Panasonic sets new low price point for webcasting studios

Panasonic has introduced a trio of products that represent a new low price point for automated webcasting studios:

• The AW-HE50S is a 1/3" 1080P camera with integrated pan/tilt/zoom and a HD/SD-SDI interface, at a $5,500.00 list price. (The same camera is available as the AW-HE50H for $1,000 less with a HDMI interface.)
• The AW-HS50N is a small 1080P 5-input, 3-output HD switcher with four HD/SD-SDI and one DVI-D input, and 2 HD/SD-SDI and one DVI-D outputs, an AUX bus, built-in keyer, dissolve transitions and a multiviewer, allowing all inputs and transitions to be viewed on one HDTV monitor. The list price is $4,000.
• The AW-RP50 (list price $2,200) is a remote camera controller that allows a single operator to set up all the parameters and control the movement of up to 100 HE50 and HE100 cameras. It has a network connection for the AW-HS50N, so that a single operator can simultaneously switch a show and control the cameras.

With these three products, you can create a basic, automated three-camera setup for less than $23,000, or a four-camera setup for just over $28,000. What's more, all of the components are light: The switcher and camera controller together are around nine pounds, and each camera is 3.5 pounds. Add a live encoder with an Ethernet or WiFi interface, and you're ready to stream.

The problem with eTextbook pricing

Let's start with a fact of the college textbook business: Textbook publishers hate used books. They see every sale of a used book as revenue that they should have received, but didn't, thanks to the First Use Doctrine that allows books to be resold by their purchasers. Consider the following case: A college bookstore sells a new textbook title for $100, then buys it back for $50 at the end of the semester for resale as a used book. For the next semester, it sells it for $50 as used. Assuming that the book can be used for ten semesters before it's too beaten up and marked up to resell, and the bookstore buys it back for $20 each time, the bookstore will end up grossing $320 (even if they buy it back the last time and pulp it.) The publisher, on the other hand, will get only some fraction of the original $100.

That's why publishers are increasingly interested in eTextbooks. Unlike print books, eTextbooks can't be resold, and in some cases, they have "time-bomb" DRM schemes that make them totally unusable after 120 to 180 days. Publishers get revenue from every sale. The problem, however, is that publishers are pricing eTextbooks too high to stop used book sales.

Kenneth Green wrote about the problem on his DigitalTweed blog. He compared the price for one textbook, Mankiw's Principles of Microeconomics, from a variety of sellers, in a variety of forms. He compared purchasing the textbook new, used, used with saleback, and as an eTextbook, along with rental. (One title does not a comprehensive analysis make, but it's a fair place to start.) According to Green, he found that title's list price is $172, and that's what most college bookstores will sell it for. However, Amazon priced it at $153. Keep those two numbers in mind, because everything else works off of them.

Green found that Amazon sells the used print version for $83.49. Amazon's Kindle price for the eTextbook is $110.38, and they're underpriced by both CourseSmart and Follett, who sell their eTextbook versions for $86.49 and $87.84 respectively. He could rent the title for the semester from Chegg for $50.49, or from Textbooks.com for $49.49. And here's the kicker: Amazon will buy back the print version for $67.25, no matter where it was purchased originally.

So, here's the breakdown:

• New list price: $172.00
• Best discounted new price: $153.00 (Amazon)
• Best used price: $83.49 (Amazon)
• Best eTextbook price: $86.49 (CourseSmart)
• Best rental price: $49.49 (Textbooks.com)
• Best used price with buyback: $16.24 (Amazon)

The used with buyback option is by far the best choice, but it's not going to be available for all books, and even if it is for a specific title, it may not be as lucrative as Amazon makes it for this title. Considering the other choices, your best option would be rental, followed by buying the title used, followed by buying the eTextbook.

In short, at their current prices, eTextbooks simply don't make sense unless they offer so much value that they overcome their price disadvantage. With today's eBook readers, they don't offer any significant advantages, especially for cash-starved students. If publishers really want to kill the used (and rental) book market, they have to price eTextbooks at about the same as rental, or about a third the best discounted new price.

That scares publishers, because they believe that doing so will devalue their titles and prematurely kill print sales. However, they'd end up with more money in their pockets over time. Let's consider my first example, with a $100 print title sold new once and used nine times. If publishers get 60% of the sale price for that new sale, they'd get $60 dollars in total. However, if they sell 10 copies of the eTextbook version for $30 each and get the same 60%, they'll end up with $180, or three times as much.

Pricing eTextbooks at or below print rental prices will dramatically increase eTextbook sales and hasten the end of used textbook sales and rentals. eTextbooks are also much more convenient for students, and low prices will save them money. In the long run, pricing eTextbooks very aggressively will be a win-win for everyone.

The set-top box Tower of Babel

A company called Dyyno is offering to create your own channel for the Roku set-top box, or you can run your video content on their existing channel. If you want your own channel, they'll charge a one-time fee of $7,500, plus a monthly usage fee starting at $149 for 1,000 viewer hours. If you're willing to run your content through their channel, you'll pay only the monthly usage fee.

Roku has its own developer program, which costs nothing to join, and its own SDK. If you've worked with JavaScript, you can probably figure out how to create your own channel without paying $7,500 and being locked into a single online video service. However, once you've developed your Roku channel, it won't work on Boxee, Popbox, TiVo, Google TV, or any of the myriad Internet-connected Blu-Ray players and HDTV receivers. Each one of those platforms has its own SDKs, and each one requires a separate development effort.

That's why I developed the Capstan Content Syndication (CCS) format. CCS is a free, open source, XML-based format that does for live, scheduled and on-demand video content what RSS does for fixed content. It also provides the hooks necessary for authentication, monetization, search and recommendations. If the set-top box companies support CCS, content providers will be able to use the same feed and format for a variety of different devices and platforms. It will dramatically decrease the cost of making video content available, and will get many more channels onto many more devices.

I'll be presenting a session on CCS at the Open Video Conference, to be held at the Fashion Institute of Technology in New York City on October 1st and 2nd of this year. There's more information on CCS at the Klemfarb website, and you can download the spec and participate in the definition process at the project's Google Code site.

More, much more, on the Hurd case

Bloomberg is reporting what I and a lot of other people said the day that the HP/Mark Hurd scandal erupted: The stories from all the parties involved the day that Hurd was dismissed and shortly after didn't make sense. There was supposed to be a mediation session between Hurd, his personal counsel, Jodie Fisher, her counsel and HP's external counsel investigating the case, Covington & Burling, scheduled for the Friday that Hurd was eventually dismissed. At the mediation session, HP's counsel was to see the actual evidence that Fisher had and would have had an opportunity to ask her questions. Instead, without the Board's knowledge, Hurd privately settled the case with Fisher on Thursday and canceled the mediation session.

It's important to note that sources speaking for Hurd claim that the Board encouraged him to settle the complaint before the mediation session. Nevertheless, the fact that HP's investigators never had a chance to either review the evidence or interview Fisher brings up a very important question: How could the Board rule that no sexual harassment took place if they never saw the evidence or interviewed Fisher? (The Wall Street Journal reports that the Board couldn't get the evidence it needed to determine whether or not sexual harassment took place, so they announced that no harassment occurred. Why didn't they say that they were denied the opportunity to get the evidence they needed to make a determination?)

Bloomberg reports that Fisher flew to company events via first-class air, stayed in luxury hotels, and had dinner with Hurd 15 to 20 times. Each dinner cost around $400. Hurd reported that he was having dinner with his security guard, but the guard denied it. Fisher was paid between $1,000 and $5,000 for every event she hosted (so she made somewhere between $15,000 and $100,000, assuming that she had dinner with Hurd after every event.) Her duties were to stand around at a cocktail party for 90 minutes, direct traffic around Hurd, and then have dinner with Hurd after the event. A few more questions: Couldn't HP simply have sent an internal corporate communications manager with Hurd to each event to direct traffic? In how many cities does dinner for two cost $400?

Now for the most salacious part of the new disclosures: HP's investigators found evidence on Hurd's work computer that he had viewed Fisher's R-rated, adult-themed movies. Another Hurd source said that all he had done was search for her on Google and found her videos, but in the context of everything else that happened, that's highly unlikely.

If HP's board had just come clean with the real reasons for and details behind its decision when Hurd was terminated, this "drip-drip-drip" of embarrassing and salacious disclosures never would have happened. As I said in my first posting, there's yet more s--t likely to hit the fan in this case.

Who don't you trust? Newspapers and TV news, that's who

U.S. newspapers, along with local and national television news shows, have all seen their audiences decline for more than a decade. The decline in newspapers has been blamed primarily on the growth of the Internet and the availability of news on the web for free that was once only available for purchase in print. The decline of television news has been blamed largely on its aging audience. There's another reason for the declines, however, and it has nothing to do with the Internet or audience age.

The Gallop Organization released a poll last Friday that shows that confidence in newspapers and television news is nearly at an all-time low for newspapers, and is equal to the all-time low for television news. In the most recent poll, only 25% of respondents said that they have "a great deal" or "quite a lot" of confidence in newspapers, and only 22% have the same level of confidence in television news. The numbers have been flat since 2007. By comparison, in 1993, the first year that the survey covered both newspapers and television news, 31% of respondents had "a great deal" or "quite a lot" of confidence in newspapers (that number was as high as 39% in 1990), and 46% had the same level of confidence in television news (the number has been generally going down ever since.)

You might think that 18-to-29-year-old respondents, who would likely be the most Internet savvy, would be the least interested in newspapers, but you'd be wrong. That age group trusts newspapers more than any other demographic category, with 49% saying that they have "a great deal" or "quite a lot" of confidence in newspapers, while their confidence in television news is only 22%. The political beliefs of the respondents also have an impact: People who consider themselves Republicans or Conservatives have the least confidence in both newspapers and television news. Democrats and Liberals have the most confidence in newspapers; when it comes to television news, Democrats also have the most confidence, but Liberals are slightly behind Moderates in their confidence. Independents are much closer to Republicans in their confidence in newspapers, while Moderates and Liberals are somewhat closer in their confidence in both newspapers and television news.

That's a lot of statistics, but here's the bottom line: If you don't trust a news source, you're very unlikely to pay for it. If three-quarters of the public has little or no confidence in newspapers, why would anyone expect them to pay for them when they can get the same content online for free? If almost 80% of the public has little or no confidence in television news, is it any wonder that they watch "The Daily Show", replay recordings from their DVRs or get on the web rather than watch the news on TV?

How are newspapers and television stations dealing with this problem? They're dumbing down their product even further. Rupert Murdoch has announced that News Corporation plans to launch a dumbed-down national newspaper specifically for tablets like the iPad. Tribune is experimenting with a dumbed-down television news format in Houston (as if television news hasn't already been dumbed down to insipid levels). If the big problem is lack of confidence, making the news even less credible isn't going to increase confidence, readership, or viewership.

In short, newspapers, television stations and networks can't blame their problems solely on extrinsic factors. The quality, accuracy and relevance of their reporting have at least as much to do with their present predicament as do the Internet and aging audiences.

Busting the DAM (Distribution/Attention/Monetization) Problem

No matter what kind of media you're producing, if you're looking for a financial return, you have to accomplish three things:

1. Distribution: You have to get your book, music, movie or video to the people who are likely to be interested in it.
2. Attention: You have to let your audience know that your media is available and get them interested in reading, listening to or watching it.
3. Monetization: You've got to figure out a way to get your audience to pay for your efforts.

That's the DAM problem, and you have to solve it in that order. You can't monetize media that your audience doesn't know about and can't find. You can get your audience excited, but if there's no way for them to get your work, you've wasted your effort.

It used to be that as a creator, all you really needed to do was solve the distribution problem. If you could get a record company to sign your band, a publisher to publish your book, a movie studio to distribute your movie or a television or cable network to distribute your video, you were golden. The distributor would take responsibility for getting your work into stores, theaters or networks, promoting your work, and getting paid for it. (Actually collecting money from the distributors has been, and remains, an ongoing issue.) However, getting a company to distribute your work could take years of effort, and you might never get past the distribution stage.

Today, distribution is the easiest part of the problem to solve. If you're an author, you can easily self-publish your books in print or electronically, through companies like Amazon and Lulu. If you're a musician, you can distribute on CD or electronically through Amazon, CD Baby and many other companies. If you've produced a movie, Amazon will distribute it on DVDs or electronically, as will Netflix and many others. And if you've created a video, from a two-minute short to a two-hour epic, you have many distribution choices, including YouTube, Vimeo, Livestream, Ustream, Kyte, etc. In most of these cases, it costs little or nothing to get your work into distribution; you pay a portion of your revenues when it's sold.

The real price for doing your own distribution is that there's no big company to handle the attention and monetization parts. You've got to figure that out yourself, and do it without the big budgets that the "old media" companies have for advertising and promotion. Movie studios spend hundreds of millions of dollars promoting blockbusters like "MacGruber" (and see how well that went?) You'll have to get out the word using social media, local events, and whatever guerilla marketing tactics you can use to get attention without spending much money.

The monetization part of the problem is also going to be your responsibility. If you're working with Amazon, for example, it'll process and fulfill orders for you, but you may be limited in where and how you can sell your work outside Amazon's network. Apple is also an option for electronic distribution and monetization, but only for its population of devices and software. Netflix doesn't fund production and does limited revenue sharing based on the number of copies of your movie or video that its subscribers view; it may bring in some money, but not much.

Your distribution and monetization options for video depend a great deal on what you're doing. If you're producing a series, and you're very talented (and somewhat lucky,) you can do what Felicia Day and Kim Evey did and get Microsoft to underwrite production and distribution of "The Guild," what Mark Gantt did and get Sony's Crackle to do the same for "The Bannon Way", or what Illeana Douglas did in getting Ikea to sponsor "Easy to Assemble." (Please note that these are extremely unlikely outcomes.) You can also produce a video for a site like Funny or Die, in order to get exposure. In this case, your video is a stepping stone to other opportunities. (This is also fairly unlikely, unless you're Zack Galifianakis.)

I realize that I haven't solved the attention or monetization problems at all, which is why it took me three attempts to write this blog entry. My point (and I had one, at least when I started writing) is that distribution is now the easiest problem to solve. Standing out from the crowd. and especially, making money from your efforts, are the real problems.

Oracle vs. Google: A very big deal indeed

Bloomberg Television this morning is covering the reaction to the Google/Verizon "policy statement", which effectively means nothing except that Google likes its business relationship with Verizon and wants to keep it. Yesterday's lawsuit filed against Google by Oracle, on the other hand, potentially means a great deal, up to and including wrecking Google's Android strategy, Google TV, and the business plans of Motorola, HTC, Sony, Adobe and many other companies.

Oracle has charged Google's Android with deliberately violating seven of its Java-related patents that it got when it acquired Sun Microsystems, plus unspecified copyright violations. Oracle is asking for a permanent injunction against Android, the destruction of all devices that use Android, and unspecified financial damages. I'm not an attorney, and I'm definitely not a patent attorney, so I'm in no position to determine the validity of Oracle's charges. However, two posts this morning, from James Gosling, the father of Java, and Miguel de Icaza, suggest that Google and its licensees may very well have something serious to worry about.

Sun got $1.6 Billion (US) from Microsoft for infringing its Java patents, but that's likely to be less than the lowest price that Oracle is going to get from Google. Unless Google can somehow invalidate all seven patents plus get past the copyright infringement charges, a process that could take years, the fate of Android and every product dependent on Android is going to be up in the air until Google settles. Oracle may also go after individual Android licensees, but I think that's unlikely.

However, one result of the case may be that Google will have to charge for commercial Android licenses. The price will probably only be a fraction of what Microsoft will charge for Windows Mobile 7, but it will take Android out of the "free for all" category. It will change the financial equation for handset, tablet and set-top box manufacturers--not enough to push them off of Android, but enough to decrease profit margins or increase prices.

Even if Google completely redesigns Android not to use any Java intellectual property, it will still have to pay Oracle for past infringement, and the resulting "new" Android is highly unlikely to be backward-compatible with old versions and old apps.

Blackmagic Design acquires Echolab

Last May 27th, I wrote a blog entry about the demise of Echolab, a well-respected manufacturer of video production switchers that had just run out of money and gone into liquidation. At that time, I wrote that Blackmagic Design might be a good buyer of Echolab's assets. For years, Blackmagic has driven down the prices of professional video capture cards, converters and routers. Last year, they acquired DaVinci, and this year, they flipped the professional color correction market on its head by offering a software-only DaVinci implementation for OS X for under $1,000 (US), and a full-bore, Linux-based implementation with dedicated control surface for literally hundreds of thousands of dollars less than the previous comparable DaVinci Resolve implementation.

By merging Blackmagic's and Echolab's know-how, the company could introduce powerful production switchers at lower prices than the competition. Today, Blackmagic announced that it acquired Echolab, and said that it will be displaying an updated version of Echolab's Atem switcher at IBC in Amsterdam next month. The entry-level Atem with one mix/effects bus and 10 inputs (8 SD/HD/3Gbs SDI and 2 HDMI) will be priced at $19,995 (US), and the two mix/effects bus model with 18 inputs (15 SD/HD/3Gbps SDI and 3 HDMI) will be priced at $51,995.

In the future, it's easy to imagine Echolab's technology brought down to the desktop level--perhaps a reengineered UltraStudio Pro or Multibridge with 1 M/E bus and 4 inputs for under $10,000. An iPad-based user interface wouldn't be out of the question, either.

In any event, this is great news for both Blackmagic Design and the engineers who worked on the Echolab platform, many of whom have been rehired by Blackmagic. Here's the official press release:

Blackmagic Design Acquires EchoLab

Boston, MA, USA - August 12, 2010 - Blackmagic Design today announced the acquisition of all assets of EchoLab Inc., one of the world’s leading designers and manufacturers of production switchers. EchoLab has over 35 years of experience in designing and building production switchers since 1974. This experience has culminated in the latest ATEM range of production switchers that include cutting edge technology for world leading features such as up conversion on inputs, multilayer SuperSource™ input, Stinger™ transitions, and built in multi-view monitoring, all in a familiar and affordable, fully digital M/E style design.

The ATEM production switchers will be demonstrated at the Blackmagic Design IBC 2010 booth #7.B25.

For the thousands of people who use production switchers, ATEM will be instantly familiar. It uses the conventional M/E style of design that’s easy, safe and fast to use on even the most critical live production. ATEM also combines powerful features such as SuperSource™, which is a separate multi layer engine with 4 x 2D picture in picture DVE’s and 4 x keyers that provide the same power as adding a whole extra multiple M/E switcher to the ATEM input!

SuperSource can be called at any time, and connects into the switcher as an input. Only SuperSource gives you the power of 4 built in layers of keying, plus 4 picture in picture DVE’s, while keeping ATEM an easy and fast to use conventional M/E style switcher.

For connecting to the widest range of cameras, decks and computers, the ATEM 1 M/E model includes 8 SDI inputs that operate at SD, HD and 3 Gb/s SDI, plus 2 switchable HDMI/Analog video inputs. ATEM includes multiple SDI outputs for program, preview, and aux. outputs, plus an HDMI output for the multi-view monitoring output. The ATEM 2 M/E model includes 15 x SD, HD and 3 Gb/s SDI inputs, as well as 3 x switchable HDMI/analog inputs for a total of 18 video inputs. ATEM 2 M/E also includes two multi-viewer outputs, clean feed, aux., program and preview SDI outputs. All ATEM switchers include serial ports for camera and VDCP servers as well as genlock.

ATEM switchers allow previewing of transitions before putting them on air. Users simply select “Preview Transition”, and the preview output of the switcher will show all the elements of the transition, so users can have the confidence to make fast multi layering decisions during live production.

When working with multiple cameras and sources, ATEM saves thousands of dollars on expensive monitoring because it includes a built in multi-viewer that lets you see multiple sources on a standard HDMI television or monitor as well as program and preview outputs. When sources are on-air, ATEM multi-viewer displays highlighted borders, and multi-viewer windows can be custom labeled.

ATEM also includes Stinger transitions for exciting and creative transitions. Stingers can be loaded into the switcher, and are then available on the 2 built in media players. ATEM can hold 32 stills and hundreds of frames of real time clips with alpha channels, so users have a wide range of graphics and clips to play back as animations, supers and stingers. Media players can be selected into any of the 4 built in upstream keyers or the transition block for ultimate flexibility and creativity.

For enhanced effects and transitions, ATEM includes a 2D DVE with borders and drop shadows that can be used with any upstream keyer or in the transition block. This means the built in DVE can be used for transitions, or it can be used for keying operations. Because the 4 built in upstream keyers are stacked, users have a wide range of layering options available, and completely independent of the SuperSource input.

When the 4 upstream keyers are combined with 5 SuperSource layers, the transition block keyer, the 2 down stream keyers and the stinger, even a 1 M/E ATEM switcher can have up to 13 keyers on screen simultaneously. This is the heart of the power of ATEM, and would require 3 M/E’s on other brand switchers.
This makes ATEM a tremendous value for money, while providing a compact and portable solution.

ATEM can be fully automated with macros, and also includes support for VDCP controlled servers and robotic cameras, all from the ATEM control panel. Customers can use the built in joy stick for controlling cameras, and then recall macros for incredibly powerful operation with very few people. No other switcher allows customers to produce powerful live productions with so few people!

“I have been using live production switchers since I was in school where we covered local theater, sports, racing and bands. I think it’s the most exciting way to do production because it’s all live and thousands of people are watching what you are doing! Production switchers need to be powerful while also being familiar and easy to operate. I think the ATEM switchers from EchoLab are the most exciting switchers I have ever seen, and it’s incredibly exciting to add these products and intellectual property to the Blackmagic Design family”, said Grant Petty, CEO of Blackmagic Design. “The ATEM switcher is a fantastic creative tool, and it includes powerful features not found in any other product. Since the acquisition, we have already dramatically expanded the engineering team working on ATEM. This fresh engineering team, which is a combination of new as well as experienced EchoLab staff, will allow us to move faster in adding new features to the ATEM product. It’s so exciting, I cannot sleep!”

ATEM Key Features
•    1 M/E model supports 10 video inputs, 2 M/E model supports 18 video inputs.
•    SD, HD and 3 Gb/s SDI, HDM and analog video inputs.
•    Full 10 bit HD operation for broadcast quality.
•    Built in multi-viewer for monitoring switcher sources, includes custom labeling and tally borders.
•    Built in SuperSource allows 4 picture in picture DVE’s and 4 keyers independent of the M/E.
•    2 Media Players are built in for animated graphics and stingers.
•    Stinger effects are independent of keyers.
•    Includes 4 upstream keyers with each including chroma, luma, linear and pattern keying built in.
•    Includes 2 downstream keyers, and independent fade to black.
•    Supports macros, and graphic and clip downloads via PC software.
•   Up to 13 keyers active at one time.

Availability and Price
ATEM is currently being retooled for production and will be available late 2010 for US$19,995 for the 10 input 1 M/E model, and US$51,995 for the 18 input 2 M/E model from Blackmagic Design resellers worldwide.

Press Photography
Product photos of the ATEM production switchers can be obtained by emailing Terry Frechette at terryf@blackmagic-design.com. Press images will also be posted to www.blackmagic-design.com/press/images/ <http://www.blackmagic-design.com/press/images/> early next week.

About Blackmagic Design
Blackmagic Design creates the world’s highest quality video editing products, color correctors, video converters, routers, waveform monitors, live production switchers and film restoration software for the feature film, post-production and television broadcast industries. Blackmagic Design’s DeckLink capture cards launched a revolution in the television industry, while the company’s DaVinci Emmy™ award winning color correction products have dominated the television and film industry since 1984 and continue ground breaking innovations including stereoscopic 3D and 4K workflows. Founded by world leading post production editors and engineers, Blackmagic Design has offices in the USA, UK, Japan, Singapore, and Australia. For more information, please check www.blackmagic-design.com <http://www.blackmagic-design.com> .

iRex is back as IRX, will fail again

iRex Technologies, a bankrupt vendor of overpriced eBook readers, has arisen from the dead, stripped the "e" from its name to become IRX Innovations, and plans to get back into the eBook reader game, this time selling overpriced eBook readers to the business and enterprise market. (That was Plastic Logic's business model, and we've seen where that got them.)

iRex (or IRX) is following a time-tested strategy--if you try to sell your offering to the business-to-consumer market and fail, switch to a business-to-business "white label" strategy and try again. The problem with this approach is that businesses aren't stupid; they see perfectly good eBook readers from Amazon selling for $139 and wonder, rightfully, why they should pay more than that. If IRX prices their readers closer to the iPad, they'll lose. So, I don't see what IRX is going to bring to the market that will allow it to survive in the "valley of death" between the Kindle at the low end and the iPad at the high end.

The simple reason why the iPad is a better eBook reader than the Kindle

The New York Times has an article today comparing the Kindle and the iPad. The overall point of the article is that in the long run, a device that does many things will beat a device that does one thing (in this case, reading eBooks). Randall Stross, the author of the article, quotes Marianne Wolk, an analyst for the Susquehanna International Group, as saying that a surprising number of people who own Kindles and iPads are shifting more of their eBook purchases to Apple's iBookstore.

I don't disagree with the people who say that the Kindle is lighter and easier to carry, has much longer battery life and is easier to read in bright sunlight than the iPad. However, I believe that the key reason that the iPad is a better eBook reader than the Kindle isn't that it can do many things, but because it's open. In this case, open means that anyone can create eBook applications for the iPad or use the Safari browser to read eBooks, while with the Kindle, you're locked into Amazon. On my iPad, I have eBook reader applications from Apple, Amazon, Barnes & Noble and Borders. I can purchase eBooks from any of those companies and have them delivered directly to my iPad. I can also purchase and read eBooks from other vendors that use Adobe's DRM system, and I can read open PDFs and EPUBs from anyone.

The fundamental advantage of the iPad is choice. I don't expect Amazon to ever make the Kindle an open platform. I'm aware of the iPad's limitations when it comes to reading eBooks, and they don't bother me. By improving the Kindle reader, Amazon is fighting last year's battle. They'll keep selling the Kindle, but internally, I'm sure that they know that the dedicated, closed eBook reader has a limited life.

The rise and fall and fall of HP

Yesterday, HP's Board of Directors dismissed CEO Mark Hurd and appointed CFO Cathie Lesjak to replace him on an interim basis. The Board awarded Hurd a $12.2 million dollar severance payment, along with extending his rights to exercise stock options worth approximately another $38 million, for a total award of $50 million.

Here's a brief summary of the "facts" (you'll see why I said "facts" in a moment): Last June, an unnamed marketing consultant represented by Los Angeles attorney Gloria Allred filed a sexual harassment complaint against Hurd. According to HP, its Board of Directors instructed the company's internal and outside counsel to conduct their own investigation, and determined that Hurd had not violated HP's sexual harassment policy. However, according to the Washington Post, "The board...found that Hurd had a personal relationship with the contractor that he had not disclosed. Hurd also filed several inaccurate expense reports meant to conceal his relationship, the board found." HP's own statement says that Hurd also misused company assets. The Post quotes HP general counsel Mike Holston as saying that Hurd "demonstrated a profound lack of judgment."

Gloria Allred made her own brief statement of behalf of the marketing consultant, saying "...there was no affair and no intimate sexual relationship between our client and Mr. Hurd." Now we get to the reason for the quotes around the word "facts." I haven't read HP's sexual harassment policy, but it's likely that if the relationship between the consultant and Hurd was consensual, it wouldn't be considered sexual harassment under the policy, whether or not sexual activity actually happened. The consultant's status as a contractor rather than an employee may have also factored into the determination that no sexual harassment took place. HP says that there was a "relationship" and implies that it was sexual but consensual; Allred says that there was no consensual relationship, and if she's correct, any sexual advances that Hurd made would constitute sexual harassment.

This is the third time in five years that HP has fired or forced the resignation of a top executive. In 2005, the board fired CEO Carly Fiorina for putting her ego ahead of sound company management. Mark Hurd was hired from NCR to replace her. The following year, board Chairman Patricia Dunn was forced to resign in the wake of a "pretexting scandal", where the board hired private investigators who engaged in illegal activity in order to identify the source of leaks from board meetings, including obtaining the phone records of journalists. Hurd was appointed as Chairman of the Board to replace Dunn. Now, Hurd has been dismissed from both his CEO and Chairman positions.

There was a time, when founders Bill Hewlett and Dave Packard were active in management, that HP was a great company, even though it was much smaller. "The HP Way", a set of rules for how the company was run that put its employees and integrity above everything else, set the model for how companies should be run. In my opinion, The HP Way was at least as important as the universities and venture capitalists in making Silicon Valley the success that it has become. Companies write Policy & Procedure manuals covering hundreds of pages and every possible contingency; the five paragraphs of The HP Way were far more effective in guiding how a company and its employees should act.

Fiorina threw out The HP Way, and Hurd denied that it ever existed. HP is now one of the world's biggest technology companies and is bigger than IBM on the basis of revenues, but it's no longer a great company. The only thing that people can learn today from HP is how not to do things. It no longer stands as a model of corporate ethics or employee respect. Its research is second-rate and focused toward getting products out the door quickly, not toward major game-changing innovations. HP is a revenue machine. That's very much in favor on Wall Street. We know, from the last few years, what else has been in favor on Wall Street, and ethics are nowhere on that list.

Update, August 8, 2010: As I suspected, Mark Hurd's behavior was symptomatic of a general culture of excessive compensation, personal entitlement and a blurring, if not complete erasure, of the line between personal and company expenses on the part of Hurd and HP's other top executives. HP's board can't deny responsibility for this--they approved the compensation and policies that allowed HP's top executives to use the company as their own private bank and airline. The best thing that they could do (which of course they won't) is to change the policies and bring in an outsider as CEO and Chairman. The entire executive team at HP is tainted and should all be ruled out of contention for the CEO position.

Update 2, August 8: The Wall Street Journal is reporting that last Thursday, the day before his dismissal, Mark Hurd reached a settlement with and paid an unspecified amount of money to the unnamed marketing consultant who filed sexual harassment charges against him. The terms of the settlement weren't released, but an unnamed source told the newspaper that HP didn't pay any money to the consultant. As with many things in this case, that's technically true but effectively false. HP agreed to pay Hurd a $12.2 million dollar cash settlement, and a large portion of that settlement undoubtedly went to the consultant. Hurd almost certainly got the consultant to agree to a non-disclosure agreement, prohibiting her and her attorney from discussing either the case or the settlement. However, Gloria Allred, her attorney, made a statement after Hurd was dismissed. If an NDA was in place, the only way that the statement could have been made is if Hurd asked (or required) Allred to make it. I believe that far more details will leak out, and they'll be damaging both to Hurd and to HP.

Update 3, August 8: Well, that was fast. The unnamed marketing consultant has named herself. According to IMDB, Jodie Fisher, 50 years old, was an actress in minor television shows and "B" movies from 1992 to 1999, then she dropped out of sight. She returned to television as a contestant on a short-lived NBC reality series called "Age of Love" in 2007, where she was one of seven 40+ aged "cougars" who were attempting to be chosen by a 31-year-old Australian professional tennis player. She was voted out of the show in the very first episode. Here's a description from the Reality TV World website:

...Mark (Mark Philippoussis, the Australian tennis pro) was forced to eliminate one of the older women and decided upon Jodie Fisher, a 46-year-old vice president for a commercial real estate company from Dallas, TX who has been married once before and has an 8-year-old son.

"I have to go home tonight, but that's okay... That's okay.  I have my sweet little boy to see." said Jodie upon learning she was the first bachelorette sent packing.  "I hope I've helped show that a woman in her 40s is sexy and interesting and powerful.  Whoever the right person for me is, he's out there."

Following her appearance on "Age of Love", she appeared in another movie, "Easy Rider: The Ride Back" in 2009. I'm confused. She was a "B" actress for a decade, went into real estate in Dallas, competed in a cougar-off on NBC in 2007 and went back to acting in 2009. How exactly does any of this qualify her to be a senior marketing consultant working with the CEO of one of the world's largest technology companies?

Is there still a market for content at retail?

I was in a Barnes & Noble store this afternoon when I overheard a customer ask a salesperson why the price of a book was so much lower online than in the store. The salesperson stumbled through a variety of stories: First, he said that the customer would have to to pay shipping on an online order below $25, so that might make the in-store price closer to online. Next, he said that Barnes & Noble's stores and online are two different companies for all practical purposes, and that the online store gives discounts to everyone. By the end of his "explanations," if I'd been the customer, I would have just gone home and purchased the book online. That experience, and some other recent events, got me thinking about the state of content sales at retail in the U.S.

If you're looking for a music store in the U.S., you may be looking for a long time. With a few exceptions, such as Trans World Entertainment and its f.y.e. stores, music store chains have died out. Once-powerful brands such as Tower Records, Sam Goody, Musicland, Wherehouse and Virgin Megastores now exist only as brand names owned by others or not at all.

In home video, Blockbuster's problems are well-known; its retail rental business is struggling against Netflix and Redbox, its kiosk business has barely gotten off the ground, and its online streaming business is virtually dead. There's not a single major player in U.S. retail video rental that hasn't gone out of business, or is just about ready to enter, is in or has recently left bankruptcy.

In books, Borders Group put itself up for sale in March 2008 but was never able to find a buyer; as of this writing, its stock is trading at $1.36/share on the NYSE. And yesterday, Barnes & Noble put itself up for sale, with the goal of "raising its market value," which it did, at least temporarily; the day of the announcement, its stock closed at $12.84/share on the NYSE, and today it closed at $15.31.

The most successful sellers of content in the U.S. are Amazon and Apple. They've used the Internet as a way to reach customers without needing a huge investment in stores, and their pricing models have made it impossible for all but the "big box" retailers like Wal-Mart and Target to compete. The move to digital content that's not only sold but distributed via the Internet gives the online merchants an even greater advantage: They can sell content and deliver it instantly.

Barnes & Noble plans to build 1,000 sq. ft. "boutiques" for its nook eBook readers in every store, located next to their cafes. To do so, they'll shrink or eliminate the music departments in the stores, and reshelve books and other merchandise to get the rest of the needed room. The question is, if Amazon is doing quite well with the Kindle without having any retail stores, and if once a customer purchases a nook, they have even less reason to go into a Barnes & Noble store, will the nook really have any long-term impact on the viability of Barnes & Noble's stores? And, if the nook won't help the stores in the long run, what else will?

Amazon's Kindle and the numbers game

Amazon has never revealed actual Kindle or eBook sales numbers, either in dollars or units. They've always stated the numbers in terms of a percentage of something else for which there are no actual numbers: Sales compared to a previous quarter or year, sales compared to hardcover books, etc.

There's a movement to try to pressure Amazon to release the actual numbers. However, there's no legal obligation on the company's part to release them, and Jeff Bezos has said that he won't do so for competitive reasons. When I was an industry analyst, I tried to get companies such as Motorola and Cisco to release installed base and/or shipment numbers for products sold into the IPTV (Intermet Protocol Television) market, and they always refused, even though they were clients of the company I was working for.

Companies have a right to withhold their sales figures for competitive reasons, but I've found that the real reason usually is that they'd be embarrassed if the numbers were released. For example, I was unable to get Microsoft to release sales numbers for its Mediaroom IPTV platform, on the basis that they didn't have permission from their customers. Apparently, not a single customer anywhere in the world was willing to release its numbers. Then, miraculously, shortly before I left, Microsoft began releasing detailed numbers. Why? Did all their customers suddenly mutually agree to start talking? In my opinion, the real reason was that Microsoft was afraid that investors would learn that they were spending an enormous amount of money on a business that was getting very little traction. Once their installed base reached a respectable level, they were happy to talk numbers.

I'm not going to state that the reason that Amazon refuses to release actual Kindle numbers is that they're disappointing when looked at objectively, since I have no evidence one way or another. However, companies with hot-selling products usually are glad to crow about their numbers. I leave the conclusion to you.

Extensive VP8/H.264 Comparison from Jan Ozer

Jan Ozer and StreamingMedia.com have done an extensive follow-up to their earlier comparison of VP8 (the video codec within Google's open-source WebM) and H.264. I'll briefly summarize their findings:

• In general, the playback CPU utilization of VP8 and H.264 are almost identical. However, many PCs and other devices have H.264 hardware acceleration; on those platforms, H.264's CPU utilization will be much less than that of VP8. This difference will continue until Google gets vendors to make VP8 hardware acceleration standard.
• VP8 requires much longer encoding times than H.264, but the difference can largely be mitigated by using an encoder that supports multiple cores and threads.
• Ozer compared the subjective output quality of Sorenson Squeeze's VP8 encoder, X264 and MainConcept's H.264 encoder. He concluded that X264 output looked best, followed by H.264 and then VP8. However, he noted that the differences between the three encoders were so small as to be virtually unnoticeable except in side-by-side testing.
• Ozer's conclusion: H.264 will remain royalty-free for free Internet content until 2015, and hardware acceleration for VP8 will take a long time to become widespread, so he sees no need for producers or distributors of free Internet content to switch. (He doesn't address the issue of paid content, and that's where VP8 is likely to have more impact when it's more widely adopted by encoder and browser vendors.)

Ozer also points to an extensive analysis by Jason Garrett-Glaser, one of the developers of X264. Garrett-Glaser's bottom line is that the encoding quality of VP8 is about the same as H.264 Baseline Profile and considerably less than Main or High Profile. He expects the decoding performance of VP8 and H.264 to be about the same, but that H.264 will have a significant advantage because of broad support for hardware acceleration of H.264 decoding.

Perhaps most significantly, Garrett-Glaser questions the claims that VP8 is patent-free; he believes that VP8 and H.264 use similar techniques in many parts of the encoding process. In fact, he says that calling VP8 "H.264 with a better entropy coder" would be an only slightly inaccurate description.

My bottom line? If you're producing or distributing free video content only, there's no reason to deal with VP8 or WebM for now. It's going to take at least a year for Google and its partners to optimize encoding and decoding and start getting VP8 hardware acceleration built into GPUs and other devices, and to resolve whether or not VP8 is truly patent-free. Unless you're an encoder, decoder or accelerator developer, I'd let these issues shake out before you adopt VP8 and WebM.

Apple's new iMacs and Mac Pros need better I/O

There have been a lot of negative comments in the media production community about Apple's new Mac Pro tower computers and iMacs. The new models are faster and have better graphics than the models they replaced, but they have the same I/O capabilities, and in the case of the Mac Pro, the same number of slots as the old models.

Many observers were looking for Apple to introduce USB 3.0 interfaces or the 1.6/3.2 Gbps FireWire standard, and were disappointed. I suspect that one big reason why Apple didn't implement USB 3.0 is that Intel is moving very slowly to support the new standard. Intel's motherboard chip sets, which are by far the most popular, still don't include USB 3.0 support, although USB 3.0 cards can be added. Yesterday, Intel announced that it had completed development of all the components necessary to implement 50 Gbps transfers over a single fiber-optic link. Intel calls this technology the Silicon Photonics Link (SPL,) and expects to have it available commercially within five years. This looks like the latest version of Light Peak, which was reportedly developed by Intel at Apple's request.

My suspicion is that SPL is what Apple is really waiting for. With SPL, Apple could attach many high-speed devices that currently need different interfaces, such as disk arrays, displays and audio/video capture devices, using a single interface. Apple doesn't want to encourage adoption of slower interfaces that it will replace in a few years' time with SPL. However, the problem is timing. If SPL is two years out, Apple might be able to hold out, but if it's really five years away, they can't wait that long for a faster interface. I don't believe that S1600/S3200 FireWire is an option; Apple has wanted to drop its FireWire interfaces for years and has kept them only because of strong pressure from the user community.

There's another issue, and it concerns how the iMacs and Mac Pros coexist in Apple's product line. The new iMacs, which come standard with Core i3 or i5 CPUs and can be ordered with i7 CPUs, are fast enough for most media production tasks, but they're crippled by slow I/O. For example, there are very few ways to get high-speed video into or our of an iMac; MacBook Pros have better I/O options because they support Expresscards, while iMac users are limited to USB 2.0 and FireWire.

An iMac or MacBook Pro with a couple of USB 3.0 interfaces, or in the future, a SPL interface, would make the Mac Pro obsolete except for highly specialized applications. Once Apple's notebook and desktop computers have extremely fast I/O, they will be able to do perhaps 95% of what a Mac Pro can do. I think that one big reason why the Mac Pro hasn't had the massive redesign that it's needed for a few years is that Apple sees it as eventually going away.

The viability of Apple's desktop and tower computers for high-end media creation depends in large part on how Apple solves its I/O issues. It can't wait five years for SPL; it's got to come up with something much sooner than that.

Amazon fires next salvo in eBook reader wars

According to Engadget, Amazon has announced its new-generation Kindles, which will replace the Kindle 2. The new models have the same 6" display size of the Kindle 2, but use the same improved E-Ink display technology as the Kindle DX. The new display offers 50% better contrast and a 20% faster page refresh time (meaning that the annoying "flashing page turn," while not eliminated, is shorter.) Also, the new Kindles are 21% smaller and 15% lighter than the Kindle 2.

Amazon has increased the Kindle's built-in storage to 4GB, slightly modified the controls to make them easier to use, improved the PDF reader to include support for password-protected files, and added an "experimental" Webkit-based browser that should, at least in theory, be able to display HTML5 content. (The fact that Amazon calls the browser "experimental" means that users shouldn't expect too much from it.)

The Kindle's Text-to-Speech capabilities have been improved, and vision-impaired users can now navigate using voice prompts. Given the Copyright Office's ruling on requiring publishers to permit text-to-speech, this could dramatically increase the number of speech-enabled titles offered by Amazon.

The single Kindle 2 has been replaced with two models, one with both 3G and Wi-Fi, priced at $189 in the U.S., and the second with Wi-Fi only, priced at $139. Both models will ship on August 27th. Amazon has priced the new 3G/Wi-Fi model at the same price as the just-discontinued Kindle 2, and both models underprice their Barnes & Noble nook equivalents by $10 in the U.S.

Panasonic to intro Micro Four Thirds 3D lens by year-end

According to Engadget, Panasonic is working on a 3D lens for its Micro Four Thirds cameras (G1 and G2), and plans to ship it by the end of the year. The 3D lens will use the Lumix G-series mount. It will operate on the same principle as the snap-on 3D lens just announced for the HDC-SDT750 camcorder; the right and left eye images will be split and recorded together on one imager. The focal length and aperture range of the lens hasn't yet been disclosed, and the lens shown by Engadget is still a prototype.

Panasonic is clearly very serious about 3D for both camcorders and DSLRs, and it'll be interesting to see how other manufacturers respond.

Panasonic's new consumer 3D (maybe) camcorder

Panasonic has formally announced the HDC-SDT750, a consumer-targeted 3D camcorder. Instead of creating a true full HD 3D camcorder, which would have required two imagers, Panasonic uses a snap-on 3D lens that splits the right- and left-eye images and sends each one to half of the imager, resulting in a 960 x 1080 image for each eye. Both images are captured in one 1920x1080 frame. (When the 3D lens is removed, the camcorder can be used for conventional 1080P recording.) About the only thing you'll be able to do on Day One will be to run the video from the camcorder out to a 3D HDTV for direct viewing, but I suspect that Adobe and Apple will build support for Panasonic's format into future versions of Premiere Pro and Final Cut Studio. The HDC-SDT750 will ship in October, priced at $1,399 in the U.S.

Pace to acquire 2Wire for $475 million

On the heels of passing Motorola in the worldwide set-top box business, Pace will acquire 2Wire for $475 million. 2Wire supplies DSL routers for AT&T and other service providers, and also supplies media management software. Pace has recently been chosen to provide next-generation set-top boxes to Comcast, so the addition of 2Wire will give Pace an excellent position in both the U.S. Cable and IPTV markets.

Two more eBook reader companies fall by the wayside

The fallout of second-tier eBook readers continues. According to Wired, two more eBook reader companies have dropped out of the market: Audiovox has dropped plans to introduce a RCA-brand eBook reader, and Plastic Logic has canceled all orders and scrapped plans to ship its eBook reader for business applications. Audiovox's decision is no surprise; they could see that it would be foolhardy to release an eBook reader now. Plastic Logic's reader, on the other hand, was at one time highly touted, but was going to cost more than an iPad yet have a monochrome display and much less capability.

Audiovox and Plastic Logic follow iRex Technologies, which went into bankruptcy in The Netherlands, and Interead, the vendor of the Cool-er eBook reader, which was forced into involuntary liquidation in the U.K.

Does content in the cloud mean the end of DRM?

Two days ago, I wrote about The Digital Entertainment Content Ecosystem's (DECE) Ultraviolet DRM initiative. More than 60 content, distribution, consumer electronics, DRM and services companies have joined DECE to build a uniform DRM-neutral platform for controlling content access and making content available to multiple devices.

Ultraviolet is based on the premise that consumers will purchase physical media--CDs, DVDs and Blu-Ray discs--and will want to play the content stored on that media on a variety of devices. Today, consumers can "rip" content to hard drives and personal media players. That's illegal under the U.S. Digital Millennium Copyright Act (DMCA) if they circumvent any security systems in order to copy the content, but it's fairly easy to do. As I understand Ultraviolet, when consumers purchase a Blu-Ray disc (for example), they will be able to access a copy of the movie on the disc in an online "digital locker", and download that movie to personal computers and portable media players using the DRM system supported by each device. Ultraviolet will prohibit customers from making more copies or using the content on more devices than they're entitled to.

Ultraviolet is a way to keep most consumers from making copies of digital content themselves, but it primarily makes sense in a "physical media" world, or at least a world where every device requires its own local copy of content. However, we're moving to a streaming environment, where consumers increasingly never touch a piece of physical media and instead stream content from the cloud. Netflix, Amazon, Rhapsody, Microsoft's Zune Pass, Pandora and other services are based on this streamed, monthly subscription model. Apple is widely rumored to be planning to launch its own cloud-based subscription service later this year.

With streamed content, must less is needed in the way of DRM. A partial or complete copy of each song or movie is streamed to each authorized device while it's being played, but the copy is temporary ("ephemeral") and is deleted when the viewing or listening session ends. The biggest downside of streaming is that a high-speed connection is required while viewing or listening to the content. That makes it unusable on most airplanes and in other places with no broadband wireless Internet service. However, the range of places without service, and devices without at least a WiFi connection, is getting smaller every day.

By the time Ultraviolet gets fully defined and commercially implemented, it will probably be made obsolete by streaming media. As for the heavyweight DRM schemes that Ultraviolet is designed to simplify, they're likely to be replaced by authentication and encryption systems that are easier to implement, more standardized and more compatible across devices. The new DRM standard is likely to be a HTML5-compliant browser or its equivalent.

What do Mark Zuckerberg and "The Producers" have in common?

I now direct your attention to the curious case of Paul Ceglia, who filed suit on June 30th in New York state Supreme Court against Mark Zuckerberg and Facebook, asking to be awarded 84% of Facebook. Ceglia submitted a copy of an agreement that he claimed he entered into in 2003 that required Zuckerberg to create a website for Ceglia's company. Tied together with that project was an agreement for Zuckerberg to sell Ceglia a 50% interest in "The Face Book". Ceglia paid Zuckerberg $1,000. In addition, a clause in the contract required Zuckerberg to give up an additional 1% ownership for every day after January 1, 2004 that "The Face Book" didn't go live. The website, at thefacebook.com, finally went live on February 4, 2004, and Ceglia claims that due to the delay, he's owed an additional 34% of the company. The entire lawsuit, including the contract, is viewable at Scribd.

Ceglia has his own problems; he's under investigation in New York state for fraud relating to his wood pellets business. Ceglia waited more than six years to file his lawsuit, and it was filed in a New York state court, not U.S. Federal court. The contract itself is a mess (I'm not an attorney, but I've read a few business contracts in my day, and this one could be an example of "Ten things not to do in a contract.")  The easy conclusion would be that Ceglia had faked the contract, faked Zuckerberg's signature, or otherwise engaged in some kind of fraud. However, that's not what appears to have happened.

Neither Facebook nor Zuckerberg's attorney have come out and said that the contract is a fake. When asked directly by the U.S. Federal Court judge who's taken over the case if Zuckerberg actually signed the contract, his lawyer said "Whether he signed this piece of paper, we’re unsure at this moment." That's a pretty startling statement by defense counsel. If Zuckerberg didn't enter into the contract, his statement to his counsel would be a straightforward "No", and that's what his attorney would have told the judge. However, it appears that Zuckerberg and Facebook are hoping that Ceglia can't produce an original copy of the contract. If not, and all that Ceglia can provide is a facsimile, it makes the case for the authenticity of the contract much weaker. In essence, what Zuckerberg's lawyer said is that they don't know if he signed that particular piece of paper, not that he signed a contract in general. In fact, Zuckerberg's attorney has admitted that Zuckerberg entered into a contract with Ceglia to build a separate website for him.

Facebook and Zuckerberg's counsel are also arguing that the statute of limitations has already run out on any claim that Ceglia could make. In addition, given the enormous amount of publicity that Facebook has had over the years, and the publicity that sales of equity holdings in Facebook have had, Ceglia had an obligation to take action to protect his interests and mitigate losses of other investors.

There's a good chance that Facebook and Zuckerberg will prevail on their arguments, even if Zuckerberg did enter into the contract...but if did he enter into the contract, why? Facebook has already had to pay a $65 million settlement to the Winklevoss brothers, who originally contracted with Zuckerberg to create the website that eventually became Facebook. If Paul Ceglia's contract is shown to be authentic, even if it can't be enforced, Zuckerberg sold him 50% of Facebook for $1,000. Why was Zuckerberg apparently selling Facebook to everyone he could find? It sounds like the plot from "The Producers"; perhaps he thought that "The Face Book" would fail, and he'd keep everyone's money, or perhaps he desperately needed the money for some reason.

In any event, would you like to have this man running your $20 billion dollar valuation business?

DECE's Ultraviolet: Still invisible to the naked eye

The Digital Entertainment Content Ecosystem, a consortium of 60 video content, distribution and DRM companies including Sony, Time Warner, News Corporation, NBC Universal, Paramount, Comcast and Cox, has announced Ultraviolet, the new brand name for DECE's initiative. Today, consumers have to deal with a thicket of different DRM schemes; content that works on one device might not work on another one, and their rights for using the same content on multiple devices can differ dramatically. Ultraviolet's goal is to smooth over the differences, so that consumers have uniform rules for how they can access and use content on multiple devices.

Consortia are inherently slow at making decisions, and with so many different members with different technology and agendas, DECE has been very slow to arrive at an architecture that its members can actually implement. In fact, there are still no finalized technical specifications, only a trademark and a set of goals. Also, the promise of universal interoperability is only a promise unless everyone buys in, and Apple and Disney have opted out of the DECE consortium in order to develop their own platform.

The odds for Ultraviolet's success, when it's finally defined, aren't great. Streaming content, which is inherently stored in the cloud and doesn't require the same level of DRM as content that's intended for local storage, is taking over in video, which is DECE's primary target. Ultraviolet is likely to be irrelevant by the time that DECE completes its specifications.