With the FS7, Sony finally learns to cannibalize itself

At the International Broadcasting Conference in Amsterdam, broadcasting equipment companies announce new products, and often ship the new products they announced at NAB in April. For example, Panasonic showed near-production versions of its Varicam 35 that was announced at NAB, as did AJA with its CION camera. Sony, on the other hand, showed a new camera whose existence started to be rumored only a few weeks before IBC. The PXW-FS7 (referred to by most people as the FS7) is a Super 35 4K camera that fits in price between Sony's FS700 and F5, but is functionally superior to the F5 in many ways. It uses the full XAVC codec and records 10-bit 4:2:2 UHD 4K at up to 60 fps and 600Mbps (Digital Cinema 4K will be supported in a firmware upgrade scheduled for early 2015,) but it uses Sony's XQD flash media, which costs substantially less than the SxS Pro+ flash media used by the F5.

It's got built-in ND filters, and it natively accepts Sony's E-mount lenses; Sony announced a new professional power zoom 28-135mm F4 lens to go along with the FS7. An A-mount adapter is available, and of course, third-party adapters that connect a variety of mounts to A- or E-mounts will also work. It's got a standard grip control that puts many of the camera's most important controls on a hand grip. An optional extension unit enables the FS7 to record using Apple's ProRes 422 codec, outputs raw 12-bit 4K video that can be recorded by external Sony and Convergent Design recorders, and supports industry-standard batteries. The FS7 will be somewhat heavier that AJA's CION; the FS7 weighs 4.5kg without the extension unit that it needs to be functionally comparable to the CION, while the CION weighs 3.4kg. Both cameras are lightweights compared with Blackmagic Design's URSA, which weighs 7.4kg.

What makes the FS7 so worthy of discussion is that a number of observers have noted that it's in many ways a better camera than Sony's F5, for less money. The F5 sells for $16,490 (U.S.) at B&H, and that's without a viewfinder or lens. The FS7 will sell for $7,999 at Adorama ($10,499 with 28-135mm lens.) Introducing a new product that competes directly with another Sony product for less money was, until now, considered heresy. Sony took extraordinary pains to make sure that its products didn't directly compete with each other, except when the company was deliberately obsoleting an older product. In this case, however, Sony says that the FS7 will replace neither the FS700, which B&H sells for $7.699 and which the FS7 blows out of the water, nor the F5, which the FS7 compares very well to for about half the price.

Sony's no-competition policy dates back to when Sony was the undisputed technological and market leader in cameras. Any cannibalization of Sony's own products was seen as unnecessarily leaving money on the table. However, first Panasonic and then Canon showed that they could build cameras that could compete very well with Sony's offerings. Panasonic in particular was largely unconcerned if its cameras cannibalized its other models, and both Panasonic and Canon were happy to take sales away from Sony. Blackmagic Design showed that it can't yet design or build cameras to Canon's, Panasonic's or Sony's standards, but it introduced price competition into a business that hadn't seen much of it. That brought in AJA, which looks like it's learned from Blackmagic's mistakes and will combine high-end performance with aggressive pricing.

Sony's in a new world. It's now got competitors that are its technological equal and are willing to accept a lower gross margin on their sales. Sony has finally figured out that it's better to cannibalize yourself and keep the revenues, rather than let your competitors cannibalize you and take the revenues. Sony's going to let its customers tell it if the FS7 replaces either the FS700 or F5. The older products will stay in Sony's product lines until sales fall off sufficiently to make one or both unprofitable to continue to offer.

With the FS7, Sony is finally doing what many observers and customers hoped that it would do decades ago, Time will tell if the FS7 is a one-time fluke or the first product in a new strategic commitment.

Apple gets its mojo back...for now

Earlier today, Apple held a multi-product announcement at the Flint Center in Cupertino. I'm going to skip the product specifications and discuss what it all means, at least to me:

iPhone 6

The long-rumored iPhone 6 was announced, in two flavors: The iPhone 6 with a 4.7" display, and the iPhone 6 Plus with a 5.5" display. Other than display size, the two phones are functionally identical to each other. The big news, obviously, is the bigger screens. Prior to today, if you wanted an iPhone, you could choose between a 4" display and...another 4" display. Android smartphone vendors have successfully competed against the iPhone with bigger phones--in fact, some analysts attribute a fair portion of the decline in iPad sales to substitution of bigger smartphones for tablets.

With the deliveries of the iPhone 6 models in September, Apple will have its own "phablet" to compete with big Android and Windows Phone models. The iPhone 6 Plus, in particular, is likely to cannibalize sales of iPads and iPad minis, but Apple would rather steal sales from itself and keep customers inside Apple's ecosystem than lose sales to competitors and risk having customers switch to Android or Windows Phone.

Apple has also adopted Near Field Communications (NFC) for use in financial transactions. The company's new Apple Pay service enables customers of five of the largest U.S. banks to make credit and debit card payments without taking out their cards. Apple says that over 220,000 stores are already equipped for Apple Pay transactions. Again, this is an area where Apple is catching up with competitors; the first NFC-equipped Android and Blackberry phones were released in 2011. NFC hasn't taken off in the U.S., largely because a relatively small number of customers had compatible smartphones, and partly because not enough banks and merchants were supporting it. Apple Pay goes a long way to cutting the Gordian Knot by bringing Apple, payment networks (American Express, MasterCard and Visa,) banks and merchants together. However, Apple Pay only works with the iPhone 6 and iPhone 6 Plus, so for quite some time, the vast majority of iPhones in customer hands will be incompatible.

From all appearances, the new iPhones are well-built, well-designed smartphones that compare well with the best phones from competitors. However, the key features that differentiate the iPhone 6 and iPhone 6 Plus from earlier iPhones, particularly the iPhone 5s, are features that competitors have had for some time. With today's announcement, the top iOS, Android and Windows Phone smartphones are largely at parity.

Apple Watch

Today's Apple Watch announcement (really a preannouncement--I'll explain in a moment) finally brought to an end most of the speculation about the "iWatch"--speculation that began in late 2012. Many, if not most of the current assortment of smartwatches from Pebble, Samsung, Motorola, LG, Sony and others, owe their genesis to a desire to get into the market ahead of Apple. Apple isn't in the market quite yet--they announced the Apple Watch with two different display sizes and three models, but didn't discuss the actual screen size, resolution, storage space, RAM size or battery life. We also don't know when the Apple Watch will ship, other than some time in early 2015. The prices was specified at "starting at $349" in the U.S., which suggests that the three models will be differentiated by screen size, bands, and possibly memory. (We've since learned that the models are also likely to be differentiated by case materials.) So, we know a lot about the Apple Watch, but if we don't know when we can buy it, how much it'll cost or how it's equipped, it's a preannouncement.

People have criticized Samsung for their tendency to throw everything but the kitchen sink into their smartphones, whether or not the features are actually going to be used or work very well. I felt the same way about the Apple Watch feature set. Some of the features, such as using a GPS-based time server to maintain the correct local time, and the ability to use the Watch as the "front end" for texts, phone calls and email, make a lot of sense. The exercise features make the Watch an effective substitute for a fitness tracker. However, some features, like the ability to draw on the crystal with your finger and to send your heartbeat to another Watch user, go into the "What were they thinking?" category.

It feels to me like no one--not Apple, Samsung, Motorola or the rest--knows what the real use cases for a smartwatch are. Of course it has to tell time; otherwise, it's not a watch. But anyone can buy a perfectly adequate watch for telling time for $25. How do you justify spending $250 or more for a smartwatch? One way is to let it act as a "front end" for the smartphone for the most common uses--phone calls, texts and emails. Using the watch for maps and navigation is also nice, and fairly common. And, of course, if the smartwatch can do everything that a fitness tracker can, you don't need the fitness tracker. But here's the problem: Other than telling time, the smartwatch doesn't do anything as well as a smartphone. The screen is too small, especially when people want smartphones with bigger and bigger screens. Fitness trackers aren't selling well, and many people who bought them have stopped using them. Will they use the fitness features longer or more regularly if they're part of a smartwatch? Perhaps. Will they want to feel someone else's heartbeat? Maybe once.

I don't think that anyone, Apple included, has as of yet either 1) Justified the prices of their smartwatches, or 2) Figured out the right feature set to make them a mass market item. At $349, I expect a watch that's a smartphone, not a watch that has to be connected to a smartphone in order to do anything more than tell time. Maybe at $199, smartwatches with comparable functionality to the Apple Watch will sell in big numbers, but at $349, or even the $249 that most Android Wear watches are priced at, they're going to be niche items.

Facebook buys Oculus VR: What now?

Earlier today, Facebook announced that it had acquired virtual reality headset maker Oculus VR for $2 billion, in the form of $400 million in cash and 23.1 million shares of Facebook common stock worth $1.6 billion. Oculus VR's shareholders could earn an additional $300 million based on achieving several unspecified performance objectives. Oculus started with a Kickstarter campaign in 2012 that raised $2.4 million; last year, the company closed A and B rounds worth a total of about $93 million.

Ever since the announcement, comments about Oculus's acquisition have been flying around the Internet. The general tone is that Facebook will destroy Oculus's independence and load its software up with links to Facebook content. Some game developers have gone so far as to say that they've either stopped or won't begin software development for the Oculus Rift. My take is that Facebook's acquisition will be good for Oculus and its third-party developers, although a few years down the road, Oculus's shareholders may wish that they had kept ownership of the company.

But first, why did Facebook acquire Oculus? Facebook's not a hardware company, and when it's tried to specify smartphone hardware or design smartphone user interfaces, it's come up short. It'll take years for Oculus to become a meaningful generator of revenues and profits for Facebook, if it ever does. However, Facebook believes that VR is the next big hardware platform after mobile devices. VR is Facebook's "blue ocean," an undeveloped market opportunity that could be the basis of tens of billions of dollars in revenues. And, Facebook is buying the recognized market and technology leader: Even though there have been VR devices for almost two decades, the Oculus Rift is the first device that can truly begin to exploit virtual reality without all the physical discomfort that's come to characterize VR systems. As I've written previously, Oculus is six months to a year ahead of Sony and other VR headset manufacturers. And, Oculus is already generating revenue: Some 75,000 developers kits have been sold, at $300 each. Most other VR developers have only dozens or a few hundred developers working on their platforms.

As for Oculus and its shareholders, Facebook's $2 billion represents a nice return on their investments (Spark Capital and Matrix Partners are said by Bloomberg.com to both have received a 20-times return on investments made from a year to just a few months ago,) although I believe that if Oculus had remained independent and had become successful, the company's valuation would have easily been ten times what Facebook paid. However, Facebook brings to Oculus enormous financial resources. The company will be able to expand its development facilities and hire more aggressively. It will also have more influence on component manufacturers, because Oculus will be able to commit to much bigger purchase quantities and bigger non-recurring engineering costs than it could before Facebook. This is critical, because Oculus doesn't have the ability to build its own displays, camera and sensors, and some of the components it needs simply aren't yet available as off-the-shelf products.

Oculus's hardware development is likely to dovetail nicely with Facebook's rapid software development philosophy. At Sony's announcement of its "Project Morpheus" at GDC, the company said that it's been working on VR longer than Oculus, but most observers would agree that Oculus is still significantly ahead of Sony. The combination of Oculus and Facebook should be able to iterate hardware and software faster than Sony (and most other big companies) can even imagine. So, Oculus will most likely be able to get its first consumer version of the Oculus Rift out faster, and possibly at lower cost, with Facebook's backing.

But what about Facebook's influence on Oculus? After all, Facebook is hardly a benign presence. In Boing Boing, Dean Putney wrote a scathing takedown of the Facebook-Oculus deal; here's a quote:

The problem isn't that Facebook is going (to) ruin Oculus, by plastering it with ads and making it a pain in the ass like everything else they've shat all over. Although that wouldn't be a surprise. The problem is that this was an opportunity for something different. And it just died.

I don't think that the acquisition is as "soul crushing" as Putney believes; Facebook has said that Oculus will be run independently, and its offices will likely remain in Orange County, at least for a while. In addition, we're unlikely to see the consumer version of the Oculus Rift until next year, and that gives competitors an opportunity to catch up. However, paradoxically, the same funding that makes the Oculus Rift less risky as a development platform increases the risk that Facebook will turn it into a platform that you wouldn't want to develop for. I don't have a good counterargument to give to the people who believe that Facebook will "shit all over" Oculus, other than you should be okay if you develop for multiple headsets, not just the Oculus Rift.

Games are just the tip of the VR iceberg

At last week's Game Developers' Conference, Virtual Reality (VR) was front and center, led by Oculus VR's second (and likely final) developer's kit, and Sony's prototype Project Morpheus VR headset. At Sony's launch event, a company executive noted that there are a number of applications for VR, but that games are the biggest opportunity. Games are an obvious application for VR; existing 2 1/2 D games, such as first person shooters, can be modified to enable the player to be immersed in the field of play using a VR headset. However, while games may be the first application for VR, in the long run, they're not the biggest application.

VR, which places the participant in an immersive environment, has the potential to recreate real-world environments much more successfully than technologies such as CAVEs that project an environment on multiple walls of a cube in which the participant stands. VR can be used for a variety of simulations; for example:

• Military and police training, where recruits learn how to differentiate friend from foe and both how and when to engage with an enemy or suspect.
• Medical training, where medical students can perform tests and try out surgical techniques.
• Flight training for pilots and trainees.

There are also many applications in education. Students can be transported into ancient Rome or Greece and participate in activities as the people who lived there did. They can run science experiments that would be dangerous or deadly if they were to do them in real life, and they can observe processes at scales that would otherwise be impossible (from sub-atomic to galactic.) Students can do these things today with PCs and tablets, but the addition of VR makes them much more visceral, which should help students to learn more and retain more of what they learn.

There's also an opportunity for VR in television and movies. We think of these as passive media, but VR has the potential to immerse the viewer in the action to a much greater degree than has been possible with 3D. However, there are many questions that need to be answered, especially for live (non-computer-animated) content:

• Can the viewer participate in the action, or are they merely an observer?
• How much freedom does the viewer have in participating--can they move freely, or are their movements limited?
• How do the characters in the production interact with the viewer? Can the viewer's actions change the production's course of action? (For example, in an action/adventure production, could the viewer's character kill the hero? What happens next--roll the credits?)

I believe that ultimately, these applications with be much bigger than gaming. However, gaming technology will be very important for creating these applications, and game developers will be in an excellent position to be early developers of these applications. Gaming engines that have been adapted to support VR will be the basis of the first generation of new applications, while production and development systems built specifically for VR will come along later. In short, VR's first big opportunity will be gaming, but the application set and market opportunities will ultimately be much bigger than gaming alone.

Oculus VR releases DK2, its second VR headset/software development kit

Just in time for GDC, Oculus VR has released its second Oculus Rift development kit, called DK2. Engadget got a look at the new hardware, and it's a mild improvement over the Crystal Cove prototype shown at CES in January. Here's a summary:

• Oculus now supplies its own user-facing IR camera to track the headset's position.
• It's made the IR-reflective dots on the headset used for position tracking, which were visible on Crystal Cove prototype, invisible and harder to damage.
• There are USB 2.0 and headset ports above the user's left eye.
• A single cord breaks out to connect the headset to a computer's HDMI and USB (power) connections.
• The display resolution is 1920 x 1080 (1080 x 960 for each eye.)

Oculus has priced DK2 at $350, $50 more than the original development kit. The company notes that the the final consumer version of the Oculus Rift will have higher resolution displays, a faster refresh rate and lower latency, and will be physically lighter than the DK2, but it's significantly closer to the final product than the original development kit was.

Even with the announcements from Sony and several other VR headset vendors at GDC, it's likely that Oculus is still significantly ahead of the pack. However, the company's one potential weakness is that it's dependent on third-party manufacturers for much of its technology--displays, sensors and cameras. For example, DK2's display has a 72 Hz refresh rate, which is as fast as Oculus could find in a 1920 x 1080 OLED display, but it needs at least a 90 Hz refresh rate to eliminate visual artifacts that can cause motion sickness. Sony manufactures image sensors and many of its own displays, so it may be in a better position to source the necessary components. 

Sony's "Project Morpheus": VR for the PS4: Good start, but far from prime time

Last night, Sony announced "Project Morpheus" at an event at the Game Developers Conference. It consists of the PS4 console, the PS4 camera, Sony's existing Move controller and a new VR headset. The presentation was spun by Sony as a major technology announcement, but in fact, it was largely a slimmed-down version of presentations over the last few months by Oculus Rift and Valve. While both companies have been quite specific about what they've found to be necessary in a VR system (not just the headset, but the sensors and content as well,) Sony stayed away from hard numbers in its presentation. For example, when asked what Project Morpheus's refresh rate is, a Sony executive replied "As fast as possible."

Engadget has gotten a chance to try out Sony's VR headset at GDC, and they found it to be not bad for a first try, but far from Sony's own goals. For example, in Sony's presentation, the company said that comfort is one of its most important objectives, but the Project Morpheus headset requires multiple manual adjustments, and when it's in the correct position, it's so tightly sealed that sweat fogs up the lenses. Screen resolution is lower than Oculus VR's new DK2 developer kit (see next post.) Vision blur is a significant problem, which suggests that Sony isn't using a low-persistence display. In addition, Sony's headset offers a 90 degree diagonal field of view vs. Oculus Rift's 110 degrees. On the other hand, one advantage that the Sony headset has over Oculus Rift is full-body tracking, but there are a lot of companies working on that.

My take is that this is Sony climbing on the VR bandwagon with a very incomplete solution. The expectation has become that if you're serious about gaming, you have to be working on VR, so Sony checked off that box. However, from Oculus's release of the DK2 earlier today, I'd say that Sony is six months to a year behind with its headset. As for audio, Sony says that it makes good headphones, but so do many other companies, and headphones aren't the problem. Will Sony's existing Move controllers and PS4 camera really work well in a VR system? I doubt it. Those devices weren't designed for VR, and I doubt that Sony put in the costs necessary to make them work at the speeds and with the accuracy needed for VR.

What we're likely to end up with is a suite of devices that Sony purpose-builds for VR--and it's not at all certain that even the PS4 will have the refresh rates necessary to drive Sony's final VR headset.

GoPro: Succeeding by sticking to its knitting

Let me introduce you to Bigbird, a juvenile pelican that was orphaned and abandoned by its flock, and washed up on the beach at the Greystoke Mahale resort in Tanzania. The resort's staff took care of Bigbird--which included teaching the pelican how to fly. The resort's team of "pelican trainers" mounted a GoPro sport camera on Bigbird's beak, and the camera captured the bird's process of learning how to flap its wings while simultaneously running down the beach. Most importantly, it captured Bigbird's first flight.

That video, which was taken by the Greystoke Mahale's staff, was edited by GoPro, and you can watch it on YouTube. You can also watch two deer be rescued from a frozen lake in Minnesota, or a kitten rescued from a burning building and resuscitated by a Fresno, CA fireman. If you can keep from crying after watching any of these videos, you're stronger than I am. If you want something a little more exciting, you can watch people snow skiing, snowboarding, water skiing, surfboarding, skateboarding, mountain biking, racing superbikes, racing cars, and much more, all from a first-person perspective. In fact, if you can name a sport or outdoor activity, it's probably been captured by a GoPro camera and can be found by searching on YouTube.

GoPro is arguably the most successful camera company in the world--they've certainly done more with fewer models than anyone else. The company exclusively makes sports cameras--small, rugged, inexpensive video cameras that nevertheless produce high-quality images. At any one time, GoPro only sells three models; currently, they sell two versions of their top-of-the-line Hero 3+ cameras, and they sell one model of their previous-generation Hero 3 line as their entry-level model. Prices range from $199 to $399. In addition, GoPro sells a range of accessories that allow the cameras to be mounted just about anywhere, and to be protected from just about any conditions (short of placing them in an oven.) The accessories for the Hero 3 and 3+ series are identical, so customers who purchased Hero 3 models can upgrade to a Hero 3+ and use all of their existing accessories.

By comparison, GoPro's biggest competitors--Sony and JVC--sell sport cameras as a sideline. For example, Sony sells full lines of point & shoot cameras, DSLRs, ILCs and camcorders, not to mention its line of professional camcorders and cinema cameras. And, in there somewhere, it's got two sport cameras. JVC is in a similar situation; its two-model ADIXXION line of sport cameras are a small part of a much bigger line of camcorders. GoPro has been able to keep ahead of its competitors, both big and small, with its laser-like focus on features that are of value to its target market of active sportspeople. Sony and JVC may each have a single product manager focusing on that market, while GoPro's entire company is focused there.

One way that GoPro keeps on top of its customers' needs is to watch videos that they make--and it gets thousands of them. Most of the videos featured on GoPro's website and YouTube site were produced not by GoPro but by its customers. So many people are producing videos with their GoPro cameras, and the videos are so popular (especially after being edited and enhanced with music by the GoPro team) that the company is launching its own branded media channels. It provides an in-flight video channel to Virgin America, and plans to launch a video channel on Microsoft's Xbox One and Xbox 360 game consoles this summer. A GoPro-branded media channel separate from YouTube is likely in the near future; such a channel would enable GoPro to fully monetize its videos, and cement customer loyalty by sharing advertising revenues with video submitters.

Last month, GoPro made a private IPO filing with the U.S. Securities and Exchange Commission. We don't yet know how much money the company plans to raise or how much of the company it plans to sell, but most observers believe that the IPO proceeds will, at least in part, be used to fund new products and the development of GoPro's media channels. By focusing on a small slice of the camera market, GoPro has built a big business and a cadre of loyal customers that's producing the content for a whole new business opportunity.

Set-top boxes and game consoles: The $99 option

Last week, I wrote about installing my OUYA game console, which lists for $99 (U.S.) OUYA's isn't the only Android game console--there are several available or in development, all of which sell in the $99-$129 price range and all of which run "casual" games. $99 is also the consensus price point for over-the-top (OTT) set-top boxes from Roku, Vizio, Apple and other vendors.

It's very unlikely that hardcore gamers will prefer Android consoles to the Xbox One or Sony's Playstation 4. Even with a Tegra 4 chip set, which some of the newer Android consoles will have this fall, they won't have the performance to be able to compete with Microsoft's or Sony's consoles. On the other hand, while the Xbox One will have features that the $99 set-top boxes don't, such as voice recognition and gesture control, it's equally unlikely that set-top buyers will be willing to spend $400 more to get them. In short, serious gamers want high-end game consoles and are willing to pay for them, while Internet set-top box buyers who aren't gamers are unlikely to pay a high premium in order to get gaming features.

For the OUYA and similar devices to succeed, they have to prove that people want to play the same games that they already play on their smartphones and tablets on their big-screen televisions as well. Despite OUYA's successful Kickstarter campaign, that's still an unproven hypothesis. In addition, the Internet set-top box market is still far from proven--Logitech dropped its Google TV-based STB, Boxee is said to be looking for an acquirer or additional capital, Roku is increasingly emphasizing software licensing to HDTV manufacturers, and Apple TV has graduated from being a "hobby" but still contributes minuscule revenues to the company.

It's still too early to tell if there's a market for either low-cost game consoles or third-party Internet set-top boxes at any price. We may get more clarity by the end of this year's Holiday season.

NAB 2013: The Wrap-up

I only had a day to spend at NAB last week, so I couldn't get to every booth, and undoubtedly missed some "gems" hidden around the show floor. However, I did get to see much of the South and Central Halls. Here's a summary of the products that impressed me (I've already written about Blackmagic Design's two new Cinema Cameras,) along with what wasn't there, and some thoughts about the future of the business:

The New

• Canon's XA20 and XA25: Canon's new small, light and low-cost ENG camcorders are the company's first models with 1080/60p capability. Both models have 20x zoom lenses, dual-band WiFi and dual SDHC/SDXC-compatible memory card slots. The XA25 adds dual XLR audio inputs and an HD-SDI output. The list price of the XA20 is $2,499 (US,) while the XA25 is priced at $2,999; street prices are $2,199 for the XA20 and $2,699 for the XA25. Both camcorders are expected to ship in late June.
• JVC's GY-HM650U ENG camcorder (street price $5,695) was launched at last year's NAB, and it's recently scored a number of high-profile, big-quantity sales to customers including the BBC. The 2.0 model introduced at this year's NAB (a firmware upgrade for camcorders already in use) adds a number of new features. The HM650U has three 1/3-inch CMOS sensors and a 23x zoom lens. It can simultaneously record to dual SDHC/SDXC-compatible memory cards, output video through its HD-SDI or HDMI connectors, and stream a webcast-appropriate version of the video over its built-in WiFi interface or a 4G LTE adapter.
• Perhaps the biggest hit of the show was Freefly System's Movi M10 camera stabilizer. Unlike stabilizers built around the Steadicam model, which uses a system of springs and joints (and requires a vest on larger models to handle the combined weight of the stabilizer and camera,) the Movi is an active hand-held design using direct-drive motors and accelerometers to keep the camera stable. The Movi weighs 3.5 pounds and is built using carbon fiber in order to keep its weight down. It can be operated in two modes: In "Monarch" mode, the cinematographer uses his or her movements to control the Movi, while in dual operator mode, one person holds and moves the Movi while another person wirelessly controls the camera's position using a tablet and RC control.
  
  Before NAB, a number of observers said that the Movi would be too heavy for long use. The maximum weight of camera, lens and accessories that the Movi can handle is 10 pounds, making the total maximum system weight 13.5 pounds or less. I saw men and women of various sizes handling the rig without problems. The Movi M10 model is priced at $15,000 and is expected to ship in Q3; the company plans to add a M5 model priced at $7,500 that can handle a maximum camera weight of 5 pounds. $15,000 is out of the range of most independent filmmakers, but the Movi will undoubtedly be available for rent.
• The low-cost UAV business got a big boost from the DJI Phantom, a fully-assembled quadricopter that includes a RC control, GPS navigation and camera mount for a GoPro camera, for under $700. The Phantom's maximum flight time is 10 to 15 minutes, and it has a maximum flight control range of 300 meters. DJI showed a prototype of a new Phantom model with a built-in video camera that can be remotely tilted. Neither the price nor the availability of the new model were announced at the show.
  
  The Phantom is about as foolproof as a radio-controlled quadricopter can get:
• It has a built-in autopilot that enables navigation to a specific latitude and longitude.
• The manual controls can be set to allow steering to be correct relative to the operator's position, no matter what position the Phantom is in.
• It can return to the operator automatically.
• If it flies beyond the range of the RC controller, the Phantom goes into hover mode, and if a good GPS signal is available, it will automatically return home.
• Matrox's new $995 Monarch HD live video encoder accepts video input from HDMI and outputs H.264 video at up to 20 Mbps in both RTMP and RTSP protocols, which means that it supports virtually any streaming server or service. It can simultaneously save the video in MP4 format at up to 30 Mbps on a removable SD card, USB hard disk or flash memory, or on network-attached storage. It has a simple web-based user interface, and can control up to three additional slave encoders for feeding to multiple streaming servers, services or CDNs. 

The Missing

• One thing that surprised me was the lack of new products from some of the leading broadcast equipment companies, especially Panasonic. For many years, Panasonic could be counted on to introduce new and exciting cameras, but this year, there was nothing really new. For example:
• The AG-AF100A, which pioneered the big-sensor low-cost cinema camera market, has only been lightly upgraded since it was announced in December 2010. Panasonic hasn't introduced any new cameras into this market (excluding the GH3, the follow-on to the company's "accidentally successful" GH2 digital camera that's gotten a wide following from budget-sensitive cinematographers.)
• Last year's "camera under glass," a professional 4K camcorder with an Android interface, disappeared this year and was replaced with a generic, consumer-looking 4K camcorder mockup that was first shown at CES in January.
• Sony, JVC and Canon didn't announce many new products. JVC's biggest news was a firmware upgrade, and Canon didn't announce anything new on the Cinema Camera front. It's possible that the companies are "catching their breath" after the last 18 months' explosion of new product introductions, but it's still disappointing to come to NAB and not see much new from the market leaders.

The Trends

• Video hardware and software pricing is looking more and more like computer pricing, where prices go down and capabilities go up each year. Here's a few examples:
• Adobe's Creative Cloud offers users everything in Creative Suite 6 for about $50 per month per user, and they can use the software on two PCs. That, combined with improvements in Adobe's software, is enabling Adobe to pick up lots of market share in video editing and post-production. In response, Avid has priced its new Media Composer 7 at $999, with the additional Symphony features priced at $1,499. $999 used to be the price of a competitive upgrade from Final Cut Pro or Premiere Pro to Media Composer, and only for limited periods; now, it's the list price of the software.
• Blackmagic Design has driven down prices in every market that it's entered, and competitors have had no choice but to respond. Prices for professional color correction systems have tumbled since Blackmagic acquired Da Vinci Systems, as have prices for video production switchers (except the very top-of-the-line models) since it acquired Echolab. The market for high-end video processing systems has always been small because of their high cost, but Blackmagic's acquisition of Teranex and subsequent rock-bottom pricing will dramatically increase the size of the market. The cinema camera market is already highly competitive, but Blackmagic is increasing options and decreasing prices for buyers.
• Canon, JVC, Panasonic and Sony are using their top-of-the-line consumer camcorders as the basis of their entry-level prosumer/professional camcorder lines, which increases production volumes, decreases costs and allows manufacturers to lower prices. In most cases, if you don't need XLR inputs or HD-SDI outputs, you can save a fair amount of money by buying the consumer models. However, even the prosumer/professional models are less expensive and more capable than comparable models from even a couple of years ago.
• DSLRs have dramatically decreased the cost of cinema cameras, and an entire ecosystem of lenses, rigs and accessories that are fairly priced in relation to DSLRs has emerged.

Penguin Random House: The Aftermath

Earlier this week, Pearson and Bertelsmann confirmed that they intend to merge Penguin and all of Random House except for its German-language business into a new joint venture, to be named Penguin Random House. (No Random Penguin or Penguin House for us.) Shortly before the deal was announced, word leaked out that News Corp. was considering making an offer to acquire Penguin, but the terms of the Pearson-Bertelsmann deal mean that Pearson can't consider any other offer.

I believe that, three to five years from now, the publishing industry will look much like the recording industry does today, with the Big 6 becoming the Big 3. In fact, it was Bertelsmann's experience in its joint venture with Sony Music that's said by some to be the reason that the company insisted on having a majority interest in its joint venture with Pearson. Its joint venture with Sony was 50:50, and differences in objectives and strategies between the two companies eventually led Bertelsmann to sell its recorded music business to Sony.

If the publishing industry looks like the recording business in a few years, here's a preview of the likely winners and losers:

• Publisher employees: The biggest reason for publisher consolidation is cost reduction. Penguin and Random House, and other consolidating publishers after them, will get rid of redundant distribution facilities and most of the people who work in them. In addition, they'll consolidate cross-imprint functions, such as sales, marketing, copy editing, production and design. That will put a lot of talented professionals on the street, and with fewer big publishers, there will be fewer places for them to look for work.
• Authors: Despite what Penguin and Random House have said, it's inevitable that they, and other consolidating publishers, will reorganize their imprints. Some imprints will be discontinued, and their authors will be moved to other imprints or dropped. The same thing will happen to the editors at the imprints--many will be laid off.
  
  Author acquisition will be dramatically affected. The Big 3 recording companies have all but discontinued their formal A&R (Artists & Repertoire) operations that sent people into the boondocks in order to find new artists. Their equivalents in publishing are acquisitions editors, and many of them will find themselves without jobs. The big publishers will increasingly focus on successful self-publishers as their "farm teams", and will pay big money to poach bestselling authors from each other. For their part, bestselling authors will have less loyalty to publishers, because many of their editors will be gone.
• Retailers: Some industry pundits have speculated that consolidation of the top publishers would give them more clout with retailers such as Amazon and Barnes & Noble. If the recording business is any indicator, they're wrong. Just as with books, the music retailing business consolidated, and highly influential retailers such as Tower Records, Musicland, Wherehouse and Virgin Music are gone (Virgin has closed its U.S. stores but still operates in other countries.) Music retailing in the U.S. is dominated by Apple, and the consolidation of the Big 6 recording companies into the Big 3 has given the surviving record companies little or no additional leverage with Apple or Walmart.
  
  It's unlikely that mergers between the Big 6 publishers will give them any more negotiating power with Amazon, Apple, Barnes & Noble or Kobo. The publishers will continue to depend on the retailers for the vast majority of their revenue, and the U.S. Justice Department will be watching over their shoulders in order to prevent more shenanigans like organized price-fixing.
• Independent Publishers: Independents will actually be helped by publisher consolidation, for several reasons. First, many talented publishing professionals who ordinarily wouldn't have considered working for smaller publishers, or working as freelancers, will become available to independents. Second, some of those professionals will set up their own independent publishing companies. Third, the authors that are shed from the rosters of the consolidating publishers will become available to the independents. Fourth, authors who might have been discovered and developed by the top publishers will instead go to independents. Fifth, with fewer titles coming from the big publishers, retailers will have more shelf space (real or virtual) to devote to independents.
• Self-Publishers: The big publishers will increasingly recruit successful self-publishers to fill their rosters and compensate for the loss of acquisitions editors. The success of the 50 Shades trilogy has eliminated any remaining stigma from self-publishing authors. Big publishers now know that success as a self-publisher is a very strong indicator of marketability--and it eliminates the cost of spending years to develop a promising author.
• Agents: Consolidation of the Big 6 will spell problems for literary agents. They'll have fewer authors on the rosters of the top publishers, and thus, fewer opportunities to earn commissions from big advances and royalty payments. They'll have to devote more of their time to independent publishers, which generally pay lower advances and generate lower royalties for their clients. And, they'll have to compete with other agents to represent successful self-publishers, meaning that they'll have to accept lower commissions.
• Consultants: Publishing consultants who have spent their entire careers in the publishing industry are going to find it hard to adjust to publisher consolidation. Consultants with contracts with two publishers that consolidate into one will have one of their two contracts cancelled, and the surviving contract will be closely scrutinized. (I saw this happen first-hand as the IPTV industry went through massive consolidation starting in 2008.) Publishing consultants will have to shift their focus to independent publishers, which have much smaller budgets than the Big 6.

In short, independent publishers are about the only group that will be a clear winner from publisher consolidation, followed by successful self-publishers. Everyone else will end up either neutral or a loser as a result of consolidation. 

Sony's A99 full-frame DSLR is official

According to Digital Photography Review, Sony has officially announced its first full-frame DSLR in four years--the A99. Technically, the A99 isn't a DSLR, because it uses the transparent mirror technology of Sony's other Alpha cameras. Sony claims that its mirror design enables the A99 to be the lightest full-frame DSLR on the market (1.79 lb. including batteries.) Instead of an optical viewfinder, it has a 2.4 Megapixel OLED viewfinder. It's also got a 1.23 Megapixel LCD display with hinges that allow it to be tilted, swiveled and reversed (it also makes great julienne fries.) As with all Alpha cameras, it's got a Sony A lens mount. The A99 has a 24MP sensor with dual phase detection auto-focus systems. It can output 14-bit RAW images with an ISO range of 100-25,600. The A99 can shoot up to 6 frames per second in burst mode, and has a built-in GPS. Storage options are Memory Stick PRO Duo and PRO-HG Duo, and SD, SDHC and SDXC cards.

On the video side, the A99 fully implements AVCHD 2.0, with frame rates up to 1080p60 at 28Mbps and 1080i60 at 24 Mbps. It also outputs uncompressed video over its HDMI interface to an external recorder or monitor. The A99 has microphone inputs and a headphone output, and an optional stereo XLR adapter connects to the camera's intelligent hot shoe. A "silent control dial" next to the lens allows a variety of settings to be changed without bumping the camera during recording.

The A99 will be available in October at approximately $2,800 for body only; the XLR adapter will priced at $800 and will also be available in October. I can certainly understand Sony's decision not to burden the design of the A99 with XLR inputs for customers who only plan to use it for still photography, but $800 for the XLR adapter seems steep to me--that's almost a third of the price of the camera itself.

If you already own an A900 and are looking for a replacement, or you've got a collection of A-mount lenses and want to upgrade to full-frame, the A99 will be your obvious choice. For other buyers, however, side-by-side testing against comparable models from Canon and Nikon over the next few weeks and months will reveal the A99's strengths and weaknesses.

Blackmagic's Cinema Camera: Not the volkskamera you were looking for

(Updated, September 9, 2012) After several months of delays, Blackmagic Design is starting to get production versions of its Cinema Camera into reviewers' hands. Over the last two weeks, Vincent Laforet, Frank Glencairn and Philip Bloom have tested the BCC "right from the box," and they all have very definite impressions. I strongly suggest that you visit all three cinematographers' blogs to read their complete evaluations and see their footage and stills. Here's a summary of what they found:

Laforet wrote that the dynamic range of the BCC's sensor was almost identical to that of Canon's EOS 1DX, at a much lower price. However, the BCC sensor's size (slightly smaller than Micro Four-Thirds) and EF mount mean that the same lens used on a Canon DSLR will have a magnification factor of around 2.3X on the BCC. That means that you need much wider lenses in order to get the same framing using the BCC, and it puts more emphasis on the quality of the lens. In addition to being small, the BCC's sensor is comparatively slow--its maximum ISO rating is only 800 1600, but its maximum usable ISO is 800. That means that in low light situations, other cameras are likely to provide images with much less noise.

Laforet also noted that the BCC's form-factor makes it useless as a handheld camera--the optional handle offered by Blackmagic is more for show than for utility. To use the BCC, you'll need rails and a tripod or some sort of mounting rig. He wrote that the BCC could have been a great handheld camera with slightly different ergonomics and a built-in ND filter.

Laforet's findings were confirmed by Glencairn's test. He did a side-by-side test of the BCC with a Sony FS100 at ISO 800, and he found that the BCC's image was more "filmic" than the Sony. He much preferred the BCC's image, but wrote that the FS100 wins hands down at faster ISO speeds. Output from the BCC in Cinema DNG RAW mode was superb--sharp, with plenty of contrast. However, Glencairn's tests show that regardless of whether the BCC is used in ProRes 422 or RAW mode, its output HAS to be graded in order to be usable. That in part explains why Blackmagic provides a free copy of DaVinci Resolve with every BCC. Going back to Laforet, he makes the same point, and notes that the BCC's grading pipeline is not for the squeamish. RED users will be very familiar with the process, but BCC users don't have the equivalent of a RED Rocket card to speed up the conversion process.

Update, September 9th, 2012: Yesterday, cinematographer Philip Bloom posted an extensive video review of the BCC. Most of his conclusions echo those of the other two reviewers, but he added some additional points, including the following:

• After in-house and field tests, he found that the BCC's battery life is less than two hours, even when the camera is on standby. That wouldn't be a problem, except that the BCC's battery is non-removable. Therefore, you have to use an external battery--but there's no easy way to mount an external battery, unless you use a rig.
• In addition to having phono plugs instead of XLR connectors for its audio inputs, the BCC has no way to provide phantom power, which limits the microphones that can be used with the camera.
• The LCD screen is much too reflective to be useful as a viewfinder, especially outside.
• He believes that the new version of the camera with a Micro Four-Thirds mount is a much better choice, even with the limitation that lenses have to be used in fully manual mode. The new version allows a far wider range of lenses to be used (with adaptors), and dramatically decreases the cropping problem caused by the small size of the BCC's sensor.

So, according to these two three cinematographers, the BCC is a great camera for the money, but it requires a couple thousand dollars' worth of add-ons in order to be usable, as well as high-quality (read: expensive) lenses in order to get the best possible images. It's got a wide exposure range but a limited ISO range. It outputs great images in RAW mode, but the output has to be color-corrected in order to be usable.

The BCC is most definitely not a "run & gun" camera--it doesn't have the necessary ergonomics. It's not really a "beginner's" cinema camera, since grading is essential in order to get the best quality output. It's not the camera that you want to use if you don't know what kind of lighting you'll have to work with. It's not even as inexpensive as it first appears, because of the external gear necessary to make it useful (rig, external battery, external viewfinder/monitor and ND filter.)

If you can live with the BCC's limitations, it's still a great camera for the money--but it's not the camera that's going to "democratize" cinema production.

Canon's EOS C100: The new entry point into Canon's cinema cameras

IBC is fast approaching, and in anticipation of the show, Canon just announced the EOS C100 Cinema Camera, its new entry-level model. According to Digital Photography Review, the C100 is approximately 15% smaller than the C300, but it has the same basic design. It has a Super 35mm 8.3 Megapixel sensor, and the camera supports any lens with an EF mount, including Canon's Cinema lenses. Unlike the C300 and C500, both of which use Canon's 50Mbps 4:2:2 video codec, the C100 is strictly AVCHD-based, with a 24Mbps 4:2:0 codec. It has two SD card slots and can record to both cards simultaneously for automatic backup, or in relay mode to permit one card to be replaced while the camcorder records on the other card. The C100 records in 1080p at 24/25/30 fps, and 1080i at 50/60 fps. ISO sensitivity is from 300 to 20,000.

With the C100, Canon has included many of the automatic features that were left out of the C300: One-shot auto focus, auto iris and auto white balance. Continuous auto focus and iris adjustment when used with Canon's EF stepper motor lenses (STM) will be added with a firmware update next year. The C100 has built-in ND filters and dual XLR audio inputs. Video output is via a lockable HDMI connector. Expected list price when the C100 ships in November is $7.999 (U.S.).

The camera that the C100 will most likely be compared with is Sony's FS700, which has the same $7,999 list price without lens, and overall, very similar specifications. The FS700 uses AVCHD, but unlike the C100, it offers the 2.0 version that supports 28Mbps recording and 1080p at 50/60 fps. It also has full HD slow motion to 240 fps, and up to 960fps at lower resolution, while Philip Bloom notes that the specifications for the C100 don't say anything about slow motion support. The FS700 also has a 3G HD-SDI output, while the C100 is limited to HDMI out. On the downside, the FS700 uses Sony's E-mount, which has fewer available lenses than Canon's EF mount. In addition, it uses the "Lego bricks" design of the FS100, which seems to be about equally loved and hated by cinematographers.

My suspicion is that this could turn into the video equivalent of Canon vs. Nikon still cameras, with camps of users who simply prefer the video from one manufacturer over the other. In any event, the C100 is likely to be a very popular camera with users and a very important camera for Canon.

Sony's new NEX-EA50EH: A large-sensor, low-cost ENG camcorder

In the DSLR News Shooter blog, Dan Chung writes about Sony's new NEX-EA50EH, a hybrid of ENG-oriented camcorders and the FS100/FS700 style of interchangeable lens cameras with Super 35 sensors. The EA50 looks like a long, thin ENG camcorder with a FS100-style viewfinder stuck on the handle. It uses the same E-mount as all of Sony's NEX cameras and camcorders, and it accepts E-mount adapters to support Alpha lenses, as well as FD, PL, Canon, Nikon and Leica mounts.

The EA50 comes with a 18-200mm F3.5-6.3 power zoom ENG-style lens with auto focus, continuously variable iris and image stabilization. The camcorder records in 1080 at 60p, 30p, 24p and 60i, and at 50p, 25p and 50i using AVCHD 2.0 (one model handles both 60 and 50 Hz.) It also has stereo XLR inputs, time code and built-in GPS. The EA50 can record to SD cards and Memory Sticks, as well as to an optional docking flash memory unit, but it only outputs to HDMI, not HD-SDI.

Dan Chung notes some negatives for the EA50: It doesn't come with built-in neutral density filters, so the user will have to add them. Its shoulder pad design is similar to Canon's old XL camcorders, so it's likely to be tiring to hold the EA50 for long periods of time. In addition, some sites have written that the EA50 uses the same sensor as the one found in the consumer-oriented NEX-VG20, not the FS100. On the other hand, it has a form factor that doesn't require any additional hardware for field shooting, and the expected price for the EA50, including the lens, will be $4,000 $4,500 U.S. (per B&H). The EA50 is expected to ship in mid-October.

With the EA50, Sony is responding to shooters who like the flexibility and image quality of the FS100 and FS700--or, for that matter, DSLRs--but don't like all the hardware they have to add to the cameras in order to make them usable in "run & gun" situations. It should be possible to take the EA50 out of the box, charge it up and take it into the field immediately, without any additional hardware. Of course, at $4,000 $4,500, there have to be some compromises in the design--the lack of a SDI output is an obvious one, and the quality of the included zoom lens may be another. Nevertheless, even with compromises, the EA50 may be the right camcorder for a good number of users.

Sony's rumored A99 to battle Canon and Nikon at the high end?

In an interview with Bloomberg Business, Sony's new CEO Kaz Hirai said that his company has three core businesses: Digital imaging, games and mobile devices. Sony's been investing heavily in its camera business, and it's now the leader in mirrorless interchangeable-lens cameras. However, even though the company has launched a number of new Alpha DSLR models, it doesn't have a camera that can compete with the top of either Canon's or Nikon's lines. According to Sony Alpha Rumors, that's about to change.

The blog writes that Sony is working on a new Alpha model, the A99, that should compete on a fairly equal level with Canon's 5D Mark II and 5D Mark III, as well as Nikon's D800. The A99 is rumored to have a 102-point autofocus system--more detailed that that of the D800 (51 points) or the 5D Mark III (61 points). The A99's video capabilities are supposed to be superior to those of any of Sony's previous still cameras. According to Sony Alpha Rumors, a new flash will provide continuous light for video shooting, and the camera will be designed to equally facilitate still photography and video--a challenge given the very different form-factors of still cameras and camcorders.

Sony Alpha Rumors doesn't give any dates for announcement and shipment, and the rumors have been floating around for a while--for example, the one about the 102-point autofocus system dates back to last March. However, it's clear that in order to be fully competitive in cameras, Sony needs a high-end model. Whether it's the A99 or another model, it's likely that Sony's working on a camera that can compete directly with Canon's and Nikon's best.

[Update, August 28, 2012: Photorumors.com has published a fairly complete list of specifications for the A99--but remember, these are still rumors (hence the name.) Here are some of the details:

• 24.3MP full frame CMOS Exmor sensor
• ISO range: 100-25,600
• 14 bit RAW output
• 1/8000 maximum shutter speed
• 10 fps continuous shooting
• 2369k OLED viewfinder
• 3" tiltable 921k LCD display
• Full HD video recording at 1080/60p
• Auto HDR capability
• HDMI output
• Built-in stereo mic
• Two memory card slots--one for Secure Digital, and the other for SD or Memory Sticks

According to Photorumors, the A99 will be announced by Sony on September 12th and will be available in stores in October, for a price of around $2,800. I have my doubts about the announcement date, given that Apple's announcement of the new iPhone is widely rumored to be on that same date, and that would bury coverage of any other product announcements on the same day.]

Who's winning and losing due to the shift to eBooks?

In my last post, I wrote that eBooks aren't expanding the market for books in general. However, even if eBooks are, overall, simply shifting money from one bucket to another, there are definite winners and losers:

Winners:

• Amazon: The company sells the most popular eReaders and more eBooks than anyone else in the U.S. (although a lot of those sales are unprofitable.) Amazon's dominance in the eBook market scared five of the six biggest publishers into (according to the U.S. Justice Department and more than 30 states) illegal price-fixing in order to take away Amazon's price advantage.
• Barnes & Noble: In the U.S., the bookseller is Amazon's only serious competitor for both eBooks and eReaders. Barnes and Noble has between 25% and 30% of the U.S. eBook market.
• Kobo: The company is Amazon's primary eBook and eReader competitor outside the U.S. It's recovered from the failure of Borders and Borders' licensees (at least, outside the U.S.) Now that it's owned by Rakuten, it has both the financial resources it needs and a natural advantage in Asia.
• Major publishers: Even though eBooks are shifting money around rather than increasing overall sales, publishers are earning more money on each sale, because eBooks have no printing, binding, shipping, warehousing or return processing costs.
• Self-publishers: eBooks have opened up the market to both writers who couldn't find publishers or agents, and writers who've been previously published but didn't earn much money. Royalty rates on self-published eBooks are much higher than those from major publishers, so writers can sell fewer copies at lower prices and still make more money.
• Consumers: Even though the Big 6 publishers have raised the prices of their eBooks under agency pricing, in most cases their eBooks are still less expensive than print. Self-published eBooks are dramatically less expensive than equivalent print titles. In addition, eReaders and tablets are far more convenient for consumers than carrying around multiple print books.

Losers:

• Independent booksellers: Few independent booksellers have successful online eBook businesses, and none of them have the same ease of ordering and delivery that Amazon and Barnes & Noble have. The American Booksellers Association inadvertently tied itself to the "albatross" of eRetailers, Google. which has since given notice that it plans to cancel its distribution agreements with independent booksellers. Whether independents will ever have a significant share of the U.S. eBook business depends almost entirely on who the ABA decides to partner with next.
• Small publishers: Small publishers that are still focused on print are tied very directly to the fate of retail booksellers. They need shelf space in order to build awareness and sales of their books.

Too early to tell:

• Apple: With no more than 10% of the U.S. eBook market and even less internationally, Apple's jump into the eBook business has largely been a bust, plus it's become entangled in Federal, state and private price-fixing lawsuits. Competitors such as Kobo are gaining share more quickly in international markets. Apple may ultimately decide that eBooks are more of a problem than they're worth, and settle for taking 30% of sales from other booksellers.
• Sony: At one time, Sony was the undisputed leader in the eReader market, but a series of missteps have left it an also-ran, even in its original strongholds of Japan and the U.S. Sony can turn things around by aggressively pursuing partnerships with booksellers outside the U.S. and Canada.

None of these judgments are set in stone: Barnes & Noble's partnership with Microsoft could help it build an international business, or its slowly-sinking retail bookstores could bring down the entire enterprise. Major publishers could fail to transition to digital-first strategies and end up with costs that are much too high for their revenues. Independent booksellers could find the right partner and become a viable competitor for eBook and eReader sales. Small publishers could start producing far more eBooks and become more visible in online eBookstores. Apple's rumored new "iPad mini" could be the perfect tablet for reading eBooks and could drive sales of many more titles.

Barnes & Noble's Q4 financial results

Reuters reports that Barnes & Noble released its Q4 financial results Tuesday morning:

• Revenue was $1.38 billion, up slightly from a year ago but below analysts' estimates of $1.48 billion. 
• The company had a net loss of $57.7 million, or $1.08/share, slightly lower than its Q4 loss of $59.4 million, or $1.04/share, a year ago. 
• Same-store sales at its 700 superstores were up 4.5% compared with Q4 last year. 
• The company had higher-than-expected returns of Nook devices from retailers after the 2011 holiday season, and a decline in sales of its eReaders and tablets in Q4. 
• Revenues at its Nook business, including eBooks, eMagazines and apps as well as devices, fell 19% to $164 million in the quarter. 
• B&N now has 27% of the U.S. eBook market, compared to 60% for Amazon. (That leaves 13% for Apple, Kobo, Sony and everyone else.) 

If publishers hate Amazon so much, why do they sell to them?

I haven't been able to wrap my head around the fact that the Big 6 publishers hate Amazon so much that they were willing to risk antitrust prosecution, yet they still sell their books to the company. If Amazon is truly such a threat to publishers, there's a simple solution: Stop selling to them. I'm not a lawyer, and I don't claim to be an expert on U.S. antitrust law, but my understanding is that sellers can refuse to deal with a class of customers, so long as they uniformly apply their standard to all applicable customers. That means that publishers could refuse to sell to online-only retailers. That wouldn't prohibit online sales, but it would require that retailers also sell their books through physical stores.

Imposing this standard would mean that the publishers would no longer sell to Amazon, Apple, Kobo, Sony and other online-only book retailers. Of course, it would make Barnes & Noble a de facto monopoly for online book sales in the U.S.; publishers may find over time that B&N becomes just as demanding and difficult to work with as Amazon was. On the other hand, it would strengthen independent booksellers, which would no longer have to compete with Amazon.

The ball is in publishers' courts--they can cut off Amazon if they want to. The real question is, why haven't they already done so?

When "something for everyone" may be too much

On the cover of the current issue of "TWICE" (This Week in Consumer Electronics,) there's an ad for Nikon's cameras with the tagline "There's a Nikon for Everyone." It got me thinking about something I noticed at the Sony and Panasonic booths at last week's NAB conference. These companies have so many different camcorders and cinema cameras that even the people selling them can't keep track of all of them. For example, when I was in the Sony booth, I couldn't find the 35mm cinema cameras (NEX-FS100, FS700, F3, etc.) I asked one of Sony's salespeople where they were, and she said that all of the company's cameras were on display in the huge circular "camera pit" at the center of the booth. I'd walked around the entire pit and hadn't seen the 35mm cameras, so I went around again but didn't find them. It turned out that the 35mm cameras were in a completely separate section of the booth.

There are so many products that they overlap each other in price and functionality. The same is also true for still cameras from Canon, Nikon, Sony and others, and smartphones from Samsung, HTC, LG, Motorola, Nokia, etc. Makers of notebook and desktop computers have the same problem--just look at the proliferation of models at HP, Dell and Acer. Manufacturers make so many models in order to avoid losing a sale, but they wind up confusing potential customers. Each of these products costs a significant amount of money to develop, manufacture and support. Resources that could be used to develop entirely new products are instead used to create minor product variations to fit into every conceivable price point.

Apple is a great example of a better approach to the problem. At any one time, Apple has a single line of smartphones, tablets, and notebook, all-in-one, mini and full-sized desktop computers, each of which is refreshed once a year. Apple continues to sell a single version of the previous year's tablet and smartphone (two years in the case of phones) at lower prices. Each computer line has four or five models, which vary by display size and processor. When a new computer line is launched, the previous line is discontinued. It covers all the price points, yet it's simple for consumers to understand and for Apple to sell. It also works well with Apple's strategy of making product announcements into newsworthy events.

Sony lost $6.4 billion last year; Panasonic lost $10.2 billion. They no longer have the money to invest in endless product proliferation--which might explain the relatively paltry number of new products shown by Panasonic at NAB. They, and companies like Canon, Nikon, Samsung, etc., would be well advised to focus on fewer, better products that are clearly differentiated from competitors and from each other.

Sony's new NEX-FS700: 4K, Super Slo-Mo, Under $10,000

Engadget has a press release with details about Sony's new NEX-FS700, the follow-on to the FS100, which I expect to remain in Sony's product line. Here's a summary:

• The good: The FS700 has a 4K Super 35mm Exmor sensor, and it has a variety of slo-mo modes, including 120 fps in a 16-second burst at 1080P and 240 fps in an 8-second burst, also at 1080P. If you're willing to settle for lower resolution, the FS700 also has 480 and 960 fps modes. It uses E-mount lenses and can support all the usual E-mount adapters. It also has built-in ND filters and a 3G HD-SDI output in addition to HDMI.
• The bad: The FS700 has the same "Lego blocks" form-factor as the FS100. There have been many complaints about handling the FS100 in the field, including poor placement of controls; it remains to be seen if the FS700 will remedy at least some of these problems.
• The unknown: Sony's press release quotes the price of the FS700 as "under $10,000 (U.S.)." Leaked reports on the camcorder had it priced at $9,000 or even $8,000. We'll probably know the real price in a few weeks at NAB. In addition, even though the FS700's sensor supports 4K, the camera will require a firmware update at some unspecified time in the future in order to output 4K over 3G HD-SDI to a Sony recorder. Will Sony charge for the firmware update, or will it be free for registered owners of the FS700? Again, we'll most likely learn the details later this month.

Given that the Scarlet-X is already shipping at a $9,000 base price, the FS700 isn't likely to be a game-changer, although it will be considerably less expensive than a fully-equipped Scarlet-X or Canon C300. Canon has a new cinema camera announcement scheduled for NAB, so they may already be preparing to compete in the "4K for under $10K" market. The company that I'm surprised that we haven't heard anything from yet is Panasonic: The AF100 is getting old. Will they have anything new to show at NAB?