Proverb of the Lions and Hyenas
Posted on October 16, 2012
Over three years ago Inside Digital Media predicted television advertisers would eventually insist they only be required to pay for ads that get watched. Thinking the Unthinkable About Video Ads reasoned that Google’s pay-per-click set a new paradigm that was ultimately going to encompass nearly all types of electronic advertising, including video. Yet television industry incumbents greeted our forecast as though it had all the credibility of an imminent second coming prophecy.
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Last week YouTube’s head of Global Content proclaimed the company does very well with skippable ads. Robert Kyncl added, “…our skippable ads in the U.S…are now making as much revenue per hour as ads on cable TV.” Advertisers don’t mind paying more when they know consumers have declined to skip the ad. Read more…
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Room for Debate: White Spaces
Posted on October 4, 2012
Background. Recently the Wall Street Journal reported consumers are increasing complaining that phone and tablet wireless Internet fees are causing a reduction in discretionary household spending elsewhere. Even 37% of presumably well-heeled Journal readers replied to an online poll confirming monthly mobile data bills are forcing them to sacrifice other items in the household budget. The problem is particularly acute for families with children where membership plans can easily reach $300 monthly.
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The two dominant carriers, Verizon and AT&T, readily concede they expect monthly bills to climb steadily higher as they adopt metered bandwidth rates. As long as wireless traffic congestion is managed by granting exclusive frequency allocations in a manner originated a century ago, carrier executives can smile at the future like a roomful of bankers fondling TARP bailout money. Yet escalating Wireless Internet access fees will not only be more costly for consumers, they also damage future growth opportunities for powerful companies such as Apple, Microsoft, and Google. Read more…
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Record Labels are like Chicago Teachers
Posted on September 25, 2012
Chicago teachers and the music industry share a delusional reality denial – they both think it’s a river in Africa.
Copyright law is one of the most convincing validations of the cliché, “The ways of the dollar are devious.” What else could explain the following complexities?
Gordian Knot
First, there are two kinds of music royalties. One is for the music publishers and the second is for the record labels. Music publishers represent composers and the record labels represent the “performing artists”, meaning singers and instrumentalists.
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Second, conventional radio stations are required to pay music publishers, but not record labels. That’s because for the better part of a century, radio station “airtime” was the key determinant of a music track’s popularity. Thus, instead of collecting royalties from the radio stations, the record labels paid them bribes – termed payola – as an incentive to play specific tracks. When payola became illegal, it was replaced by other perquisites. Read more…
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A Satisfying Computer to TV Set Up
Posted on September 11, 2012
After years of experimentation, I’ve finally got a satisfying computer-to-TV set up. Now, watching Internet videos on my TV is as easy as watching them on a computer, only I get to sit sixteen feet away from the screen which I manipulate with a mouse and keyboard on the coffee table in front of my sofa. The viewing experience of movies over the Net is now indistinguishable from Cable TV. The principal Internet movie advantage is that the videos are available whenever I want them thereby emancipating me from a broadcast schedule. Moreover, the Internet has a far greater abundance of videos although recent-release movies are generally not legally among them.
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This post describes my configuration in layman’s terms.
Network
When attached to televisions, computers must also connect to the Internet. Generally this is accomplished with a wireless (WiFi) home network. WiFi is available in a number of standards, but dot-11n is the best choice for video. My WiFi router is in a home office adjacent to the living room where I do most of my TV watching. Thus, the WiFi signal in the living room is sufficiently strong to provide a good experience. If I were to try and watch Internet videos in more distant rooms, WiFi repeaters would likely be required.
Television
My flat panel TV is a discontinued Hewlett-Packard model with three HDMI (High Definition Multimedia Interface) sockets. They are a key feature for good computer-to-TV viewing. Most current model flat panel TVs include such sockets as pictured (although they’ll normally be labeled “HDMI In”.)
The principal HDMI advantage is that it transports both video and audio. Other sockets on older TVs normally do either one or the other, thereby requiring multiple cables to transport both picture and sound.
Computer
I’m using Apple’s MacMini for three reasons. First, since it is only about the size of a cigar box it is unobtrusive. Second, the boot-up time is much shorter than Windows thereby making Internet Video a more appliance-like experience, similar to conventional television. Third, relative to Windows, Apple computers are less likely to be targeted by malware.
Since MacMini’s have HDMI sockets, the hardware set-up is straight-forward; plug in the power cord and connect the MacMini to the TV with a HDMI cable. The MacMini automatically sensed my WiFi network and prompted me to enter the pass code. It spontaneously used BlueTooth to detect my remote keyboard and mouse, although initializing the MacMini required a corded mouse.
Display Settings Frustration
The most frustrating part of the set-up was getting the output of the MacMini to display properly on the television. Essentially, the image-footprint of the MacMini was about an inch too big around the edges. Unfortunately, that little inch was hugely consequential because it was impossible to see the menu bar along the top border of Apple programs. It was hidden behind the plastic frame of my TV.
Metaphorically, the image “footprint” of the MacMini was too big for the “shoe” defined by the physical dimensions of my TV. After about an hour on the phone with the Apple help desk trying various resolution adjustments, I was told that the problem was my television. They wanted me to buy a new TV.
I went to BestBuy to look at TVs and actually contemplated buying one, but there was a nagging doubt that it would solve the problem. A few days later my 26 year old son stopped-by for a visit. Within minutes he fixed the problem by adjusting the Mac Mini’s “Underscan” slider within “Display Options”. While he didn’t know the meaning of the term “Underscan”, he concluded, “It was the only other option to try, and presumably it was there for a reason.” While I kicked myself for not thinking the same way, it is important to note that Apple’s help desk also failed to suggest the option.
Understanding Underscan
The terms “underscan” and “overscan” are obsolete and intuitively useless to most of us. They date to a time when the chief electronic display was a broadcast TV in which images are “painted” across the screen electronically in nearly parallel lines. Older readers may remember the days when television images would sometimes flicker and couldn’t be photographed by film cameras without the appearance of dark lines. A camera lens catches such dark swaths while the human eye interpolates a component part of the overall screen image.
The “test pattern” below illustrates “underscaning” in a context applicable to my computer-to-TV set up. The green area represents the size of my TV display, but the MacMini was providing an image the size of the pink border. By using the “Underscan” slider within the MacMini display settings, I proportionally reduced the computer’s “overscan” represented by the pink border, to the size of the green area. Thereafter the menu bar became visible on my TV, enabling me to navigate the computer normally.
Terms like “underscan” and “overscan” are unnecessarily geeky. If the slider adjustment were simply labeled “Adjust Display Borders” with “Larger” at one end and “Smaller” at the other, there’s a better chance that I would have figured out how to fix the problem without phoning Apple’s help desk, which didn’t know the answer anyway.
Conclusion
Despite the frustration for needing to learn new arcane concepts like “underscan” and “overscan”, such efforts are likely going to remain a requirement for making computers do our bidding. Nonetheless, it is disappointing that Apple’s help desk failed to suggest the “underscan” adjustment.
Except for sports programming and a couple of TV shows like “Mad Men” and “Breaking Bad”, I’m pretty close to discontinuing Cable TV service. While Cable operators faithfully believe sports programming is their “Ace in the Hole”, the Internet is also unexpectedly challenging that assumption. Specifically, Meet-Up groups enable spectator sports enthusiasts to watch their favorite teams in sports-bar settings with groups of fans similarly devoted to the same teams. It’s a good way to make new friends and better enjoy the games – and it does not require Cable service at home.
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Post-PC Era Characteristics
Posted on September 4, 2012
While the recent abrupt slowdown of personal computer sales at Dell and Hewlett-Packard undoubtedly portends major changes in the future of computing, it’s unlikely that anyone has a fully developed picture of the much discussed “Post-PC Era”. At best we can identify a number of salient characteristics that shall likely prevail.
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First, desktops and laptops shall likely remain the primary tools for creating files and doing work for years to come. Examples include word-processing documents, “slide-show” presentations, building and augmenting websites, spreadsheets, and high quality video and audio productions. In contrast, smartphones and tablet computers shall become our primary means of consuming media. For example, even in the living room, iPhones and iPads enable users to view most any Internet video through a flat panel TV so long as the television is attached to a $99 AppleTV appliance. As illustrated in the chart below, new buyers of tablet computers typically spend more time doing work on their desktops and laptops while spending less time consuming media.
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WiFi Connected Appliances
Posted on August 22, 2012
Much like illusionary cold fusion the legitimately attainable smart-home-of-the-future has been an overly promoted concept for more than twenty years. But presently there are three reasons smart-homes may be coming of age, particularly within multifamily dwelling units where property managers have a profit motive.
First, a sizeable majority of consumers are familiar with WiFi and steadily more comfortable using it. Many have become habituated to surfing the Net at their favorite coffee shop or restaurant. Some are using services like Sling and Aereo to connect to home televisions in order to watch favorite shows while traveling. Given such habits many can readily comprehend that it might be sensible to connect appliances to the Internet as well.
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Beyond familiarity, WiFi is an inexpensive way to connect to the Internet throughout the house. While full household coverage often requires multiple access points, wireless networks are far less expensive than the hardwired schemes previously specified in the smart-home designs of yesteryear. Read more…
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Popularity of Music on YouTube
Posted on August 14, 2012
As the chart below indicates, Nielsen confirms that YouTube has become the most popular source of recorded music for teenagers in the thirteen-to-seventeen age group. CDs ranked fourth whereas conventional radio barely nudged-out Apple’s iTunes for second. Furthermore, YouTube ranks third for all of us over seventeen, trailing only radio and CDs which ranked first and second. Yet the most significant point is the behavior of the thirteen-to-seventeen year olds. Their consumption patterns are likely a leading indicator for the mass market model of the future. As they age they will take their habits with them into older demographics.
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YouTube versus Netflix
Posted on August 6, 2012
Only about a year ago many industry observers falsely concluded Netflix was pioneering the chief video entertainment business model of the future. The service economically permitted users to stream popular movies and TV shows over the Internet. Since then it’s become increasingly evident that the legacy content providers aren’t going to let Netflix license their catalogs at attractive rates. Simultaneously, it’s likely they’ll simply price much of their content beyond the Netflix budget. Most recently, the company’s second quarter financial results underscored such points as the combined DVD-rental and streamed-service subscriber count declined.
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In sum, Netflix is looking more like a video version of profitability-challenged Pandora Media, than a trail blazer toward a lucrative streaming video future. Pandora is the leading Internet Radio service whose margins are squeezed tightly by unavoidable music royalty fees. Despite continued subscriber growth, at $10 Pandora’s stock is trading below its year-old IPO at $16.
In our analysis, innovations at YouTube are better indicators of a future video entertainment scenario. That’s because YouTube gets most of its content for free, yet is able to share advertising revenues with the content provider. Especially promising are YouTube Channels.
There are three types of YouTube channels.
First, everybody who registers with YouTube – typically to upload their own videos – is (often unwittingly) creating a personal channel. If Joe-the-Plumber uploads a video, by default he also generates a personal channel. Anyone subscribing to his channel will get a feed of (1) every comment he makes, (2) all the “likes” he clicks, and (3) every video he uploads. Normally such channels are boring and reveal more about Joe’s viewing habits than the typically infrequent uploads disclose about his videographer skill.
Second, some YouTube users restrict their comments and “likes” to an alternate user-name. Thus, the channel of the prime user-name only includes the owner’s uploaded videos. Some such channels are popular and can be tracked at VidStatsx.com. An example of a posting on one of the popular channels is provided here. While amateur features are obvious in the example, it also shows talent that is likely to only get better.
Third, YouTube is investing $200 million into scripted programming for one hundred channels. In recent years new types of studios have formed to create such videos. Examples in include, Maker, Machinima, Mahalo, and Vuguru where pioneering producers have been reported to take jobs for as little as $1,000 a month.
Yet YouTube viewing has been growing. As the chart below documents YouTube viewing doubled over the past 18 months whereas Hulu’s traffic has been flat.
In our analysis, the preceding chart validates Clay Shirky’s “Theory of the Long-Tail”. Each of us has personal interests that cannot be satisfactorily addressed by mass media because the audience size is too small. But the Internet enables fractionally small audiences to find content germane to their special interests. And an abundance of aspiring actors, producers, and other film workers means that such programs can be produced economically. A vast number of aspirants shut out of Hollywood will flock to a new generation of studios making scripted programs for YouTube. Some of them – probably only a small fraction – will produce works that can drain audiences away from shows produced by legacy programmers.
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