Archive for September, 2006

Former Blockbuster Online Founder Joins Inflatable Madness

Sep 30

Posted by Davis in Disclosure - I own stock in co. mentioned, Netflix | 1 Comment

DVD Rental Central

David Perkovich used to be the Blockbuster’s Vice President of Online Subscription Services, but earlier this week he joined inflatablemadness.com as their CTO. Inflatable Madness is a media distributor that operates as one of the top power sellers on eBay and he will be helping to manage their proprietary software that allows them to monitor up to a million auctions at any one time. Perkovich’s may have only been a Vice President with Blockbuster, but he made his mark on the company when his site was choosen to be the genesis of the Blockbuster online program.

Originally Perkovich had started his own DVD by mail service through a subsidiary named Net Learning Inc. that he called DVD Rental Central. When it became clear that Netflix was starting to gain traction with their DVD by mail service, Blockbuster knew that they needed a solution so they turned to DVD Rental Central as a way to jump start their own program. When Blockbuster first purchased DVD Rental Central, they rebranded the site as FilmCaddy.com and quietely begun using it as a testing ground for what would later become Blockbuster Online. After Blockbuster moved FilmCaddy.com from the testing phase into the mainstream they rebranded the site as Blockbuster Online. Perkovich later left the company and started a movie trading website named Movie Bandits.

MovieBanditsMovieBandits Hosted on Zooomr

Movie Bandits worked a lot like Peerflix except you would mail your DVDs to a central location instead of directly to another customer. Movie Bandits was an interesting idea, but one that never took off. The registration on the site is still active, but currently nothing being hosted there. Interestingly enough though, like Netflix co-founder Jim Cook, Perkovich also tried to start his own Netflix for Wine program through a website named Wines-Shiped.com, but that never took off either and currently Movie Bandit’s parent company lists that domain for sale.

Snowflakes In San Francisco

Sep 29

Posted by Davis in Photos | Comments off

Snowflakes In San FranciscoSnowflakes In San Francisco Hosted on Zooomr

Robot Tells Reporter That Humans Taste Like Soylent Green

Sep 29

Posted by Davis in Uncategorized | Comments off

Thanks to TiVo I’ve seen every single Twilight Zone episode and one of my favorites is the ubber creepy episode To Serve Man. The episode features an alien race that promises to give away technology if humans will come visit them on their home planet. At the end of the episode we learn that To Serve Man is really the title of a cookbook. 8O

It may not be as creepy as the Twilight Zone, but NEC System technology was showing off a robot that they’ve trained to analyze wine by utilizing laser beams when the jounalist interviewing the robot put his hand in front of the sensor it told him that he tasted like prosciutto and that a cameraman tasted like bacon.

I’m always up for tasting a new wine, but I’m not sure that I want to be the one to verify the accuracy on this technology. Using a robot to digitally smell wine is certainly an interesting idea though and considering that they already they have professions where people train their senses to predict a good wine, using a computer to analyze wine from a chemical perspective makes a lot of sense.

From Zero – Download In Less Then 6 Seconds

Sep 29

Posted by Davis in TV, VOD | 1 Comment

The super sexy Tesla Roadster may be able to go from 0 – 60 in less then 4 seconds, but it doesn’t do you any good if you have to sit in traffic. This is the same problem that the movie industry has had with movie downloads. The idea of having content on demand is very exciting but between the large movie files and the slow download times, having to wait 4 – 6 hours to see a movie purchased over the net makes your high end tricked out PC feel more like a city bus when it comes to VOD.

All of this may be changing though with the introduction of new 4G wireless technology. In an invitation only event held in South Korea this week, Samsung showed 50 lucky academic and industry execs a demonstration of the new 4G information super highway by downloading a high definitition DivX film in less then 6 seconds over the net. This new wireless technology has already been embraced by Sprint and Intel and has cost over $100 million to develop. To highlight the speed and potential for the technology, Samsung mounted the network to a city bus on the island of Cheju, where they were able to acheive download speeds of 100Mbs while moving and up to 1GBs while stationary.

To date I’ve been very disappointed with the amount of time it takes to download content over the net, but 4G technology shows real promise in bringing a legitimate video on demand solution to consumers. While it will cost serious money to rollout across the US there is clearly demand for faster speeds and with the ability to add the technology to trains and buses this could make video on demand a legitimate option for morning commuters.

Hollywood Courts Congress With Fuzzy Math

Sep 29

Posted by Davis in Disclosure - I own stock in co. mentioned, Movies, Netflix | Comments off

Hollywood is out with a new study estimating the cost that piracy has to the US economy. Not surprisingly, they are using the result to try and convince Congress to put more stringent copy protections into place. In the study, they estimate that piracy costs the economy $20 billion a year in lost revenue and are emphasizing that this results in $800 million in lost taxes.

Piracy is definetely a problem for the movie industry, but I question whether or not it’s appropriate to point to the $20 billion number because they aren’t calculating how much revenue the movie industry is losing out on per se, but how much revenue the economy loses because Hollywood isn’t hiring more people and those people aren’t spending money on other goods. In fact, the study actually ignores what else consumers might be spending their money on with the supposed $6 billion a year that Hollywood is “losing” from piracy.

While piracy does have a cost, it’s hard for me to feel very sympathetic to the movie industry because despite the role that the internet has played in P2P distribution, they’ve still made more money off of DVD sales then they ever could have pre-internet. I have no doubt that piracy is a big issue, but Jason Schultze with the EFF, rightly identifies what the study isn’t telling you in the article.

“In other words, let’s say people are forgoing paying for $6 billion in movies by downloading or consuming illegal goods but end up spending that $6 billion on iPods, computers and HDTV sets on which to watch the movies, which leads to $25 billion in job creation in the computer/software/consumer electronics field,”

Using the same logic employed in the article, you could argue that Walmart’s aggresive cost cutting on DVDs is costing the overall economy $12 billion in lost revenue or that Netflix’s threat to the video stores is really costing the economy $5 billion a year, but the truth is that even though people can save money by using Netflix or shopping at Walmart, they will still spend the money that they saved and that money ends up trickling down into other areas of the economy even if it doesn’t end up in the fat cat movie execs coffers.

Partner or Compete? How TV Monopolies Benefit From Competition In The DVR Industry

Sep 28

Posted by Davis in Disclosure - I own stock in co. mentioned, HDTV DVDs, Media, TiVo, TV | Comments off

TiVo may be the brand name in the DVR space, but it’s no secret that they’ve faced a lot of competition from cable and satellite providers. Despite all of the doom and gloom that we’ve heard though, over the past few years, instead of fighting the cable and satellite operators head on, we’ve instead seen TiVo partner with these competitors and they now have licensing agreements with DirecTV, Comcast, Cox & the National Cable Television Cooperative (NCTC). Collectively, these relationships represent over 65 million potential homes that TiVo could find themselves in and with the DVR marketplace exploding in the growth, TiVo is well positioned to leverage these relationships to help accellerate their own expansion plans.

As cool as TiVo is though, they aren’t the only game in town. Some have argued that the cable and satellite providers are a threat to TiVo’s business model, but over the last few years we’ve seen a much different trend begining to develop in the television industry. While the MSOs are the most visible providers of set top boxes, they’ve actually had quite a bit of trouble building their own reliable DVRs and have turned to a number of different companies to meet their set top box needs.

On the surface a DVR seems like something that would be pretty simple to build. You would think that all you really need is a small computer and a large hard drive and you should be good to go, but in reality these machines take complex middleware, finicky hardware arrangements and important patent rights in order for consumers to enjoy the luxury of being able to time shift their television. As the MSOs have moved forward with their own expansion plans in this area, one thing they are figuring out is that it’s not an easy process.

Earlier this year, DirecTV was supposed to drop their relationship with TiVo after signing an agreement with NDS Group to provide their own high definition box, but after experiencing countless delays on their HDTV Frankenstein box and after seeing their competitor Dish absorb a devasting body shot in their patent loss to TiVo, DirecTV rethought their strategy and extended their relationship with TiVo for another 3 years. While industry watchers have attributed the move as a defensive play on DirecTV’s part, I believe that this move was part of a larger trend in the set top box industry. As the cable and satellite companies are finding out how unwieldy the DVR can really be, they’ve abandoned the go it alone strategy and are now turning to multiple solutions for their customers.

This does two things for the DVR industry. First, it offers more choices to consumers. Rather then forcing consumers to live in a world where they have to accept the terrible Gemstar TV Guide menu, consumers may one day be able to pick which software they want to run and decide how much it’s worth paying for. Whether it’s Microsoft’s foundation software, OpenTV’s participation TV or TiVo’s upcoming operating system download that is rumored to be in beta testing right now, despite all of the talk about cable and satellite doing it alone, it’s interesting to note that there are already four different software solutions for the Motorola set top boxes that have been unveiled over the last two years.

The second effect that these partnerships are having in the DVR industry though is that by partnering with so many firms, the cable and satellite companies have been able to better negotiate contracts then had they choose just one vendor to give exclusivity to.

To date we have largely seen this trend contained to the software part of the set top box business, but recently there have been signs that the MSOs are trying to bulk up their offerings on the hardware side as well. So far Motorola and Scientific Altlanta (who was later bought by Cisco) have been the largest hardware beneciaries from the growth of the DVR industry, but Pace Micro Technologies has recently been making a splash of their own.

Less then a month after signing an agreement with DirecTV to provide next generation HDTV boxes to their subscribers, Pace Micro Technologies has now begun shipping their standard definition set top boxes to Comcast as well. This marks the first time that Comcast has moved beyond Motorola for their hardware needs and is an important trend to keep an eye on. Thus far the Motorola set top boxes have received pretty lackluster reviews and they’ve been plauged with hardware and software issues, but by bringing Pace Micro on board, Comcast will not only have a new solution to offer consumers, but will also be able to leverage this relationship to force Motorola to improve the quality of their hardware and to think more critically about their pricing negotiations. While analysts may point to the threat that the cable and satellite industry poses to the DVR industry, I believe that as the MSO’s open up, the real competition will come from the various DVR players all fighting for the same cable and satellite subscribers.

While you can’t call up Comcast today and customize your DVR, I believe that in the future consumers will choose who the real winners in this industry will be and will be given the option of not only choosing whether they want Microsoft’s Foundation technology or TiVo’s Home networking solution, but will also be able to customize their hardware choices by adding on things like DVD players, burners and HDTV DVD support. The industry still has a long ways to go, but as the DVR becomes an integral part of the digital home, I believe that the cable and satellite industry will abandon the monopolistic practices of the past and will end up benefiting more from the intense competition in this consumer electronics space.

Sonific Offers 40,000 Tracks To Web 2.0

Sep 27

Posted by Davis in DRM, Music | 1 Comment

Over the last several years there have been a lot of companies that simply don’t understand the marketing opportunties that exist in a web 2.0 culture. Whether it was NBC not grasping the promotional value of having their Lazy Sunday clips on YouTube or EMI’s attempts to get the Grey Album mashup by DJ Danger Mouse censored from the internet, we’ve seen a lot of media companies choose to forgo free advertising in a desperate attempt to try and keep content locked within their own walled gardens.

Fortunately though there is at least one company out there that recognizes the opportunity that exists when artists partner with web 2.0 and they are taking some pretty interesting steps to help independent artist get new found exposure. Sonific is a company that is trying to help artists leverage the mashup culture by making it easy for people to integrate independent music into the web in a free and legal way. The advantage for a blogger using Sonific’s web player is that they get access to a database of over 40,000 songs to share with their readers without having to worry about copyright issues. The advantage to the artist is that it provides them with free media exposure and gives them an online distribution channel that they can sell downloads from.

In a lot of ways, Sonific’s business plan reminds me of what the radio is suppose to be. A place where consumers can hear good relevant music and an opportunity for artists to try and convince consumers to purchase their album. While some may fear that giving away free streaming music will take away incentives for consumers to actually purchase an album, I think that this thinking is short sighted. By letting consumers share good music online, more people will discover a band and this pays off in a number of ways. If someone likes a band, they will support that artist even if there are ways that they can get the music for free. Instead of freaking out and restricting the content, artists can make more money by building that fan base and selling more concert tickets, iPod downloads and future albums.

Whether it ends up being bloggers sharing their music with readers or Ebayers using the Sonific web player in auction listings, it’s nice to see a company out there that understands the partnership potential that comes from sharing with the rest of the web.

Is DVD Burning Hollywood’s Next Box Office Flop?

Sep 26

Posted by Davis in DRM, DVDs, Movies, VOD | Comments off

There has been a lot of noise about movie downloading this year, but one of the consistent criticisms about these services has been the inability to burn a download to DVD. This has been important for the video download companies because they haven’t been able to figure out a solution to the ten foot problem and without offering consumers an easy way to view their content on their television sets, it limits the mass market appeal of their services. Apple has turned to their iTV dongle as a solution, TiVo is rumored to be in talks to help bring Amazon’s download service to the TV, but Cinema Now is actually doing something pretty rare in the movie industry, they are giving consumers what they’ve asked for and letting them burn their movies to DVDs on their home computers.

The program has been in place for the last few months and CinemaNow CEO Curt Marvis says that movie downloaders prefer burn on demand DVDS by a margin of 5 to 1 compared to the more restrictive DRM’d offerings on their site. To help bolster demand for the service, CinemaNow is currently testing releasing the The Fast and the Furious: Tokyo Drift at the same time as they release the DVD into retail stores.

To consumers this move really isn’t all that significant, but to the studios it’s earth shattering and something that they will be watching very carefully. Why it would be a bad idea to sell a DVD to people who see a film in the theater is beyond me, but the studios like to play games with the release patterns on their films. First the theaters get the films, then DVD retailers and finally the movie downloaders and cable TV channels get their shot at distributing the film. With the film industry beginning to understand that the DVD boom market is now over, they are experimenting with all kinds of business models in order to enhance their shrinking DVD revenues.

While many in the blogosphere have commented that they want downloads to be able to burn to DVD, Cinema Now’s experiment may be best filed in the be careful what you wish for department because the technology is doomed to failure from the start. Burn on demand DVDs will certainly work as a solution for some people, but I question the mainstream appeal that this solution will have for consumers and suspect that it will end up as a nothing more then a footnote in the history of the DVD.

The problem with Cinema Now’s burn on demand technology is that in order to use it you have to first download a film from their site. This itself isn’t a major obstacle, but it immedietely limits the service to the tech saavy crowd who isn’t intimidated by these sorts of things. Once you’ve decided to actually purchase a film online, you then need to wait over five hours for your film to finish downloading. Finally, once your movie download completes, you then still need to own a DVD burner in order to actually get the film to your TV set. If you do happen to own a DVD burner, it’s up to you to spend your own money on blank DVDs in order to make legal copies of a film that you paid retail prices for.

While this process isn’t impossible and admitedly the same early adopters that find the service appealing to begin with will tend to have DVD burners, I think that it is way too many hoops for the average consumer to jump through in order to pay retail prices for a DVD that you burn with your own equipment. If the movie download speeds were more instantaneous then it could be advantagous to go this route, but with the bulky DRM attached the downloads make digital delivery painfully slow and with a 5 hour plus download wait time, consumers are better off going directly to a video store or waiting for Netflix to deliver their DVD in the mail, then they are going the do it yourself route.

I’m encouraged to see CinemaNow continue to push the envelope on film distribution, but the future of VOD needs to be hooked directly to a television set, needs to offer DVD quality or better and it needs to be instantaneous before we see the mass market adopt downloading as a real solution. Some consumers will experiment with CinemaNow’s technology, but I believe that the real opportunity for burn on demand will be at the video store level and not to the home PC. Video stores are open to everyone, not just people with DVD burners. It would be relatively easy for them to handle the orders and for the mainstream consumer, driving to the video store is an easier process then dealling with buffer overrun problems. With an online interface, the video stores could let consumers click a button and pick up their flim later in day. While it would still necessitate a trip to the video store, it would still be easier then making consumers do this on their own.

San Francisco Days

Sep 26

Posted by Davis in Photos | 2 Comments

San Francisco DaysSan Francisco Days Hosted on Zooomr

Motorola Joins Kiosk Revolution

Sep 25

Posted by Davis in Kiosks | Comments off

Redbox uses kiosks for DVDs, Apple uses them for iPods, & Coinstar uses them to help us turn change into cold hard cash, but the latest entrant into the kiosk space is Motorola who hopes that the vending machine will turn out to be a hit for people who want to buy a cell phone on the go.

In an announcement made last Wednesday, Motorola has said that they are starting a test program where they will be deploying 20 – 30 cell phone kiosks in select locations over the next few months. They have partnered with San Francisco based Zoom systems to help provide the necessary technology for the vending machines.

This is a smart move by Motorola because the vending machines have high up front costs, but limited on going costs associated with them. By placing the vending machines into places like the San Francisco Airport, Motorola and Zoom can take advantage of desperate travellers who have forgotten their chargers, headsets or cell phones at home. While many consumers still express some skepticism about making such a large purchase from a machine, consumer behavior is rapidly adjusting to the number of new self service options that we have. While a cell phone vending machine likely wouldn’t have made much traction during the 80′s and 90′s with consumers being more tech saavy and used to automated purchases we are seeing a resurgence in kiosk popularity.

The program will likely be in a test phase for the next 12 months, but if this proves popular, it could be a real competitor to the manned kiosks in the malls and the cell phone stores that seem to be everywhere. Vending technology is getting easier and easier and as more consumers become comfortable with buying a cell phone/iPod/PSP without having to talk with someone, I think we’ll continue to see this industry explode in growth. In the past people may have used vending machines just to buy candy bars, but with nice profit margins and low on going costs, vending is turning out to be a real solution for the hardware industry.