You can help save drive-in movies

Bloomberg reports that drive-in movie theaters, which once were a central part of suburban life in the U.S., have passed the point of being endangered species and are headed toward extinction. At their peak, there were more than 4,000 drive-in theaters operating in the U.S.; today, there's only about 360. The remainder have been converted into swap meets, bulldozed to make room for strip malls and subdevelopments, or simply leveled and left to turn back into grassland.

210 of the remaining 360 drive-ins are threatened with closure if they can't replace their film projectors with digital models. Motion picture distributors have just about stopped sending their movies to theaters in the form of film reels; instead they typically send reusable hard drives loaded with encrypted versions of movies. Digital projectors cost $50,000 to $100,000, depending on their throw (how far they can project a viewable image) and resolution.

Honda has stepped up to help with a promotion called "Project Drive-In," which will give five digital projectors to drive-in theaters chosen by voters on the projectdrivein.com website. The site also has links to a separate Indiegogo campaign to raise money to help drive-ins with digital conversion. This video explains the problem and Honda's program:


It's not just drive-ins that are in danger; art and nonprofit theaters are also threatened. If there's a drive-in, art or nonprofit theater in your city or town, it's worth it to call or stop by and see if they need help with funding their digital conversion. Even ten or twenty dollars could be a big help.

Chromecast, Leap Motion and Ouya: Experiences and updates

So far this summer, I've gotten several new gadgets; here's the rundown and my experiences so far:

Ouya

I was an Ouya Kickstarter backer and got my system a few weeks before it arrived on store shelves. At the time, I wrote that the software was very rough, with frequent freeze-ups, a confusing user interface and a limited selection of games. Now, after untold firmware updates, a factory reset and many restarts, my Ouya is finally reasonably stable. It still has a tendency to crash in the middle of games, but instead of freezing up, it returns to a point where it's easy to recover. I still wouldn't recommend that gamers rush out and buy one, but it looks likely that Ouya's firmware will be solid and a good selection of games will be available for the Holiday season.

Leap Motion

I put a pre-order in for a Leap Motion sensor last year, and mine arrived a couple of weeks ago. The Leap Motion device plugs into a USB port on a Windows or Macintosh PC, and it senses the position and motion of hands and fingers in a space above and around the sensor. A collection of apps that take advantage of the sensor are available on the Airspace website.

In general, I'm very disappointed with the Leap Motion device. I recognize that it's still effectively a beta product, but based on the demonstrations given to the press, it certainly appeared to be stable and usable. My experience so far is that it's neither. I've tested the sensor on a Core i3-based laptop running Windows 8.1 Pro, and a Core i7-based iMac running OS X Mountain Lion. There's a significant amount of noise in object detection on both machines--when holding my hands still, the image of the hands jitters in space as if I've got palsy--but the problem is worse on my Windows machine. Both computers also have difficulty detecting all ten fingers unless I hold my hands almost perfectly parallel to the Leap Motion sensor. Moving either hand (especially my left hand) more than slightly vertical will cause fingers to disappear from tracking.

The Airspace apps are nothing to write home about, either: A hand-controlled version of Google Earth included with the package is impossible for me to use. No matter where I start on the globe, I usually end up underwater in an unmarked body of water. A version of Cut the Rope is also included, but it's far easier for me to use a mouse or trackpad to control it than it is to control it with my hands and the Leap Motion sensor. Flocking, another free demo app, uses your hands to control a group of fish. It does absolutely nothing on my Windows system, leading me to believe that Leap Motion's performance is very sensitive to your processor's power. Other Airspace apps, which range from free to $29.99 with most priced at $9.99 or less, tend to be overpriced and underpowered--there are far better free to $0.99 apps in both the iTunes Store and Google Play than anything you'll find in Airspace.

At this point, I can't recommend the Leap Motion sensor. It's still too early in its development cycle, and it has no compelling applications. Anything that you can do with Leap Motion, you can do faster and more accurately with a mouse or with your finger on a touchscreen. If Leap Motion improves the stability and performance of its software, integrates it better with Windows and OS X, and improves its usefulness in 3D applications, I'll be able to recommend it.

Chromecast

I got a Google Chromecast Internet video player last weekend, and of these three devices, it's clearly the best thought-out and most mature. Chromecast is a $39 dongle that attaches to an open HDMI connector on your HDTV or A/V receiver. It gets its power from an included USB wall wart. There's virtually no hardware configuration needed on the Chromecast:

1. Plug the Chromecast into an open HDMI port
2. Plug in the power supply and attach the USB cable between the power supply and the Chromecast
3. Switch your HDTV to display the signal from the port to which the Chromecast is attached
4. Go to http://cast.google.com/chromecast/setup and download the setup app for your operating system
5. Follow the instructions in the setup app to save your Wi-Fi router's SSID and password in your Chromecast

It was when I got to step 5 that I hit my first (and only) glitch: The Chromecast has to be on the same Wi-Fi network as all the devices that want to use it. I was running on a 5GHz 802.11ac network (which isn't supported by Chromecast,) and my Windows PC couldn't find the the device. However, a couple of clicks later, the setup app switched my PC to a 2.4GHz connection, the app found the Chromecast and configured it for my network.

On the Chromecast setup website, you can also download and install a Chromecast extension for Google's Chrome browser. Once your device is talking to the Chromecast, you can send any webpage (even a webpage with video, such as Hulu or CBS.com) to your HDTV. If you're not using a Chrome browser, you can still use your Chromecast to watch videos from any site that supports it. YouTube currently supports Chromecast with a small icon in the bottom right-hand corner of each video; click the icon, select your Chromecast device, and in a few seconds, the video will start playing on your TV. In addition to YouTube, Netflix and Google Play currently support the Chromecast; other sites are planning to add support in the near future.

Mr. Bezos buys a newspaper...and you know what happens next

Earlier today, The Washington Post Company announced that Jeff Bezos, founder of Amazon.com, has agreed to purchase The Washington Post and affiliated newspapers, along with the printing plant, for $250 million. The sale came as a shock, especially to many Post employees, who hadn't been told that the paper was for sale. For his part, Bezos said that the current publisher and executive editor will stay in their jobs, and that no layoffs are contemplated as a result of the transaction.

What, I wondered, would be the reaction of The New York Times, the "newspaper of record," the "Grey Lady"? The Times has run an increasingly shrill series of articles about Amazon, so I was interested in seeing how the newspaper handled the Washington Post story. As expected, the Times turned it into evidence of some sort of a nefarious scheme.

The Times gave the story to Nick Wingfield and David Streitfeld. I've written about Streitfeld previously, and called him a hack whose sole purpose at the Times seems to be doing hatchet jobs on Amazon. This evening's story did nothing to change my opinion of either his objectivity or his writing skill. The article--one of the biggest media stories of the year--has in it a total of two quotes: A generally laudatory one from Rob Glaser of RealNetworks, and the second from Dennis Johnson, who runs publisher Melville House and its blog Moby Lives. Mr. Johnson, whose negative position on Amazon is well-known in the book industry, has been Streitfeld's go-to source for negative quotes about the company. Here's a quote from the article:

Critics of Amazon were aghast at the news of The Washington Post purchase, saying it would further increase the power of a company and a tycoon they think already has too much of it. Although Mr. Bezos and not Amazon bought The Post, rivals and critics were already concerned that the newspaper’s work would be used to help Amazon. 

“It’s an old boring story — rich man buys a newspaper — but in this instance it’s one of the richest men ever buying one of the most important newspapers ever, which is the one our government leaders read first thing every morning,” said Dennis Johnson, the co-founder of Melville House, a well-regarded small publisher. “This is the capper in the development of one of the most powerful vertical monopolies in our history, which is also one of the most controlling in matters of cultural concern.”

It doesn't take a trained journalist to see how "over the top" Johnson's quote is. (For example, for the record, Jeff Bezos ranks 16th on Bloomberg's Billionaires list, behind Warren Buffet (who's actively buying newspapers,) the Koch Brothers (who are rumored to be interested in buying some or all of Tribune's newspapers,) and the Walton family heirs (whose Walmart has been accused of its share of sharp practices,) among others.) Johnson sees a conspiracy under Amazon's rock--but I don't recall him reacting the same way when Barnes & Noble and Borders divided up the retail bookstore business and caused literally thousands of independent bookstores to go out of business. Incidentally, his books continue to be on sale at Amazon.

That leads me to wonder: Why does the Times have it in so badly for Amazon? There are other companies that sell online without collecting sales tax. There are others that have pushed their suppliers around to get preferential pricing, terms and conditions. There are others that are more dominant in their industries than Amazon is. There are others that have been accused of poor working conditions in their factories and warehouses. Is the Times trying to curry favor with one of Amazon's competitors? Is it getting payback for a business deal gone wrong? From where I sit, it's impossible to know.

Aereo: If you can't beat 'em, buy 'em?

Let's set the War of Retransmission between Time Warner Cable (TWC) and CBS aside for a minute, and consider another battle that CBS is fighting: The one with Aereo, the company (backed by IAC/InterActiveCorp) that's deploying hundreds of thousands of tiny antennas in cities across the country to allow consumers to watch broadcast television over the Internet. So far, Aereo has prevailed in court against CBS, Fox, ABC, Univision, NBC and local broadcasters.

Aereo is paying nothing for retransmission rights, and if it prevails in lower court, the television networks will have a potentially years-long court battle to shut the service down, followed by fighting to enact legislation against Aereo if the court battle fails. In the worst case, Aereo could provide a model for anyone to get into the over-the-top Internet television business without paying a dime to broadcasters.

Let's return to the War of Retransmission. Earlier today, Time Warner Cable made CBS an offer: Instead of including CBS as a standard part of all of its cable packages, TWC would make CBS and its related channels "a la carte," just like HBO or CBS's Showtime. CBS could charge whatever it wants, TWC would collect the fee and pass 100% of it back to CBS.

That brings us to an important point: Broadcast retransmission and cable network licensing fees can't continue to go up indefinitely. We are very close to the point where multichannel video services will be too expensive for the majority of consumers. When that happens, we'll see millions--yes, millions--of cable, satellite and IPTV customers downgrading their service, and quite a few of them cancelling service altogether.

There are two trends that could result in very undesirable outcomes for broadcasters:

1. Aereo may have a legal way to distribute broadcasters' video without paying them anything for retransmission rights, and
2. Broadcasters don't have much more room to increase retransmission fees before cable operators and their customers walk away.

Here's a heretical approach that could well solve both problems: A group of broadcasters should buy Aereo, and use it as the basis for their own multichannel video service. By most accounts, Aereo's customer software is well-designed, and the company is scaling up to serve the 60 largest U.S. markets. With Aereo, broadcasters could quickly put a national video distribution system into place. As for the problem with rising retransmission fees, broadcasters could figure out just how much consumers are willing to pay...by charging them directly.

Instead of Aereo's current pricing model ($8 to $12/month,) a broadcaster-owned Aereo could offer channels on an a la carte basis--and consumers could buy the channels that they want. Those broadcasters (and cable networks) that want carriage on Aereo without getting direct compensation could make their channels available as part of the basic Aereo package (which would be priced at perhaps $5 per month) at no additional cost to subscribers. Broadcasters could make all of their digital subchannels (the extra channels made possible by digital television in the U.S.) available through Aereo, either at no charge or as part of their main channel subscription. They could also offer their own bundles and packages in order to launch new channels or increase viewership of existing ones.

The next step would be to add cable channels to Aereo. Some of the most popular free and paid cable channels are owned by the major U.S. broadcast television networks, including ESPN, The Disney Channel, Fox Sports 1, FX and Showtime. The only broadcast network that probably wouldn't participate is NBC (which owns USA, Bravo, Syfy, E! and others) because it's owned by Comcast, but given NBC's ratings in recent years, that's no loss. With Aereo in broadcasters' hands, it would no longer represent a threat, but instead would be both an offensive and defensive weapon: Offensive, in its ability to attract revenue away from existing video distributors, and defensive, by being offered to consumers for free in markets where a cable operator or other video service is threatening to drop a broadcast network over retransmission fees.

Do I think that a group of broadcasters is likely to buy Aereo? No. Do I think that they should seriously consider it? Yes.

Time Warner Cable offers a la carte option to CBS

The Verge is reporting that Time Warner Cable CEO Glenn Britt has made a new proposal to CBS in the form of an open letter (PDF). Time Warner Cable stopped carrying CBS's television stations and cable networks last Friday (except for CBS Sports Network, which is covered by a separate agreement.) Trade reports indicate that Time Warner Cable is currently paying $1.00 per subscriber for CBS, close to CBS's industry average of $0.85 per sub. CBS is reportedly asking for $2.00 per subscriber.

Time Warner Cable's new proposal is that the cable operator can either take its previous final offer, which would continue to make CBS available to all subscribers, or it could make CBS and its affiliated networks available to individual subscribers on an "a la carte" basis. CBS would be able to charge Time Warner Cable's subscribers whatever it likes, and CBS would get 100% of the revenue.

The choice between Time Warner Cable's offers isn't clear, because we don't know for certain how much TWC has offered to pay, how much CBS is looking for, or how many of TWC's subscribers are likely to pay separately for CBS if it goes a la carte. That last number also affects how much CBS can charge advertisers, since it would only be able to count the subscribers who actually pay extra for CBS as part of its potential audience, not the entire Time Warner Cable subscriber base. Here's a quick example:

Time Warner Cable had 11.7 million video subscribers as of June 30, 2013 (PDF). Assuming that CBS gets $1 per subscriber, that means that CBS would get $11.7 million per year from TWC, not including Showtime, CBS Sports Network or its other premium networks. At $2 per subscriber, CBS would have to sign up at least 50% of TWC households in order to bring in the same revenue--but they'd actually have to sign up more, because instead of selling to a single customer (TWC,) it would have to sell to 11.7 million households, and there would be significant marketing and promotion costs. CBS would pay TWC for some of that promotion; other parts would have to be done by CBS through its own stations and networks, and through other media.

The impact on ad revenues would be based on how many TWC households CBS signs up. Let's say that CBS only signs up 50% of TWC households, or 5.85 million households. That means that there would be almost 6 million fewer households that have the potential to watch CBS's hit shows. Some of those households would switch to other video providers, and some would watch CBS's stations over the air, but there would be an inevitable drop in CBS's ratings in some of the biggest markets in the U.S., including New York and Los Angeles.

CBS has said that it will consider the proposals and respond soon.