Exploring the impact of broadband and technology on our lives, our businesses, and our communities.
IP TV is exploding
Just weeks after Apple's video iPod was introduced to great skepticism (...who wants to download TV programs?), all the major studios are getting into this new business. The iPod was released with some primetime ABC shows available for download, but now CBS and NBC have announced plans to sell episodes of major shows for ninety-nine cents, bypassing the iTunes store and undercutting the ABC prices by half.
In the short term, this is a windfall for the studios. They get a one time revenue hit from the first airing of a show, and a bit more from reruns, but after that--nothing. Most shows never make it into syndication, and those that do don't always generate much additional cash.
So sticking the popular shows on a Web site and collecting a buck per download looks pretty good; you don't have to sell too many copies to start generating a significant stream of new "found" cash. Shows with a big fan base are going first, like "CSI" and "Law and Order."
I think a buck is a magic number. The shows are provided commercial-free, and the ability to watch it when you want, without commercials, is going to look pretty attractive to a lot of people. The studios win big with this, and they stand to make more, possibly, than from DVD sales.
Who are the losers? Advertisers have to be worried, as people suddenly have an alternative to "free" content. TV ads have become so long and so intrusive that paying a buck to watch your favorite show without ads could catch on quickly. And local TV stations that rely heavily on syndicated reruns may see ad revenue fizzle out as people decide to pay to watch instead.
Competition is a wonderful thing. Who would have predicted that a price war would break out this quickly over the cost of downloading TV shows? And who predicted even two years ago that all this would happen this quickly? It is another illustration of why it is dangerous to rely entirely on the past to predict where new economic development opportunities are coming from.
Updated 11/8/05:
Pixar Studios has announced that they have sold 125,000 short movies via the iTunes video store in the few weeks since it has opened. Steve Jobs, the CEO of Pixar, noted that the major obstacle to selling feature length movies is that "broadband is too slow in the United States." The emphasis is mine, but I find it interesting that Jobs qualified that statement; Pixar apparently does not see the same limitations in other countries.
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New wind turbine generates cheap power
A vertical axis wind turbine that has been under development for more than ten years is nearly ready for commercial use. Propeller-type wind turbines have been controversial because they are visually ugly, make a lot of noise, can kill birds, and are not all that efficient.
This vertical axis turbine, by comparison, does not have to be mounted as high to work, creates little noise, spins only as fast as the ambient wind (so is less a threat to birds), works in higher winds that propeller turbines, is much easier and less expensive to maintain, and is less expensive to build.
But wait, there's more. It also generates electricity at less cost than typical commercial fossil fuel systems, unlike a lot of other "green" systems like solar.
Will this solve all our energy problems? It won't, but it does illustrate that the emerging Energy Economy will have lots of different kinds of energy systems that will work better that what we have now, will have less impact on the environment, and may actually lower the cost of energy.
And there will be lots of new businesses to build, install, and maintain these new, highly diversified systems. New businesses means new jobs, so is your region including an Energy Economy strategy as part of its economic development plans?
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Is Tivo dead or alive?
Over the long term, I don't think products like Tivo have a future, for two reasons. First is more philosophical: If you can get any content you want on demand (like some kind of video program) via broadband, you don't need a device to store it. Second is more practical: If you do need something to store it, I think a "media computer" with a Tivo-like software program will be cheaper and easier to use, and will not require that you give away all your personal information (what you watch and when you watch it), like Tivo requires now.
Having said all that, the Yahoo!-Tivo partnership makes sense in the short term (next 3-4 years) because we have very limited broadband connections, and so what will become popular is downloading IP video programs overnight, storing them on your Tivo-like device (or your media computer), and watching them later.
This partnership creates, in effect, a new distribution channel that short circuits the traditional Hollywood system--competition, in other words, which is always a good thing. And it may sell a few Tivos as well, which is a major concern for Tivo, since they can read the writing on the wall too. They need to sell as many Tivos as they can over the next several years, before the devices become obsolete.
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Amsterdam gets it on community fiber
EuroTelcoBlog has a story on Amsterdam's community fiber initiative.
The Dutch city has committed to running fiber to every home and business, and is starting with 40,000 homes, or about 10% of the city. So over the next seven to ten years, everyone in the city will have access to community-managed fiber and a wide variety of private sector services--in other words, competition and choice. This citation from the city-issued report shows how serious the city leaders are:
"This enables our city to compete with other European cities. The fiber network delivers to Amsterdam an innovative and freely accessible infrastructure, suitable to support growth in demand for the next 30 years or more. In this way we ensure a wide open marketplace for innovative service-providers and economic growth, as well as a fast track for the smarter and cheaper delivery of care, education and other public services."
The project is particularly interesting because of its organizational component. A stock corporation has been formed (something I've argued for for years), and the city holds one third of the stock, local housing corporations hold one third (probably the equivalent of our HUD-style housing efforts), and private investors hold one third. It is a public private partnership, and telcos and other telecom players could invest in and profit from the shared infrastructure. The private sector ownwership componenent neatly sidesteps the "unfair competition" issue tossed around so casually in the U.S.
For American towns, cities, and regions, this is the competition. And there is another message here as well. There is a lot of DSL in Europe, and Amsterdam has said, with this initiative, "We don't think DSL is good enough."
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The golden age of newspapers
The media loves nothing better than stories about itself, so there is much handwringing in the media about the drop in newspaper circulation. I predicted this in 1994 at a meeting of newspaper folk who came to Blacksburg to hear about the newfangled Blacksburg Electronic Village thing.
What I told them then has not changed--newspapers have a golden future ahead of them if they would only stop thinking their job is to print the news on paper and toss those clumps of paper in people's driveways.
What papers have is an organization designed to edit and filter the news, and that is what is valuable, not the fact that they have a big machine designed to spread ink onto dead trees; the printing press is a byproduct of the news process, not the news process itself. But newspapers have trouble seeing that.
I talked to a newspaper person recently who asked, "How do we get young people to read the paper?" The short answer is, "You can't." They expect to get their news online, and so newspapers have to abandon paper and move to a new model of news distribution, using the Internet. And the paper has to do more than just stick articles designed for paper on the Web.
Why is it the golden age of newspapers? Because in a world awash in information, most of it suspect, an organization that does a good job of telling what the most important stuff is has nothing but opportunities ahead of it. But newspapers have to let go of paper, and dropping the word "paper" from their name would be a start.
Technology News:
Video iPod content set to explode
Anyone who thinks that the new video iPod is strictly a novelty item for teens and twenty-somethings should probably think again.
If a picture is worth a thousand words, what is a video worth? Could it be ten thousand words (about twenty pages)?
That sounds about right to me. Zoom and Go, a popular travel site, is putting their entire library of travel videos in iPod format. According to the site, that is about ten thousand videos.
Travel and tourism is a huge business, and travelers are interested in the best places to go, to stay, and to eat. Watching a short video clip of a hotel, restaurant, or attraction is far more compelling that reading about it, or even browsing a few pictures on a Web site. Imagine, as you are getting ready to leave on a trip, downloading directions, hotel information, video maps, and restaurant information straight to your iPod, and having, essentially, an interactive tour guide every step of the way.
It's just an early example of what will be a flood of video-enabled information designed for portable devices. One of the advantages of the iPod, oddly enough, is that it does NOT require an Internet connection. The one-button downloads and fast synchronization of files from your desktop machine make it incredibly easy to download gigabytes of information and then use it anywhere, without the fuss of finding a hotspot or cellphone connection.
As I wrote recently, Step One of your region's revitalized economic development plan may be to buy all your leaders iPods, and then show them how to use them.
Technology News:
The Internet Monroe Doctrice
Some bloggers are calling this simple four part statement a "Monroe Doctrine" for the Internet. The United States has made it clear that it is not going to give control of the Internet to the U.N. Good. If it ain't broke, don't fix it.
Technology News:
Sony hacks a computer near you
This article talks about Sony's Digital Rights Management (DRM) software that comes on Sony music CDs. The DRM works in part by installing a bunch of secret software on your PC, without your permission! In other contexts we call that computer trespass and/or illegal behavior.
This is just one more example of a long term trend in the music industry to treat customers--all their customers--as thieves, even in the absence of evidence. It's no wonder CD sales are down--who wants a music CD that takes over your computer, installs secret software, and changes your working environment in unpublished ways?
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Free speech fight on the Internet
Congress is fighting over a bill that would protect bloggers from having to file onerous reports on their activities. Part of the fall out of the 2002 campaign finance law is strict regulations on campaigning and candidate support. The problem arises because the law is so vague that a private citizen with a lightly read blog who endorses a candidate for election would fall under the regulation of the Federal Election Committee.
Most of the original sponsors of the bill agree that they never intended to try to regulate the speech of private citizens, but instead were trying to limit the influence of well-organized groups. But the Law of Unintended Consequences kicked in on this one, as it seems to so often when legislators are involved.
Blogging, in principle, is no different than the pamphleteering that was so popular in the early days of the country. Tom Paine, one of America's greatest political writers and analysts, was a blogger. He wrote down his own thoughts, published them at his own expense, and distributed his thoughts to interested readers. That's blogging, and I don't think a Federal Commission should be telling us what we can and cannot write.
What baffles me is how this has become a partisan issues. Both conservative and liberal bloggers stand to lose from limits on free speech. It is almost always the case that if you seek to limit the speech of your opponents in the U.S., the laws come back around to bite you. What might look like clever political strategy today could be disastrous a year from now. More voices is a good thing, and I don't see the need for limits on speech. Right or left, the more the merrier--that is what America is all about.
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Red light cameras cause accidents
Red light cameras, which are used at busy intersections to catch people running red lights, are being turned off. Aside from some very serious privacy issues, the cameras cause accidents. Intersections with red light cameras are getting 10% to 20% more accidents than before the cameras were installed.
The problem is that once people know the cameras are there, they tend to stomp on the brakes as the light changes, for fear of running the light and getting a ticket. The result is an increase in rear end crashes, as the hapless person behind them (also probably trying to sneak through the light) runs into the brake stomper.
It is a good reminder that technology sometimes creates problems rather than solving them. We always need to look carefully at the promises of vendors before buying new stuff.
On the privacy side, the red light systems have been heavily marketed by private firms that "manage" them system and take a cut of every ticket issued. This is a great pitch to make to cash-strapped government--more tickets, more revenue, and all costs outsourced. But there are some things that should never be delegated to the private sector, and law enforcement is one of them. Getting paid to write tickets invites abuse.
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