Erik Jacobs A Real American Hero

Generally-interesting-guy-I-follow, Hank Williams, talked about the Kindle a little bit in his post on Arrington’s great Kindle idea. In it, Hank discusses the merits of creating a reference design based off of Amazon’s Kindle for other companies to emulate and create a class of “readers.” However, he mentions something about Android which I’d like to comment on.

Interestingly, this is really what Google should be doing with Android. Google is indeed licensing the Android OS to third party phone manufacturers, but by not creating and controling an initial reference design they are leaving important pieces of the design to third parties, in a field (mobile phones) where important design elements can be critical.

I definitely agree with the Kindle software being offered up as an “OS,” but I’m not entirely convinced on the whole reference design concept. In the reader market, the paucity of players provides for an opportunity for Amazon to “set the bar,” so to speak, on performance and quality.

When you’re talking about computers and operating systems, its the chip vendors that are setting the reference design.  The i686 architecture, for example, supports a particular instruction set, communications/bus protocols, and etc.  The motherboard vendors have to adopt certain standards, offered by the chip maker in design guides, to make their product.  The OS vendors have to make the OS work with the instruction sets of the CPU and the various bridges/buses and etc.

Now, when you’re talking about Android, how would the reference design benefit the third party manufacturers? The benefit is already in the fact that the Android contributors have already done the legwork in designing the OS, so all the phone vendors have to do is make sure they pick hardware that can talk to it.

If you were to look at it from the reverse, Google has extraordinarily limited experience in hardware design. Is it really in their best interests to design some “uberphone” that can run Android when most of the phone makers have a pretty good pulse on what the market wants?

Sure, one can argue that the phone vendors don’t have a clue, and that’s why the iPhone is “smashing” other handset sales. There are a rush of copycat designs that try to approximate the iPhone in feature set and functionality, and all hit the mark to one degree or another. However when you look at the global scope of phone sales, the overwhelming leader in mobile web browsing (and probably total handsets sold) is actually a non-smart phone — the Motorola Razr.

I think, to a certain degree, that the “best phone” on the market will always serve as a type of reference design, and the Android OS, in and of itself, will do the same. By being open and transparent and accessible, we will see both a large number of products/apps developed for Android, as well as variations on Android’s components that will make each handset unique in its own way, should the manufacturer choose to do so.

A lot of people these days seem to be writing about how record labels are dying or how record labels are evil or how the record labels want too much money. And it seems that the fact of the matter is that they may be right on all counts.

In the olden days, record labels existed for a reason – to help fledgeling artists make it big and to introduce them to a greater population of consumers than the artist could reach by themselves. This required significant investment of funds. Hoewver, it seems that, today, this model is broken.

Artists obviously still require promotion efforts to get noticed. However, it appears that the avenues through which this is occuring are changing. The basic premise still applies:

1. Put together a band
2. Write some songs
3. Go on tour
4. Repeat steps 2-3 until
5. Get noticed, get paid

It is the “get noticed” step that seems to be changing. A few weeks ago, an article popped up about how Electronic Arts was signing artists to a music label of sorts. In this article, Priya Ganapati writes:

Until now, game companies worked with recording labels or publishing firms to get licensed or original music, often opting for new and independent artists in an attempt to inject fresh, interesting and undiscovered music in their games.

Priya then goes on to talk about how EA has basically cut out the middle man of the record label by forming their own “label” of sorts, Artwerk. Additionally, this same model is being adopted by some larger corpriations with huge marketing budgets, like Apple. Why pay the record label to license music from the artist and then have to do your own marketing for the game/product, for which the label will ultimately profit from the rise in popularity of the artist? That is simply a model that doesn’t make any sense.

Another broken model is radio. Traditionally, record labels were the might behind an artist’s radio debut, pushing out promos to radio stations all across the country. Now, with the advent of the internet and social media, it is far easier for consumers to access artists from all across the world and become exposed to their music. The RIAA is destroying “internet radio” by forcing the companies that play the artists of the big labels to pay exhorbitant fees/royalties back to the record lables. So, instead of protecting their artists and making more money, what RIAA will do is force artists to band together and form micro-labels, potentially backed by the big corporations and game makers, perhaps in a form of symbiotic-promotional entity that promotes the music/game/product in order to promote the music/game/product.

But wait, micro-labels have existed forever. Let’s revise the table from above, shall we?

1. Put together a band
2. Write some songs
3. Go on tour
4. Repeat steps 2-3 until
5. Get noticed, get paid by micro label for distribution/help/etc.
6. Write songs
7. Go on tour
8. Repeat 6-7 until larger label comes along and buys you out

However, looking above, considering the ease of digital distribution and the usefulness of the internet, it appears that the micro-label will reign supreme in the foreseeable future, the CD and big labels will wax away and die, and iTunes will collapse. Why?

Music should not be free. This is just a silly hippie pipe dream. Sure, artists should make money to play concerts and sell merchandise, but their music has value outside of being performed live (i.e. recorded). The issue is that the recording industry model has established a precedent for what the value of music is, and the paradigm has shifted to make it such that the recording industry no longer controls the value of music because they no longer have the exclusive hold on its distribution.

It is not that music is any less valuable in and of itself. It is more that there’s less need for someone to spend huge money trying to make music popular, which means there’s less expense to recoup, which means the savings can be passed on to the consumer.

Obviously these are gross exaggerations and generalizations, but there is a point to all of this. The industry is changing, and the big recording companies are scared, but they’re also too stupid to change, drunk on decades of fat profits that they see eroding before them.  Poor fatties.

Technology blogger and generally interesting fellow Hank Williams recently blogged about the new Latitude-On option laptops from Dell.  He writes:

The basic idea of the new Latitude is that the machine will have a second ARM based processor and Linux operating system along side the standard Intel processor and Windows OS. This machine within a machine will provide a super fast, lightweight, battery friendly environment for doing things like email, web browsing, and perhaps other communications tasks. It will be “instant on”, so you will always be able to get to your basic functionality, and yet you will get a battery life measured in days and not hours when in this mode.

While Hank is more concerned with the innovation being brought forth by Dell, it brings up a question in my mind: Who is going to use this? The thing I wonder about is the quality of the user experience and the interactivity with “corporate standards.”

For example, this type of machine will likely apply to world travellers and executive types.  Who else would need their laptop battery to last so long just to be able to do things like check email or quickly browse the web?

If that is, in fact, the target market for these machines, they better darn well make sure that the box can access things like Exchange mail servers and/or Outlook Web Access. And we all know how well that sort of thing works in Linux at this time.

Not that I have anything against Linux… in fact I work for Red Hat currently!  However, I realize the integration troubles at the enterprise desktop level, so you can understand where my concern stems from.

And, if this is not the intended use-case for this machine, is such a laptop really going to be able to compete with the new “netbooks” out there?  Sure it may offer significantly increased battery life, but at what cost?  Without a Openoffice.org or some other word-processing suite available, it will not be very useful for students trying to take notes on a laptop and get a full class-day’s battery life out of it.

It seems like companies are slowly marching towards a pure “web terminal” type of portable thin-client. I wonder if we’ll ever see a netbook that simply boots its OS from the cloud and has zero storage.

There was recently a post over at Ajax Blog about Japan’s super-advanced mobile web. Serkan Toto discusses some of the intricacies of the unique mobile web that has evolved in Japan, a country where most people don’t have PCs and almost everyone uses their cellphone to browse the web.

Toto writes:

The availability of cutting-edge phones is one reason why many Japanese people don’t own a PC but would rather browse the web exclusively on mobile devices. And it’s not just for short bursts. They never write SMS either but rather thumb-text push-mails, often containing little icons, emoticons and coded youth slang acronyms. Booking flights online, ordering clothes, auctioning off used stuff, gaming, paying for movie tickets via direct debit: all of this has been possible on Japanese mobile phones for years now.

This is a very valid point. Having spent time in Japan I can definitely say that I, myself, wrote rather long messages on my phone to friends. I also spent time writing full-length emails to people in Japan who were using their phone email address as their sole email access.

However, despite the fact that Japan has a “relatively sound regulatory policy” when it comes to the mobile web, I see the “mobile web” itself as an aging dinosaur, and the iPhone is clearly the reason why.

Firstly, I feel that Japan is relatively unique in its lack of home PC users. The rest of Europe is fairly PC-heavy (just look at the main contributors to open source software and Linux itself), and they certainly have embraced the cellphone. Just this morning a Businessweek author mentioned how she can rent a bicycle in Germany using her mobile. So, the overwhelming majority of current web users probably get their access from both a PC and, potentially, a mobile.

Secondly, the iPhone clearly makes a targeted reference to “the web on your phone.” Not the mobile web, but the real web. The big bad nasty web that has awesome graphical content, multimedia and all the whiz-bang you could ask for. In a world that is continually going “Web 2.0” where AJAX is almost a requirement to build a modern site, why would an organization want to spend all the time and effort to develop a supremely awesome website, only to have to develop and attrocious dumbed-down lo-fi version for some poor schlub’s tiny little phone?

Let’s face it, folks. The iPhone demonstrates that the world is ready for UMPCs. Because that’s really what the iPhone is. Sure it is a phone, but it basically runs MacOS and can download and install new applications (software) and can do lots of PC stuff – including browse the web (the real web).

As display technology gets cheaper and materials science gets better and battery technology improves, we will definitely see more and more UMPC-like mobile “phones” on the market. As more and more individuals have acess to real software and real web on their mobile device, the need for a separate “mobile” web will fade away.

While WML is an excellent standard and is great in practice, its usefulness is running out, in my opinion. Mobiles just don’t have the same limitations today that they did even just a few years ago. With x86-based mobile devices on the horizon with the evolution of things like the Atom processor, can the “mobile web” really survive?

In a recent post on TechCrunch, Erick Schonfeld discusses how an outside organization has designed a new Facebook application to not only replace the university-related features that Facebook removed, but to do so with tighter and direct integration to the university systems.

Schonfeld brings up an excellent point in his closing statements (or at least, I’m extrapolating one):

Inigral will charge a few dollars per student, and in return schools get a way to interact with their students on Facebook in a way that they can control. It is really a group management app for instructors, athletic teams, and student organizations to contact their members and manage events through a forum students are already using anyway.

One of the hot things going on in the enterprise space is that your local MegaCorp, Co. is trying to implement its own internal social network and/or microblog for the benefit of internal employee communication and group performance.  There is no reason that another company couldn’t copy Inigral‘s model except extend it with features suited to the enterprise space.

Think about this for a moment.  If IBM designs an internal social network application (I shouldn’t say if, they already have done so) to offer features and functions to its 338,000+ worldwide employees, and it costs them $10/year/employee to build the infrastructure and maintain and administer it, that’s $3.3M/yr that they are spending.  This is probably a fairly deflated figure in reality.

In fact, IBM went so far as to create a whole software suite – Lotus Connections – that has many “Web 2.0” and social networking features built in.  But the reality of the fact is that this suite smells an awful lot like Facebook in an internal enterprise-packaged form.  The infrastructure, maintenance and administration costs are still there.

Now, if a company does something like Inigral and offers enterprise-related features, but can leverage the existing infrastructure of Facebook and charge substantially less, that is considerable savings.

Now, the question really is – are there truly “enterprise” features that could be offered within the confines of a Facebook application that an enterprise would really want to access?  Are there Hippa/Sox or other compliance/auditing concerns that would make such an endeavor impossible to implement successfully?  Obviously security concerns would have to be dealt with in that only organization employees can view information about other employees within Facebook.

Hopefully these thoughts will provoke some ideas in all of you.  I’d love to hear your thoughts.

Hank Williams over at Why Does Everything Suck? raised some excellent points about the recent appeals decision in Cablevision’s “network DVR” case.

While Redlasso can almost certainly not operate the type of clipping service they were operating, this may be an opening to a much bigger opportunity. In essence the Redlasso technology is a virtual DVR, just like what Cablevision is offering. Technically, the only difference is that the content is delivered over the Internet.

Hank raises some excellent points. I hadn’t thought about the whole “third party” aspect to this decision. If the FCC or whatever other organization deemed responsible were to mandate that the cable/satellite providers provide “access information” (i.e. what networks a consumer is entitled to DVR), it could be done very easily via an XML interface.  When a consumer signs up for DVR service with a third party, they provide their subscriber/account number.  Third party provider then makes frequent requests to the operator to determine channel accessibility, and a web interface that looks like any other channel guide could let the end user choose what program to record.

Here is where it gets sticky. For one, the cable operators have a huge advantage in the bandwidth arena over the regular internet crew. In practice, the available bandwidth on a coax cable like is run to most homes is fairly significant – this is why you can get so many HD + SD channels AND 10mbit internet. Watching network DVR provided by your cable company is no different than on-demand provided by them.

However, when you talk about a third party that is not physically attached to the cable network, they’re having to do what most people call IPTV – the video signal has to stream right through the public internet. This is a significant disadvantage for the third party provider to overcome, especially in the HD content arena.

The one possible benefit to third party providers like Redlasso is that I see them as becoming a crucial partner (or acquisition target) to the satellite companies that do not have the ability to do on-demand like cable companies do. Especially if the satellite companies continue to forge alliances with the telcos (a’la DirecTV/Bellsouth partnership here in the Atlanta area), I am sure that something interesting could be worked out.

This also probably bodes well for companies like Verizon and AT&T who are starting to provide television service in addition to their standard internet service. These organizations already have the network depth and breadth that the cable companies have, but their primary advantage is that they are also major internet backbones, which gives them a huge advantage if they additionally wanted to provide “IPTV” access to networked DVR content (although end-user bandwidth is still an issue in that scenario).

The more that this gets discussed, the more it seems like this is a great opportunity for the entire industry – content providers (networks), operators, advertisers, and consumers alike.

In an article today on Tech Trader Daily, Eric Savitz talks about the ruling of the U.S. Court of Appeals in New York regarding Cablevision being able to implement a “network DVR.”  Eric Savitz writes:

On the other hand, [Bernstein Research analyst Craig] Moffett contends the ruling is “a major loss for media companies.” As Moffett puts it, “with a stroke of a pen, the Appeals court has opened the door to a massive increase in the penetration of DVR capabilities. Core among these is ad-skipping.”

Well, here is the reason why I’m not sure that this is really such a loss for media companies.  First of all, let’s think of what the “network DVR” really enables and how it compares.  A cable DVR currently is a hard drive in your cable box.  When you record a show, the file gets written to your cable box.  How does a network DVR differ?

Well, first, it’s the same in that there is a “recorded” file, except that this file exists on the cable company’s network of storage.  However, because the cable company is storing this file, they can use the same file for everyone that wanted to “record” this program.  Think of the savings here — the cable company needs one file for S1E11 of House (Season 1 Episode 11 – Detox), even though 14,632 people may have that episode “recorded.”  Not only that, but for a show that is in syndication like House or Friends or any other, the cable company only needs one file no matter how many networks are airing that episode.

How does this pertain to advertising?  Well, let’s consider some possibilities, ignoring any consumer complaints that might arise from them for later:

1. No commercial skip
   If the cable company is completely in control of the DVR, what’s to stop them from implementing ads that cannot be skipped?  Just like when you pop a DVD in the player and you can’t skip the FBI warning (in the USA at least on a standard DVD player), why couldn’t the cable company implement a system of ads that could not be skipped?
2. Targeted advertisement based on network or suggestive advertising/related advertising
   The cable company is providing the network with the storage for their shows to make them available for “recording.”  Normally, a network and a cable company share some of the advertising time during a show, and there is a whole complex system surrounding this.  Well, now the cable company and the network know that the show has been recorded.  There is no guessing here.  They know what network the consumer recorded the show off of.  This leaves a wide range of data mining opportunity for more selected advertising.
3. Pay for no commercials
   Along the lines of non-skippable commercials, what is to stop the cable company or the network from offering consumers the ability to pay to have a commercial-free experience?  Networks like HBO, Cinemax and others already charge premium fees on top of normal cable subscriptions for access to commercial-free movies and entertainment.  In this new world of networked DVR, what is to stop the networks and/or the cable company from providing the same tiered service?

The network DVR may make it difficult for advertisers to sell in to cable providers or networks, but it certainly doesn’t hurt the totality of “media” companies.  This is just another way that advertisers are going to have to get more creative in this new world of on-demand digital content.

Lastly, and on a different note, Savitz writes:

Also losing here: the satellite companies, who have no way to offer network DVR capability, which requires point-to-point connectivity. “The satellite operators will be forced to operate at a significant technological and economic disadvantage,” [Moffett] writes.

Since when is it the law’s job to protect companies from competition?  Is it the fault of the cable companies that satellite television technology is not conducive to allowing for the type of on-demand content that the cable companies can provide?  Satellite television definitely serves a market.  It is a viable product.  It is not the government’s job to cripple one form of technology so that another form of technology can remain competitive.  If the cable companies get the ability to network DVR, then DirecTV, Dish and others will have to innovate elsewhere to survive.  If this were the case, then shouldn’t the Fed cripple cable companies’ ability to deliver faster internet service than the telephone companies?

These are just my thoughts.  I look forward to your comments.