Are cable and IPTV operators going to "back into" a la carte?

NewTeeVee ran an article last week about AT&T's decision to drop Crown Media Holding's Hallmark Channel and Hallmark Movie Channel from its 2.5 million U-verse IPTV households in the U.S., effective September 1st. As of this writing (September 9th,) the channels haven't been reinstated. NewTeeVee said that a JPMorgan research report from last April found that there are only 50 cable networks in the U.S. for which 10% or more of cable subscribers would switch service providers in order to watch them. The Hallmark channels aren't within that group of 50 essential networks.

Cable, satellite and IPTV systems have the capacity to carry hundreds of channels, and system operators have been racing each other to offer the most networks. New and small cable networks can get carriage on cable systems by giving their programming to cable operators at no cost or paying to have their programming carried (called "reverse compensation".) However, most of those networks get little viewership, and the service providers are essentially wasting bandwidth by carrying them.

Cable operators have successfully fought the FCC for years to prevent the imposition of rules that would require them to allow viewers to choose, and pay for, only the channels they want to watch (often called "a la carte".) However, as they begin to drop lesser-watched channels in order to save on retransmission fees, the operators of those networks will put political pressure on the FCC to protect them.

Cable and IPTV operators could turn this situation to their advantage (satellite operators have less flexibility, due to their technology.) As cable operators move to switched digital video and IP transport, they will have the ability to send any channel (or set of channels) to any subscriber. (IPTV operators like AT&T and Verizon can do this today.) These operators could offer to make small networks available on an a la carte basis in return for revenue sharing (for example, 70% of the fee would go to the cable operator and 30% to the network.) There would be some upfront costs to the network for making their content available to subscribers.

The "top 50" essential networks wouldn't be subject to a la carte, so those network operators would be unlikely to fight the move with the FCC or U.S. Congress. Some customers might actually save money by buying a few channels a la carte.  The cable and IPTV operators could position the move as sensitivity to consumer demand. They would also have more latitude to remove unpopular channels, giving them more flexibility to offer HD and 3D channels, and more bandwidth for high-speed Internet services.

Your instructional dancing videos of the night

According to researchers at Northumbria University in the U.K., women find this style of dancing unattractive:

On the other hand, they find this dancing irresistible:

Inkling and Kno: Two very different takes on how college eTextbooks should work

Earlier today, Kno, a Silicon Valley-based startup, announced that it has raised $46 million in its most recent round of funding, to add to the $10 million it previously raised. Kno and San Francisco-based Inkling, which recently announced its eTextbook application for the iPad, compete directly with each other, but the two companies have dramatically different approaches to how eTextbooks should look and work.

Kno began with the concept of reproducing print textbooks as closely as possible in an electronic form. For the Kno team, that meant preserving the look and feel of individual pages, right down to the page numbers. A professor who tells students to read "Chapter 6, pages 137 through 149" in a textbook can be confident that the chapters and page numbers will be identical in the print and Kno eTextbook versions. To make the Kno approach work, the company designed its own eTextbook reader (Kno refers to it as a "tablet", but it's really two tablets stitched together.) The Kno reader's dual displays are designed to show 99% of all college textbooks in use today at 100% magnification. In other words, no panning, scrolling or zooming are needed. It's just like reading a paper textbook. In addition, the Kno displays can be controlled by touch or with a stylus, so students can write notes in the margins of their eTextbooks and highlight text, just as they can with print textbooks.

The downside of the Kno approach is that the Kno reader that's needed to make everything work is heavy (the weight of two average textbooks), big (the size of a large notebook computer, except turned vertically) and expensive (the company says that it will be "under $1,000.") If the reader isn't accepted by students, the rest of the Kno approach will fall by the wayside. Kno took the "path of least resistance" approach: Make the eTextbooks just like print books so that students won't have to relearn how to use them. Use the same page format as existing print so that publishers don't have to pay to reformat their books for Kno.

Inkling, on the other hand, started with the content of textbooks and went from there. Inkling recognized that tablets like the iPad would likely become the preferred devices for reading eBooks (even though the iPad didn't exist when Inkling began development.) Since they didn't know what screen sizes their eTextbooks would have to work on, they designed Inkling to support a variety of screen sizes. Their system starts with Adobe InDesign (and possibly Quark) files, integrates audio, video, animations and hyperlinks, and outputs eTextbooks that dynamically reflow to fit the screen size of whatever device is used to read them.

There are a number of downsides to the Inkling approach: For example, page number references are no longer valid between print books and eTextbooks, so professors will have to refer to chapters and sections, not page numbers. (Update: A commenter says that Inkling maps the print version's original page numbers to the eTextbook version and allows users to navigate using the print page numbers.) Disiplay of eTextbooks on devices with screens smaller than 7" will be marginal at best. Inkling requires much more redesign and reformatting of content than does Kno, so it costs more and takes more time to create Inkling eTextbooks, and publishers have to be much more involved in the conversion process. On the other hand, Inkling eTextbooks work with the iPad, and will likely work on Android tablets in the future. Inkling doesn't have to build, sell and support its own tablets, and it's already supporting a wildly popular platform.

Kno's approach may be the path of least resistance in the short run, but it's hard to believe that we'll see millions of college students carrying heavy, bulky, expensive Kno eTextbook readers instead of cheaper, lightweight iOS and Android tablets that can do much more. Inkling's approach is better suited to where the industry is going. Making eTextbooks that look and work like their paper counterparts is an interim strategy at best. The value of a textbook is the information it contains, not its packaging, and that's why my money's on Inkling for the long run.

IBC reminder and fast ways to track new product announcements

A quick reminder: If you're involved with or interested in professional video, the International Broadcasting Conference (IBC) starts this coming Thursday, September 9th, in Amsterdam. As with many conferences of this type, most of the new products are announced either shortly before the conference begins or the first day of the conference, in order to drive traffic to exhibitors' booths. A great way to keep track of new product announcements is a site called Virtual Press Office, or VPO. They distribute press releases and already have almost 100 press kits from exhibitors available for download. (Materials on the site will be updated throughout the show.) You don't need to be a reporter to use VPO, but you do have to register in order to get access to some of the materials.

In addition to VPO, you can also find IBC press releases at BusinessWire and PR Newswire. Not all companies use all three sites, so monitoring them all will enable you to keep track of just about everything.

Will Barnes & Noble become "Starbucks with books"?

The New York Times ran an article earlier this week about Barnes & Noble's decision to close its bookstore across the street from Lincoln Center in New York City. The article said that many people in the neighborhood who didn't buy anything there are sad that the store is closing, and that the store is at least as important as a social meeting place as it is as a bookstore.

With that in mind, what will a typical Barnes & Noble store look like ten years from now? (I realize that I'm making the assumption, not altogether defensible, that Barnes & Noble will still be in business in ten years.)  First of all, there will be far fewer stores than there are now, and the ones that remain will be much smaller and will look more like oversized Starbucks than bookstores. The cafe will dominate and will take up the largest amount of floor space. There will be a display space for demonstrating and selling whatever the nook eBook reader turns into ten years from now.

Some print books will still be on sale, but only a very limited selection of bestsellers. For everything else, there will be one or more touchscreen kiosks at which customers can browse tens of thousands of titles. Customers will be able to purchase any of them as eBooks and immediately download them to their eBook readers or tablets, or order physical copies for home delivery. They'll also be able to "rent" them for reading on their eBook readers or tablets while they're in the store.

Barnes & Noble may also place its kiosks into a big-box retailer such as Wal-Mart, Target or Best Buy, just as Wal-Marts have Redbox DVD kiosks inside their entrances. The combination of downsizing and using kiosks to sell books could reopen a niche for independent bookstores that actually stock a wider variety of titles, for those customers who still want to look through physical books on shelves before purchasing and are willing to pay a higher price for that privilege.

Like video rental stores before them, book superstores such as Barnes and Noble and Borders are becoming dinosaurs. They'll have to evolve into social meeting places that also sell books, or even just automated kiosks in big-box stores and coffeehouses, if they want to survive.

Samsung's Galaxy Tab: Real, impressive, unpriced

Samsung has officially introduced the Android 2.2-based Galaxy Tab at IFA in Berlin. It has a 7 inch display with slightly lower resolution than the iPad (1024 x 600) but more dots per inch, front- and rear-facing cameras, and a 3G GSM modem with the capability to act as a (big) smartphone as well. Samsung has created a custom user interface and Android apps designed to take full advantage of the tablet's screen. In addition, the Galaxy Tab is the first Android tablet with official permission from Google to access the Android Marketplace.

It's when you start talking about prices and availability dates that details get a bit sketchy. Samsung says that the Galaxy Tab will be released in Europe this Fall but quoted no prices, and has provided no details about either a release date or price in the U.S. I suspect that it will be released in November in the U.S., in partnership with one or more of the major mobile carriers (most likely Verizon). It'll almost certainly be priced less than the iPad, but how much less (given that it has more features than the iPad) remains to be seen. Also, to work with Verizon's network, it will need CDMA support, which wasn't announced at IFA.

We're going to get a barrage of Android tablets between now and the end of the year (Toshiba just showed its dual-operating system Toshiba Folio 100 at IFA, Archos announced a new family of Android tablets yesterday, and Viewsonic announced its ViewPad 7 on Monday.) 

Apple TV: A lost opportunity?

When you were a child, did you ever annoy your parents into buying you a toy for Christmas or Hanukkah, only to find that once you unwrapped it and took it out of its box, it wasn't exactly what you were expecting? I felt that way after Steve Jobs' introduction today of Apple TV Part Deux. For months, there were rumors flying around about what the new Apple TV would be able to do. Jobs himself specified the problems with the old Apple TV approach in an interview with Kara Swisher and Walt Mossberg at the D8 conference last June:

"The problem with innovation in the TV industry is the go to market strategy. The TV industry has a subsidized model that gives everyone a set top box for free. So no one wants to buy a box. Ask TiVo, ask Roku, ask us... ask Google in a few months. So all you can do is ADD a box to the TV. You just end up with a table full of remotes, a cluster of boxes... and that's what we have today. The only way that's going to change is if you tear up the set top box, give it a new UI, and get it in front of consumers in a way they're going to want it. The TV is going to lose in our eyes until there is a better go to market strategy... otherwise you're just making another TiVo."

The new Apple TV doesn't solve any of these problems. It's not a replacement for any existing set-top boxes, especially the ones from cable, satellite and IPTV operators, because the only content providers that have signed on are Disney/ABC and Fox. So, to use Apple TV, you're adding a set-top box and remote. Jobs said that the solution was to "...tear up the set-top box (and) give it a new UI...", but Apple TV is simply a smaller version of the original Apple TV, with a slightly improved UI. In short, it doesn't do what Jobs correctly said had to be done in order to change the game.

Further, Apple TV is closed. It apparently doesn't use iOS, it doesn't allow developers to create apps that extend its functionality, and it doesn't have a web interface or other means to access content on the open Internet. Many people, myself included, were hoping that the new Apple TV would be iOS-based and would run iOS apps. Apple may have decided that the living room TV would stretch the iOS user interface so much that it wouldn't make sense to try to run phone- and tablet-based applications. They may have also believed, as Jobs said today, that consumers don't want to deal with a computer when they want to watch television. However, they still could have opened up Apple TV to content from third-parties. With the exception of Netflix, YouTube and Flickr, Apple TV is a walled garden and other content providers need not apply.

The only real improvement that Apple TV brings to the table is price. The box and the content are less expensive than in the first version. However, much of that same content is available for free from other sources, and other solutions provide far more content overall.

At the end of the day, I don't know why Apple and Jobs bothered to release this iteration of Apple TV. It doesn't do what Jobs himself said that it had to do in order to be viable, it doesn't have a critical mass of content partners, and it provides only small incremental improvements over the product it replaced.

Apple's opened a hole wide enough for Google TV to drive a truck through...if Google has the talent to take advantage of it.

Apple's announcements: iOS News, All-New iPods, New iTunes and Updated Apple TV

Apple made a series of new product announcements in San Francisco earlier today; I'll summarize the ones that are most relevant to regular readers of this blog:

iOS Announcements

Apple's iOS 4.1, which has been in beta test since the release of the iPhone 4, will ship to customers next week. The most important media-related feature is support for High Dynamic Range (HDR) photos, a capability that has been provided by some third-party apps. iOS devices with cameras will be able to take three pictures in quick succession, one underexposed, one properly exposed and one overexposed, and then digitally merge the three pictures together to bring out additional highlight and shadow details. Both the "properly exposed" and HDR images will be saved.

iOS 4.2, to be released to customers in November, will be the first version of iOS 4 that will run on iPads. It will bring all the functionality of iOS 4.1 to the iPad, and will also introduce two new capabilities for iOS devices:

• Wireless printing: Printers can be selected and documents can be wirelessly printed from iOS devices.
• AirPlay (the next generation of AirTunes) will enable audio, video and photos to be streamed between devices over WiFi. For example, content can be streamed from a Mac to an iPad for viewing.

A new iPod touch

The entire iPod line has been refreshed, except for the "classic" hard disk-based iPods, which remain in the product line. The most important announcement was the next-generation iPod touch, which keeps the same iPhone 3-based design but is thinner. It has a number of major improvements:

• A Retina Display with the same resoultion as the iPhone 4
• The same Apple A4 chip as the iPhone 4
• A three-axis accelerometer
• A front-facing camera and support for FaceTime over WiFi
• A rear-facing camera with HD video recording

You're probably figured out that the new iPod touch is essentially an iPhone 4 without a phone, in a package that looks like a slimmer iPhone 3GS. The iPod touch will ship next week (as will all the new iPods.) Here are the prices (U.S.):

• 8GB: $229
• 32GB: $299
• 64GB: $399

iTunes 10 and Ping

Apple also announced the next version of iTunes, Version 10, available for immediate download. The most important new feature in iTunes is called Ping. It's a social network built into iTunes that works on PCs, Macs, iPhones and iPod touches (and presumably will work on the iPad once iOS 4.2 ships.) Ping allows performers and individual users to share song lists, videos and notes.

Apple TV, Take 2

As widely expected, Apple introduced its next-generation Apple, one-quarter the size of the existing Apple TV. The new Apple TV, which will ship in four weeks at a price of $99 (U.S.) streams content for viewing on demand, rather than downloading it to an internal hard drive. It has minimal connections: Power, HDMI out (720P, not 1080I or 1080P,) a Toslink optical connector for 5.1 audio out and a wired Ethernet connection. (It also has 802.11N WiFi wireless Ethernet.) The component and composite video outputs on the existing Apple TV have been dropped.

Apple's business model for the Apple TV is content rental only, not purchases. HD movies that are released day-and-date with their DVD versions will be priced at $4.99 per play, and prices for older movies will be lower. HD television shows will be available for rental at $0.99 per episode. In addition to video, music and images can be streamed to Apple TV from iTunes 10-equipped computers, as well as iPhones, iPod touches, and iPads, using AirPlay (and iOS 4.2.) Apple TV owners will also be able to stream content from Netflix, YouTube, Flickr and Apple's mobileMe. The user interface has been enhanced to include reviews from Rotten Tomatoes and related content.

There were a few serious disappointments:

• Apple has only been able to come to agreements with Disney/ABC and Fox to make their movies and television shows available for rental. Warner Bros., CBS, Viacom (Paramount, MTV, Comedy Central, etc.), Sony and NBC Universal have all refused to participate.
• Contrary to some rumors, it's not an iOS device and it's not open to developers. iOS apps can't be run on the new Apple TV, and it's unclear whether or not it can be hacked to run Boxee or other third-party media management apps.
• The lack of a component video interface means that owners of older HDTVs and audio receivers won't be able to use the new Apple TV.

The new Apple TV is a refinement of the original vision of the Apple TV, not an entirely new concept. It doesn't bring the world of iOS apps to the big screen, and it's not a platform for developers. Apple deliberately opted for usability over expandability, so there's going to be room for products like Boxee, Roku and Google TV for more sophisticated customers.

Sony concedes the U.S. eBook reader market

Today, Sony introduced three new eBook reader models that are upgrades of existing models. Unfortunately, they seem to have been designed in a vacuum where Amazon and Barnes and Noble don't exist. All three of the new models have the same improved E-ink displays as the new Kindles, along with touch screens and a base memory capacity of 2GB. Here's more on each model (all prices in US$):

• The Reader Pocket Edition has a 5" display. Memory can't be expanded beyond 2GB, and it has no wireless capabilities. The list price is $179.

• The Reader Touch Edition has a 6" display. Memory can be expanded with up to two 16GB memory cards, and it can play MP3 and AAC audio files. It also has no wireless capabilities. The list price is $229.
• The Reader Daily Edition has a 7" display, the same memory expansion capabilities as the Touch Edition, and has both WiFi and 3G wireless connections, The list price is $299.

None of these models is competitive with either the Kindle or nook. The WiFi Kindle is $139 and has a 7" display; the 3G Kindle is $189. Sony's higher prices are clearly unsustainable in the U.S., and I think that the company will de-emphasize the North American market and focus on markets where Amazon isn't yet selling Kindles. Sony's press release confirms this:

“Today, we’re excited to announce not just the availability of the Reader Touch Edition and Pocket Edition in the countries we already serve but also plans to expand the Reader line to previously untapped markets,” said Steve Haber, president of Sony’s Digital Reading Business Division. “We take a thoughtful approach to country expansion, including Italy, Spain, Australia, Japan and China, working with local bookstores to ensure content is compatible, relevant and in the appropriate language for each market.”

Amazon is just now beginning to expand distribution of its Kindle to Europe, and Sony already has strong distribution deals with the biggest book retailers there. So, Sony will emphasize reader sales outside North America for as long as its products remain viable.

But what about North America? Sony also announced that it's developing software readers for iOS and Android. I expect to see a Sony Android tablet before the end of the year, and Sony's eBook efforts in North America will shift to selling eBooks on its own tablet(s).

Lowest summer attendance in U.S. movie theaters since 2005

In addition to the problems caused by the decline in DVD sales, you can now add bad news in movie theaters. According to Hollywood.com, U.S. theatrical attendance hit its lowest point since 2005, even though theatrical revenues hit a new record ($4.35 billion.) Why did revenues increase even though attendance dropped? The reason is that average ticket prices have been rising for years, and the introduction of 3D has pushed prices even higher.

If revenues are up even though the number of customers declined, that can't be bad news, can it? Actually, it can. Ticket prices can't continue to escalate at the rate they have indefinitely, especially given the slow and tenuous financial recovery. To spike revenues, movie studios are converting movies originally shot in 2D to 3D, with generally poor results. Revenues for these converted titles have been dropping throughout the year, and if the studios aren't careful, they may kill off the willingness of moviegoers to pay more for 3D before the new format even has a chance to take hold.

If theaters can't raise prices and attendance continues to decline, the inevitable outcome will be decreased theatrical revenues. DVD sales and revenues are also declining, even though the "loss leader" discounting of new DVD titles by the big-box retailers (Wal-Mart, Target and Best Buy) is largely a thing of the past. Blu-Ray hasn't taken up the slack in DVD sales and is unlikely to do so in the future. The market is shifting to DVD rentals, video on demand and digital downloads, but these channels bring in much less revenue than DVD sales.

It's the combination of all these trends, not any one trend in particular, that is (or should be) grounds for extreme concern in the movie industry. Some say that the industry has always had down years and has always rebounded--first radio, then television threatened to kill off movies but failed--but studios have become addicted to the "crack" of DVD sales and increased ticket prices. Movies like "Avatar" and the "Transformers" series couldn't have been produced without these revenues. Studios will have no choice but to either maintain budgets and release fewer films (increasing their exposure to risk of failure) or decrease budgets and produce the same number of films. This will decrease the potential for breakout blockbuster hits, which could result in even lower revenues. Neither outcome is appealing, and there's no solution on the horizon.

New Canon XF100 and XF105 Camcorders: High quality, low price?

In preparation for both IBC and Canon Expo, Canon has announced two new professional camcorders: The XF100 and XF105. The two new models are positioned as "little brothers" to the XF300 and XF305 released earlier this year, but their performance is very similar. The new camcorders both support the same XF MPEG-2 4:2:2 50Mbps codec as the XF300 and XF305. In addition, they're designed to be used in pairs for 3D video capture, and have infrared low-light capabilities that Canon claims allow them to capture scenes in total darkness. Both models record to Compact Flash media and support hot-swapping.

As with the XF300 and XF305, the primary difference in the two models is connectivity: The XF105 supports genlock in, SMPTE timecode in/out, and both HDMI and HD-SDI out, while the XF100 only supports HDMI out. Canon hasn't released any prices, but the company's press release says that it will "...demonstrate the versatile low-cost capabilities" at Canon Expo later this week, which suggests that they'll be priced significantly less than the XF300 and XF305. Both models are scheduled to ship in Q1 2011.

My suspicion is that the XF305 will be priced close to Sony's HXR-NX5U AVCHD-based camcorder, which has a list price in the U.S. of $4,950 and a street price of just under $4,000. The XF codec should provide considerably better video quality and easier editing than the H.264/AVC-based AVCHD codec used in the Sony model.

Can we PLEASE have a manual video mode? (UPDATE: Sony listened...)

Update, 7 September 2010: According to EOSHD.com, Ichiro Takagi, Deputy President of Sony's Imaging Business Group, announced that Sony will be adding manual video controls to some of its NEX- and Alpha-series DSLRs (most likely the NEX-5 and Alpha A55, although Takagi-san didn't mention specific models.) The new firmware is to be formally announced at Photokina at the end of the month, so unless Sony announces yet more new models between now and then, the firmware will upgrade existing models. (Now, if Nikon will only get on board...)

Nikon and Sony have recently announced two important DSLRs: The D3100 from Nikon and the A55 from Sony. Both cameras have 1080P (at least under some conditions), both have continuous autofocus in video mode, and both are priced very aggressively (especially the D3100). However, both are missing something every important: Manual controls in video mode.They do video in full auto only.

Both cameras support both manual and full auto operation in photo mode, so all the capabilities for supporting manual video are built in. Everything, that is, except for manual support in the cameras' firmware. Why did Nikon and Sony choose not to implement manual video mode? One argument is that given the target audience for these cameras, first-time DSLR owners moving up from point-and-shoots, manual video would be too difficult to use and too intimidating. However, shooting good pictures in manual still mode isn't easy, yet both cameras can do it.

In my opinion, the reason reason why Nikon and Sony have left out manual mode is that they don't want to cannibalize other, more-expensive products. Nikon is likely to have a higher-end DSLR with manual video mode coming very soon for $1,000 or more (U.S.), and to date, Sony's position on full manual is that if you want that, you'll have to buy one of their camcorders. Only Canon has gotten it right, with 1080P and full manual control in the T2i/550. Canon, which sells at least as many DSLRs as Nikon and quite a few more than Sony, trusts its customers to be able to flip the necessary switch to enable or disable manual control.
Manufacturers have the right to put whatever features they want into their DSLRs. However, if a customer wants manual video control, they're not going to accept full auto, and if they can't find manual in a camera in one product line at a price they can afford, they'll buy a camera from someone else.

In praise of smart women

This is a little off-topic for me, but it's something I've been thinking about for a while. I was very lucky to grow up around smart women. My mother and father ran their own retail store for 30 years, and in the 1960s, my mother was the first woman in the eastern part of the U.S. to learn how to do jewelry repair. It was a time when the skill was considered far too difficult for a woman. She learned how to do soldering with a torch, how to resize rings, and other things that required both talent and strength. She was a feminist years before feminism was a movement. If she wanted to do something, she learned how to do it.

With that in mind, given that I follow media and technology in my blog, I'd like to talk about three women that deserve, and undoubtedly will get, a lot more attention throughout their careers:

• Kari Byron is an artist and one of the host's of Discovery's "MythBusters." She's an equal partner with the (four, count 'em, four) male co-hosts. She's just as involved with constructing the equipment needed to test myths as anyone, and she's treated as an equal. This gives a subtle but important lesson to girls and women watching the show--you can do whatever you want and be an equal to men, even in areas that have historically been considered the province of men. Now she's hosting a daily show on Discovery's Science Channel called "Head Rush" that's intended to get middle-school students, and especially girls, interested in science and technology.
  
  "Head Rush" isn't "Watch Mr. Wizard" (yet,) but if it's successful, a generation of scientists and engineers may one day see her as the reason they got interested in science.
• Felicia Day is an actress, writer, producer, musician and businessperson. When she came to Southern California to enter the entertainment industry, she got frustrated with the lack of roles, stereotyping and lack of control that women (and men) have to contend with, so she wrote her own business plan. She create a web series called "The Guild" that over a few years has gone from being funded by viewer contributions to a self-sustaining series funded by Microsoft that's available through many outlets and generates revenues from episode and merchandise sales.
  
  She had many offers to sell the rights to "The Guild" but chose to keep control of the series. Ms. Day has established herself as a successful actress in series like "Buffy the Vampire Slayer" and the web musical "Dr. Horrible's Sing-Along Blog," but she doesn't need to rely on others for opportunities--she's in control of her own destiny.
• Allison Scagliotti is an actress and musician who co-stars on SyFy's "Warehouse 13." She has the poise and communication skills of someone who's been doing it professionally for 20 years, yet she'll just turn 20 in September. G4's Chris Hardwick interviewed her on his "The Nerdist" podcast, and was blown away when he found out that she was just 19. She's getting an opportunity to hone her acting craft with some very good actors, but my suspicion is that acting is ultimately only going to be one of the things that she does, and that (like Sarah Polley) she'll end up spending a great deal of time behind the camera as a director and writer.

We're still not at the point where women have the same opportunities in science, technology and media as do men, but we're beginning to get there, and these three smart women are helping to make a difference.

We're buying lots of eBooks, but are we reading them?

I just read a very funny blog entry about television procedurals written by Josh Friedman (and no, we're not related--I'm Feldman and he's Friedman, and further, no two Feldmans, not even mother and child, are related to each other, but I digress.) In his posting, he writes the following about the television show "Lost":

I'm not the first to say this, but Lost is a freak show that will never be repeated. It's the Michael Jackson of television. No one should try to deconstruct the Lost phenomenon ever again. There is nothing to be gained from studying Lost's success. It's a Black Swan, or an Outlier, or one of many other books on my Kindle I'll never read now because, let's be honest, it's on my Kindle.

He's picked up on a behavior that I've noticed in myself. I've bought five eBooks from Amazon to read in the Kindle app on my iPad, and I haven't read a single one of them. With a physical book, it's visibly sitting somewhere, and every time I see it, I'm reminded that I haven't read it yet, or I haven't finished it. If I'm done with it, I've stored it on my bookshelf. Unless I bother to open up my Kindle app, there are absolutely no reminders that I've got the books. "Out of sight, out of mind." I call it Kindle Amnesia Syndrome, or KAS.

There are copious statistics on how many more eBooks than print books that Kindle owners purchase after they buy a Kindle, but I wonder how many of those eBooks actually get read, and how long that purchasing pattern will continue. My suspicion is that after a few months, a Kindle owner's eBook purchases will go down to about the same rate as print.

September will be a big month for new product announcements

Stand by for a lot of new product announcements in September:

• The announcements start Wednesday, September 1st, with Apple's fall event in San Francisco. We're likely to see a new iPod touch and iPod nano; we may also see the long-rumored next-generation Apple TV, and possibly even an announcement date for iOS 4 for the iPad. 
• IFA, one of the world's largest consumer electronics conferences, begins on Friday, September 3rd in Berlin. Samsung has already previewed its new Android-based Galaxy Tab tablet, and will formally introduce it at the conference, and we're likely to hear from many other companies as well.
• IBC, the International Broadcasting Conference, begins on Thursday, September 9th in Amsterdam. We'll see production versions of products that were shown as pre-production models at NAB last April, as well as many new products. Panasonic will almost certainly show production models of its AG-AF100 4/3" and AG-3DA1 3D camcorders, and Sony is likely to formally announce its professional Alpha-lens-based camcorder.
• Photokina, the biannual photography conference, will begin in Cologne on Tuesday, September 21st. Canon, Nikon and Sony have already announced new DSLRs in advance of Photokina, but many more products are likely to be announced at the show.

eBooks and on-demand--the new publishing economy?

The Wall Street Journal ran an article today about on-demand publishing. Like eBooks, on-demand has been the "next big thing" for many years, but it looks like it's finally finding a viable niche. On Demand Books, which makes the Espresso Book Machine, has sold 51 machines in 50 locations. They supply a $97,500 computer and automated binding and trimming machine that interfaces with a variety of printers.

The Espresso can be used to make available out-of-print and low-demand titles that would otherwise be unavailable. The cost of the Espresso, which is designed to be installed in bookstores, has been a big impediment to its success. It's been extremely difficult for bookstores to justify the cost of the Espresso based on the demand for low-volume titles. However, it's found a niche in college bookstores, where the prices of the books and other materials are much higher than in conventional bookstores, and it's possible to justify a $100K+ investment.

The rapid rise of eBooks may open up an unintended opportunity for devices like the Espresso. As demand for eBooks increases, print runs will get smaller, since publishers won't want to be stuck with large numbers of unsold copies of books. The fixed costs per print run won't change, so the delivered cost of the books produced per run will increase, which will drive even more buyers to eBooks. However, there will be some demand for printed versions of books for decades, so the ability to economically produce individual printed books as needed will be critical.

Publishers and even distributors will inevitably replace their existing printing and binding systems with "just-in-time" systems that can produce a few copies of a title as needed. Retail chains like Barnes & Noble and Borders could be reduced to little more than kiosks offering instant download of eBook titles and same-day delivery of on-demand print versions.

These new on-demand books may not be any more expensive than today's print books, since there will be no need to allow for returns. By and large, nothing will get printed that isn't already sold to a customer. The days of remainder tables, "stripping" (removing and returning the covers of unsold paperbacks for credit) and pulping books will be a thing of the past. We're still years from the "tipping point" where decreased print book volume makes on-demand printing more economical than large print runs, but the crossover is inevitable. Paradoxically, it will be eBooks that drive the market for on-demand printing.

That sound you hear is TiVo circling the drain

Residents of Alviso, California have reported hearing a strange "swishing" sound for several weeks. That sound has now been identified as TiVo circling the drain. TiVo's fiscal second-quarter financial results were released yesterday, and the company is continuing its long downward spiral:

• The company lost 125,000 subscribers in the quarter, and its total subscriber base stands at 2.5 million vs. 3.1 million last year, down 22%.
• Subscriber churn in the quarter was 1.9%, up from 1.5% a year ago.
• Revenues fell 11% overall to $51.6 million, and the services and technology component of revenues fell 14.2% to $42.1 million.
• The company posted an overall loss of $15.3 million, compared to $2.7 million a year ago.
• TiVo has been claiming for several years that licensing deals with cable and satellite operators would make up the difference, but companies like Comcast have been extremely slow to roll out services based on TiVo's technology.

If TiVo's problems were simply due to the bad economy, you could argue that a turnaround is only a matter of time. However, TiVo's subscriber declines predate the recession, so a macroeconomic turnaround may well not help TiVo enough to make a difference. Companies that fade as long as TiVo has very rarely turn around on their own.

In my opinion, it's time for TiVo to actively begin looking for an acquirer. The company still has some valuable patented technology, but as time goes on, more companies are figuring out ways to get around those patents, so TiVo management needs to move while it still has something to sell. TiVo could be integrated into the businesses of set-top box powerhouses such as Motorola, Cisco and Pace. Its DVR and advertising monitoring technologies could be valuable to Google in the future development of Google TV.

TiVo is forecasting still more losses for the next quarter, and investors have to wonder when, if ever, they're going to see an upside. Given the company's track record, the only likely upside will be when the company is acquired.

Radio Shack to operate mobile centers within Target stores

Earlier today, Target announced that it will partner with Radio Shack to open Target Mobile centers within 850 of Target's stores in the U.S. by the end of this year and virtually all Target stores by the end of next year. This is a direct move to counter the increased emphasis on mobile at Best Buy and Wal-Mart. In particular, it looks very similar to Best Buy's partnership with Carphone Warehouse, the U.K.'s largest independent mobile phone retailer. In order to increase its mobile retailing expertise, Best Buy acquired 50% of Carphone Warehouse in 2008, and the two companies together developed the Best Buy Mobile centers that are now located in all Best Buy stores, as well as 77 free-standing Best Buy Mobile stores.

Radio Shack has been rumored to be in play for acquisition, but it seems very unlikely that Target would partner so closely with a company that might be purchased by a competitor. Therefore, it's likely that Target is in the running to acquire part or all of Radio Shack. If the in-store Target Mobile centers are successful, this could lead to some Radio Shack stores being rebranded as Target Mobile stores.

Sony introduces its first DSLRs with 1080p/i video

Sony has just introduced four new cameras, two DSLRs (A560 and A580), and two quasi-DSLRs (A33 and A55). Their video specifications are very similar; all four cameras can do 1920 x 1080 1080i at 50/60fps with AVCHD compression (at 17Mbps average), and 1440 x 1080 1080p using MPEG-4 compression (at 12 Mbps average). So what, you ask, is a quasi-DSLR? Sony's new design uses a permanent, highly light-transmissive fixed mirror than enables continuous autofocus and live mode for both still shots and video. This means that the cameras have electronic, not optical, viewfinders, although they have a largely conventional DSLR body and can use Sony's conventional Alpha-range lenses. The A560 and A580 are conventional DSLRs and can't do continuous video autofocusing.

Digital Photography Review has published a review of the first production version of the A55. There are some unusual "features" that it found in its video tests:

• The camera can record approximately 29 minutes of video in AVCHD mode, but it can only record 9 minutes if SteadyShot is turned on. The review is unclear as to why image stabilization affects storage capacity so much, but it may be due to the fact that the camera does digital image stabilization inside the camera rather than using lenses with optical image stabilization.
• Even though MP4 uses a lower bitrate and should allow a storage card to save more video, storage of MP4 files is limited to 2GB at a time, which limits the maximum duration of a shot to around three minutes. AVCHD doesn't have this limitation and can span multiple files in a single shot.
• DP Review found that the A55's autofocus feature was often less than helpful in video mode, as the camera sometimes lost track of the object that it was focusing on and went out of focus. This problem was especially pronounced with fast-moving sports events.
• They found that the A55 has a fairly pronounced rolling shutter "jello" problem, about the same as many other DSLRs, but more severe than some competitors.
• The review states that the A55's average AVCHD bitrate is 17Mbps, but it's unclear if that's the camera's maximum bitrate. Some other DSLRs and camcorders can support 24 to 30 Mbps.

DP Review was very impressed with the A55 as a still camera, and in fact gave it a Gold Award, so it's important to recognize that it's a very good camera. However, as with many DSLRs, the video functionality of the A55 isn't as well implemented as the still image features. In the U.S., the A55 will ship in October at a list price of $750 (body only) and $850 (with an 18-55mm lens). The A33, which has essentially the same video specifications as the A55, will ship in September priced $100 lower than the A55.

In Cable TV, one quarter does not a trend make

Today, SNL Kagan reported that in the second quarter of this year, net pay TV subscriptions in the U.S. dropped for the first time in history. Cable systems lost 711,000 subscribers, and six of the eight largest cable operators reported their worst subscriber losses ever. So that means that consumers are dropping pay TV and moving to over-the-top Internet video services, right?

Not necessarily. Satellite (DirecTV and Dish) and IPTV services (Verizon FiOS and AT&T U-Verse) gained a total of 495,000 subscribers in the same quarter (414,000 for IPTV, 81,000 for satellite), and the satellite services don't even offer high-speed Internet. Why the big gain? You've probably seen the aggressive introductory price deals offered by the satellite and IPTV companies on television or in the mail, so people are switching to these services to save money.

Really? According to Steve Hawley, an IPTV industry analyst I used to work with, the monthly ARPU (Average Revenue per User, or subscriber) for the IPTV services is higher than that of any of the major cable operators. Only Cablevision comes close to Verizon and AT&T. That means that on average, the IPTV operators are charging more per month than the cable operators.

But pay television still lost a net of 216,000 subscribers in the quarter, so that still means that those subscribers went to Internet video, right? Perhaps, but Verizon and AT&T lost 515,000 subscribers to their DSL high-speed Internet services in the quarter, and you need high-speed Internet for Internet video.

So what does it all mean? We simply don't know yet. Over the next year or so, we can start sorting out what's really going on and identify the underlying causes. Are we seeing a temporary drop due to economic pressures (people losing or in fear of losing their jobs) that will be reversed when the economy improves? Are people experimenting with Internet video or committing to it as a replacement for pay TV? Is there a long-term shift from cable to IPTV and satellite, or in a saturated market, are people simply switching back and forth to get the best deal, just like they used to do with long distance services?

The key thing to remember is that one quarter does not a trend make.

Are we at the end of the blockbuster film era?

NewTeeVee is reporting on a research report written by BTIG analyst Richard Greenfield, which states that the delays between the DVD release of feature films and their availability on cable VOD have collapsed from an average of 30 days in 2006 to five days in the first half of 2010. Now, most movies are being made available on VOD on the same day and date as DVD.

According to the article, Greenfield's belief is that movie studios have largely given up on protecting DVD revenues against VOD in favor of protecting the entire home video revenue stream against Netflix and Redbox. The typical price for a day-and-date VOD movie is $4.99 in SD and $5.99 in HD, and 70% of that revenue goes to the studio (versus 60% for conventional "windowed" VOD releases.) By comparison, Netflix's model is that they essentially pay the manufacturing cost for the DVD when they purchase it (often no more than a dollar or two (U.S.)) and then pay the studios a small amount every time a subscriber rents the title. Redbox purchases the DVDs at wholesale, and that's the only revenue the studios get; there's no revenue sharing beyond the initial purchase.

The problem is that the studios are making a lot less from VOD than from DVD sales, even though they don't have any manufacturing and shipping costs with VOD. Consider a DVD with a list price of $19.95; studios typically receive 50% of that, or $9.98. Manufacturing costs for most DVDs in the quantities that studios purchase them are $1 or less, so that leaves almost $9.00 for the studios for shipping and warehousing, advertising, royalties, etc.

Compare that with the $4.99 that cable operators charge for SD VOD films. Studios get 70% of that, or $3.50, and they have no manufacturing, shipping, or warehousing costs, but let's assume that shipping and warehousing adds $0.50 to their costs. That means that they get $3.50 from the VOD showing and $8.50 from the DVD sale. The $3.50 that they do get is much more than they get from Netflix or Redbox, but it's still $5.00 less than they get from DVDs.

The implications of this shift are much bigger than simply making less money per transaction. For more than ten years, DVD sales have been the profit engine driving the movie studios. Theatrical attendance has been dropping for years, and the only reason that the studios have been able to maintain their theatrical revenue stream has been increased ticket prices. The profits from sales of DVDs have enabled studios to dramatically increase their production and advertising budgets for feature films. These profits enabled studios to go ahead with films that cost $200 million or more to produce; their expectation was that with break-even performance in theaters, they could make a big profit from DVD sales.

Now, the DVD profit well is drying up, and Blu-Ray, which was once seen as the successor to DVD, isn't making up the difference and will likely never generate the level of revenues that DVDs once did. This explains the desperate push on the part of studios to adopt 3D. Theaters charge more for 3D tickets, and studios get as much as 80% of the ticket price for releases in their first few weeks in theaters. In addition, Blu-Ray supports 3D, and studios hope to push more Blu-Ray sales through 3D. However, the studios are at risk of killing 3D by flooding the market with cheesy post-production 2D-to-3D conversions.

Without the DVD profit engine, and without anything to replace it in the near term, studios are going to have to cut back on spending. That might mean betting more on blockbusters and their huge budgets, and cutting back the total number of movies they release each year, or maintaining the same number of releases and cutting back on budgets. Either approach means big changes for the movie industry.

Lather, rinse, repeat...the right model for webcasting?

Continuing with my webcasting theme for this weekend, there are many different ways to do webcasting (and, for that matter, video on the web in general.) One approach is the talk show, done over and over with different hosts and different subject matter. One of the first people who pursued this model successfully is Leo Laporte. Laporte, a TechTV alumnus, started a podcast called "This Week in Technology", or TWiT. Eventually, he produced additional podcasts, and then started webcasting them. At first, he did occasional video versions, but he subsequently turned his Petaluma, CA ("Home of the World Wrist Wrestling Championship") farm into a video production center where he produces around 15 webcasts, most on a weekly basis. His TWiT Webcast Network is funded by advertising and contributions; Laporte pays his own salary from the contributions (he also hosts radio and television shows for commercial broadcasters and cable networks), and uses the advertising revenue to pay for everything else.

Following TWiT came Revision3, founded by Kevin Rose, Jay Adelson and David Prager in 2005. Rose, another TechTV alumnus, cofounded the digg website with Adelson, and on the side, Rose and Alex Albrecht (yet another TechTV refugee) started a podcast and webcast about digg called Diggnation. The success of that show led Rose, Adelson and David Prager (he worked at TechTV as well) to found Revision3. The company has close to 20 shows, most of which are produced weekly in Revision3's studios in San Francisco. Like TWiT, Revision3 is funded by advertising, and it also sells branded merchandise.

The latest entry into this field is "This Week In...", owned and run by Jason Calacanis. If "This Week In..." sounds familiar, it should. Calacanis, a frequent guest on TWiT Network shows, purchased the "thisweekin.com" domain name and set up a very similar webcasting network to TWiT, which caused confusion on the part of the audience and a good deal of animosity between Laporte and Calacanis. This Week In produces 19 webcasts, the most popular of which is "Kevin Pollock's Chat Show," a weekly talk show hosted by actor and comedian Kevin Pollock. This Week In is advertising-funded.

All three networks have a number of things in common:

• While all three networks have shows with female hosts and shows targeting women, most of their shows are male- and technology-focused (which makes sense, given that the founders of two of the three networks came from TechTV, a strongly male- and technology-focused cable network.)
• Their production values are very much on the basic side: TWiT's shows are shot in Laporte's combination studio/control room, and This Week In's shows look like they're all shot on Charlie Rose's set when Rose isn't around. Revision3 uses a TV news set metaphor, and goes for a little more color and outside-the-studio production than the other two.
• The shows tend to be overly long, meandering and often light on content. Webcasts have no schedule and no time limits, but schedules and time limits force producers to tighten shows and get to the point. It's asking a lot to expect viewers to watch these shows for more than an hour (or even more than two hours, as a "Kevin Pollock's Chat Show" with Seth MacFarlane ran earlier this year.)

The business model behind these networks is quantity over quality: TWiT, Revision3 and This Week In know that most of their shows will get small audiences at best. They plan on a few of their shows getting large audiences (at least for webcasting), and that the appeal of those shows will allow them to sell advertising across their entire schedule of webcasts, generating more revenues, even at a lower CPM. With a large schedule of webcasts, they also hope to have the option of selling out to a bigger media company, as Calacanis did when he sold Weblogs, Inc, a service that published Engadget, Autoblog and several other blogs, to AOL.

I question whether this is really a viable long-term strategy. It's similar to the 24-hour cable news networks, whose audiences pale in comparison with those of entertainment-oriented cable networks, even though they have distribution into tens of millions of U.S. homes. They have to put something on the air 24 hours a day, but very few people are watching most of the time.

I'd like to see someone do fewer but better, more tightly produced shows that are a better use of the audience's time. Could a webcasting network build a viable business with just a few good, well-produced shows? Would really compelling shows increase audiences and eliminate the need for a bunch of "filler" shows? It seems like a reasonable alternative.

A new model for video acquisition and live production

Earlier this week I attended an event at Morningstar's headquarters in downtown Chicago. To get there, I walked past the studios of WBBM-TV, CBS' owned-and-operated station in Chicago. Like many of the new television studios built in major cities in recent years, WBBM's news studio is surrounded by windows and visible to the street from two sides, so that pedestrians can watch the shows as they're produced.

I was passing by in mid-afternoon, so there was no production going on, but I could take a look at the equipment. There were three high-end studio cameras on robotic pedestals (only one person is needed to operate all three cameras) plus a smaller camera on a fixed pedestal looking out the window for street shots. I looked up the list price for a typical high-end studio camera from Sony that's like the ones used at WBBM, and it costs $100,000 (U.S.).

By comparison, Panasonic can equip a HD webcasting studio with three automated cameras, a camera control unit and switcher for $23,000. One person can simultaneously switch the show and operate the cameras. Add in everything else you need--tripods with heads and dollies, a computer for graphics, an audio mixer, wireless microphones, LED lights, a live streaming encoder and software--and you'll be around $40-45,000. under $50,000 (I priced it out, and a complete system is priced around $47.000.) So for about half the cost of a single high-end studio camera, you can have a fully-functional live HD production facility (that, incidentally, is small and light enough to fit in the back of a minivan.)

WBBM, of course, is an over-the-air broadcaster that's also carried on cable, satellite and IPTV systems all over the greater Chicago area, so even though its news programs are struggling in the ratings, it gets a huge audience in comparison with what most people could attract through webcasting. However, the webcasting operation can run at a tiny fraction of WBBM's budget, so:

• It doesn't need to generate a lot of revenues to be profitable, and
• Once it reaches profitability, it will have a much higher operating margin than the broadcaster

A couple of years ago, I visited Current TV's headquarters in San Francisco and saw how they were using computers and data-based video workflows to build an automated cable network at a fraction of the cost of legacy networks. Just as Current changed the model for how to build a cable network, these new systems from Panasonic and other vendors are changing the model for video acquisition and live production.

Nikon's D3100 takes on the Canon Rebel T2i

Nikon has introduced the D3100, a replacement for the D3000 and a direct competitor for Canon's Rebel T2i. Most importantly for readers of this blog, the D3100 is the first Nikon DSLR that can do full 1080P video, albeit only at 24fps (faster frame rates require 720P.) It's also got continuous autofocus in video mode, which only the Panasonic GH1 and G2 have been able to do.

Update, August 25, 2010: The first expert feedback is coming in, and according to EOSHD.com, Nikon Germany has stated that the D3100 has no manual controls in video mode. While this makes it easier for first-time users and is useful for some applications, it makes the video mode almost useless for more serious production work.

In Zacuto's DSLR shootout, Nikon's D3S had the best low-light performance but took a backseat in most of the other tests due to being limited to 720P. The Nikon D3000 has nowhere near the extended ISO exposure range of the D3S, but it's an indicator that a professional-level 1080P DSLR is coming from Nikon.

One of the most impressive features of the D3100 is its price: With an 18-55mm zoom lens, its list price in the U.S. is $699.95, almost exactly $200 less than the T2i with a comparable 18-55mm lens. For those photographers who already own Nikons and have an investment in Nikon lenses, the D3100 means that they can move into video without losing their investment.

Before you go rush out and buy a D3100, you should wait until experts such as Philip Bloom and Nino Leitner and blogs like Digital Photography Review have a chance to test it. Resolution is just one of the many factors affecting video quality and performance, and we don't yet know what compromises Nikon made in order to get to the D3100's low price. Nevertheless, the D3100 is proof that Nikon is taking video seriously and intends to keep up with Canon.

Redrock Micro introduces lower-cost DSLR rigs

Not long ago, I wrote a post comparing the price of Sony's new NEX-VG10 interchangeable lens camcorder with the cost of purchasing a NEX-5 DSLR and adding components to make it handle like a camcorder. When I did that comparison, I looked at prices from Zacuto, Redrock Micro and others. I was surprised to find that despite Zacuto's reputation for higher prices, they were actually less expensive than Redrock Micro for entry-level rigs.

Redrock has now launched a new line of low-cost DSLR rigs that are more in line with the prices of new DSLRs, especially models like Canon's Rebel T2i. The new Nano Rigs are priced from just over $100 to just over $600 (U.S.), and the highest-priced Nano is less expensive than the lowest-priced models in Redrock's DSLR 2.0 line of rigs. Other companies are likely to follow Redrock Micro with their own "prosumer-priced" lines of DSLR accessories, which will keep pricing pressure on the camcorder manufacturers.

Is Google's Chrome Web Store a precursor to Chrome tablets?

The rumors are flying that Google plans to release a Chrome OS-based tablet built by HTC in partnership with Verizon, and put it on sale on Black Friday (the day after Thanksgiving and the heaviest shopping day in the U.S.) Google is also preparing the Chrome Web Store--no rumor, since it was announced at the I/O Conference earlier this year. Details on the Store are now up on Google's web site; here are a few highlights:

• Developers will be able to create and offer installable web apps based on HTML5 and Ajax, themes that change the look of the Chrome browser/OS, and Chrome browser extensions that change or add to the functionality of Chrome itself.
• Apps can be given away or sold. The minimum price for sold apps is $1.99 (vs $0.99 in the iPhone app store), and Google will charge a processing fee of 5% of the sale price plus $0.30 per transaction (vs. Apple's 30% of the sale price.) For a $1.99 sale price, the developer would retain $1.59 from Google and $1.39 from Apple.
• The Chrome Web Store also supports one-time payments as well as monthly or yearly subscriptions, free trial options, and what they call "custom payment solutions".

Google is clearly working to have a good population of apps, themes and extensions ready for this Fall, which is when the first Chrome OS tablet is rumored to be hitting the market. This may also explain in part why Google has refused to allow any tablet vendors to license Google's Android applications or access the Android Marketplace. If Google is positioning Android for phones and Chrome OS for tablets, it would be in its interest to discourage usage of Android for tablets. On the other hand, we hear of new Android tablets under development almost every day, and that Gingerbread, the next major release of Android, will have explicit support of tablets. So who knows, and more to the point, what are consumers to think if tablets running on two completely different Google operating systems come out at about the same time?