The Barbed Wire Keeps Out The Sharks
April 24th, 2007 Davis
Locked In Or Locked Out? Hosted on ZooomrPosted in Photos | No Comments »
AT&T Takes Lead Over Comcast In Battle For Broadband
April 24th, 2007 Davis
I still remember when I first time I saw prices for broadband internet access 
I couldn’t believe that anyone would ever be willing to pay that much, just for a faster hook up to the net. Of course that was before video became an online powerhouse and before DSL started slashing prices in order to attract new subs. Since then, broadband internet access has moved from being a luxury good to an important commodity for the digital home.
Over the course of my life, I’ve used dial up, DSL and cable internet access. Of the three, cable has turned out to be the fastest, but at nearly twice the cost, it’s hasn’t necessarily been the best. While I do notice a lag when I’m on a DSL connection, it’s still fast enough that it gets the job done.
Even though I think DSL offers a better value for your money, I’m still a Comcast subscriber instead. This is in part because they offered me a juicy up front discount if I bundled my TV with my internet. I also prefer cable because I watch a ton of internet video and the lag on DSL drives me nuts when I am streaming content.
If I still had a landline, I’d probably consider going back to DSL, but since AT&T won’t allow me to use naked DSL, I’ve got to factor in the telephone price along with the cost of the service. When you do that, cable starts looking more attractive.
I may still be a Comcast subscriber, but I’m clearly behind on broadband trends because AT&T has just taken the top position for the total number of broadband subs. Between the combination of lower prices and increased demand for faster bandwidth, consumers are proving willing to look past the downloading lags, in exchange for faster service at the same price as dial up.
It could be that the real difference between DSL and Cable internet is really only psychological. I’ve used tools, like the CNET bandwidth meter, to test my performance before and to be honest, I’ve never seen all that much of a difference. One disadvantage to cable is that because of the infrastructure that supports it, customers are impacted by what your neighbors are doing on the net. This means that you’ll see slower downloading times at peak hours, but can bit torrent to your hearts content from about midnight to 6am.
Just like we used to have the Pepsi challenge in the 70’s and 80’s, I’d be interested in seeing AT&T run a bandwidth taste test to see if consumers can even tell when it just comes to performance. If the speeds really are noticably slower, then I’d know that the performance issues, actually exist outside of my head, but if consumers can’t reall tell the difference, then I give kudos to Comcast’s marketing team, for branding a similar commodity as a premium brand.
Posted in Technology, Media | 5 Comments »
You Got Questions - We’ve Got High Priced Accessories
April 24th, 2007 Davis
America’s finest news source, the Onion, took a stab at financial analysis on RadioShack’s stock and concluded that even the CEO of RadioShack can’t figure out how they are still in business. The article is packed full of gems, but here are a few of my favorite choice quotes from the piece.
-”"Even the name ‘RadioShack’—can you imagine two less appealing words placed next to one another?” Day said. “What is that, some kind of World War II terminology? Are ham radio operators still around, even? Aren’t we in the digital age?”"
–”One of Day’s theories about RadioShack’s continued solvency involves wedding DJs, emergency cord replacement, and off-brand wireless telephones. Another theory entails countless RadioShack gift cards that sit unredeemed in their recipients’ wallets. Day has even conjectured that the store is “still coasting on” an enormous fortune made from remote-control toy cars in the mid-1970s.”
-”It’s like walking into your grandpa’s basement. You always expect to see something cool, but it never delivers.”
-”I know one thing,” Day continued. “If Sony and JVC start including gold-tipped cable cords with their products, we’re screwed.”
Even though the article is a parody, there is still a little bit of truth to it. Last month, Moody’s told investors that RadioShack wasn’t just selling junk inside of the store and despite the company’s recent stock rebound, they still face plenty of challenges as they complete their restructuring.
I don’t normally shop at RadioShack, but the last few times I have gone in there, I haven’t been very impressed. Sure they have plenty of gadgets, but they are never the kick ass cutting edge gadgets, they are the cheap plastic gadgets that someone might buy, but wouldn’t really need. Things like wireless doorbells or $80 adapters that recharge your cell phone, even though you can use a $2 USB cord instead.
What I do use RadioShack for though is scoring accessories that I’ve forgotten about, but need at the very last minute. I may end up paying more for new batteries or an ethernet cord, but at least they have it and it’s usually convenient to find a Radio Shack location.
I would actually shop at RadioShack more, except everytime I go into their store, they try and hard sell me on something I don’t need. Whether it’s their “gold tipped cable” cords or a more expensive version of what I’m really looking for, their sales associates have always been very aggressive with the suggestive sale. This probably helps to keep themselves in business, but as a consumer who typically knows what he wants, it’s a huge turn off when I think about going into one of their stores.
Posted in Uncategorized | No Comments »
Davis Freeberg’s Site Of The Weeks
April 22nd, 2007 Davis
Scrible Hosted on ZooomrI am sorry to my friends and readers, but my posting has been light for the last few weeks. I’ve been taking a bit of a break from blogging and while that is ok for my regular articles, when it comes to the Site of the Week contest, it puts me behind on my master plan. To compensate for my laziness, I have decided to double the pleasure by hosting two sites of the week contests, until I catch up. The contests will run much shorter, so get your vote in now, but their will be twice as many sites for you to be able to check out.
This weeks winner of the site of the weeks was Scribble. Scribble is a website where you can make drawings online and then share them with other people. I’ve never been very good at drawing with a mouse, but it is still a great way to kill time and do something creative.
One of the things I like about the site is that you can see Scribbles that other people have made. Unfortunately, there are no permalinks to the drawings, but I had more fun looking at what other people were making, then trying to draw my own. Scribble was designed by Grant Robinson, who also has a great page filled with links that he finds on the internet. Congratulations to Grant on winning this week’s site of the week contest.
The nominies for one of this week’s contests are below. You can vote in the sidebar. If you know of a great site that should be included in the site of the week contest, you can email me at davis at davis freeberg dot com and it will be considered for nomination.
Pac-Xon
Fax It Nice
What The F
Posted in Site Of The Week | 1 Comment »
A Year In Rewind - DivX’s Old And New CE Partners
April 20th, 2007 Davis
Hosted on ZooomrEarlier this week, DivX issued a press release announcing a new partnership with MoboVivo. The deal will allow MoboVivo to package and distribute their content along with DivX certified consumer electronic devices. While the revenue that DivX can earn from these sorts of content partnerships could end up being meaningful, considering that these sorts of relationships currently account for less then 3% of DivX’s total revenues, it’s pretty hard to get too excited over the availability of new nature shows on the DivX platform.
This isn’t to discount what MoboVivo is trying to create or the importance of smaller niche partners to DivX’s business model, but from a business standpoint, it’s hard to get too excited about what smells suspiciously like a Barney agreement. (I love you, you love me, but it’s really just a big purple dinosaur when it comes to earnings)
What the press release did highlight though, was that DivX has a lot of smaller partners that they are adding (and losing) each year. Since most companies tend to focus their press releases on the positives and not the negatives of their business, I wanted to dig a little deeper then the press release, so I went back and found out how many new partners DivX has signed up over the last year and even more importantly, how many partners they lost and didn’t tell us about.
Rather then focusing on their lower margin content deals, I was more interested in tracking the various consumer electronic companies that are licensing their technology. This is a much more meaningful area to DivX’s business and because of the short term nature of these contracts, it’s an area of risk that investors should be constantly evaluating.
In order to identify new and terminated partnerships, I ran a filter that compared DivX’s current list of signed partners with their list from a year ago. While this isn’t as accurate as digging through the SEC filings to get the information, it does offer a quick snapshot into some of the changes that DivX has seen since going public.
Companies No Longer Listed As A DivX Partner
Advance & Beyond-Tech. Co., Ltd.
Advanced Micro Devices (AMD)
AKI Digital Electrical Appliance Co., Ltd.
Alarity Corporation
Alpine Corporation
AM Logic
Amoi Electronics Co., Ltd.
Apex Digital Inc.
Arlink Tech Corporation
ChangZhou XINGQIU Electric Co., Ltd.
CIS Technology Inc.
Citron Electronic
CyberHome Europe AG
DigiOn, Inc.
DK Digital AG
Dongguan Visper Industrial Co., Ltd.
Eastern Asia Technology Ltd.
ELSA Japan Inc
Freecom Technologies
Fugle Technology
Gericom AG
Hamg Shing Technology Corporation
Harbour Team Technologies
Hay Media (Ever fortune)
HUMAX Co. Ltd.
Ingenient Technologies
Initial Technology
Kinpo Electronics
Medion AG
MultiChannel Labs
NAD Electronics
NEC Electronics
Neuros Audio, LLC
Newlane Limited
NTP France
Orient Power Multimedia Ltd.
Oxford Semiconductor
Philips Semiconductors
Pixa, Inc.
QiSheng International
Renesas Technology Corp.
RJ Tech
Sandmartin (Zhong Shan) Electronic Co., Ltd.
Scitec
Senlan Ltd/Perspectives
Shantou Hi-tech Zone Idall Enterprise Co., Ltd.
Shenzhen E-boda Technology Co., Ltd.
Shenzhen GIEC Electronics Co., Ltd.
Shenzhen Messo Electron Technology Co.
Shenzhen Mizuda Electronic Co.
Shenzhen MTC
Shenzhen Oriental Digital Technology
Shenzhen Skywood INFO-TECH INDUSTRIES CO., LTD.
Shenzhen Sobon Digital Technology Development Co., Ltd.
Shinco Electronics Australia
Siemssen
Sigma Designs
Sony
Suns Corporation
Supratech Computers
The Petters Group (Polaroid)
Vieta Audio S.A.
WIS Technologies, Inc.
Yukyung Technologies Co., Ltd.
Zhenjiang Jiangkui Group Co. Ltd.
Zhongshan Kenloon Digital Technology Co., Ltd
New Companies Partnering With DivX
Audio Partnership
Bang & Olufsen Operations a/s
Casio Computer Co., Ltd.
Cisco Systems - Linksys (Asia) Ptd. Ltd.
CM Tech Co., Ltd.
CommTech Technology Macao Commercial Offshore Ltd.
COMPEX spol. s r.o.
Core Logic
Cowon Systems, Inc.
Diasonic Technology Co., Ltd.
Digen Co., Ltd.
Dongguan Contel Electronics Co., Ltd.
DongGuang Simon Technology Co., Ltd.
Elmarc, B.V.
Espace Services Multimedia (Peekton)
Express Luck Industrial Limited
Express Way Ltd.
Georgia Technology Corp.
Giant Video Electronics Co. Ltd.
Harman International Industries, Incorporated
HB Multimedia Electronic Products Vertriebs-GmbH
Hon Hai Precision Industry Co., Ltd
Hopeful Electric Co. Ltd.
HuiZhou Freeway Electronics Co., Ltd.
Hyo Seong Techno Corp.
Hyundai Digital Technology Co., Ltd.
IDCOM
J&J Information Technology Co., Ltd. (H.K.)
JiangSu HongTu High Technology Co., Ltd.
Kalosnett Co., Ltd.
Kenmark Industrial Co., Ltd.
Konka Group Co., Ltd.
Le Hong Po Company Limited
Link Concept Technology Ltd.
McubeWorks Inc.
Meiloon Industrial Co., Ltd
MtekVision Canada, Ltd.
Musical Electronics Limited
Ngai Lik Digital Technology Limited
OPTIMAG
PEARL Agency Allgemeine Vermittlungsgesellschaft mbH
PlayMedia Systems, Inc.
Polaroid Consumer Electronics LLC
Raza Microelectronics, Inc.
Redmond Group of Companies LP
Renault Samsung Motors
Rotel Co., Ltd.
Samsung Electronics, Inc.
Schoenfeld International, Inc.
Shenzhen Arlink Tech. Co., Ltd
SigmaTel, Inc.
Silisand Co., Ltd.
Sony Corporation Japan
STEL Mutimedia GmbH
SupportPlus China Ltd.
Syabas Technology Inc.
Take Off Multitronics
Telstar Spolka z o.o.
Tinnos, Inc.
Titech
Trak Electonics Polska Sp. z o.o.
UTMS Co., Ltd.
Wissen Media Verlag GmbH
Wistron Corporation
x-peer.de
After taking a closer look at the list, there were a few things that jumped out at me. Which partners are coming and going actually matters a lot more, then how many are turning over. Nonetheless, I found it interesting to see that DivX has actually lost 66 partners, but gained 65 over the last 12 months. Such a high turnover among their client base is caused in part by the very nature of the evolving consumer electronic industry, but this data highlights some of the risks that DivX faces to their core business. While adding 65 new partners is definitely impressive, losing 66 isn’t very characteristic of growth companies.
Another thing that jumped out at me was how many subtle partner changes we saw. Now maybe I shouldn’t have counted these, but I think it matters nonetheless. Case in point, this year they added Samsung Electronics as a partner, but last year they already had a relationship with the parent company Samsung. Without doing more research, it’s hard to determine what impact this nuance has on their business, but when you see companies like Sony drop off the list, only to be replaced by subsidiaries, like Sony Japan, it does make one wonder what the difference means.
When I was putting this list together, I was also surprised at how many of the companies on DivX’s partners list, I had never heard of before. Whether it’s was a small international player in a different market or larger companies that are producing digital products that I did not know about, there were a lot of brands that I wouldn’t normally even consider, without the DivX certification included. If you are Sony, Apple or Microsoft, then getting access to DivX brand name isn’t as important, but for companies like Hyo Seong Techno Corp, having the DivX certification is a great way to leverage DivX’s brand name and can make or break their products, when it comes to DivX consumers.
Overall, I’m not really sure how useful this list is, but going through the exercise of comparing what’s changed over the last year, has really highlighted how diversified DivX really is. Don’t get me wrong, there are several partners that make up a good chunk of their revenue, but when you have over 300 partners, it helps remove some of that concentration risk from the equation.
While I don’t expect that we’ll start seeing press releases announcing when DivX loses a contract, this is something that I’m planning on paying closer attention to going forward. While I can understand DivX losing a customer because they went out of business or were acquired, it would be fascinating to learn why some partners are going in a different direction. I am still optimistic about DivX’s future, but retaining their current CE customers will be an important challenge that investors should not ignore and something that I’d like to see DivX do a better job at.
Posted in DivX, Technology, VOD | 3 Comments »