NBC @Home: One last Olympics post

Yes, the Olympics are over, but the technology background stories are still coming out, so here's a summary of some of the interesting facts:

• For the first time, all of the video was shot digitally and sent to U.S. viewers over a Gigabit network provided by Cisco.
  
• Video was ingested into an Omneon MediaGrid SAN in Beijing, and then only those portions that were needed for editing into on-air content were mirrored to a MediaGrid in the U.S. via Omneon's ProCast Content Distribution Network.
  
• All of the on-air content shown on NBC Universal's cable networks and Telemundo stations was edited in the U.S. The commentators for all of the events shown on these cable networks were located in the U.S., not China. Most of them were working in Studio 8H, the studio normally used for "Saturday Night Live," watching the events on HD monitors.
  
• Virtually all of the highlights clips and packages were produced at NBC headquarters in New York.
• There are more details in the current issue of TV Technology Magazine, available online.

It's now possible to foresee an Olympics where the vast majority of production and post-production occurs at the network's headquarters, not on site (assuming, of course, that the host country's broadcaster provides plenty of high-quality feeds.) Of course, there aren't very many events on the scale of the Olympics, but no matter the size of the event, the fewer people and less equipment that you need to send to a location, the better.

A great Android article

There's a fairly long article on Gizmodo by John Mahoney about Android that's worth reading. To boil it down to its essence, Mahoney's argument is that Android will succeed because 1) It's truly open, 2) It's not tied to a metaphor that just doesn't work well, such as porting the Windows UI to phones, and 3) It will (or at least should) be upgraded on a regular cycle, much like Ubuntu Linux. By comparison, the iPhone has a great UI, but it's limited by what Apple will and won't allow developers to do.

How well Google realizes Android's potential will be determined to a great extent by how open the platform remains: If service providers exercise their abilities to limit the functionality of Android applications, much of the appeal of the platform will be lost.

The big crush is coming

Notice that I said "crush", not "crash", although given what's been happening today, we may get one of those as well. No, what I'm talking about is the crushing together of multiple camera product categories. I've recently written about the new Canon 5D Mark II, which is a pro still camera with what appears to be very good HD video capabilities. Earlier, I wrote about the marked improvements in camera phones, and how those phones are making a lot of point & shoot cameras obsolete. I've also written about the growth of the point & shoot YouTube camcorder category, best exemplified by Pure Digital's Flip Video Ultra and Mino under-$200 camcorders.

So here's what I think is going on:

• Prosumer camcorders are going away, to be replaced by digital SLRs that have HD video capabilities. Why? Interchangeable lenses, for one thing. There's no prosumer camcorder that you can buy today with interchangeable lenses for less than $5,000, but the new Canon 5D Mark II will sell for less than $3,000 without a lens when it ships. The video capabilities on Nikon's new D90 (list price under $1,000) may leave a lot to be desired, but the problem is fixable. Panasonic will be in the market with an AVCHD-compatible version of its new G1, also for around $1,000, early next year. Sony, if it can get over its burning fear of competing with itself, should have a product in the market before too long as well. In short, price and interchangeable lenses will kill the prosumer camcorder as we know it.
  
• Camera phones will kill the market for point & shoot cameras. Samsung's new Pixon just hit the market with an 8 megapixel camera (as well as video capabilities), and there are 10 and 12 Megapixel models on their way. I've never been a big fan of camera phones, but both image quality and user interfaces are improving dramatically. Of course, the "hottest" phones, the 3G iPhone and the new G1, both have pretty schlocky cameras. Who cares? They may have a role to play, but for now, people are buying them for their smartphone capabilities, not their cameras.
  
• The Flip Video class of point & shoot camcorders will continue to eat everyone's lunch in the under-$1,000 camcorder market, for two reasons: Price and simplicity.

It's interesting that the most aggressive moves have come from Nikon, a company with no camcorder market share to protect, and Pure Digital, a company that made throwaway digital cameras until a couple of years ago. (Not to mention Nokia, a company with no camera business, and Samsung, with a fairly recent entry into the camera market.) When you have no existing market share to protect, you can do radical things that fundamentally change the market. I expect CES next January and NAB next April, as well as the cameras and camcorders that we carry around in the future, to look quite a bit different, thanks to these companies.

DirecTV Gets AT&T Contract

The waiting game is over: According to this report from Reuters, DirecTV will replace Dish as the supplier of AT&T's satellite video service, effective January 31, 2009. Existing Dish/AT&T customers will continue to receive service after that date, but my assumption is that they'll deal directly with Dish, rather than AT&T, if they want to make any changes. As you may recall, it was less than a year ago that AT&T decided to drop DirecTV's service in favor of Dish, but at the same time, left the door open to reconsider its decision.

AT&T's decision isn't a surprise, but it nonetheless puts additional pressure on Dish, which has been losing money and subscribers. However, it does free Dish to compete more aggressively against both AT&T's satellite and U-Verse services, which it may have felt constrained to do so long as there was a chance that the company would retain its partnership with AT&T.

Here comes the G1

Yesterday, T-Mobile and Google launched the G1, previously known as the HTC Dream, the first Android-compatible mobile phone. Comparisons with the 3G iPhone were immediate and obvious; the G1 is about the same height and width as the iPhone, but it's about twice as thick. It will sell for a little less, $179 vs. $199 for the 3G iPhone, and like the iPhone is available only on a two-year plan. The G1 has several more buttons than the iPhone, the most important of which are part of a slide-out QWERTY keyboard, which, of course, the iPhone doesn't have.

As you'd expect, the G1 is very Google-centric; you have to have a Gmail account in order to use the phone, and all the other Google services are front-and-center. It has a lot of location-centric, GPS-based features--even more than the iPhone, and unlike the iPhone, turn-by-turn navigation applications will be possible. And, developers can add applications to the G1 without review or approval by Google or T-Mobile, so it's a far more open platform than the iPhone.

There is a "but", however, and as this video from Engadget shows, in this case the "but" is that the iPhone is just much better integrated, and operates much more smoothly, than the G1. However, that's to be expected, since Google's Android is designed to operate on a wide variety of devices, some of which Google will have very little control over, while the iPhone and the version of OS X that the iPhone runs are engineered together. Android is a "generalist" system, while the iPhone is very tightly integrated.

I'll withhold my final verdict until I can play with the G1 myself, but from everything I've seen, it's not as refined as either the iPhone or the most recent BlackBerry models, but nevertheless, it's a very good first effort.

Want a Scarlet today? Buy a Canon 5D Mark II

I previously wrote about the restart of Red's Scarlet project, apparently to turn it into a still and video Digital SLR. The Scarlet, of course, was supposed to cost $3,000, and Red fanboys everywhere have been waiting breathlessly. Well, the first HD video from Canon's new 5D Mark II has shown up (thanks to our friends from Gizmodo), and it looks awfully good. The 5D can be had from Ritz, a reputable dealer, for under $2,700 without lens, or for about $3,500 with a lens. The video referenced by Gizmodo used 11 different lenses, so this was anything but a simple production. Nevertheless, pro photographers, the market targeted by Canon, buy lenses all the time, and still lenses cost a small fraction of the cost of video lenses. This is why Red made its move.

There's still plenty of market opportunity for Red, but as Jim Jannard said, the market has changed (dramatically), and the Scarlet, with its fixed lens and video-only orientation, simply wouldn't have cut it when it reached the market next year.

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• Vincent Laforet spends a weekend with a pre-production Canon 5D Mark II; shoots a commercial and loves it

Adobe Creative Suite 4 is on its way

I watched today's announcement of Adobe's Creative Suite 4 online, and frankly, Apple can announce nothing better than Adobe (or most companies) can make a "big" announcement. From the very beginning, Adobe was on the defensive, with managers saying that "this is much more than a point upgrade." From what I saw, the need to upgrade depends almost entirely on whether or not you have to have the new features in the products that you use most. For some people, an upgrade is almost mandatory: Premiere Pro, for example, now supports both Red and AVCHD formats. If you need to edit video in either of those formats, it clearly makes sense to upgrade. On the other hand, if you're perfectly comfortable with what you can do with Illustrator or Photoshop right now, you might want to spend your money on other things.

This may be the point at which Adobe users decide to upgrade individual applications, rather than an entire suite. I've loyally gone from individual apps to Creative Suite to CS2 to CS3 over the years, but the apps that I use the most are Acrobat and Dreamweaver, with Illustrator following behind and Photoshop even further back. All of them work fine for me. I've been testing Dreamweaver CS4 for some time, but I can jump back to CS3 if I have to.

If you haven't bought into the Adobe platform at all, a suite may very well make sense, if you're going to use two or more applications. I believe, however, that there's not all that many creative professionals that haven't already bought into Adobe. Students can buy in at greatly reduced prices. And no, this announcement isn't going to cause a mad dash to Microsoft's creative applications, although some people might take the money that they'd spend to upgrade their Adobe apps and buy Expression Studio ($699 list for five applications).

Rather than purchase an upgrade as a knee-jerk reaction, check out the new features in the Adobe applications carefully. In this tight economy, you might do better to save your money and wait for CS5.

CSIRO: Losing while winning

Image via WikipediaAs you may know, Australia's Commonwealth and Scientific Industrial Research Organisation, or CSIRO, has been suing Buffalo Technology over Buffalo's claimed infringement of a patent related to Wi-Fi, and CSIRO managed to get a permanent injunction against the sale of Buffalo's Wi-Fi products in the U.S. from a Federal District Court. Last week, the Court of Appeals for the Federal Circuit (the Federal Circuit generally handles patent-related cases) upheld the District Court's decision, but it punched a huge hole in CSIRO's ability to sue anyone else for infringement. According to the Appellate Court's decision (PDF link), there was more than sufficient prior art to demonstrate that CSIRO's patent should be invalidated, but Buffalo's counsel made mistakes in the original trial that, in essence, forced the Appellate Court to rule in CSIRO's favor. In its decision, the Court of Appeals walked through the arguments that need to be made in order to invalidate CSIRO's patent.

CSIRO once claimed that 100 companies are infringing its patent. According to Wi-Fi Planet, Apple, Dell and Intel, among others, are suing to invalidate CSIRO's patent. With this decision as a guideline, it's only a matter of time before they do so. (Disclaimer: I'm not a lawyer, and most certainly not a patent attorney, so this is only my opinion.)

Vapor, in a shade of Scarlet

Well, so much for the Red Scarlet, the $3,000 3K video camera scheduled for release next Spring. Here's a quote from Jim Jannard, the founder of Red: "We have changed everything about Scarlet because the market has changed and we have discovered a lot of things in the process. We have a new vision. Wipe you (sic) minds of the past announced Scarlet. Forget the design and forget the price. It is all different now. We think you will be surprised. Glad we didn't take any deposits... :-) ."

Red has recently been talking about introducing its own digital SLR (DSLR) still camera. With the recent introduction of digital SLRs from Nikon and Canon that can shoot HD video, the functions of still and video cameras are blurring, especially for press photographers who are increasingly called upon to shoot video for websites. There's a real opportunity to release a DSLR that does stills and video equally well, so Red had the choice of building two cameras (the Scarlet and a DSLR), or building one. They've apparently chosen to build one, which will be the redesigned Scarlet.

This only reinforces what I've said in the past: Don't believe anything about a product until you can buy it. The milled aluminum mockup that they showed at NAB is probably being melted down as I write this.

Something's coming from Adobe and Google

I'll be following two big announcements tomorrow. First, Adobe will launch Creative Suite 4 at events around the world. In this column, I normally write about Flash Video, but the applications in Creative Suite, including Photoshop, Dreamweaver and Acrobat, are Adobe's true bread and butter. I've been using betas of Dreamweaver and Fireworks CS4 for some time; both products, which came from Macromedia in the Adobe-Macromedia merger, now look and feel more like Adobe applications. Whether that's better or worse depends on whether you prefer the old or new user interfaces. To my eye, the functionality of the CS4 applications has been modestly upgraded, at best. We'll know more tomorrow.

(Update 10:14 p.m. Pacific Time, September 22, 2008) Adobe has posted details of the new CS4 bundles on its website, prior to the announcement events tomorrow. As with CS3, there are seven bundles: Standard and Premium versions of the Web, Design and (Video) Production bundles, plus a Master Collection that includes everything. There are no bargains, either: Unless you were one of the few people who purchased 3.3 versions of the bundles, upgrades start at $499 for the Standard bundle versions, $599 for the Premium versions, and $899 for the Master Collection. If you're starting from scratch, the Standard bundles are $1,399, the Premium bundles are $1,699, and the Master Collection is $2,499. (All prices are in US dollars).

Image via CrunchBase
The bigger announcement, at least in terms of press interest, will be the T-Mobile/Google annoumcement of the first Android phone, the HTC Dream, and of the imminent completion of T-Mobile's 3G mobile service rollout throughout the U.S. Android phones will compete with iPhones and Windows Mobile-based smartphones at the top of the mobile phone food chain, and the Dream is rumored to sell for the same $199 price (on a two-year plan) as the base 3G iPhone. The Dream will have a slide-out QWERTY keyboard, which promises to make it easier to use for power emailers than the iPhone (yet most likely still at a disadvantage vis-a-vis the BlackBerry.) All of the applications in Google's Android store will be free, at least initially, and anyone can post applications (the countdown to the first Android malware has already begun.)

I've been playing with the Android development system on my PC for some time, but I'm reserving judgment on how the Dream performs until I get a chance to try it. I used to be a T-Mobile customer, and if the Dream lives up to the hype, I may well switch back. Again, more tomorrow.

Off Topic: Fallout from the Bailout

Bits and pieces of the proposed U.S. financial bailout are trickling out. It appears that the U.S. Treasury will spend $700 billion ($2,000 for every man, woman and child in the U.S.) to buy Collateralized Debt Obligations, or CDOs. CDOs were created when banks and other lenders mixed together lots of subprime mortgages and other debt, and magically created AAA-rated investment vehicles. Well, now you're going to own $2,000 worth of them.

I'm not complaining that the government is moving to shore up the economic system, but I am very concerned about the process. Can we forget the Patriot Act, an abomination with bipartisan support that was proposed after 9/11 by the same Bush Administration that's proposing this emergency action? Or, how about the secret Bush Administration briefings to Congress that warned of dire consequences if we didn't go to war with Iraq, the briefings that were later found to be almost entirely false? When these particular boys "cry wolf," I'm inclined to apply a pretty thorough smell test. In rushing to try to get a law passed this week, I hope that we don't end up with something that we're very sorry about in the future.

Whatever the eventual bailout plan looks like, will it help the man on the street, the man on the 80th floor, or (I hope) both of them to some degree? In my opinion, the plan has to do everything it can to keep people in their homes. Whether through cutting interest rates, extending payments or even forgiving a portion of some homeowners' debts, it's far better for people to stay in their homes rather than either abandon them or be forced out by foreclosure. Lived-in homes are maintained, and they help to preserve the property values of surrounding homes. It only takes a trip to a city such as Stockton, California's foreclosure capital, to see the carnage wrought on neighborhoods by foreclosures. There, you'll see block after block of abandoned homes that have been raided for their copper plumbing and wiring, with overgrown yards being used as dumping grounds. Many of these homes, still fairly new, are so badly damaged that it would be cheaper to tear them down and build something new than to repair them.

The investors who purchased the CDOs had no interest in preventing foreclosures; in many cases, they didn't (and still don't) even know which mortgages they held. If the government consolidates these mortgages in one place, with the goal of getting the mortgages to reliably pay something, and with getting already abandoned homes rehabilitated and generating income again, everyone will benefit, and this bailout will be worthwhile. If, however, the government shows the same lack of concern that the investors currently holding the CDOs have shown, the citizens of the U.S. are going to end up paying, and paying very dearly, for the hubris of Wall Street.

Taking the competition to the next level

A few posts ago, I wrote about the difficulty that IPTV operators are having with differentiating their services from cable, satellite, and (in some markets) over-the-air broadcasters. Triple-play packages (landline telephone, high-speed Internet and video) are old news in most markets, and cable operators are using VoIP to compete head-to-head with the telcos. Quadruple-play packages, adding mobile service, are less common, and are more difficult for non-telcos to compete with. In order to get access to mobile services, cable and satellite operators usually have to resell services from a telco, which puts them at a pricing disadvantage.

In most places, even when you buy a triple- or quadruple-play package, you get a bundle of services that don't talk to each other. Consumers purchase on the basis of price and features; brand loyalty doesn't exist. In this situation, you can get a runaway "race to the bottom", as is happening in several countries in Western Europe, with France being the best example. There, operators are piling on more and more features while maintaining the price at 30 Euros a month. Packages that would sell in the U.S. for $99 a month or more are going for the equivalent of under $45 at current exchange rates.

The real opportunity is in what I call silo-busting--tearing down the walls between services in order to unlock consumer value and provide the opportunity to increase prices (or at least maintain prices in the face of competition.) Telcos are just now starting to let consumers get Caller ID on their television when the phone rings. Instead of running to the phone when it rings, your television can tell you who's calling, so that you can make the decision of whether or not to take the call. If that service has value to you, and the competition doesn't offer it, you're more likely to stay with your service provider. Let's take it to the next step: Add a speakerphone to the set-top box's remote control, and you can take the call without picking up the phone. Now the television and the phone service are tightly linked. That adds value and increases differentiation.

Let's take a quad-play example: PCCW in Hong Kong enables consumers to look up movie showtimes and buy tickets, right from their televisions. The tickets are sent to their mobile phones in the form of a barcode. At the theater, the barcode is scanned for admission. PCCW can do this because they control all the elements. They're now the biggest seller of movie tickets in Hong Kong. They not only generate transaction fees every time they sell a movie ticket, they offer a desirable service that their competitors can't match.

Or consider a location-based service that ties the television and mobile phones together: A parent can see where her children are by plotting the position of their GPS-enabled mobile phones on a map on her television. It's a service that non-telco competitors can't match, and it's of considerable value to a section of the market.

The last point has to do with paying for these new services. In highly price-competitive markets, there's a fear that telcos won't be able to increase their prices, and these new services will simply get sucked into consumer expectations. Most video providers, whether IPTV, cable or satellite, package their services into tiers: For the basic price, you get a basic tier. If you want more channels, you have to buy another tier at a higher price. If you want premium channels, you pay even more. Consumers are familar and comfortable with this model. The integrated (or converged) services that I'm proposing can be priced into service tiers, just like video programming. Service providers can offer a basic service at a low price to retain subscribers, and offer unique services on tiers to bring in more revenue.

In short, I believe that the real key to unlocking value is to integrate services through applications. As consumers see the power of tying these services together, they'll migrate to the service providers that let them do the most, not just to the providers that are the cheapest.

Watching the dominoes fall

Last night, I was watching the Wall Street bloodbath in real-time: Lehman Brothers racing toward bankruptcy, Bank of America buying Merrill Lynch for a wildly inflated price compared to the market, and AIG playing "chicken" with the Federal Reserve and U.S. Treasury to try to raise $40 billion before the rating agencies lowered its ratings and effectively made it impossible for AIG to borrow any more money. Today, the Dow fell more than 500 points, but given everything that happened over the weekend, that wasn't the worst possible outcome.

So what happens next? Market traders expect Washington Mutual and Wachovia Bank to be the next to go, based on their exposure to subprime mortgages, thus leaving JPMorgan Chase and Bank of America as the two "superbanks"...or so it appears. What the market seems to be discounting is exposure to credit card debt. The same consumers who can neither refinance their home loans nor get new home loans are drawing ever more heavily on high-interest, high-fee credit card debt. Both Bank of America (through its acquisition of MBNA) and JPMorgan Chase are deeply exposed to credit card debt, as are Citicorp, Capital One and others.

It's far too early to call any financial institution or executive "smart"...there are way too many dominoes left on the table in precarious positions.

How fast is fast?

At the International Broadcasting Conference (IBC) in Amsterdam this week, Texas Instruments announced a chip for cable operators that allows eight downstream and four upstream DOCSIS 3.0 channels to be bonded together for a maximum of 320Mbps down and 160Mbps up. Compare that to today's situation, where most cable subscribers get less than 10Mbps down, and most cable operators are contemplating providing no more than 50 to 100Mbps down maximum.

I don't seriously believe that we'll see 320Mbps in the foreseeable future, but this capability will become a weapon in the arsenal of cable operators. The fundamental advantage that Verizon's FiOS service has over cable offerings is the inherent bandwidth of fiber-to-the-home (FTTH); DOCSIS 3.0 bonding is keeping cable operators in the contest. Switched digital video (SDV) and Cable IPTV will enable cable operators to utilize their available bandwidth even more efficiently. The result is that cable operators and telcos may end up competing on a level playing field, so far as bandwidth is concerned.

What business are you in, part two

I've spent the last 20 months writing and talking about telecommunications companies using Internet technology to deliver video programming to consumers (IPTV). In the U.S., AT&T and a host of smaller companies offer IPTV, as do France Telecom, Telefonica, Deutsche Telekom and many other service providers in Europe. They compete with cable operators, satellite providers and over-the-air broadcasters.

A few posts ago, I mentioned Ted Levitt and his famous "What business are you in?" question. If you talk to representatives of these companies, they're likely to tell you that they're in the telecommunications, or cable, or satellite, or broadcasting business, but they're really all in the entertainment business. That's what consumers are buying. Consumers couldn't care less whether the signal comes in over a twisted pair or a coaxial cable, using a satellite antenna or rabbit ears. To consumers, these services are interchangeable; economists call them fungible. Consumers are making their decision based on price, channels, picture quality and customer service. To date, for all the talk about interactive applications, there's no evidence that they actually drive consumer choice one way or the other.

That's why there's so much "sturm und drang" about HD programming, at least in the U.S. DirecTV got an early lead in HD channels, and everyone else has been fighting back ever since, either by adding more HD channels or trying to convince consumers that they're not all that important. The fact that only a minority of U.S. households has the ability to watch HD television hasn't put a lid on the war of words.

There is a way for these companies to differentiate themselves for real, which I'll write about in a future post.

Microsoft's Idea of Cool

The second Seinfeld-Gates commercial (more like a mini-movie) is out on the Microsoft website. Earlier this week, I listened to the This Week In Tech crew spend a half-hour deconstructing the first commercial in the series, as if it were a Supreme Court decision. Folks, you're reading way too much into these ads. Apple's "Mac vs. PC" ads purport to show how superior the Mac (and Mac users) are vs. Windows and Windows users, but these new Microsoft ads are designed to show that Windows is for "real people". In the second ad, Gates and Seinfeld struggle to fit into a "real family", but the point is that they're trying to fit in, while Apple, by implication, is only for the elite.

Let's not forget that the advertising agency that created these ads currently has the Burger King being hit by a cab and Volkswagen Beetles talking with a German accent. Sophisticated comedy is not their thing.

Is Jobs's "Reality Distortion Field" fading away?

Today's "big" announcement by Apple just ended--new versions of the iPod Nano and Touch, and a new version of iTunes, plus some new headphones and a lot of chest beating about the App Store. Almost everything had been leaked weeks ahead of the presentation, and even if Apple had kept a lid on it all, there would have been nothing all that exciting.

The new pricing for the iPod touch isn't going to drive sales (if you're even mildly interested in the 3G iPhone, you're crazy not to buy one of those rather than an iPod Touch.) The revisions of the iPod Nano are nice, but no one is going to be lining up to buy one; at best, it'll be a good replacement for previous-generation Nanos. Apple seems to think that the new "Genius" feature in iTunes (a ripoff of Pandora) is going to generate more sales, but I disagree.

The net of all of this is somewhere between "feh" and "so?". Any other company would have made these announcements with a press release, and perhaps, a press conference. With an announcement like this one, the very fact that Jobs was involved actually increases the disappointment level.

The last really important announcement that Apple did was the original iPhone; compared to that one, today's announcement doesn't even merit a footnote.

Going, going...

If you're a newspaper publisher, the Newspaper Association of America issued some pretty horrifying news today. Total newspaper advertising revenues dropped $3 billion year-to-year in the first six months of 2008, to $18.8 billion dollars, and online newspaper ad revenues dropped for the first time. Alan Mutter, who writes the Reflections of a Newsosaur blog, plotted the decline for his readers:

 

In non-adjusted dollars. these are the worst results in 16 years, but Tim Windsor restated the results in constant 2008 dollars, and determined that these were the worst results since 1982. Here's Tim chart:

Using inflation-adjusted numbers, ad revenues are actually lower than they were in 1982. In addition, according to the NAA, national daily circulation has been falling steadily since 1988, and Sunday circulation has been falling since 1990.

We're in a recession, so that's magnifying the revenue fall-off, but it's very clear that a lot of newspapers are either reaching or have passed the tipping point at which they don't have the resources to attract and keep readers. With less advertising, the news hole either gets bigger or the newspaper gets smaller. If you can't afford to pay enough writers and editors to fill the news hole, the only option is to make the newspaper smaller. At some point, the newspaper goes away.

Broadcasters should take no solace from these numbers. The audience for news shows has been dropping for years, and the average age of the audience watching the national nightly news is over 60. CNN, Fox and MSNBC aren't enlarging the news audience, they're simply trading it among themselves.

Years ago, Ted Levitt, a marketing professor at the Harvard School of Business, asked the rhetorical question "What business are you in?" Newspaper publishers aren't in the newspaper business, they're in the information business. They've got to figure out profitable ways to get their information to customers. For a lot of publishers, that's not going to involve a printing press for much longer.

Off Topic: Back to the real world...

Last night, we learned that Sarah Palin can walk and chew gum at the same time. Bully for her. Today's job loss statistics, which triggered a 300 point loss in the Dow, say one thing to me: The Democrats have to go through their boxes and find those "It's the Economy, Stupid" signs they had in 1992. The U.S. has already had two recessions under George W. Bush, and there's nothing in John McCain's economic plan that deviates substantially from the strategies of the Bush II administration. If the Democrats focus on the economy, they will win. If they get trapped in "social issues" such as abortion, sex education and gun control, they'll lose.

I think that Palin will self-destruct before the end of the campaign: "You can't hit me because I'm a woman and wear glasses" won't wash when she's acting as McCain's attack dog. All of the opposition research that the McCain campaign should have done before appointing her their VP candidate is being done by the press and assembled in easy-to-find chunks at places like the Huffington Post.

If we've learned anything over the last eight years, it's that it's not the strength of the candidate, but rather, the strength of the campaign that determines who gets into the White House. George W. Bush was a lame speaker and a weak debater, but he beat two Democrats who should have mopped the floor with him, at least on paper. However, Al Gore and John Kerry both ran singularly lame campaigns. So far, the Democrats seem to have been caught flat-footed by the Palin announcement. If they can get back on message, it won't matter who the Republican VP candidate is.

Microsoft Goes for Price Leadership with Xbox 360

As of Friday, Microsoft is dropping the U.S. prices of all three Xbox 360 models. The entry-level Arcade model with no hard drive drops from $279 to $199--the cheapest current-generation game console on the market. The basic model with a 60GB hard drive falls to $299 from $349, and the Elite, with a 120GB hard drive, drops to $399 from its previous $449 price. The Arcade and base model prices now bracket the Nintendo Wii, which is priced at $249. The entry-level Sony Playstation 3 is $399.

I'm not sure that the price drops will make a huge different in sales for Microsoft, but it will certainly keep the product price-competitive with Nintendo. However, I think that it's long past time that Microsoft introduce a version that's a media extender first and a game console second. The Elite has everything it needs to be a HD PVR, except for digital or analog video inputs. Even the Arcade can be a usable SD media extender in streaming mode. Microsoft is positioning the Xbox 360 as a set-top box for Mediaroom IPTV systems, but with digital or analog inputs, it could do a lot more.

TiVo and DirecTV: Back Together Again

When News Corporation took operational control of DirecTV a few years ago, it began an agonizing split between DirecTV and TiVo, its supplier of DVR technology. Prior to the split, DirecTV was by far TiVo's biggest market. After News Corp. took over, it demanded a much bigger split of subscription revenues, which TiVo wouldn't agree to. News Corp. called on NDS, a corporate subsidiary, to port DVR software that had already been developed for BSkyB and other services to the DirecTV platform, cutting out TiVo. Last March, DirecTV announced that subscribers wanting HD DVR service had to switch to NDS's set-top box, a decision that's been roundly criticized by many DirecTV users.

However, within days of DirecTV's announcement, John Malone's Liberty Media acquired News Corporation's controlling interest in DirecTV. Liberty Media almost immediately began talks with TiVo to reestablish the relationship between the two companies, and today, both companies announced that TiVo will develop a DirecTV-compatible HD DVR for delivery in the second half of 2009.

The loss of DirecTV as a major customer made TiVo a much stronger company: It completed a distribution deal with Comcast that's in the process of rollout, and it shifted a good deal of its revenues from selling boxes and subscriptions to selling viewing and marketing information to advertisers. Winning DirecTV back can only help the company's bottom line.

Obligatory Google Chrome Post

Yes, I've installed Google Chrome, and no, it's not an Internet Explorer killer, at least not yet. My browser of choice is Firefox 3, and I see nothing in Chrome at this point that will get me to switch. The biggest advanage that I see so far is that Chrome seems to be considerably faster in loading pages than either IE or Firefox. Chrome uses the same WebKit rendering engine that Safari uses, and Safari has been roundly praised for its speed, so it's no surprise that Chrome is fast. Google benchmarks show that Chrome's V8 JavaScript compiler is much faster than the interpreters in IE, Firefox and Opera, but the forthcoming Firefox 3.1 will have its own JavaScript compiler, so Chrome's performance advantage may be short-lived.

It's going to take a long time for Chrome to get the same kind of third-party developer support that Firefox already has, but I don't think that's Google's objective: I think that they're targeting users who want simple, fast browsing, and couldn't care less whether the browser supports add-ons. Click one button and it's installed. Every visitor to Google Search is a potential user. That's got to scare Microsoft, even if Chrome is less sophisticated in many ways than IE.

I've visited some sites that don't recognize the Chrome user agent, and thus either limit access or won't give access to Chrome users at all. Therefore, the onus is now on Google to get site developers to support Chrome. That's not going to be easy, because other than the Google name, I haven't seen anything compelling enough to get most people to switch from their existing browser to Chrome.