Quick comments on Cuban

Mark Cuban is a leader in thinking about the future of media. No one with more money is more open to challenging the existing paradigm. He knows what consumers want before they do, maybe because he is a consumer (though I have no idea how he could have time to be one).

His recent post about the issues that new media faces and internet TV in comparison to the two other businesses that have been decimated by the new distribution methods already (music, news). I highly recommend it. I want to say that he agrees 100% with what I've been writing recently. I have been advocating for the cablecos who already control the pipes to take advantage of their monopoly on delivery and get the on demand content to a higher level and basically shut down all of the upstart web companies (though I love them so much).  However, he raises issues I haven't gotten to yet, so definitely give it a read.

Here the main argument against internet TV:

The path of least resistance to get TV, is turning on the TV. It works. It works fast. It’s reliable. The product is consistent and equal for everyone. It is predictable. The best content is available first on TV. The same can not be said for internet delivered TV. In fact, its the opposite. You have to work to get your internet TV to work. Which site has which content changes. Which content is actually available changes. Internet TV quality is not consistent from usage to usage. Internet TV requires upgrades to software to stay compatible which creates work (your next flash/silverlight/quicktime upgrade is when ?). The experience is not consistent from website to website. So every time you want to sample something new, you never really know what to expect. TV is the no work platform relative to Internet TV

I think his definition of Internet TV is too narrow. Based on his narrow definition, he is definitely right. A lot of the advantage traditional TV has is due to legacy content partnerships based on the distribution monopolies that cablecos had. There is no reason it has to stay that way.

However, cablecos should be upgrading the software (and remotes) on the set-top boxes they rent. As you know, I think that's the way to crush internet video startups, grab new media ad dollars, and justify their new emphasis on broadband pricing tiers (or other price increases). To me, his arguments in favor of cablecos dominating are the same as why an internet company would dominate in the absence of a cableco pricing per byte (which is probably why Hulu has seen such impressive growth). Sure, the cablecos could do it, but that doesn't mean the right startup isn't already there (e.g., TiVo or boxee). There should be a lot of OS/interface options to choose from, and they all should just work.

And, frankly, my cable (from Time Warner Cable) is often not working. My HD channels will go out, or onDemand won't work. And, the choices on any channel are constantly changing just like they do on the web. Further, the argument that 'which site has which content changes' is just as true if you replace site with channel. So, regular TV is just as frustrating as Internet TV.

And, while his argument for/against a la carte pricing may seem slightly insane today. It isn't. There is no reason to bundle shows together on a network. That is an artifact of a legacy distribution method. If we had to buy individual groups of television shows like we buy tickets to sporting events, we would not buy tickets to see Nets vs. Bucks when, for the same price, we could buy Cavaliers vs. Lakers.  But, the way ABC chooses the Sunday Double Header shows that people will pay for good content (even if they just have to pay attention).

He ends with this:

In order to be sustainable as a platform, there has to be a way to pay for it. TV is winning this battle and by all appearances is advancing further, faster in a more standardized way than Internet Video. Hard to believe, but you need to ask yourself “Who would you rather depend on for open platforms and standards for advertising, google or cable/satellite/telcos”.

He is right, of course. That cable/satellite/telcos are more likely to make this happen, but I think that consumers don't want Internet Video. They want video on demand. Right now, the internet does a better job of providing options/selection, even if you don't get the benefit of the big screen TV.

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Hulu is actually video on demand, not online video

I want to formally suggest that we stop thinking of Hulu (and others like it) as online video and more as video on demand. Hulu competes with youtube in name only. The products are different. Hulu is selling video on demand. It competes with regular tv, timeshifted tv, dvds, and video on demand offerings from other sources (cable, netflix, etc).

Related: boxee is asking people to help them write their pitch to get Hulu back. Personally, I think too many of the users complain that the content owners should basically just give their shows away. They complain when there are more ads. They complain when they would have to pay for it. They talk about downloading shows as 'stealing' and make it sound like civil disobedience. I want free stuff as much as the next guy. But, I will not delude myself into thinking that because I know how to steal, it's ok. That's like walking into a bodega and stealing a pack of gum because the gum company was doing a free-sample promotion on the street the other day. These people are hurting their case and only making content owners more nervous about the internet.

Just to be clear, despite recently writing on the side of content owners, I do think that a lot of what they do is potentially not as valuable as it once was. The drop in costs of advertising and proliferation of outlets to reach consumers really should change the economics. It's hard to think that the networks were actually in the business of matching advertisers with receptive customers, rather than making the great content we've been enjoying for all our lives and selling it (that's the movie business). The content has always been a loss leader. If we accept that, it's lot easier to accept that people in production are probably overpaid. It's not as complicated as it once was: technology makes it easier to produce and the distribution is getting to be almost free. There is maybe not a good reason for an actor on a sitcom to make $1MM an episode in the future. Hopefully, the dropping cost of advertising leads to cheaper prices for our toilet paper. Though, it would probably also mean more scarce, and therefore an increased price for, good content.

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The perfect set-top box: it's about the pipes and the remote

What would the ideal set top box have in it?
It definitely needs tv, maybe games, and it has to connect to my existing downloaded content and the most importantly it needs the internet (a DVD player would be nice, too, in the short term).

#1 on the list is definitely television content. There is hardly a way for anyone to do without the content regularly delivered via the cableco. Most content can be had on demand, but the live events and news are always going to need to be streamed. The 'guide' that shows you what is on and when is probably the biggest advancement of content consumption since the tv was invented. And yet, the potential is so much higher.

What about a google search? Or relevant information about what I'm watching? What about bringing my fantasy team into a page on the guide that updates in real time while I watch football (it's been possible for at least 2 years)? What about the recipe being made on the cooking show I'm watching? Or the IMDB page for the movie I'm watching? Maybe overlay it on the screen. Yahoo is still working on tv widgets, which is the beginning of a solution.

The point is there is lots of secondary content relevant to what I'm watching on tv that would be great to have along side it. There are opportunities for ads in the guide, which might bring the gatekeeping cablecos along. The box could provide suggestions of what to watch (like TiVo) but from the full content library (Hulu, Netflix, etc), not just previously recorded programs.

Which gets me back to a point I've been making for a long time: cable cos suck. By making it so hard for people to hack their own set-top box together, they have limited innovation substantially. There's nothing about what I've suggested above that you couldn't already do on your pc. The hard part today is incorporating the tv, which the cable companies walled-in (CableCARD was a poor attempt to fix that).

The biggest problem with existing set-top boxes is that they can only have one cable input, compared to the cableco box that has two (so you can record one thing while watching something else). Any 3rd party set-top box you get you has to take the one output that would normally go to the TV and be in the middle, which eliminates the two source possibility. This has managed to get me to pay them $7 a month per box. TiVo charges $12 per month. I do believe that they have a better product and it would be worth paying more for, except that they can't get two sources if you have digital cable. Has a culture that used to buy VCRs and DVD players really abandoned the hardware model? I'm not that sure. So, why can't people continue to pay a portion of a monthly charge to the cable company with the rest going to a company like TiVo, who also gets to sell the hardware. I really think people would pay for a the right hardware with the right software (I still believe Boxee could be that software).

With Obama talking about national broadband, there is a chance we can cut the power of cablecos and make everyone get a richer experience. It's possible, we nationalized the highways once-but that's another post (hopefully coming soon, but requiring actual research).

So, how would you control the ideal box I've been describing which has tons of different features and configurations. With a touch screen remote (like the ipod touch-which I mentioned wanting to use as a remote way back when). But, the tv experience is often a lean-back experience, the tactile feel of a real remote makes browsing without looking away from the tv much easier. Well, you could do like the old palms and have people learn different gestures to do specific tasks, or a swipe across the screen could change modes. But that might not be ideal. I think I would want like 4-5 physical keys to switch to my favorite settings/modes and a home screen with everything else. But, that's a more tactical implementation discussion. I believe people would get past it or that you could solve the browsing issues by having a full keyboard as well.

The remote really is the key. You could get Picture-In-Picture with the remote as a screen with little speaker to keep an eye/ear on when the game comes back from commercial. It could be where you keep your fantasy scores (or otherwise replace the laptop on the coffee table). The finger flick of the iphone would be a good way to browse the program guide without bringing it up on the screen if desired.

The beauty of the touchscreen interface is that its a blank canvas so you can do anything with it. The question is whether we are over engineering this solution. I might be in this exercise, but I think we could all stand to get more from our tv experience.

How would you change it?

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Boxee Money Makers

[So, immediately after I mentioned horror stories in cable company customer service, I got great service from my cableco. Although, that was in response to the literally immediate failing of my television and internet. Conspiracy? Prob not, unless it goes down tonight too]
Here are some of my ideas for Boxee to generate revenue. I'm focusing mostly on the video services, but Boxee also provides the ability to listen to music. [Also, please understand that I could talk for hours about each of these options. I tried to balance brevity with background.]

1. Get onto the cable or telco's set top boxes.
Cable companies control the television through their cable boxes. Getting into those boxes opens up a new world of potential user to your software.
This has to be the most unlikely of all of my suggestions because the cable companies don't want to give up control over the television. TiVo has been trying this strategy for a while with limited success. Even though they have gotten themselves on some Comcast and DirecTV boxes as a premium service, these agreements haven't reached their full potential. The cable monopolies continue to dominate. IPTV services like U-VERSE and FiOS might want a differentiator (which FiOS brought with whole home DVR).
However, for a long time the music industry thought it had a nice monopoly. As the distribution and consumption habits changed, Apple has taken control of nearly everything through iTunes (even though their DRM should turn off consumers and drive them to Amazon, but that's another post). Itunes even has made inroads into downloaded television programs and if they ever decide to focus on AppleTV, it could put a lot of pressure on the incumbent boxes. Maybe it's time for the cable companies to get out in front of this thing. The right software on an existing box can transform that loud, slow, unextensible box into something really strong. [Aside: it's amazing how lacking the existing boxes are. People are forced to put up with it because they don't know what could be better, but that's another post].
Why shouldn't the cable companies be happy to take $7 a month (what they get now) from any number of set top boxes and let box keep the premium above that?

2. Get on ANY set top box
There are tons of companies working on being the set top box that finally bridges the gap between computer and television. It seems unlikely that many of them will be able to successfully make their value proposition work to end consumers, unfortunately. The low chance of success of these companies could be an opportunity for Boxee to be basically outsourced UI design and help them conserve cash (especially right now). If you can be the software on every box, you can be the Microsoft of home media. You can make it easier for people to switch between boxes because of the common interface. That could drive hardware sales similar to sales of stereos and VCRs in years long since passed. Which could appeal to today's hardware companies.
Obviously this plan probably has a lot more development costs associated with it. Think of why they chose to build on Apple machines first, one type of hardware makes development way easier.

3. Make deals with content providers
Similar to how Netflix made a deal with Roku, why couldn't Boxee make a deal with Netflix? Why couldn't Boxee make deals with every content provider, Including the traditional networks?
If CBS needs more eyeballs watching its shows, wouldn't they be willing to pay a share of revenue for those eyeballs? Obviously, Boxee could be more targeted in its advertising than traditional television (as all new media products propose to be) so that should have value to advertisers and in turn content providers. This would be low-risk for the providers as it could be completely variable pricing based on the impressions, potentially with guarantees, etc.
Further, who knows how Hulu will be operating in a few years. Hulu could be buyers of original content not shown on TV first and basically become the world's first online 'network' with syndicated and original content (Boxee could become that as well, but Hulu has the head start here). That makes companies like Hulu and Joost and even YouTube potential partners (assuming they can figure out their own sufficient revenue streams).

4. Sell premium content
If Boxee provides the on-demand viewing we've all been waiting for, in addition to the helping us discover new content that we want, Boxee could sell downloads, rentals, individual channels (like a la carte pricing IPTV has been promising).
You can even leverage the social networks that Boxee is tapping into. When a friend buys a program, you could let them share a version that has commercials in it. Potentially, a whole load of friends would be buying the same content.

5. Launch an app store for plug-ins
Similar to how Apple does it with the iPhone. They provide value in the being the operating environment. If they can make plug-ins easy to buy and install, people might do it, but there are major hurdles to clear in order to get people to pay and download anything. Depending on how the above strategies play out, you may still have only a core of users who dowloaded Boxee already, in which case they would be more likely to pay for add-ons. I'm not sure exactly what those add-ons would look like, but that's why it's an app store and not a feature request. This is can be considered a modified 'freemium' model.

When I first wrote these down, I thought they were groundbreaking (or at least creative). Are they still that way? I'm not as sure. When I finally get to my post about the ideal mediacenter (based on technology that is around today), it will be more clear where I'm coming from.

However, Boxee's focus on Apple and Linux gives it a great foundation with people who are generally ready to find and install software. It also makes a bet on Boxee look a lot like a bet on Apple. The only real concern is whether they might be too early.

As always, readers, the floor is yours. What do you think?

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Election Results

Just a few quick thoughts on a politics. I do not claim to be an expert. In fact, I claim to be quite ignorant. I am mostly posting questions here, even if not phrased that way, and would much appreciate your input.

Listening to the pundits talk about elections last night drove me a bit crazy. However, I was definitely happy to hear that the Democrats were going more moderate overall. With a country this big, how can anyone not agree that we need constant compromise?

The fact the longest serving Senator just got convicted of a felony is maybe one of the scariest things I've heard.

I am happy that the Democrats do not have a super-majority, if for no other reason than that the system of checks and balances would become woefully out of whack.
There are problems with the two-party system, but I think there is little reason why any new potential member of Congress would go alone.

Republicans are already looking to 2010 as a possible repeat of 1994. Personally, I thought 1994 was the start of a pretty good time in the USA, but I was only 12. As they say, correlation is not causation.

Not that I am an expert, but I've been thinking about the structure of our government. Specifically, the relationships between states and the feds. The comparison to our major corporations that are called 'too big to manage' is very apt. The value of a state being in the union with another is that if one has a major disaster, they can count on the other to help bail them out of it. That could mean one state may be supporting others in most years. Very similar to a large corporation where one division is a cash cow funding everything else (e.g., Google with AdSense funding YouTube, etc.).

Not every issue needs to be a national issue. Some issues can be dealt with at the state, county or city level.

Also, I think this election (and coming recession) may have at least a short term impact on the personal accountability of Americans. I believe that sometimes things go wrong. I believe that by trying to legislate wrong-ness out of existence we are trying to pass on accountability.

All of these thoughts deserve a lot more conversation. I almost wish I hadn't started thinking about them. Any pointers to already written papers on these topics would be appreciated (please don't suggest the Federalist Papers)

TED Conference Video: Education Kills Creativity

Not much to say in addition, but watch this video. I only wish Sir Robinson would have provided a more concrete sample solution to the problem. Though, I suppose that giving concrete answers would defeat the point.



It's amazing. Here'e the direct link

A Thought on Earth Day

So, today was Earth Day, and I had a weird thought. When did people start using trash cans? I feel like I've been dragged to a lot of Colonial Williamsburg type places on family vacations and school trips, and I can't remember ever seeing a trash can.

I had a friend when I was in college who was an environmental engineer. She raised the issue to me that the rise of disposable cleaning products is the worst thing to happen to the environment, probably ever. At the time, I thought she made a good point. I am definitely someone who believes in the power of baby steps (which I learned from this woman). And, as I think about it now, I more and more look at the amazing amounts of waste we create every day. Especially with bottled water. I'm trying to do my part, so I've started carrying around a Nalgene bottle like a cruncy hippie.

I'm not worried about fecal matter (mostly because the enjoyment I get from pooping is too high to consider it waste). But, what about the toilet paper we use? There's a lot of paper being flushed down the toilet every day.

I can think of two potential solutions.

1. A butt brush - it's like a tooth brush, but for your ass. It would have to sit in some kid of sterilizing liquid, I'm thinking like the blue stuff my barber keeps the combs in. But then we'll have some harsh chemicals to deal with.
   

2. Reduce the amount of TP we use. I'm not talking about getting up with shit on your ass. I'm just thinking that, if you tear of 4 squares for each wipe, try to get it down to 3. If you're down to three, try 2. If you're already at 2, try to reuse the square you've got. Instead of starting in the center of the square, start on one side, then use the other side for a second pass. I'm calling this new campaign, Spare a Square.
   

I would love to have you join my campaign. Please let me know in the comments if you have any suggestions to further our goal and save the lives of some poor, defenseless squares. And don't try to tell me that you "can't spare a square".