Your local cable company (aka MSO) and local phone company (aka RBOC) have enjoyed monopoly status for years. The telecom act of 1996 was meant to spur competition in the local phone market while the emergence of direct broadcast satellite providers was expected to drive competition in the pay tv market. Each of these events spurred some competition, but the real battle is just starting to shape up.
Today cable companies are starting to offer voice over IP (aka VOIP) service that competes directly with wired telephony service. Verizon announced long ago that they intend to run fiber optic cables to the home which would give them the opportunity to offer video services, super speed internet access, and other services yet to be dreamed up over the huge bandwidth pipe that fiber provides. While telephone companies have been dreaming of running fiber to the home for years, it appears that costs are finally starting to hit points that make the unit economics feasible (meaning that it makes sense to spend $1,000 running fiber to the home since the discounted cash flow expected from the new offering exceeds $1,000).
The only certainty in this coming war is that consumers will win. Consumers are already seeing the benefits when these two companies fight to offer broadband services (DSL prices have come down from $54 to around $29 per month). Today I spend around $180/month to RCN for digital cable (HBO, Cinemax, etc.), all I can use local and long distance phone service, and high speed internet access (5 mbps which rocks!)... but I can't wait for the day that Verizon can offer me the same package and price wars break out. I can envision cost competition driving this bill down to around $80/month if not less.
God bless competition.
Monday, May 17, 2004
Broadband - Does "speed" matter to consumers?
Verizon has announced that it intends to offer faster DSL plans to consumers. While the cable and telecom companies have been fighting the DSL & Cable Modem wars for a couple years, I get the sense that the market is headed toward commodity status.
I don't believe that an average consumer can understand the difference between a 1.5 mbps download speed and 3 mbps, but they certainly understand the difference between $29.95/month (roughly the price for DSL these days) vs. $45/month (roughly the price for a cable modem). With price as the basis of competition today firms offering DSL services at cheaper prices are gaining subscribers faster than their cable modem offering cousins.
The inability to understand download speeds is probably tied to the lack of applications that really take advantage of broadband capabilities. When consumers start using services like Cinema Now or MovieLink, it will be easier to market cable over DSL or vice versa. Imagine an ad explaining that the movies you download would take only 30 minutes rather than 60 minutes, now consumers can understand that. Until there is a killer application for broadband, expect price to drive adoption of DSL and cable modems services.
I don't believe that an average consumer can understand the difference between a 1.5 mbps download speed and 3 mbps, but they certainly understand the difference between $29.95/month (roughly the price for DSL these days) vs. $45/month (roughly the price for a cable modem). With price as the basis of competition today firms offering DSL services at cheaper prices are gaining subscribers faster than their cable modem offering cousins.
The inability to understand download speeds is probably tied to the lack of applications that really take advantage of broadband capabilities. When consumers start using services like Cinema Now or MovieLink, it will be easier to market cable over DSL or vice versa. Imagine an ad explaining that the movies you download would take only 30 minutes rather than 60 minutes, now consumers can understand that. Until there is a killer application for broadband, expect price to drive adoption of DSL and cable modems services.
Friday, May 14, 2004
The failed execution of Gmail
It is hard for me to recall a web product more hyped up than Gmail. As you all know Gmail is Google’s free web based email service that gives users 1000 MB of free storage in exchange for having targeted ads displayed that are relevant to the email the user is reading. At the time of the Gmail announcement I wrote about how I thought that Gmail was a stroke of genius since Google “changed the rules” of competition in the web based email market. Before Gmail it seemed as though the basis of competition between Yahoo! Mail and Hotmail were not features but how well they could drive traffic back to their portal pages. Neither product had innovated much. When Gmail entered the service promised to flip this market on its head and it changed the basis of competition back to offering what users wanted: more storage space, better spam filters, an easy to user interface, and a fast interface.
I hate to say it, but it appears that Google blew this one big time. Yahoo! today announced that they will be offering 100MBs of storage to its current users shortly and essentially unlimited storage to pay customers. Google simply took too much time between announcement & public launch and they have allowed the competition to react and remove the pain points that would have prompted people to switch. How long before Yahoo! integrates their search capabilities into their free mail offering? Assuming the media storm settles down how long before they use Overture to offer contextual ads in emails for users? Google seems to have forgotten that switching email addresses is a painful thing to do, and in order to switch, the product a user is considering switching too had better be substantially better than the incumbent… well Gmail is substantially better than both Yahoo! mail and Hotmail; but it appears those days are numbered and it may well be just another email service when it launches.
NOTE: If anyone at Google reads this… please think about the pain of switching email accounts and build in a simple utility to import mail and contacts from other services!
I hate to say it, but it appears that Google blew this one big time. Yahoo! today announced that they will be offering 100MBs of storage to its current users shortly and essentially unlimited storage to pay customers. Google simply took too much time between announcement & public launch and they have allowed the competition to react and remove the pain points that would have prompted people to switch. How long before Yahoo! integrates their search capabilities into their free mail offering? Assuming the media storm settles down how long before they use Overture to offer contextual ads in emails for users? Google seems to have forgotten that switching email addresses is a painful thing to do, and in order to switch, the product a user is considering switching too had better be substantially better than the incumbent… well Gmail is substantially better than both Yahoo! mail and Hotmail; but it appears those days are numbered and it may well be just another email service when it launches.
NOTE: If anyone at Google reads this… please think about the pain of switching email accounts and build in a simple utility to import mail and contacts from other services!
Thursday, May 13, 2004
VOIP going mainstream
VOIP provider Vonage has begun selling its product through RadioShack's 4000+ retail locations. Often times you will see companies trying to stuff retail channels with products that are not ready for the mainstream. For example Segway launched their much hyped Human Transporter through Amazon. This was an interesting decision considering how many people do you think would buy a $5,000 product whose value proposition was unclear to the masses?
Vonage's move into broader distribution channels is a smart strategic decision. Broadband penetration is on the rise across the country and cable/DSL companies are ramping up to sell VOIP services to consumers directly. This would in effect shut out players like Vonage before they can get going, much in the same way TiVo faces the potential of being shut out by Cable & Satellite companies offering generic DVR capabilities.
While TiVo has tried to sell it's product as a lifestyle product, Vonage has sold its product based on price. This is an important distinction because it provides TiVo the opportunity to move up market by adding capabilities and features, while Vonage could be stuck in a price war soon. Vonage's best bet could be to get broad distribution (think Wal-mart, Best Buy, RadioShack) to push adoption before the companies controlling the broadband connection into the house get into the business.
Vonage's move into broader distribution channels is a smart strategic decision. Broadband penetration is on the rise across the country and cable/DSL companies are ramping up to sell VOIP services to consumers directly. This would in effect shut out players like Vonage before they can get going, much in the same way TiVo faces the potential of being shut out by Cable & Satellite companies offering generic DVR capabilities.
While TiVo has tried to sell it's product as a lifestyle product, Vonage has sold its product based on price. This is an important distinction because it provides TiVo the opportunity to move up market by adding capabilities and features, while Vonage could be stuck in a price war soon. Vonage's best bet could be to get broad distribution (think Wal-mart, Best Buy, RadioShack) to push adoption before the companies controlling the broadband connection into the house get into the business.
Sony's Death... Samsung's Rise
I love the consumer electronics industry. Most people look at the industry and hate it… they say that there is too much competition, it isn’t all that profitable, intellectual property is hard to retain, and your firm can be too dependent on outside factors (gov’t regulation, complementary products, etc.). While these attributes make it difficult to compete in the marketplace, think about the power of a great consumer device; they can literally change the world. The cell phone has revolutionized the way we communicate; the iPod has taken the country by storm changing the way people enjoy music, digital cameras are leading a revolution in the photography world, etc. And I love the idea of creating world changing products.
Decades ago Sony created a product that changed the world: the Walkman. From the huge success of the Walkman, Sony began its long march to becoming the world’s most powerful consumer electronics company. Year after year Sony created products that were meeting consumer needs and they appeared to understand global markets better than any other firm in the industry. I believe that we are in the midst of watching a giant fall, and that Sony today is making decisions that will be used in business schools around the world for what not to do. Lets walk through a few of those decisions:
- Sony was so late to the flat panel TV market that they were recently forced to lay off 20,000 employees globally and shut down numerous cathode ray tube (CRT) factories that produce the old bulky TVs seen in most houses today.
- After shutting down these CRT factories the firm found itself so far behind in the flat panel market they were forced to partner with a market leader… in this case Samsung (more on them shortly)
- Name a company in a better position to manage the transition to digital music better than Sony. Sony owns a major music label as well as the know how to create a great CE device to play the music. They recently launched their Connect music service which is just terrible. (Please see my review here.
- Over the past few years Sony has continued to try and push proprietary formats on consumers to lock them into their products. Just look at the Connect service and how it only work’s with Sony devices and the ATRACK format, look at the memory stick format, their proposed portable television product (closed architecture), etc. Firms that try and lock consumers into their platform clearly don’t understand that consumers don’t want to be locked into buying from one company. There are times when creating a closed proprietary standard can be beneficial to consumers, but this isn’t one of them… there are clearly other options / platforms for consumers to choose from that work well… and Sony doesn’t understand this.
The fall of Sony is not only being driven by bad managerial decisions but also a rising star from Korea… Samsung. Over the last five years Samsung has transformed itself from a commodity player to a producer of high end products across numerous segments. Just think about the following facts:
- According to DisplaySearch Samsung is the worlds largest manufacturer of flat panel displays.
- It sells more TVs than Sony and Philips Electronics
- It is now # 2 in the world in cell phone revenue behind Nokia… an incredible accomplishment given that they have only been in the industry for around 5 years.
- Samsung has been the fastest growing brand in the world for two years in a row according to the survey done by Interbrand and BusinessWeek
I worked at Samsung last summer as a MBA intern, and I really believe that the company has the products to remain differentiated to provide great experiences to consumers. The executives at Samsung have Sony in their cross hairs and if they continue to execute while Sony continues down their path of proprietary products that are late to market then it is only a matter of time before Samsung rises up to the top of the CE world and kills today’s king.
Decades ago Sony created a product that changed the world: the Walkman. From the huge success of the Walkman, Sony began its long march to becoming the world’s most powerful consumer electronics company. Year after year Sony created products that were meeting consumer needs and they appeared to understand global markets better than any other firm in the industry. I believe that we are in the midst of watching a giant fall, and that Sony today is making decisions that will be used in business schools around the world for what not to do. Lets walk through a few of those decisions:
- Sony was so late to the flat panel TV market that they were recently forced to lay off 20,000 employees globally and shut down numerous cathode ray tube (CRT) factories that produce the old bulky TVs seen in most houses today.
- After shutting down these CRT factories the firm found itself so far behind in the flat panel market they were forced to partner with a market leader… in this case Samsung (more on them shortly)
- Name a company in a better position to manage the transition to digital music better than Sony. Sony owns a major music label as well as the know how to create a great CE device to play the music. They recently launched their Connect music service which is just terrible. (Please see my review here.
- Over the past few years Sony has continued to try and push proprietary formats on consumers to lock them into their products. Just look at the Connect service and how it only work’s with Sony devices and the ATRACK format, look at the memory stick format, their proposed portable television product (closed architecture), etc. Firms that try and lock consumers into their platform clearly don’t understand that consumers don’t want to be locked into buying from one company. There are times when creating a closed proprietary standard can be beneficial to consumers, but this isn’t one of them… there are clearly other options / platforms for consumers to choose from that work well… and Sony doesn’t understand this.
The fall of Sony is not only being driven by bad managerial decisions but also a rising star from Korea… Samsung. Over the last five years Samsung has transformed itself from a commodity player to a producer of high end products across numerous segments. Just think about the following facts:
- According to DisplaySearch Samsung is the worlds largest manufacturer of flat panel displays.
- It sells more TVs than Sony and Philips Electronics
- It is now # 2 in the world in cell phone revenue behind Nokia… an incredible accomplishment given that they have only been in the industry for around 5 years.
- Samsung has been the fastest growing brand in the world for two years in a row according to the survey done by Interbrand and BusinessWeek
I worked at Samsung last summer as a MBA intern, and I really believe that the company has the products to remain differentiated to provide great experiences to consumers. The executives at Samsung have Sony in their cross hairs and if they continue to execute while Sony continues down their path of proprietary products that are late to market then it is only a matter of time before Samsung rises up to the top of the CE world and kills today’s king.
Life Events
When I started this blog I decided that it would be focused on the business issues that technology companies are facing and what is occurring in the markets. There are millions of blogs out there where the author writes about what they had for breakfast, who they dated last night, their favorite color, etc. I wanted to keep my private life private and I also figured that my life is relatively boring, so why write about it. Instead I wanted to write about something always on my mind, business / technology issues. Well I have had a crazy 48 hours that have forced me to make my first posting about my life.
On Tuesday night I was headed off to an interview down the Virginia area and when my flight landed I got a call telling me that my wife went into labor and she is only 27 weeks pregnant. I ran to the gate with the last flight to Boston and talked my way on the plane. When I got to the hospital in Boston my wife was on medications to stop the contractions. After a sleepless night the great staff at Beth Israel Hospital and my brave wife were able to slow down the contractions and we are now resting comfortably in the hospital. We hope that our stay here will be long and that our daughter won't be delivered for weeks to come but we are prepared for anything.
I am living my life minute by minute right now. I expect that there will be some down times where I will post a lot and there will be times when I won't post all that often. I expect that writing will be therapeutic for me; so just bear with me as I bunker down for my extended stay here at the hospital and I settle into a new routine.
On Tuesday night I was headed off to an interview down the Virginia area and when my flight landed I got a call telling me that my wife went into labor and she is only 27 weeks pregnant. I ran to the gate with the last flight to Boston and talked my way on the plane. When I got to the hospital in Boston my wife was on medications to stop the contractions. After a sleepless night the great staff at Beth Israel Hospital and my brave wife were able to slow down the contractions and we are now resting comfortably in the hospital. We hope that our stay here will be long and that our daughter won't be delivered for weeks to come but we are prepared for anything.
I am living my life minute by minute right now. I expect that there will be some down times where I will post a lot and there will be times when I won't post all that often. I expect that writing will be therapeutic for me; so just bear with me as I bunker down for my extended stay here at the hospital and I settle into a new routine.
Tuesday, May 11, 2004
Yet another failed hardware play by Microsoft
Microsoft has had numerous forays into the hardware space including UltimateTV, X-Box, and their line of home networking products. Today Microsoft announced that it is getting out of the home networking business. Check out the following interesting quote from the News.com article:
"A source close to the company said Microsoft entered the Wi-Fi field with hopes of 'raising the bar' on security, ease-of-use and performance and now feels it has accomplished those goals. "
Does anyone think that the Microsoft entry into wi-fi accomplished any of these goals? I think the real reason they left the business is that the margins were terrible compared to software and they were getting their butts kicked in the market by Linksys. I believe that products like UltimateTV and this Wi-Fi push are great examples of the company wasting shareholder money. What the company really needs to do is to start paying a huge dividend that will force the company to really focus on investing in business that are strategically important to the business.
"A source close to the company said Microsoft entered the Wi-Fi field with hopes of 'raising the bar' on security, ease-of-use and performance and now feels it has accomplished those goals. "
Does anyone think that the Microsoft entry into wi-fi accomplished any of these goals? I think the real reason they left the business is that the margins were terrible compared to software and they were getting their butts kicked in the market by Linksys. I believe that products like UltimateTV and this Wi-Fi push are great examples of the company wasting shareholder money. What the company really needs to do is to start paying a huge dividend that will force the company to really focus on investing in business that are strategically important to the business.
Monday, May 10, 2004
MIT Media Lab launches CELab
Today the MIT Media Lab held a consumer electronics symposium to mark the launch of the Consumer Electronics Lab (CELab) within the Media Lab. I attended the first half of the day (I had to miss the second half due to classes) and here are some thoughts and quotes from the morning:
V. Michael Bove, Jr. - Director of the CELab
- Stated that the major themes of the lab would be: Materials, Power, Sensors/Actuators/Displays, Self managing ecosystems/smart displays, Cooperative wireless networks
- Michael also highlighted a major change in funding policy for the CELab... in the past only large institutions could afford to sponsor (sponsorship gave the rights to all intellectual property within the research group being sponsored and it typically cost millions) the Media Lab and reap the intellectual property benefits from membership. The CELab will be open to firms of all size and sponsorship fees will be based on the sponsor firms revenues.
- In a typical marketing move the lab is offering 20% off for those that sign-up before July 1st and 10% off for those that sign-up before October 1st.
Nicholas Negroponte - Chairman of the MIT Media Laboratory
- Nicholas believes that we are entering a new era of computing
- Era 1: Bits are bits - this was the realization that all bits are just bits and it doesn't matter if you are storing music, pictures, text or video, it is just bits
- Era 2: Bits vs. Atoms - this era focused on how bits can transform atoms... think along the lines of how Amazon changed retail distribution and how Apple is changing music through iTunes and iPod
- Era 3: Bits IN Atoms - This is the era we are heading into where bits will co-exist with atoms everywhere. Think about embedded computing and the idea of computing devices being everywhere, including inside the body
- Nicholas also mentioned that firms need to start thinking about not: "Piling on more stuff into gadgets moving on Moore's law VS. making stuff easier to use"
Walt Mossberg - WSJ personal technology columnist served as emcee
- Walt commented that while the notion of convergence has been hyped for decades now, a sign it could now be occurring is that the most popular CE device on the market is made by a computer company - Apple's iPod
- Here are some great quotes from Walt about the recording industry's effort to raise prices on digital downloads:
-"the infinitely stupid recording industry"
-"I couldn't match their stupidity if I tried"
- Despite all the talk about home networking, Walt remarked that most consumers only get wi-fi to share an internet connection, not for any real home networking purposes like sharing files or printers.
Geoffrey Frost - Chief Brand Officer - Motorola
- Geoffrey had a great quote about how you can tell the wireless industry is in it's beginning: "we call it wireless... today we don't call cars 'horseless'."
The afternoon was packed with great professors from the Media Lab that I am upset I missed. I noticed that the event was being taped so check out the media lab homepage to see if they will post the sessions there.
V. Michael Bove, Jr. - Director of the CELab
- Stated that the major themes of the lab would be: Materials, Power, Sensors/Actuators/Displays, Self managing ecosystems/smart displays, Cooperative wireless networks
- Michael also highlighted a major change in funding policy for the CELab... in the past only large institutions could afford to sponsor (sponsorship gave the rights to all intellectual property within the research group being sponsored and it typically cost millions) the Media Lab and reap the intellectual property benefits from membership. The CELab will be open to firms of all size and sponsorship fees will be based on the sponsor firms revenues.
- In a typical marketing move the lab is offering 20% off for those that sign-up before July 1st and 10% off for those that sign-up before October 1st.
Nicholas Negroponte - Chairman of the MIT Media Laboratory
- Nicholas believes that we are entering a new era of computing
- Era 1: Bits are bits - this was the realization that all bits are just bits and it doesn't matter if you are storing music, pictures, text or video, it is just bits
- Era 2: Bits vs. Atoms - this era focused on how bits can transform atoms... think along the lines of how Amazon changed retail distribution and how Apple is changing music through iTunes and iPod
- Era 3: Bits IN Atoms - This is the era we are heading into where bits will co-exist with atoms everywhere. Think about embedded computing and the idea of computing devices being everywhere, including inside the body
- Nicholas also mentioned that firms need to start thinking about not: "Piling on more stuff into gadgets moving on Moore's law VS. making stuff easier to use"
Walt Mossberg - WSJ personal technology columnist served as emcee
- Walt commented that while the notion of convergence has been hyped for decades now, a sign it could now be occurring is that the most popular CE device on the market is made by a computer company - Apple's iPod
- Here are some great quotes from Walt about the recording industry's effort to raise prices on digital downloads:
-"the infinitely stupid recording industry"
-"I couldn't match their stupidity if I tried"
- Despite all the talk about home networking, Walt remarked that most consumers only get wi-fi to share an internet connection, not for any real home networking purposes like sharing files or printers.
Geoffrey Frost - Chief Brand Officer - Motorola
- Geoffrey had a great quote about how you can tell the wireless industry is in it's beginning: "we call it wireless... today we don't call cars 'horseless'."
The afternoon was packed with great professors from the Media Lab that I am upset I missed. I noticed that the event was being taped so check out the media lab homepage to see if they will post the sessions there.
New Blogger, New Look
Blogger, the software that I use to manage this site, has re-launched with some new functionality. The site is a little easier to use, and there are some new cool features but I am upset because despite promises during the sign-up process, Blogger will not allow me to upgrade to a premium account. A premium account would allow me more control over the entire site to add more functionality.
Anyway, here is a list of the changes on this site:
As always, I would love feedback on these changes and what features you would like to see.
Anyway, here is a list of the changes on this site:
- New look and feel
- New "Previous Posts" section - This can be found on the right hand side of the page and it will list the titles of some of my most recent postings
- New "My Favorite Books" section - This section will contain links to all my favorite books
- New "My Favorite Gadget" section - Not added yet, but when I get around to it you will see a list to what I think are the coolest technology products out on the market
As always, I would love feedback on these changes and what features you would like to see.
Sunday, May 09, 2004
The legitimate online music explosion
This past week Apple Computer announced they sold 3.3 million songs through iTunes. While some will argue that this number was boosted by a temporary increase in traffic due to the release of iTunes 4.5, I believe that the legitimate online music world is in the midst of explosive growth. Just think about it, with 3 million songs sold through Apple and RealNetworks Rhapsody service having roughly 500,000 subscribers paying around $9.95 per month the online music market is not made up of only geeky leading edge users anymore... this market is crossing into the main stream.
Given their recent actions, the major music labels may agree with me on this point. With their attempts to raise song prices, bundle songs, etc... the labels are making a last ditch effort to tip the economics of the industry further in their favor before too many users get used to buying songs at 99 cents. The labels don't want consumers to get used to buying single songs at 99 cents because they will have a very hard time making money in this model... so expect them to continue to pressure iTunes and RealNetworks to raise prices for both subscriptions and song singles.
Given their recent actions, the major music labels may agree with me on this point. With their attempts to raise song prices, bundle songs, etc... the labels are making a last ditch effort to tip the economics of the industry further in their favor before too many users get used to buying songs at 99 cents. The labels don't want consumers to get used to buying single songs at 99 cents because they will have a very hard time making money in this model... so expect them to continue to pressure iTunes and RealNetworks to raise prices for both subscriptions and song singles.
Saturday, May 08, 2004
Which is more evil: Gmail or the state of Massachusetts?
A while back I blogged about how a state senator from California was introducing legislation to try and stop Google from launching Gmail because of privacy concerns. Well recently, Massachusetts, the state I currently reside in has posted on the state's website a list of individuals and businesses they believe to be delinquent on their state taxes.
Now I don't know about you, but I feel much safer having email in the hands of Google than I do having my financial reputation in the hands of my Tax person. Think about it... pretend you are in the midst of a job hunt and you have a disagreement with your home state around your income taxes. The state then posts your name on its website saying you are essentially a criminal where any search engine could get this information. I don't know about you, but I trust Google with my email more than I trust that any state tax & IT system.
Now I don't know about you, but I feel much safer having email in the hands of Google than I do having my financial reputation in the hands of my Tax person. Think about it... pretend you are in the midst of a job hunt and you have a disagreement with your home state around your income taxes. The state then posts your name on its website saying you are essentially a criminal where any search engine could get this information. I don't know about you, but I trust Google with my email more than I trust that any state tax & IT system.
Friday, May 07, 2004
AOL's Survival Will Depend on Premium Services
So what do you do with a business that is turning out cash like there is no tomorrow, but your customer base is declining fast? If you are AT&T you essentially transform yourself into a VOIP company... that is their only chance to survive long term. If you are AOL you enter into premium services to leverage your huge install base and hope to lock them in before they jump to broadband without you. In a smart move the company is launching a new video game site that they hope will get customers to buy into AOL even after they switch to broadband. Now more than ever AOL needs to be creative in new services and utilize content from other Time Warner companies to offer services that can't be matched by rivals. Imagine insider Sopranos episodes that can only be viewed by AOL subscribers or concert tickets that go on sale early to only AOL users. I am not preaching anything new here... but now is the time for AOL to move before broadband just explodes in the next 12 - 24 months.
Thursday, May 06, 2004
DVD-Recorders & the fight for CE cash
High definition TVs, HDTV Service, DVD-Recorders, DVRs, Digital Music, iPod... these are some of the hottest consumer technology products and services available today. Not only are these products & services hot they are not cheap. Consumer electronics companies are being forced to really compete for every dollar these days... and services like Netflix, TiVo, and Rhapsody (Real's online music subscription business) will run someone around $43 dollars a month or $516 dollars per year. It now looks like consumers are ready to dive into what will be another expensive habit... DVD recording. According to a new report DVD-recorder sales are set to soar. Might as well throw in another $5 - $10 per month for blank DVDs.
I wonder how consumers will respond when they upgrade to HDTV and realize that all these other products and services don't work with HDTV. Out with the old TiVo, the DVD burner won't burn at HDTV quality, currently there is no HD-DVD player so you will have to suffer at 480p resolution, etc. The entire "entertainment stack" will need to be replaced and upgraded, which will give CE companies a few golden years to reap the benefits. I only hope that the average consumer doesn't go out and blow all their cash on products and services that will be obsolete before they know it.
I wonder how consumers will respond when they upgrade to HDTV and realize that all these other products and services don't work with HDTV. Out with the old TiVo, the DVD burner won't burn at HDTV quality, currently there is no HD-DVD player so you will have to suffer at 480p resolution, etc. The entire "entertainment stack" will need to be replaced and upgraded, which will give CE companies a few golden years to reap the benefits. I only hope that the average consumer doesn't go out and blow all their cash on products and services that will be obsolete before they know it.
The end of TechTV as you know it
For all you geeks out there today is a sad day. Leo Laporte's blog reports that Comcast, who recently purchased TechTV, is laying off the entire TechTV staff. Apparently all operations in San Fran will be shut down by July and all the jobs will be moving down to LA. For a network that has struggled, TechTV had some great shows like The Screen Savers, Fresh Gear, Tech Live, and others. I hope the folks at Comcast can keep some of the great talent and build a stronger new station. Best of luck to all you TechTV employees that have worked your butt off.
I wonder if Comcast has made a mistake in the way they have handled this purchase. When you buy a station like TechTV you aren't buying it for a large viewer base, you must be buying it for the assets like the talent and the shows. With a blanket firing of all the staff it doesn't appear that new management is making many friends. I hope that they find a way to keep on the talent and continue to build on the best shows there.
I wonder if Comcast has made a mistake in the way they have handled this purchase. When you buy a station like TechTV you aren't buying it for a large viewer base, you must be buying it for the assets like the talent and the shows. With a blanket firing of all the staff it doesn't appear that new management is making many friends. I hope that they find a way to keep on the talent and continue to build on the best shows there.
Mossberg on Gmail
Seems like everyone has an opinion on Gmail. Heck, I have been blogging too much about it myself. Today Walt Mossberg (the same Walt Mossberg that in this blog I called the most powerful person in consumer technology) weighed in on Gmail. While you can read his entire article here, let me summarize it for you by quoting his final paragraph:
"So I'm calling on Google to preserve its sterling reputation for honesty and customer focus by offering an alternative form of the new Gmail service. The company should offer Gmail accounts without the ads, and without the scanning, for a modest annual fee. That would put the choice where Google has always placed it: in the hands of its users."
I think Walt is 95% of the way to the solution that will make everyone happy. Allow users to either use Gmail in its current form, ads and all for free or allow all those who are worried about the privacy issues pay a small annual fee and their email will not be scanned and no ads will appear on their pages. Let me know what you think.
"So I'm calling on Google to preserve its sterling reputation for honesty and customer focus by offering an alternative form of the new Gmail service. The company should offer Gmail accounts without the ads, and without the scanning, for a modest annual fee. That would put the choice where Google has always placed it: in the hands of its users."
I think Walt is 95% of the way to the solution that will make everyone happy. Allow users to either use Gmail in its current form, ads and all for free or allow all those who are worried about the privacy issues pay a small annual fee and their email will not be scanned and no ads will appear on their pages. Let me know what you think.
Wednesday, May 05, 2004
First Impressions: Sony Connect
There are so many online music stores today that I can't even remember them all. There is iTunes, RealNetworks Rhapsody and Music Store, Napster, Wal-Mart, etc. Given all the offerings today any new comer to the market needs to either be exponentially better than what is on the market or simply as good but carry a great brand name. Fortunately for Sony, they carry one of the biggest brand names in the world, because their new music service called Sony Connect SUCKS!
Yes, I said the service sucks! I couldn't find another word to better describe my first impressions of Connect. So what is so bad that I have resorted to the term "Sucks" to describe it... well its starts from the very beginning when you try and install the software. I have been through some painful software installs, but Sony has taken it to the next level with Connect. After downloading over 10MB of software the application took around 15 - 20 minutes to install on my laptop. In comparison, all other music services took me less than 5 minutes to get up and running. I never let the install process affect my thoughts about the actual product, so after installing (and being forced to reboot) I waited a while before launching the application and seeing the features.
Upon launching the application it is hard to ignore how terrible the user interface is. I have a 15" screen on my laptop and unlike iTunes which uses all of that space to allow me to see information and navigate my music Sony wastes 75% of my screen with nothing! It is literally painful to try and navigate the 3000+ songs I loaded into the application. There is a search feature that works decently and the main way of navigating your tunes is through a drop down list and a "mini keypad" that will allow you to choose a letter and jump to artists whose name starts with that letter.
When you jump over to the music store the wasted screen space becomes even more annoying. Doesn't Sony realize they are trying to sell music and that utilizing less screen space makes it hard to find content because you spend more time scrolling than anything else. So lets pretend that you find the album you want to buy, Outkast's Speakerboxxx/The Love Below. And what do you find... you can't even buy the album!!! You are told you can go buy the songs one by one and you see the option to buy only 36 of the 40 songs! Now if you head over to iTunes you can buy the entire album for $19.99 and get ALL 40 songs. Recap: Buy 36 of the 40 songs on Sony for about $36 bucks or buy the entire album, all 40 songs for about $20 bucks from iTunes... Perhaps the only redeeming factor for Connect is that you can use United Airlines miles to purchase songs.
Summary: Shame on Sony! Shame on them for being so late to enter the market. Shame on them for forcing users to buy some albums song by song! And most of all, shame on them for creating such a TERRIBLE product.
Yes, I said the service sucks! I couldn't find another word to better describe my first impressions of Connect. So what is so bad that I have resorted to the term "Sucks" to describe it... well its starts from the very beginning when you try and install the software. I have been through some painful software installs, but Sony has taken it to the next level with Connect. After downloading over 10MB of software the application took around 15 - 20 minutes to install on my laptop. In comparison, all other music services took me less than 5 minutes to get up and running. I never let the install process affect my thoughts about the actual product, so after installing (and being forced to reboot) I waited a while before launching the application and seeing the features.
Upon launching the application it is hard to ignore how terrible the user interface is. I have a 15" screen on my laptop and unlike iTunes which uses all of that space to allow me to see information and navigate my music Sony wastes 75% of my screen with nothing! It is literally painful to try and navigate the 3000+ songs I loaded into the application. There is a search feature that works decently and the main way of navigating your tunes is through a drop down list and a "mini keypad" that will allow you to choose a letter and jump to artists whose name starts with that letter.
When you jump over to the music store the wasted screen space becomes even more annoying. Doesn't Sony realize they are trying to sell music and that utilizing less screen space makes it hard to find content because you spend more time scrolling than anything else. So lets pretend that you find the album you want to buy, Outkast's Speakerboxxx/The Love Below. And what do you find... you can't even buy the album!!! You are told you can go buy the songs one by one and you see the option to buy only 36 of the 40 songs! Now if you head over to iTunes you can buy the entire album for $19.99 and get ALL 40 songs. Recap: Buy 36 of the 40 songs on Sony for about $36 bucks or buy the entire album, all 40 songs for about $20 bucks from iTunes... Perhaps the only redeeming factor for Connect is that you can use United Airlines miles to purchase songs.
Summary: Shame on Sony! Shame on them for being so late to enter the market. Shame on them for forcing users to buy some albums song by song! And most of all, shame on them for creating such a TERRIBLE product.
The King of Technology
So who is the most powerful man in the world of consumer technology? Bill Gates has over $50 billion in the bank and wants to turn your home into a digital dream house. Steve Jobs has helped transform the music industry in a legal way. The men running Sony hope to marry content and devices to shape the future of entertainment. Yet all of these people have less power than Walt Mossberg, the personal technology columnist from the Wall Street Journal. Walt's reviews of products can have a serious impact on the fate of not only the product, but also the company. Take a look at what Wired Magazine calls "The Mossberg Effect":
The full article can be found here: Wired 12.05: The Kingmaker
| The Mossberg Effect | |
|---|---|
| Walt said | What happened |
| "CNET is the real deal, a serious, scrappy online news organization." (1996) | CNET's stock climbed 33 percent in the five days after the review. |
| "This is simply the most gorgeous personal computer I've ever seen or used." (2000) | Apple's stock price jumped 10 percent the day after his Cube review hit stands. |
| "The initial radios are poorly designed & Navigation is a nightmare." (2002) | XM's stock dropped nearly 9 percent the day Mossberg panned its radios. |
| "Overall, we like Vialta's idea of incorporating your television into a videophone." (2003) | Vialta's stock rose 15 percent the day the column ran. |
| "Try it. You may never go back to Internet Explorer again." (2004) | Installations of Stilesoft's Web browser jumped 371 percent the day of his rave. |
| "Mailblocks is a very good system for eliminating spam. And it will only get better." (2004) | Mailblocks' daily sales tripled the day after Mossberg's endorsement. |
The full article can be found here: Wired 12.05: The Kingmaker
Tuesday, May 04, 2004
Best Buy & Dell are winners
Every year Twice, the consumer electronics industry publication, releases its analysis of consumer electronics sales through retailers. While the industry grew at only 6%, both Dell & Best Buy grew at much faster rates. Surprisingly, Wal-Mart didn't grown nearly as fast as Dell or Best Buy... here are the top 10 retailers for this year along with comparable sales for last year: (all revenue is in Millions)
Rank 2003 Rev 2002 Rev
1 Best Buy 19531 $16,589
2 Wal-Mart 15,680 14,141
3 Circuit City 9,750 9,950
4 Dell Computer 6,263 5,178
5 Target 4,962 4,799
6 RadioShack 4,649 4,577
7 Staples 4,022 3,676
8 CompUSA 4,010 4,155
9 Sam’s Club 2,763 2,536
10 Office Depot 2,599 2,670
*in $ millions
Full story can be found here: TWICE- CE Sales Reach $106.6B For Top Chains: "Rank2003 Revised 2002
Rank 2003 Rev 2002 Rev
1 Best Buy 19531 $16,589
2 Wal-Mart 15,680 14,141
3 Circuit City 9,750 9,950
4 Dell Computer 6,263 5,178
5 Target 4,962 4,799
6 RadioShack 4,649 4,577
7 Staples 4,022 3,676
8 CompUSA 4,010 4,155
9 Sam’s Club 2,763 2,536
10 Office Depot 2,599 2,670
*in $ millions
Full story can be found here: TWICE- CE Sales Reach $106.6B For Top Chains: "Rank2003 Revised 2002
Yahoo's secret weapon
With all the talk about Google's IPO and Gmail, there was almost no mention in the media when Yahoo! released a beta version of the next version of Yahoo! Messenger. While this new version of Messenger offers some fun new features like avatars, new "stealth settings", additional emoticons, and games... there is one feature that I think is an important strategic move for Yahoo!. Yahoo! has integrated the LAUNCHcast Radio service into messenger which will now dramatically broaden the distribution and awareness of the LAUNCHcast service. For those of you that don't know anything about LaunchCast, think of it as an internet radio service with the ability to customize your own station so that you only hear favorite artists, albums, or tracks. I used LaunchCast last summer during my internship and really enjoyed the service. At the time you would listen to about 5 or 6 songs and then hear an advertisement mostly around offering the ability to upgrade to LaunchCast pro and stop being interrupted by commercials. There is no doubt in my mind that this integration into messenger represents the first step before either a full blown iPod music store or a Rhapsody like music subscription service.
In addition to launching music services through messenger, it is only a matter of time before AOL, Microsoft, or Yahoo! realizes that their IM clients are really platforms to launch social networking services. Just think about it, Yahoo! and any other IM service already knows who your friends are, how you have classified them and your email address. All they need to do is extract all the relationships that exist in the application today and dump them into a service like Friendster or Orkut. Imagine just logging into Messenger and being told that you can simply accept an invitation into the Yahoo! social networking service and all your friends will be there without having to send out invites to your friends.
In summary, companies like Microsoft, AOL, and Yahoo! can utilize their IM platforms to launch compelling services. The real question is what is taking so long?
In addition to launching music services through messenger, it is only a matter of time before AOL, Microsoft, or Yahoo! realizes that their IM clients are really platforms to launch social networking services. Just think about it, Yahoo! and any other IM service already knows who your friends are, how you have classified them and your email address. All they need to do is extract all the relationships that exist in the application today and dump them into a service like Friendster or Orkut. Imagine just logging into Messenger and being told that you can simply accept an invitation into the Yahoo! social networking service and all your friends will be there without having to send out invites to your friends.
In summary, companies like Microsoft, AOL, and Yahoo! can utilize their IM platforms to launch compelling services. The real question is what is taking so long?
Sunday, May 02, 2004
The Gmail Bubble has burst
I wrote on Friday about the insane bidding that was taking place on eBay for Gmail accounts. For a brief period on Friday the demand for Gmail accounts far exceeded the supply so some people paid $200+ for a single account (Here is the original auction I blogged about that ended up closing at $200.) Given the insane prices the market for accounts was quickly flooded, and at a point this weekend there were over 220 accounts up for sale. From there simple economics took over and with this new supply came lower prices. Accounts are now being sold for around $30.
So why have I posted about this situation 3 times? Well I can't help but wonder if we are likely to see a similar pattern with Google in the near future. As you all know Google has filed for an IPO and will be selling shares through an auction process. There is no way that everyone interested in the Google auction will be able to get certified to participate, and even if they are certified not everyone will win in the auction (you can bid both too high and too low causing you too lose out). So unlike the old days where IPO shares were spread out to friends of bankers through the underwriters, now the more shares will end up in the hands of the public... but not enough shares. So what will we be left with? A small number of people that got in on the auction and the rest of public clamoring for shares resulting in the same insanity we saw in the bidding for gmail accounts. Rest assured though, market forces will fix the problem of supply in the stock market at well... you can be certain the boys over at Sequoia and Kleiner Perkins are looking to dump some shares quickly.
So why have I posted about this situation 3 times? Well I can't help but wonder if we are likely to see a similar pattern with Google in the near future. As you all know Google has filed for an IPO and will be selling shares through an auction process. There is no way that everyone interested in the Google auction will be able to get certified to participate, and even if they are certified not everyone will win in the auction (you can bid both too high and too low causing you too lose out). So unlike the old days where IPO shares were spread out to friends of bankers through the underwriters, now the more shares will end up in the hands of the public... but not enough shares. So what will we be left with? A small number of people that got in on the auction and the rest of public clamoring for shares resulting in the same insanity we saw in the bidding for gmail accounts. Rest assured though, market forces will fix the problem of supply in the stock market at well... you can be certain the boys over at Sequoia and Kleiner Perkins are looking to dump some shares quickly.
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