It's confusing, and probably deliberately so, but it looks like the best deal for people who want continuous data coverage but won't use a lot of bandwidth is the Sprint 2GB/month plan. Customers who will use a lot of bandwidth (primarily for video) should go with the T-Mobile 5GB/month plan. Verizon's price is appealing only for those customers that have to have a Galaxy Tab and will primarily use it on WiFi networks. For those customers, a WiFi-only iPad would be a better option.
Enhanced by Zemanta

Tuesday, October 26, 2010

New Barnes & Noble Nook Color Announced

Barnes & Noble has taken the wraps off its nook Color eBook reader/tablet (more on that tablet part in a moment.) The nook Color will be priced at $249 in the U.S. and will be available on or around November 19th.

Here are the basic specs: The nook Color has a 7" touch-sensitive display, is 0.5" thick and weighs just under one pound. It can store 6,000 eBooks, and storage can be expanded with a microSD card. It runs an unnamed version of Android. Unlike the previous nooks with their dual displays, the nook Color has a single display and virtually no physical buttons--almost all interaction is with the touchscreen.

Interestingly, the nook Color only has WiFi, not a 3G broadband interface, in order to keep the cost down. B&N hasn't ruled out offering a 3G (or 4G) version in the future. The company has started a developer program to encourage Android developers to build nook apps, but the nook Color has its own API. It's not currently compatible with the Android Market, and it appears that it's not likely to be compatible for quite some time, if ever. Lonely Planet, and Pandora have already signed on to provide apps, and B&N will include a few apps of its own (crosswords and sudoku were shown.)

B&N has added social networking features to the nook Color; users can recommend eBooks, newspapers and magazines on Facebook and Twitter, and can change their status on both services. The company also claims that it will have 100 newspapers and magazines available in full color when the color Nook ships.

Based on what B&N showed today, the nook Color probably won't have a very long life, at least not at its current price. At $249, it's expensive for an eBook reader, and as a tablet, it's extremely limited, with only a handful of apps, no current or forthcoming compatibility with the Android Market and not a great deal of incentives for developers to write custom apps. (B&N claims to have 20% of the digital book market, meaning that the 75% market share that some analysts have attributed to Amazon is probably correct.)

I suspect that B&N dropped the dual display to provide an out in the event that it loses the lawsuit filed against the company by Spring Design (developers of the Alex eBook reader,) or if Amazon decides to enforce its patent on eBook readers with dual displays. The current nooks' dual display is too much of a litigation lightning rod; getting rid of it will remove a big risk factor for B&N.

There was no word of B&N dropping the prices of its existing models, but I wouldn't be surprised to see the WiFi black & white nook drop to $99 for the holiday season.
Enhanced by Zemanta

Unintended consequences of the Cablevision/Fox standoff

The Cablevision/Fox retransmission rights standoff is now more than a week old. Neither the New York Yankees nor the Philadelphia Phillies made it into the World Series, so there's going to be much less demand for Fox in those cities come Wednesday. However, Dish Networks is the next service provider to be threatened with losing Fox's over-the-air stations, and its subscribers in Texas and the San Francisco Bay Area would lose access to the World Series if Fox pulls the plug on November 1st.

I wrote previously about the likelihood that these retransmission battles would result in binding arbitration being imposed, either by the FCC or the U.S. Congress. There might be a different outcome, however. You may recall ivi tv, the Seattle company that's retransmitting over-the-air signals from stations in New York City and Seattle to subscribers across the U.S. over the Internet. Ivi has been sued by just about every broadcast network and programming supplier, but the company is relying on a statute that's been on the books for decades that requires broadcasters to make their signal available to any cable operator, in return for fees paid by cable operators to the U.S. Copyright Office. These fees are then distributed to the broadcasters. In most cases, these statutory license fees are a tiny fraction of what broadcasters are asking for, and getting, from service providers for their retransmission rights.

If enough political pressure is applied, the Congress could repeal the statute that gives broadcasters the right to deny permission for retransmission and the right to ask for compensation. In that case, the law would fall back to the statutory license procedure that's still on the books. It would put local broadcasters that have been relying on retransmission fees for an ever-increasing portion of their income in a world of hurt.

The service providers would love to go back to statutory licenses, even if the license fee was raised substantially. Broadcasters will fight the change with every breath in their bodies. Both sides need to be very careful, because they could end up losing control of the negotiating process.
Enhanced by Zemanta

Working on "The Feldman File" video podcast

After writing about video and new media for five years, I think that it's time to launch a video podcast. One of my objectives is to keep costs down as much as possible. Last weekend, I shot a test episode, where I learned a few things:
  • I suck as a host. Okay, let me rephrase that: I need to work on my on-camera presentation skills.
  • Audio recorded on a consumer camcorder quickly goes out-of-sync with audio recorded with an external recorder. I'm now experimenting with a variety of ways of bringing the audio back into sync with picture (using the audio recorded from the camcorder as a scratch track for identifying sync points.) Update, October 26th: Singular Software's DualEyes looks like the synchronization solution I'm looking for. It's a standalone application that can synchronize the audio track from a camcorder or DSLR with externally-recorded audio. It can correct for drift (the problem I'm dealing with) as well as align tracks in time. DualEyes currently only works on Windows, but a Mac version is in the works. At $149 (on special for $119 until October 30th) it's the most cost-effective solution I can find, and it requires minimum effort.
  • I'm trying to do everything with Apple's iLife '11, which may or may not work, and avoid having to buy Final Cut Studio or Adobe's CS5 Master Collection. Either one will cost me at least $1,000, even with upgrade pricing from Adobe.
  • You can get a ton of light out of inexpensive fluorescent fixtures. I considered LED lights, but their light falls off quickly, and even the least expensive "no-name" light panels are around $300 each. Instead, I bought a pair of Flashpoint Cool Light 4s from Adorama with four 45 watt compact fluorescent bulbs and stands for under $200.00. Each fixture throws the equivalent of 900 watts of light at 5500K. They remain cool, require no special power or separate circuit, and replacement bulbs cost all of $6.99 each.
  • I'm using a Sanyo Xacti GC-102 camcorder and an Olympus LS-10 audio recorder that I've owned for some time. The Sanyo is priced comparably to Flip and Kodak models, but it has a flip-out LCD that lets me see myself while I'm shooting to insure that I'm framed and in focus. There's a fair amount of low-light noise with the Xacti, so I need to wear lighter colors without patterns to cut down on noise.
My video and audio editing skills are a bit rusty, and I'm on a learning curve with the iLife applications. There are no third-party books yet available, and Apple's online help leaves a lot to be desired. So, I'm taking my time. My hope is to shoot a usable episode this weekend and release it next Monday. I'll post new episodes here, on YouTube and iTunes. In the interim, if there's anything that you'd like to see in the podcasts, please email me at len (at)
Enhanced by Zemanta

Monday, October 25, 2010

Sprint offers Samsung Galaxy Tab for $399.99

According to Engadget, Sprint just because the second U.S. broadband service provider to price the Samsung Galaxy Tab 7" Android tablet. Sprint will sell it for $399.99 starting November 14th for customers that commit to a two-year data plan, or $599.99 for customers that opt for month-to-month data coverage ($29.99 for 2GB/month or $59.99 for 5GB/month.) From the Sprint website, it appears that the monthly prices for the 2-year and month-to-month plans are the same.

The option to buy the Galaxy Tab at a subsidized price is likely to drive many more sales than Verizon's unsubsidized $599.99 pricing. However, AT&T and T-Mobile will also be carrying the Galaxy Tab, and they might offer even more aggressive offers when they announce their pricing.
Enhanced by Zemanta

Thursday, October 21, 2010

Is binding arbitration coming in cable retransmission deals?

As of today, Fox's local television stations and cable channels have been unavailable to Cablevision subscribers for five days. Dish Network's retransmission deal with Fox runs out at the end of October, and the Fox channels may go dark on Dish as well. Cablevision has offered to enter into binding arbitration, but Fox appears to be afraid that it won't get what it wants from arbitration.

It's looking more and more like the U.S. Congress or Federal Communications Commission may step in and impose rules for retransmission negotiations. One line of thought is that broadcasters would be prohibited from withdrawing their over-the-air programming from cable, satellite and IPTV service providers while negotiations are underway. Cable networks would be exempt from this rule, but the problem is that service providers could simply stretch out negotiations indefinitely.

Here's where I think this will go: Broadcasters will be required to supply their programming to service providers for a limited time after the expiration of a retransmission contract (perhaps 30 to 60 days) to allow the parties to negotiate a new deal themselves. After that, binding arbitration would be imposed. This would only apply to over-the-air programming--Fox would be free to pull down its cable networks as soon as its contracts expire, as would NBC Universal or Disney.

Any such rules would be tied up in court challenges, potentially for years, but as retransmission standoffs escalate and more service provider customers lose access to channels they want to watch, there's simply going to be too much pressure on the U.S. Government to ignore. 
Enhanced by Zemanta

Wednesday, October 20, 2010

A take on today's announcements from Apple

Earlier today, Apple announced two new MacBook Air notebook computers (both available today) and a bunch of new Mac software and services:
I'll start (and finish) with iLife '11 quickly, only because it's primarily a refresh of iLife '09 with improvements to iPhoto, iMovie and GarageBand. iLife '11 will be included with all new Macs and will cost $49 when purchased separately.

The new MacBook Air computers probably got the most press attention. They're thinner and lighter than the previous MacBook Air, and one model has turned into two: An 11-inch model with a 1.4 GHz Intel Core Duo processor and 64 or 128GB of flash memory, and a 13-inch model with a 1.88 GHz Core Duo processor and 128 or 256GB of flash. Prices range from $999 for the 11 inch 64GB model to $1599 for the 13 inch 256GB model.

At today's event, Steve Jobs said that the new MacBook Air represents the future of notebook computers. I'm not so sure, nor am I convinced of the value proposition. Consider that a 64GB WiFi iMac sells for $699, and you can add a Bluetooth wireless keyboard to it for $69. So, for about $770, you've got an iPad that's easier to use than a Mac, has less expensive software and weighs less. Apple says that the iPad is for content consumption and the MacBook Air is for content creation, but there are plenty of content creation apps for the iPad (including Apple's own iWork suite).

The MacBook Air is also somewhat crippled as a content creation platform. It's got two USB 2.0 connections and a DisplayPort for an external monitor, but that's it. 256GB of flash is plenty for text-based content, but it'll get used up very quickly if you try to do image or video production. You can carry around a portable hard drive, but there goes the size and weight advantage of the Air. Also, the Core Duo will soon be two generations old, since Intel plans to start shipping Sandy Bridge-based Core i3, i5 and i7 processors in January.

In short, the MacBook Air remains a niche product, albeit less expensive than the previous generation. At the low end, it will compete with an iPad configuration that costs $229 less, and at the high end, for $200 more you can get a 15 inch MacBook Pro with a much faster Core i5 processor, more storage space, more battery life, more I/O options and twice as much memory.

FaceTime will link Macs, iPhones and iPad touches for video calling. FaceTime has become one of the most popular applications for the iPhone 4, and Apple's announcement today enables video calling on all of its devices equipped with a front-facing camera.

OSX Lion will implement multitouch gestures, although it will use a touchpad or Magic Mouse to do so, not a touchscreen. It will bring many of the familiar user interface elements from iOS to OSX, but as demonstrated today, the user interface metaphors look a bit "glued together", not fully integrated. I suspect that a lot more work will be done to make OSX look more like iOS.

Perhaps the most interesting announcement was the new Mac App Store. Steve Jobs said that 7 billion apps have been downloaded from the iOS App Store so far, and while the company can't hope to replicate that number on the Mac, it's trying to replicate the experience. Mac users will be able browse and search for apps just like they do with iOS, and they can purchase, download and install apps with one click. Developers will get the same 70%/30% revenue split that they get from the iOS App Store.

The Mac has always taken a back seat to Windows in the number and variety of applications available. Where there might be dozens or even hundreds of applications available for Windows in a given category, there might only be a handful of Mac apps. (Note that I'm comparing quantity, not quality, but I'm not convinced that Mac applications, as a group, are "better" than Windows apps.) If Apple can make it easier to buy and sell Mac apps, and can get Mac owners to "impulse buy" Mac apps as iPhone and iPad owners buy iOS apps today, it could go a long way to equalizing the perception that Windows has a better selection of applications.

To make this work, however, Apple needs to get Mac application developers to price their apps closer to those for the iPad than to Windows. $0.99 to $4.99 is an impulse buy, and Apple will need a steady supply of low-priced apps to drive volume and get users coming back again and again.
Enhanced by Zemanta

Verizon to ship Samsung's Galaxy Tab Nov. 11th

According to Computerworld, Verizon will ship the Samsung Galaxy Tab starting on November 11th for $599.99. The Galaxy Tab is a 7" tablet that runs Android 2.2, and it includes both WiFi and 3G CDMA wireless interfaces. Verizon will sell the Galaxy Tab without a contract, with month-to-month data service starting at $20 for 1GB.

I can understand why Verizon is following the same unsubsidized model as Apple uses for the iPad, but the Galaxy Tab is a poor value at $600. Consider that the 16 GB 3G iPad is only $30 more--$629--and it has a bigger screen and access to a much bigger catalog of apps. Also, Google itself says that Android 2.2 isn't designed for tablets, and only gave Samsung access to the Google apps and Android Market through a "special dispensation". The Galaxy Tab will be able to be upgraded to Gingerbread, Android 3.0, which will support tablets, but not until next year.

Verizon would sell a lot more Galaxy Tabs if it offered the same model for $399.99 on a 2-year data-only contract as well as $599.99 unsubsidized.
Enhanced by Zemanta

Tuesday, October 19, 2010

What does the OverDrive/Insight Venture Partners deal mean?

Yesterday, OverDrive announced a "major investment" in the company by Insight Venture Partners. OverDrive enables libraries to lend audiobooks, eBooks and videos, and Insight is an investor in Chegg and two other education-focused companies, as well as many other companies, including Twitter. OverDrive's press release says that the company will use the funds to fuel additional growth. The press release also says that OverDrive has been profitable for 20 straight quarters. Under normal circumstances, that would be a recipe for an Initial Public Offering, but these are hardly normal circumstances, and the market for IPOs is likely to remain small for at least another year or two.

One has to assume that some of the Insight investment is going to OverDrive's owners to allow them to partially cash out, but what about the growth opportunities for OverDrive? The company is in a perilous position; many libraries are adopting Amazon's Kindle readers (which are incompatible with OverDrive's service), even though Amazon's user licenses officially bar lending. Amazon hasn't taken any action against libraries, but the risk for OverDrive is if Amazon decides to officially allow lending and makes a big push into the library market. Amazon's pricing power and Kindle readers would make it very difficult for OverDrive to compete.

One potential opportunity (and this is speculation on my part) is that OverDrive might use part of the proceeds from Insight to acquire Findaway World. Who is Findaway World? They make an audiobook player called the Playaway that's designed for lending and education use. Each Playaway comes preloaded with an audiobook, and when a patron borrows a Playaway, they get the audiobook and headphones. You may think that the idea of selling MP3 players loaded with a single audiobook is crazy, but Playaways are very popular with both libraries and publishers. Libraries check the Playaways in and out just like conventional books. Publishers like the fact that audiobooks on Playaways can't be downloaded or copied.

There's not the frenzy of competitive activity in the audiobook business that there is in eBooks. OverDrive could build a strong competitive position there that would be much less vulnerable to competition from Amazon or other vendors. Findaway World would help OverDrive to sell many more products through its existing distribution channels, to its existing customers. Also, both OverDrive and Findaway World are based in Cleveland, OH, so it would be simple to consolidate the two companies. Finally, Findaway World knows how to build devices that can stand up to heavy usage, which would help OverDrive if it wants to develop its own media devices for the library market.
Enhanced by Zemanta

Sunday, October 17, 2010

Consider the source when you ask for advice

Y Combinator held its Startup School yesterday on the campus of Stanford University, and the entire event was streamed live on (The sessions have been archived for viewing here.) Some of the most interesting information came in the question and answer sessions, where many of the speakers were asked variations on two questions:
  • Are you funding the type of products/services that I'm working on?
  • What do I have to do in order to get funding from you?
It's natural to ask "people with money" about your ideas to see if they might be interested in investing, but it's also very easy to draw the wrong conclusions about their answers. For example, if they say that they're not funding projects in the area that you're working on, but they're very excited about another market or technology, it's natural to consider dropping your idea or modifying it to match the investor's interests. Before you do that, however, consider whether or not the investor is really in a position to judge your idea.

Most angel investors and at least some VCs started as entrepreneurs themselves; most of the angels got their initial bankroll for making investments from their startups. Many of them don't have a lot of experience beyond their own businesses and the few investments that they've made. If you ask them about a business idea that's outside their "comfort zone", they'll often give you their opinion, even if it's nothing more than a semi-educated guess.

Investors usually specialize in particular markets or technologies. It's always a good idea to know what an investor specializes in before you ask them to evaluate your business. You'll get better feedback, and you'll be better equipped to evaluate their answer.

Some investors will dismiss an idea, not because it's bad, but because they already have some investments in that area and are uninterested in making more. If they reject you, it doesn't mean that there's anything wrong with your idea, team or business plan--in fact, you might actually be potentially stronger than an investment that they've already made. (The risk in this case is that they'll tell their existing investment what you're doing.)

Finally, some investors will engage in "counterintelligence", and will deliberately mislead you because they already have a stealth investment in the area that you're working on. They may dismiss your idea or business, only to announce a few months later that they've funded a startup working on the same thing that you're doing, or something very similar.

For all these reasons, it's important to consider the source when you ask for advice, request funding or get feedback. Dig a little more deeply to understand the basis for what you've been told before you act on it.

Enhanced by Zemanta

Friday, October 15, 2010

Apple's iPad goes mass market

Last week, Bernstein Research announced that the iPad has become the fastest-selling consumer electronics product in history, and an analyst from Ticonderoga Securities who spoke with one of Apple's component suppliers said that the company is gearing up to sell 45 million iPads worldwide next year. Apple's putting in place a distribution channel that will be able to sell that many iPads. By the end of this month, Apple will have at least tripled the number of stores selling the iPad in the U.S. since it was first launched earlier this year, and one of the new distribution deals is a harbinger of much bigger deals to come:

Verizon's iPad/MiFi bundle is clearly an interim solution until Apple can start delivering a CDMA-compatible version of the iPad. More importantly, this announcement means that the rumors of a forthcoming Verizon iPhone are almost certainly true. Apple's January announcement is going to be extremely interesting.

Enhanced by Zemanta

Wednesday, October 13, 2010

New 300Mbytes/second SD Card Format

The SD Association, which develops standards for SD memory cards, has announced a new dual-row pin SD card design that can achieve theoretical bus interface speeds of up to 300Mbytes/second, which is more than enough for 4K cinema applications. (By comparison, the fastest data transfer speed available with the current single-row design, UHS, is 104Mbytes/second.) The new design is backward compatible with devices that can use existing SD, SDHC and SDXC cards (although devices will have to support the dual-row connector in order to take advantage of the full speed of the new cards), and will be available in both full-size and micro formats. The new interface will be formally defined in the SD 4.0 specification, which the SD Association expects to release in early 2011.
Enhanced by Zemanta

Monday, October 11, 2010

A crack in Public Television's wall

This may be an isolated case or an omen of things to come, but KCET, the primary Los Angeles affiliate of the Public Broadcasting System, the U.S. equivalent of the BBC or CBC, announced last Friday that it would drop its affiliation as of January 1st. KCET made the decision because the annual fees that it pays to PBS have been rising for years, to $6.8 million, which is 22 percent of the station's entire budget. KCET will replace PBS programming with classic movies, locally-produced television programs, and series and documentaries licensed from other sources.

KOCE, a public television station located in Orange County, California, south of Los Angeles, will take over as PBS' primary affiliate in the Los Angeles basin. The problem is that KOCE isn't as convenient for viewers to find, either over the air on on cable, satellite or IPTV, so the audience for PBS programming in the second largest city in the U.S. will undoubtedly drop. PBS will feel the pinch financially, since KCET paid nearly 4% of the network's total dues. Producers of shows on PBS are also concerned, because their underwriters, who use their endorsement messages in PBS programming to reach high-income and high-education viewers, will get smaller Los Angeles audiences. Some PBS underwriters may drop out and redirect those funds for other purposes.

For its part, there's plenty of programming for KCET to acquire. There are alternative public television programming services available, such as American Public Television. Some cable networks might jump at the chance to partially defray their production costs by licensing their shows to KCET for airing after they air on cable. If KCET holds onto enough of its audience, pledge income and underwriters to stay viable, other public stations will start questioning whether to leave PBS. In addition, some producers may leave PBS and offer their programming directly to public stations or through other distributors.

Thus, the biggest issue for PBS is what other public broadcasters take away from KCET's decision, which won't be known for at least a year. If KCET's success leads other big-market stations to pull out of PBS, the financial survival of the entire network would be in doubt.
Enhanced by Zemanta

Microsoft introduces Windows Phone 7 and partners' smartphones

Earlier today, Microsoft formally introduced Windows Phone 7 in New York, along with ten new compatible smartphones (nine at launch, the tenth in early 2011) to be offered by sixty carriers in more than thirty countries. Each carrier will sell a different set of phones; AT&T, for example, will offer three models, one each from HTC, Samsung and LG, all priced at $199, while T-Mobile USA will offer one model each from Dell and HTC. (Engadget has a complete list of carriers and the phones they'll offer, and Gizmodo has pictures of all the phones.)

The early reviews for Windows Phone 7 have been very positive. The operating system is a clean break from Windows Mobile and has more in common with the Zune UI than it does with Windows. The phones vary considerably in price and features, but they all seem to perform well, even though Windows Phone 7 uses a lot of animation in its user interface.

Update: Well, some of the reviews aren't quite so good after all: PC Magazine reports that the LG Quantum's slide-out keyboard has a "bizarre" keyboard layout and a balky sliding mechanism. Of more concern is that Windows Phone 7 doesn't want to reconfigure its display properly when the phone is moved to landscape format. The LG Quantum's keyboard forces the phone to be used in landscape format, so unless Microsoft fixes the problem soon, the Quantum and similar phones will be virtually unusable.

As you might expect, there's already a fair amount of "too little, too late" sentiment about Windows Phone 7. Those feelings may ultimately be justified, but Microsoft has done an excellent job of bringing top-notch smartphone manufacturers on board. The big question remains third-party developers. Apple and Google both have tremendous support for their smartphone operating systems, and RIM's BlackBerry, while not as well accepted by the developer community, has an entrenched customer base. The third-party app announcements and demonstrations at the launch event today were nice but far from overwhelming.

Windows Phone 7 smartphones will ship so late this year that they probably won't make much market headway until next year. Developers that are already struggling to keep up with updates on the iOS and Android platform are likely to take a "wait and see" attitude on developing Windows Phone 7 apps; developers of the most popular iOS and Android games may be offered financial incentives by Microsoft to port their applications. There's no rush for them to staff up in advance if they can get Microsoft to pay for the effort.

In the long run, Windows Phone 7 is likely to have more impact on HP and Nokia than it does on Apple or Google. Most developers, given the choice between supporting Windows Phone 7 that runs on smartphones from four manufacturers, or supporting WebOS that runs only on HP's smartphones, are likely to prefer Microsoft's platform. And, at least in the U.S., Windows Phone 7 will be one more nail in Nokia's smartphone coffin.

There were two puzzling aspects of today's announcements: The first was Microsoft's statement that based on feedback from developers and early users, it would release a version of Windows Phone 7 that supports cut and paste in early 2011. You would think that Microsoft would have learned from Apple's experiences with the iPhone and would have incorporate cut and paste from day one.

The second was that Verizon, the largest mobile operator in the U.S., was completely absent from today's announcement. You may recall that Verizon was Microsoft's exclusive carrier partner for the Kin, its feature phone that was a complete marketing and business disaster for both companies. Kin's failure may explain why Verizon won't be selling Windows Phone 7 smartphones any time soon. However, Verizon may also be gearing up to carry the iPhone, as has been rumored by the Wall Street Journal and other sources, in which case it really doesn't need Windows Phone 7.
Enhanced by Zemanta

Saturday, October 09, 2010

The value of ideas (hint: It's not zero)

I've read a few articles recently that argued that ideas, by themselves, are worthless. According to these writers, it's only when an idea is implemented (e.g., when a startup takes the idea to market) that it has value. In support of their argument, they cite the belief that angels and VCs pay much more attention to the team than to their idea; a great team with a bad idea can find a better idea, but a mediocre team, even with a great idea, is likely to fail.

I disagree with the argument that ideas are worthless. Every business starts with an idea, and if it's a bad one, the company will probably fail unless management recognizes the problem in time AND finds a better idea to implement. A good analogy is between potential and kinetic energy. An idea by itself has potential energy that can be released (converted into kinetic energy) if it's implemented properly. The better the idea, the more potential energy it has.

There are great ideas with tremendous potential that can't be released, because they're ahead of the market or the available technology. That doesn't make them worthless--it just means that they need to be put on the shelf for a while. There are equally great ideas that are implemented by mediocre teams and fail, not because the idea isn't good but because the team implementing it bungled the job. The implementation of the idea was bad, not the idea itself.

As for VCs and angels who believe that if a "great" team has a bad idea, it can successfully pivot and find a better idea, consider that for even the savviest investors, 70% of their investments fail completely, 20% survive but rarely return more than their initial investments, and if they're very lucky, 10% succeed and are either sold for a big profit or go public. In my opinion, it's at least as likely that the "great" team will go from one bad idea to another until it runs out of capital or blows apart.

One other point: The definition of a "great team" is very speculative. Enron had a widely respected management team, right up to the point that it imploded. The top management of the major commercial and investment banks were considered "Wizards of Wall Street", even though they didn't understand the financial instruments that they were buying and selling. We didn't find out how incompetent they were until they nearly dragged the world into a new Depression. It's very difficult to identify the teams that are going to work well before they've actually spent a considerable amount of time working together on the idea that's being funded (not based on their previous experience working together at other companies.)

Therefore, the quality of an idea is at least as important as the team executing it. If you discount the value of ideas, you do so at your peril.
Enhanced by Zemanta

Thursday, October 07, 2010

Follow the bouncing carriage deals

According to Multichannel News, AT&T has sent a postcard to its U-verse subscribers, telling them that they may lose access to a number of channels if the company can't negotiate acceptable business deals with them. Here are the dates on which a number of carriage agreements expire:
Just so everyone knows that AT&T means business, the Hallmark Channel and Hallmark Movie Channel have been off U-Verse since August 30th, and there's no word of if or when they're going to be restored.

As service providers knock more and more cable channels off of their systems to save money, they lower the value of their services to current and potential subscribers. There are a handful of channels that subscribers would likely change service providers in order to keep--the problem is that they're different channels for every subscriber. I'm a Comcast subscriber, and if they lost ESPN, I wouldn't blink, but if they lost Discovery, I'd be on the phone to DirecTV or Dish to schedule a hookup, which leads to the other problem--every service provider is playing the same brinksmanship games. I could switch service providers and still end up losing Discovery.

The inevitable future for all but a handful of cable networks is monthly subscriptions through Apple TV, Google TV, Roku, Boxee and the like. That's the only way to insure that they can reliably reach a critical mass of households.

Enhanced by Zemanta

Apple TV vs. Google TV: A clear choice for consumers

Now that Apple TVs are showing up in stores (and are being snapped up by customers), and Logitech has set a ship date and price for its Google TV set-top box, consumers will have a clear choice between the companies' fundamentally different approaches to user interaction.

Apple TV takes over the living room screen while you're looking for content, but once you press "play", it gets out of the way, and you watch television as you always have. However, it doesn't interact in any way with your existing cable, satellite or IPTV set-top box, and your existing video signal doesn't pass through the Apple TV box.

Google TV, on the other hand, turns television into a content source for the Internet, and turns your big-screen television into an oversized Internet browser. Your existing video signal passes through the Google TV box. It overlays a search bar and search results on live television. It puts web pages on the television screen, with the live television image as a small "picture-in-picture" overlay.  If you're a Dish Network subscriber, Google TV takes over the electronic program guide functions as well.

The fundamental question for consumers is: Do you want to browse the Internet on your living room television? If you do, Google TV is the way to go. Or, do you want to watch television on your television and simultaneously browse the Internet through a tablet or laptop? If so, Apple TV should be your choice. The "wild card" in all this is the fact that Apple TV runs iOS and could run third-party apps in the future. This would dramatically increase the functionality of Apple TV, although it would still be a separate content source, not a television pass-through device.

Many people believe that Apple's long-term game plan is to make much of the content that's currently available through cable, satellite and IPTV set-top boxes available through Apple TV, thus competing directly with the existing service providers. If that happens, Google TV's ability to pass through video from existing set-top boxes would no longer be an advantage.

As a practical matter, I think that the price difference between Apple TV and Google TV, and Apple TV's inherent ease of use, will be the most important factors driving sales for the holiday shopping season. Apple TV is $99 complete, while Logitech's Revue running Google TV will be $299.99 (Dish Network subscribers can buy it for $179). The Revue comes with an ugly QWERTY keyboard as its remote control; a slightly more elegant optional remote control can be purchased for $129.00, and an HD video camera for webcasting and videoconferencing will cost $149.99. (Sony's new remote control for its Google TV implementation looks like it was designed by the same team that did the Pontiac Aztek.)

My suspicion is that in-store demos of Google TV are going to go "off the rails" as soon as people pick up the keyboard and try to use the TV as a web browser. Apple TV is point-and-click simple, but when consumers realize that they have to type in order to use Google TV, interest is going to drop very quickly. I could be wrong, but I think that Apple TV will win the battle, at least this holiday season.
Enhanced by Zemanta

Tuesday, October 05, 2010

The old, old media

I've been thinking about how hard it is for a new media company to attract audiences of the size of old media companies, at least in the old media companies' markets. One impressive thing is how old the old media companies in the U.S. really are, and how long they've survived. Let's look at the companies that dominate U.S. mass media, based on when they (or their original predecessor companies) were founded:
The most recent company on this list was founded 40 years ago, and the next two were founded 87 years ago. There have been mergers and acquisitions, but these remain the leading media companies in the U.S. The media businesses of Yahoo and AOL are tiny compared to any of these companies. Google sells advertising connected to other people's content rather than creating content on its own, and while Facebook's audience dwarfs most of the major media companies, it's a stretch to call it a media company.

There are certainly other successful media companies out there, but they tend to focus on market niches. Discovery Communications, for example, focuses on science and nature, although it will expand into children's programming with The Hub, its joint venture with Hasbro, which launches later this month, and OWN, the Oprah Winfrey Network, which launches January 1, 2011. The National Geographic Society has published its namesake magazine since 1888, but formed its cable network as a joint venture with News Corporation (Fox).

Perhaps the formula for success as a new media company is to avoid what the old media companies are doing. Don't try to be a movie studio, a television network, a newspaper or magazine. It also means being independent of old media. If your business model depends on getting permission to distribute old media companies' content, or getting old media companies to distribute your content, your fate isn't in your own hands. In other words, don't play in the big guys' sandbox. Build your own.
Enhanced by Zemanta

Startups: Getting back to first principles

It's become so easy and inexpensive to launch a software or Internet-based startup that the current "leading edge" of thought is that startups should "fail fast" (make mistakes early) and then "pivot" (adopt a different strategy, or even develop a different product or service) until they land on a viable market opportunity. We've lost sight of some fundamental first principles that startup teams should think about before they write a line of code. These are first principles in the vein of "The Art of War"--how likely are you to survive engagements with customers and competitors.

For example, direct, head-on competition with entrenched competitors is likely to result in failure. If you're building a new search engine, you're likely to fail (see Cuil and endless other companies) unless you've got a parent company that makes more money than it knows what to do with (see Bing.) The best outcome in this case is that you'll develop some unique and interesting technology, and larger competitors will find it cheaper and easier to buy it from you than to build it themselves.

If you're planning to go after much bigger competitors, misdirect them and keep your mouth shut about your true intentions until you're too big to kill. Netscape was growing incredibly rapidly as a browser company, but Microsoft was largely ignoring it. However, as soon as Netscape announced that it was positioning its browser for running applications on any operating system, Microsoft saw it as an existential threat and did everything it could to destroy the company. Since Netscape still had tiny revenues, Microsoft could "cut off its air supply" by giving its browser and Internet servers away. Had Netscape kept quiet about its intention to turn its browsers into an application platform until it was big enough to withstand attacks from Microsoft, it would have survived. (AOL, which acquired Netscape, has abandoned all use of Netscape's brand name and products, and moved out of the last of Netscape's buildings in Silicon Valley in late August.)

Google learned from Netscape's demise and kept quiet about its long-term plans. It was a search engine, and search was at best a minor part of Microsoft's business. It generated advertising revenues, but Microsoft made its money through selling software, so that wasn't perceived as a threat, either. The first iteration of Google Apps was seen as a joke by Microsoft and dismissed. Google hired Andy Rubin, the founder of Danger (the developer of Sidekick mobile phones, which was subsequently acquired by Microsoft) and adopted the funky smartphone operating system (Android) that he had been working on. Again, it was under the radar and not worth Microsoft's time. By the time Microsoft fully realized how many of its businesses were under attack, Google was too big for Microsoft to kill.

If you're going into any market dominated by "old media" companies, position what you're doing as a way for them to retain market share and/or make more money, and make sure that they agree--otherwise, they'll kill you. Napster completely disrupted the business models of the big record companies, and they sued Napster out of existence, but not before they were crippled by music sharing. Apple stepped in and offered the record companies a way to make money from the growth in usage of digital media players. The record companies bought in, which ultimately resulted in Apple becoming the world's largest seller of music, and made the record companies dependent on Apple for their survival.

If your business depends on information or support from entrenched companies, you're going to have an uphill battle. Steve Huffman, one of the founders of Reddit, set off to create an airline ticket comparison service, Hipmunk, that makes it easy to find the lowest fares. This, however, threatens the airlines, which see it as decreasing their potential profits. So, Hipmunk has struggled to get access to the flight and pricing information that it needs for its service. The company has launched, but its most likely exit strategy (if it survives) is to be acquired by a search engine or a larger travel service.

When startups take on entrenched competitors, they almost always roll out the David and Goliath story. The reason that story has so much resonance is that the little guy beat the big guy, when in the real world, the big guy almost always wins. The lesson for startups is to avoid taking on the big guys until you're big enough to fight them as an equal.
Enhanced by Zemanta

Sunday, October 03, 2010

Panasonic's AG-AF100: A long answer to a short question

Panasonic showed a "70% complete" version of its new AG-AF100 Micro Four Thirds camcorder at DV Expo last week. The AG-AF100 will ship in late December at a price of $4,995 (U.S.). Dan Chung of DSLR News Shooter interviewed Panasonic's product manager for the camcorder, Jan Crittenden Livingston, and asked her why a DSLR user should switch to the AG-AF100. She went into a long rundown of all the features that the new camcorder has that a DSLR doesn't.

Having spent most of my career as a product manager, I sympathize with Jan's situation, but at the end of the day, the right answer is to focus on use cases rather than "speeds and feeds". If you're primarily a still photographer and want to capture a little bit of video as well, go with a DSLR. Any good DSLR from Panasonic, Canon, Nikon or Sony will do a far better job of shooting stills than the AG-AF100.

However, if your primary interest is shooting video, you'll have to add at least $1,000 of equipment to any DSLR in order to fix its inherent problems with video. You'll need to add a mounting system to make it handle more like a video camera, a viewfinder (either a magnifier/loupe attached to the LCD or a separate electronic viewfinder) and an external audio recorder. Even after that, you still won't get all the features that you'll get in a camcorder purpose-built for video, such as HD-SDI video out, timecode sync in/out and long record times on internal media (in the AG-AF100's case, up to 12 hours of continuous shooting on two 64GB SDXC cards).

If your primary interest is still photography or your budget is extremely strapped, buy a DSLR and the cheapest add-on hardware you can find, but if you can afford it, the AG-AF100 and future camcorders like it will be a better solution for full-time video use.
Enhanced by Zemanta

Friday, October 01, 2010

The Chicago startup competition this week that you didn't hear about

This was the week of TechCrunch Disrupt in Silicon Valley, where perhaps the biggest news was AOL's (or is it aol's) acquisition of TechCrunch itself. There was a startup competition in Chicago this week as well, midVentures LAUNCH, but it didn't get much press coverage, even in Chicago. I was very pleasantly surprised and encouraged by some of the startups at the event, and the health of the startup community in general.

First, we need to define the Chicago venture community as covering a lot more than Chicago. Some of the most impressive startups I saw at the event were from Indianapolis, Bloomington, IN, and even Bethesda, MD. Rather than being a standalone center for startups, Chicago is really the hub for ventures throughout the Midwest. Next, there were companies competing that are actually making money. TinderBox, for example, is already very successful "under the radar" with an impressive service for creating, managing and tracking proposals that's integrated with There were contestants with pre-release services that already look very refined: MyJibe is going after the market space with a personal financial management and budgeting service. They're targeting the local and regional financial services companies (banks and credit unions) that want online services to compete with those of much bigger companies like PNC, but don't have the resources to build their own solutions.

For all the hand-wringing over the lack of new hardware startups, the winner of midVentures LAUNCH was a hardware company. The winner, Wearable, makes the AirStash, a $99 wireless flash drive with built-in media server that fits into your pocket. It holds any SD card with up to 32GB of capacity and then shares the contents of the card with other WiFi-enabled devices. It also connects via USB and looks just like a flash drive to a PC. The AirStash is an impressive device, and it's shipping now.

The one thing still missing from Chicago that's holding down the number of startups is a large angel community. A large, successful startup that cashes out in an IPO or acquisition spins out lots of potential angel investors, and the only company in Chicago that's likely to be in that category soon is Groupon. However, those Groupon angels will fund other startups, and as those companies cash out, a new generation of angel investors will be born. That cycle is the backbone of seed funding in Silicon Valley, and it needs to be "jump-started" in Chicago, possibly through Silicon Valley angels investing in some Midwestern startups. They would have been very excited by what they saw, had they attended midVentures LAUNCH.
Enhanced by Zemanta