Finding hope in difficult times

It's very difficult to live in Western society today without becoming cynical, or at least without seeing a lot of things as a "glass half empty". We have one universal language: Lies, and one universal religion: Money. Corporations, politicians, pundits and commentators lie so much and so often that it leads to deep cynicism--we expect our institutions to lie, and are pleasantly surprised when they tell the truth. Even the press, which we've relied upon for more than a hundred years to tell the truth, is regurgitating stories fed to them by PR flacks, avoiding stories that would alienate advertisers, using sensationalism to deflect attention from stories that are more difficult to tell and more important to understand, and spinning the news to the benefit of political parties or corporate interests.

The worship of money is very closely connected to the proliferation of lies. When there's no money at stake, there's no need to lie, but when the cost is high, it often costs much less to lie than it does to tell the truth and accept the consequences. Here are a few examples: Many energy companies and firms that either output greenhouse gases or make products that create greenhouse gases spend tens of millions of dollars in an effort to stop legislation designed to curb global warming. They hire lobbyists to convince legislators to block laws, underwrite bogus research that questions the impact of human activity on global warming, or even that global warming exists at all, and create "astroturf" groups to further inflame voters already panicked about the state of the economy.

Multiple pharmaceutical companies have been accused of suppressing research that found that their drugs may be unsafe. Health care organizations publicly supported U.S. reform legislation, but privately lobbied legislators against it and created their own "astroturf" organizations to try to defeat the legislation. The tobacco industry spent decades lying about the health effects of their products, and is now focusing on less-developed countries where companies can freely advertise to children and don't have to warn consumers about the risks of cancer and heart disease.

Banks and other financial institutions sold millions of mortgages to consumers who couldn't afford them, and then bundled the mortgages together and sold them (and their risk) off to others without detailing their shoddy quality. Companies pursuing high-profile mergers say and do everything they can to convince government agencies to approve the deals, and then backpedal on their commitments whenever they can once the merger is approved. Some corporations claim publicly that they're cooperating fully in civil and criminal investigations, while privately, they're destroying evidence that could be used against them.

Politicians, political appointees and staff members regularly go to work for lobbying firms hired by the same companies that they formerly monitored and regulated, at many times their governmental salaries. Some politicians are on a "Merry-Go-Round": They get elected, then after several years, move into the private sector as a lobbyist or corporate lawyer. A few years later, they make another run at public office. Their staffers often follow them, from public jobs to private, and back to public.

Journalists sometimes follow the same path, moving from a career reporting on companies to jobs in public relations firms, where they're paid by the companies and organizations they used to cover to pitch stories to other reporters and spin the facts. Of course, a reporter who's diligent in their efforts to learn the truth about individuals and companies that they cover isn't likely to get very many PR job offers, so there's strong pressure to run stories as they're pitched, and to not look under too many rocks.

Even with all these lies, all this gaming of the system, I maintain hope. Almost every day, I see organizations (primarily government-run and university laboratories, as well as start-ups) working on solutions to our energy and global warming problems. Some corporations recognize that global warming represents a bigger business opportunity than maintaining the status quo. As we get more existence proofs showing that we can maintain our standard of living while still decreasing greenhouse gases, the arguments of the companies and their paid advocates who say that it can't be done will be shown to be lies.

Our consumer protection systems continue to work, albeit often slowly and poorly. Some (but, unfortunately, not enough) of the abuses I wrote about above were detected by these regulatory agencies. Despite efforts to water down or eliminate many of these agencies, I believe that their value will ultimately be understood as essential for capitalism to be both effective and fair.

As "old media" companies find themselves in an ever-increasing spiral of sensationalism and irrelevance, new companies, large and small, for-profit and non-profit, are launching to fill the void. The Internet has eliminated the need for transmitters, printing presses and government licenses, and has decreased the cost by several orders of magnitude. Individuals can report as an avocation, and millions of them do, using their mobile phones, camcorders and personal computers. When you don't have to make a profit (or very much of a profit), it's very difficult for an "old media" company to kill you.

Even with all that, there are days when I just want to turn off my television, radio and computer, toss out the magazines and newspapers, and move to a cabin outside the range of modern media. There are just so many lies that I can take.

Cut & paste journalism

I've been reading the current issue of Mix Magazine, which covers the professional audio industry. I've read Mix for years, and it's one of my favorite trade magazines, but it's indulging in what I call "cut & paste journalism". It makes me doubt the independence and the veracity of what the magazine publishes. Here are a few examples:

• In an article on sound for the movie "Transformers: Dark of the Moon", re-recording mixer Greg P. Russell is quoted as saying "We want to have a defined soundscape, so it's not just a wall of mess--it's very articulate, with a lot of detail and definition." Later on, he says "The movie is really big and bold, but it's not painful." The writer of the article, Matt Hurwitz, didn't challenge Russell on any of his assertions; in fact, the article is written as one big advertisement for the movie.
  
  The problem is that almost every review of "Transformers: Dark of the Moon" comments on just how loud, painful and muddied the movie's sound is. It's possible that it sounded wonderful in the multi-million dollar mixing theater that Russell and his colleagues used, but it doesn't sound that way in real-world theaters. Mr. Hurwitz could have asked Mr. Russell about director Michael Bay's reputation for making his movies abusively loud, and what (if anything) Mr. Russell and his team might have done to fix things for this movie, but the question apparently never came up.
• An article on "Ribbons on the Road", about using ribbon microphones, which are notoriously fragile, in the field, turned into an advertisement for Royer's R-121, R-122 and SF-24 microphones. Only one other vendor of ribbons, sE Electronics, is even mentioned. There are many other companies that make ribbons; are Royer's customers the only ones who made the editorial cut?
• An article titled "Versatile Sound: New Loudspeaker Arrays for All Venues", is nothing more than a list of pull quotes from press releases and data sheets from more than 25 vendors. There's so little original writing involved that it doesn't even qualify for a byline. Would you like to know how the sound of these speakers compares? Interested in information on their manufacturing quality? Sorry, don't look here.

None of these examples includes the "New Products" section, which is also filled with quotes and pictures from press releases, with no editorial input except to shorten the releases for space. Yes, Mix does do reviews, but you have to look very hard to find one, in this or any other issue in recent memory, that suggests that you shouldn't buy the reviewed product.

I'm not saying that Mix's editorial standards are egregious; rather, they're representative of a wide range of trade publications that fill up far too many of their pages with editorial content that should more accurately be labeled as "advertorial", or simply as advertising. Journalistic standards and credibility in the U.S. are, by many measures, at an all-time low. Life is too short to waste it reading advertising disguised as an editorially-independent magazine.

Google (plus Microsoft, Yahoo, Wendy's, Pep Boys, etc.) are in talks to buy Hulu

The Los Angeles Times reported today that Google is in preliminary talks to buy Hulu. More precisely, as the newspaper reported in the very next sentence, Hulu's investment advisors have arranged to make presentations to Google, Microsoft and Yahoo, and probably any other company that has money in the bank. Whether Google is seriously interested, or is simply "kicking the tires", remains to be seen.

Hulu has a very nice technical platform and semi-exclusive distribution rights from its existing owners (Comcast, News Corporation and Disney), but it doesn't own any content. It has no permanent exclusive rights to anything, but it recently renewed its distribution rights with News Corp. and Disney. Comcast, which acquired part of Hulu when it acquired majority control of NBCUniversal, is prohibited by the terms of that acquisition from exercising any control over Hulu, so it's required to license its content to Hulu on the same terms and conditions as its other partners.

For Hulu to have any real value to Google or anyone else, the buyer will have to get Hulu's existing partners to grant semi-exclusive rights for much longer than three years. Most buyers would settle for a ten-year deal, but if Hulu's existing owners could take back the rights after just a few years, the company would have almost no value to an unaffiliated buyer.

If Hulu's current owners are willing to grant long-term distribution rights, an acquisition could happen fairly quickly. However, if, as reported elsewhere, Hulu's current owners and content partners are demanding that the company's distribution rights be renegotiated after the acquisition, it makes little sense for anyone to bid.

Ricoh agrees to buy Pentax from Hoya

Engadget has reported that Hoya, one of the largest glass makers in the world, has sold its Pentax camera business to Ricoh. Hoya acquired Pentax in 2007 and will retain Pentax's medical instruments business. Pentax has partnered with Samsung for DSLR product development since 2005, and it's unclear whether that partnership will remain in place once Ricoh takes over. Pentax has also had some recent success with projects that were apparently fully developed in-house, such as the 645D medium format camera and the new Q, touted by Pentax to be the world's smallest digital camera with interchangeable lenses. Ricoh's acquisition of Pentax is scheduled to be completed in October of this year.

Adobe drops prices for FCP owners by 50%

Adobe made a huge move today to capture disgruntled Final Cut Pro users who have been disheartened by the missing features in FCPX: Any Final Cut Pro or Avid OSX Media Composer owner can "sidegrade" to Premiere Pro or Creative Suite 5.5 Production Premium and save 50% off the full or upgrade price. The deal is only good for the Mac OSX versions of the Adobe software. However, any current owner of a Mac version of Premiere Pro or Creative Suite can also take advantage of the deal.

I give the company a lot of credit for making this offer, and I suspect that a lot of FCP and Avid users will take advantage of it. Of course, those people who purchased a slightly discounted upgrade to CS5.5 from resellers over the last few weeks may not be happy that they didn't wait for Adobe, and they may want to go back to their resellers to request a refund of the difference.

The sidegrade deal is available direct from Adobe through September 30, 2011. Even non-owners of Creative Suite (or people like me, who run CS on a Windows system, plus FCP on OSX) can get CS5.5 Production Premium for OSX for well under $1,000; those who qualify for upgrade packages will pay much less. It's an offer well worth considering, in that Production Premium also includes After Effects, Flash, Photoshop, Illustrator and Audition.

Should I base my start-up in Chicago, or move to Austin, Portland or Silicon Valley?

I'm in the early days of working on an Internet services start-up, and one of the questions that I'm wrestling with is where to base my business. In the early days, it's very easy to move from one city to another; once my business has multiple employees, many with families, it'll be much more difficult (and more disruptive) to move. I haven't yet come to a decision, but my thinking may be of value to some of my readers who are also going through the process, or who may do so in the future.

Let's start with Chicago, since that's where I'm currently based. Specifically, I'm located in a far northwestern suburb of Chicago, not the city itself. As a practical matter, I'll have to move to Chicago or to one of the near suburbs, such as Evanston or Skokie, to find the talent I need. Chicago has just about everything a technical startup needs--excellent colleges (University of Chicago, Northwestern, Illinois Institute of Technology and University of Illinois at Champaign-Urbana) for talent, a culture with plenty of night life and social activities to attract young people, and reasonably priced office space. It's also got some angel investors and venture capitalists, but by and large, they're significantly more risk-averse than investors in Silicon Valley. Investors in Chicago like to see a start-up making money before they invest, which goes against the whole purpose of seed funding, which is to help new businesses get to the point where they can generate revenue. If you need to be generating revenue in order to attract the necessary investment in order to generate revenue, you're not being offered seed money.

Another problem with the Chicago financing community is that there's a big hole between angel investors and when most local venture capitalists will participate. Even if you manage to get angel investment, it's extremely difficult for growing businesses to get the next round of funding. The amount needed is too high for the local angels, and the risk is too high for local institutional investors.

There are two other issues that make Chicago less than ideal for start-ups (I'll deal with weather in the section titled "Potential Natural Disasters"). The first one is political corruption. Chicago is the most corrupt major city in the U.S., and Illinois is the most corrupt state in the U.S. Last Night's "Daily Show" gave an amusing, but accurate, look at the situation, but for now, consider that you're more likely to go to prison if you get elected Governor of Illinois than if you commit murder in Chicago. This corruption adds billions of dollars each year to the cost of government (which results in higher taxes), and to the cost of running businesses (in the form of those same higher taxes, plus payoffs, contributions to political campaigns, requirements to use union labor when non-union labor is just as good and is much less expensive (even with benefits), and other expenses.)

The second issue is the risk-averse nature of the Chicago community. Just as investors look to minimize their risk by focusing on revenue-producing businesses, Chicagoans would much rather take a job with a start-up, with a guaranteed income and benefits, than start a business themselves. Taking the personal and financial risks involved with a start-up simply isn't ingrained in the local culture, as it is in Silicon Valley.

Potential Natural Disasters: This is where I'll discuss weather and similar problems. For Chicago, the issues are winter weather in general, with blizzards in particular, along with floods and tornadoes in the spring and summer.

Another option is Silicon Valley. The universities (Stanford, U.C. Berkeley and U.C. San Francisco, along with many smaller colleges), existing base of trained developers, engineers, marketers, lawyers and financial experts, and deep financial resources in the form of angels, super-angels and venture capitalists, along with the local culture that supports and encourages start-ups, make Silicon Valley the best place in the U.S. to start a business. Some Chicagoans brag that there's more money in the Chicago Merchantile Exchange than in all of Silicon Valley, but if the people who are investing in the CME won't invest in start-ups because they don't fit their "risk profile", their money is worthless.

Silicon Valley's Achilles' heel is the cost of doing business. Everything in California costs more than just about anywhere else in the U.S. Taxes are higher, and housing costs more, as does medical care (and the insurance to cover that medical care). All of those costs mean that salaries in Silicon Valley are higher than just about anywhere in the U.S., yet the standard of living isn't any better. So long as I can find qualified people in another location, I can save 30% to 50% of my operating costs by basing somewhere other than Silicon Valley.

Potential Natural Disasters: Earthquakes, floods, mudslides, droughts and firestorms. Silicon Valley (and much of California) has earthquakes all the time; most of them are too small to be sensed. However, everyone waits for "The Big One", a magnitude 7.5+ earthquake on one of the major fault systems that's overdue. Any big earthquake has the potential to disrupt transportation, electricity and natural gas supplies for days, weeks or even months. It also has the potential to take many lives. The one big positive is that California's building codes have been upgraded many times, and few places in the world are better prepared for earthquakes. In the coastal areas of California, including Silicon Valley, winter is the rainy season, and that's when the state gets floods and mudslides. The summer is when California gets firestorms, usually in some of the state or national forests.

Austin, Texas is a good alternative. Austin is the capital of Texas, the home of the University of Texas at Austin, and it houses Dell's and Freescale Semiconductor's headquarters as well as major facilities for AMD and Intel. It's also a little circle of liberalism inside a huge red conservative state. Austin has a young, creative population, as perhaps best illustrated by the city's annual SXSW conference every spring that attracts techies, filmmakers and fans from around the world. Austin is a moderately-sized city, but it has technical and business resources that belie its population size. It's also small enough that a start-up isn't likely to get lost or ignored. Finally, Austin's cost of living is a bit lower than Chicago's and much lower than Silicon Valley's.

Austin has a small angel and venture capital community, but it's not as developed as Chicago and nowhere near the size of Silicon Valley. It's also largely dependent on the University of Texas to provide an ongoing supply of young talent.

Potential Natural Disasters: Summer weather in general, droughts and tornadoes. An oppressively hot day in Chicago would be considered cool and comfortable in Austin, where daily maximum temperatures near or even over 100 degrees Fahrenheit are common. Texas is in the midst of a severe drought, and the state suffers a drought every few years; combined with the heat, this causes pretty miserable conditions.

I've also considered Portland, Oregon. I haven't been there for many years, but it's a beautiful city with a strong technical community (Intel, Tektronix, Agilent, Nike and others). Portland State University is based in the city, and both Oregon State and the University of Oregon are two hours away or less. It's also less than 150 miles to Seattle, where Amazon, Microsoft, Nintendo U.S. and many other technology companies are based. Portland's a young person's city, with lots of night life, easy access to the Pacific Ocean, and a deep commitment to the environment. Surprisingly, Portland's cost of living is almost identical to Chicago's.

Portland's angel and venture capital community are similar to Austin's, with one big difference: Portland's location--driving distance from Seattle and two hours from Silicon Valley by air--makes it possible for Portland start-ups to attract funding from both areas, as well as local investors.

Potential Natural Disasters: Volcanoes, earthquakes, tsunamis, floods. When I lived near Portland, Mt. St. Helens erupted (not the devastating eruption that blew off the side of the volcano). Both Mt. St. Helens and Mt. Hood are active volcanoes. Earthquakes occur due to faults and plate lines off the Pacific coast. Portland is much less seismically active than Silicon Valley, but like California, Portland and the rest of the Pacific Northwest are awaiting their own Big One, which is likely to trigger tsunamis due to the underwater location of the faults. Perhaps the biggest weather problem with Portland is its almost continuous rain for eight months out of the year. Unlike other cities, the rain is more like a mist, and the sun comes out so rarely during the rainy season that weather forecasters predict "sun breaks". When the sun finally comes out and stays out, however, Portland is spectacular.

So, those are my options: Chicago, which has a lot of things going for it but also has some serious drawbacks; Silicon Valley, which has much more going for it but is an incredibly expensive place to live and work; Austin, which is a great city with an excellent cost of living, but is incredibly hot in the summer; and Portland, which is also a great city with an excellent cost of living, but it's rainy and overcast eight months of the year.

What are your thoughts? What other cities should I consider, and why?

FCPX Part 3: The backfire

I didn't want to write another post about Apple's Final Cut Pro X debacle (I really, truly didn't), but I've reached my irritation limit. Let's be frank: Apple blew it, but not necessarily for how FCPX turned out. Rather, it blew it by:

1. Not fully communicating just how much of a departure FCPX is from FCP 7, and not educating users to see it as version 1.0 of an entirely new platform,
2. Not anticipating how vehement user reaction would be to key missing features, such as the inability to import FCP 7 projects, no multicam capabilities, and the lack of any facilities for getting audio and EDLs from FCPX to and from other applications, and
3. Not keeping Final Cut Studio 3 available for sale while Apple and third-parties worked to bring FCPX up to functional parity with FCP 7.

As I said, Apple blew it, but the reaction by users and resellers is completely out of proportion to the problem. There is absolutely nothing keeping existing FCP users from continuing to use their current copies of FCP. If it worked for you last Monday, it will still work for you today. Multiple sources indicate that FCP 7 will work fine on Lion, the new version of OSX that will be released next month. Moving to any other editing platform is going to entail a learning curve.

The enormous reaction, for a product that represents a minute fraction of Apple's revenues, suggests to me that there's something more at work here than simple customer dissatisfaction. For example, Adobe started looking for "Premiere Pro ambassadors" just prior to the launch of FCPX. Call me paranoid, but I have to suspect that Apple's competitors are encouraging the firestorm, even to the point of offering talking points to bloggers and tweeters. I have no evidence that this is happening, but the number of posts and tweets, and their similarity, sound very much like what would be driven by a competitive response team. (I used to run those teams in the past, and I know how they work.) Throw in free "evaluation" copies of software that have valid serial numbers, and you end up with a corps of people who have motivation to keep the pressure on.

The resellers who have been tweeting constantly since last Tuesday, trying to get FCP users to switch to Avid or Apple, have a transparent reason for doing so: They can no longer make any money selling FCP. FCPX will only be sold through the Apple App Store, so resellers and integrators can't make any money selling it. They can continue to sell peripherals that work with FCPX, but they can't make any money on FCPX itself.

The FCPX release has stirred more negative reaction than Microsoft's decision not to support direct Windows XP upgrades to Windows 7. Remember that one? It affected, and still continues to affect, millions of PC users--many times more than the FCP user base--but it didn't get this level of vitriol.

So, I've stopped following the resellers that continue to tweet negative coverage of FCPX and exhort me to buy Avid or Adobe. When Apple gets this resolved, as I'm convinced they will, there's going to be a lot of people with egg on their faces. And, for the record, I've been compensated by no one for this (or any other) post, and I'm not writing from anybody's talking points other than my own. I just wish that a whole bunch of people would grow up.

Two more words about Final Cut Pro X: Don't Panic

Ever since Apple released Final Cut Pro X today, there's been a flood of tweets and blog posts offering instant analysis, most of them referring to missing features and capabilities, such as the inability to import previous FCP projects into FCPX. Some of the complaints are just plain wrong; for example, one person tweeted that FCPX can't use shared media, then tweeted a bit later that it can.

One thing that some commenters are getting right is that this is Final Cut Pro X Version 1, not Final Cut Pro Version 8. It's (apparently) an entirely new code base, with a dramatically different user interface, and different terminology for some of the same functions in previous versions. Version 1.0 of a new product always has bugs and missing features. It's a given with any software product, and FCPX is no different.

If you're already using Final Cut Pro 7 or Final Cut Studio, you should continue to use it for deadline-based and revenue-producing jobs while you get up the learning curve on FCPX. Even if FCPX was a completely incremental release, I'd still be suspicious of switching to it immediately. New releases always have bugs. However, if you're an existing Final Cut Pro user and you can afford the $300, I'd suggest that you buy it, in order to learn the software on your own schedule. This is the future of Final Cut Pro, and unless you want to eventually abandon the platform entirely, you'll need to understand and use it.

On the other hand, if you're a new user or you have questions or concerns, there's no risk in waiting. Those "instant" reviews are likely to be largely appended, corrected and superseded over the next few weeks. Let others dig into the software and give you their feedback.

When OSX Lion ships next month, the App Store will be integrated into the operating system, and updates will be much faster and easier than they are today. Only the parts of the code that need to be changed will be updated, not the entire application, so downloads and installation will be much faster. Over the next few weeks and months, Apple will release updates, and third parties will release utilities and drivers to correct or compensate for the more serious shortcomings in FCPX.

In short, don't panic. This isn't a race.

Final Cut Pro X: The war is on

Earlier today, Apple made Final Cut Pro X available in the OSX App Store for $299.99 (U.S.). Since NAB, there have been many questions about how Apple would make the other applications in the previous Final Cut Studio suite available, and the company answered the questions today: Motion is available as a separate application, for $49.99, as is Compressor, for the same $49.99. Final Cut Pro X includes much of the functionality from Soundtrack Pro, Color and DVD Studio Pro, so I assume that those applications have been discontinued.

Yesterday, I noticed a number of posts on Twitter, saying that Adobe is looking for bloggers to become Premiere Pro "ambassadors". The reason is clear: Adobe has got to be very scared by Apple's new pricing. A full copy of Creative Suite 5.5 Production Premium costs $1.699. If you just want Premiere Pro, that's $799; After Effects is $999, and Audition is $349. In other words, it's cheaper to buy the Production Premium suite. I would say that Adobe has to lower its prices dramatically to compete with Apple, but that goes against Adobe's corporate philosophy, which is to continually raise, not lower, prices.

Avid is also feeling pain; the company launched a preemptive strike against Apple by making Media Composer available to Final Cut Pro users for $995 right before NAB, only to learn that Apple planned to sell Final Cut Pro X for $300 a few days later. Again, I don't expect Avid to drop its prices to compete with Apple; the company remains in somewhat fragile condition, and a price war is the last thing it needs.

One question is, why did Apple drop its prices so precipitously? It didn't really need to in order to satisfy the needs of the professional audience, which has been conditioned to expect pro video editing packages to be priced at $1,000 or more. I think that there are a few possible reasons:

• Final Cut Pro X is dramatically different from previous versions of the software, and Apple may have wanted to lessen resistance to buying the new version. At $300 (or $400 for the equivalent of the previous Final Cut Studio), it's almost an impulse buy.
• By making Final Cut Pro X available at a low price and selling it only in the OSX App Store, Apple may be conditioning its customers to buy all their software, not just inexpensive software, online. (It may also be part of the process of getting customers ready for Macs without any optical drives.)
• Apple and Adobe aren't friends, or even "frenemies". They're enemies. Apple is already driving a stake into Flash, and any sales that Apple takes away from Premiere Pro and After Effects will show up in Adobe's bottom line. In this battle, Avid may turn out to be an unintended casualty.

This is most likely not the end of Apple's pricing moves. There's still Logic Studio, sold as boxed software and priced at $499. I wouldn't be at all surprised to see a new version of Logic Studio, priced at perhaps $199 or $299, released in the OSX App Store later this year.

Apple's pricing for Final Cut Pro X opens up a new front in its war against Adobe (and to a lesser extent, Avid). Apple's competitors absolutely don't want to respond, but they may have no choice.

Incoherence in the movie industry

Something happened this weekend that caused me to reflect on the state of the U.S. movie industry, and that something was the release of "Green Lantern". No one movie better exemplifies the state of corporate moviemaking in the U.S., which can best be explained by the following analogy: What would happen if a bunch of drunks stumbled on a satchel full of money and decided to make a movie?

Movie executives readily affirm their desire to minimize risk by making movies based on "pre-sold" properties--that means books, comic books, television shows, cartoons, other movies and anything else that consumers recognize instantly. (I'm amazed that we haven't already seen "McDonalds, The Movie.") So, this summer, we got "Thor", "X-Men: First Class", "Kung Fu Panda 2", "Pirates of the Caribbean: On Stranger Tides", "Fast Five", "Judy Moody and the NOT Watchable Movie" (not the real title, but accurate), and, of course, "Green Lantern." We're waiting for "Cars 2", a second version of perhaps the worst movie that Pixar ever made, and "Transformers: Dark of the Moon", where Michael Bay blows up Chicago without getting rid of a single corrupt political official.

Some pre-sold movies turn out very well; I don't think that Christopher Nolan can make a bad movie, the original "Iron Man" was brilliant, and the first two X-Men movies were fun, but not one of the series movies that have been released so far this summer, with the possible exception of "Fast Five", is as good as the best movie in its series.

"Green Lantern" is reported to have cost Warner Bros. $150 million to produce. For $150 million, you would have thought that studio executives would have read the script. Martin Campbell, who directed "Casino Royale", directed "Green Lantern" with the alacrity of a blind man driving an Indy Car. For that matter, Kenneth Branagh, who directed some of the best versions of Shakespeare's plays ever put on film, directed "Thor", another pre-sold superhero movie that wasn't worth the price of admission. This conclusively demonstrates that the "auteur theory", which states that the director, not the writer, is the "author" of the movie, has been replaced by the "hooker theory", which states that directors will knowingly film any complete piece of crap if they're paid enough.

What the U.S. movie industry has done is not minimize risk by fixating on pre-sold properties--it's attempted to absolve itself of any responsibility for making good movies. You can make excellent movies from pre-sold properties, as Brian Singer, Gore Verbinski, Jon Favreau, Christopher Nolan, and even Martin Campbell (with James Bond) demonstrate. You can also make really lousy movies. If you're paying $150 million, it doesn't cost any more to make it good. J.J. Abrams' "Super 8" proves that you can make a good movie for much less than $150 million that's still loaded with special effects and suspense.

My philosophy is that any movie from a U.S. studio other than Pixar has to be regarded as crap unless proven otherwise.

The (second) rise and fall of walled gardens

Those of us who have been around for long enough remember the era of proprietary online services. In the U.S., the leaders were America Online, CompuServe, Prodigy and GEnie. Canada and several European countries had teletext services. All of these services were what came to be known as "walled gardens": Each service had its own collection of content, its own email service, and its own client software. Subscribers could use the content and services from one vendor, but couldn't get to the content or services from other vendors without subscriptions to their services. You could easily send email and messages to subscribers of the same service, but it was very difficult to send email from one service to another. Content providers had to use the publishing tools provided by each online services, and needed contracts with each service to reach their subscribers.

The Internet, and in particular the web, changed all that. Anyone with a web server on the public Internet could reach anyone with a web browser. Thanks to HTML and HTTP, browsers, servers and authoring tools were standardized, so that proprietary software and tools weren't needed. It only took a few years for the open Internet to displace the proprietary online services. Of the four U.S. leaders, only America Online survives, with web-based services and content. CompuServe is now a brand name of America Online, GEnie closed down at the end of 1999, and Prodigy closed down in 2001.

We're now living in the second era of walled gardens, thanks to smartphones. Apple's iOS, Google's Android, RIM's BlackBerry, Microsoft's Windows Phone 7 and HP's WebOS all support web content, but they have their own proprietary standards for apps, their own app stores, and their own rules for which apps will or won't be allowed to run on their devices. Apps written for one platform won't work on a different platform without recompiling and significant recoding.

As with the proprietary online services, the web (especially the combination of HTML5, CSS and JavaScript) may lead us out of the walled garden era of mobile operating systems. PBS's MediaShift recently published an excellent video interview with Tom Peeters, the multimedia manager for Mediafin, the Belgian-based publisher of newspapers De Tijd and L'Echo.

Mediafin has been working on an HTML5 version of its newspapers for the iPad for some time, even though it already has native iOS apps in the App Store. The Financial Times' decision to release an excellent HTML5-based web app for iOS, and to commit to eventually replace its existing iOS app with a web app, is bringing a lot of other publishers with similar plans (especially European publishers) out of the woodwork. The FT's actions are also serving as an existence proof--publishers can deliver usable web apps with a high degree of interactivity without going through Apple. FT's decision also gives momentum to HTML5 publishing toolkits from companies such as OnSwipe and pugpig.

One point that you'll hear in the interview is that there's a definite marketing advantage to being in the App Store, but if you already have a way of reaching customers directly, as Mediafin does with its newspapers, you can gain much more control over the development process and save the 30% commission (closer to 40% for Mediafin, due to VAT) that would go to Apple.

It may be wishful thinking, but ten years from now, I expect that we'll look back at today's mobile walled gardens and wonder how they ever existed.

Technology previews vs. premature release

Earlier today, Nintendo previewed its new Wii U at the E3 conference. The Wii U is a new console with a tablet-like device that serves as a controller and second display device. Like a number of other Nintendo events, today's Wii U announcement was deliberately positioned as a technology preview rather than a formal product announcement. The Wii U won't ship until 2012, and it may be significantly different by the time it ships. However, Nintendo is encouraging developers to start writing games and applications for the Wii U, so that when it ships, there will be a significant third-party library to support it.

I'm not a fan of early announcements, but when it comes to new platforms, technology previews make a lot of sense. They introduce developers, the press and potential customers to new product concepts, and they build interest and support for the formal product release. They buy time for their vendors--Nintendo said "2012", which gives them almost 18 months. They're clearly prototypes, and they give vendors the time they need to gather feedback and make changes before they go to market.

Compare this approach with what Google did with Google TV and its Android 3.0 tablets. Last year's Google TV announcement was clearly premature; the resulting products from Sony and Logitech were too expensive and too hard to use for most consumers. There was no reason for Google and its partners to rush Google TV out for last year's holiday season. Had they positioned the announcement at last year's I/O Conference as a technology preview, with a product release scheduled for some time in 2011, they would have had the opportunity to get developers involved, get much more usability feedback and resolve objections from television and cable networks before they went to market.

Much the same thing happened earlier this year with Android 3.0 and Motorola's Xoom. Google and Motorola were determined to beat Apple's iPad 2 to market, so they rushed out both Honeycomb (Android 3.0) and the Xoom. Third-party developers had almost no time to develop tablet-aware Android apps before the Xoom shipped, and the first version of the Xoom was much too expensive: $799 (U.S.) without a data plan, or $599 with a two-year contract. In addition, Motorola promoted the Xoom's LTE broadband compatibility, but the initial model shipped with 3G CDMA, and Motorola still hasn't released the LTE capability.

Honeycomb was rough around the edges, with almost no tablet-specific apps, and the Xoom was too expensive. It was a replay of the Google TV launch. Even though there are many more Android tablets coming this year, it looks like there won't be a big market for them until 2012 at the earliest.

If Google had given a technology preview of Google TV last year for release in 2011, and if they had previewed Honeycomb with "reference platform" tablets early this year for release in time for the holiday season, it would have given developers time to build a base of compatible apps, and hardware vendors time to build devices that took full advantage of the operating system while meeting customers' price expectations. In hindsight, it wouldn't have hurt Google and Motorola at all to ship after the iPad 2; in fact, they would have shipped better products at lower prices.

The lesson is that if you're working on platforms, not just products and services that are compatible with existing platforms, technology previews are a much better option than prematurely releasing final products.

Can "old media" survive a double-dip recession?

Last Friday, the U.S. Labor Department announced that national unemployment unexpectedly rose in May to 9.1%. 54,000 people found jobs last month, but that was more than 100,000 less than what most economists expected. That follows news that the Conference Board's Consumer Confidence Index dropped to 60.8 in May from 66 in April, and more than 100 before the start of the Great Recession. The Standard & Poor's/Case-Schiller Index of housing prices in the 20 largest U.S. markets fell in March to its lowest level since 2003.

I don't usually dabble in economic forecasts, but it's increasingly looking like we're entering a double-dip recession. In the current issue of Business Week Magazine, writer Peter Coy refers to the situation as the economy's "You First" problem: Unemployed people don't have money to spend, and people who are employed don't want to spend money, because they're still afraid that they might lose their jobs. Businesses are unwilling to start hiring again because consumer spending is so low. Both sides are waiting for the other to go first, and the Federal Government is in gridlock, so the economy has no option but to fall back into recession.

The Great Recession did no favors for incumbent media companies. The decline of newspapers, which had begun years before the start of the recession, took on a fatal momentum. Magazines' advertising dropped precipitously, and many magazines either shrank their page counts or folded completely. Radio and television advertising revenues also dropped dramatically; in the case of television, the drop in advertising made local stations much more dependent on retransmission fees from cable, satellite and IPTV operators in order to stay in business.

While there seems to be no hope for the recovery of the newspaper industry, advertising revenues for other media have improved, although they're still far below their pre-recession levels. However, a double dip recession would likely drive revenues back down to where they were two years ago. It's hard to overestimate what impact that would have on incumbent media companies. Internet companies will likely hold their own, but a lot of media companies that barely got through the Great Recession won't survive a second one.

3D: Not dead, but headed for a niche

The New York Times has an article about the back-to-back poor boxoffice performance of 3D versions of "Pirates of the Caribbean: On Stranger Tides" and "Kung Fu Panda 2". "Pirates of the Caribbean" only sold 47% of its tickets in 3D, and "Kung Fu Panda 2" only sold 45%, even though both movies were heavily promoted as 3D titles. In fact, 3D's share of boxoffice revenues has been declining almost since "Avatar" left the theaters. Audiences are getting tired of movies that were originally shot in 2D and then poorly converted to 3D (like "Clash of the Titans" and "Thor"), along with the low brightness, glasses and headache-inducing qualities of 3D as shown in most theaters, and, perhaps most importantly, the steep ticket prices.

As the New York Times points out, the movie studios have a bumper crop of 3D titles coming out this year, and the industry has become dependent on 3D's higher ticket prices to try to compensate for declines in DVD sales and the failure of Blu-Ray to pick up the slack. It now appears that 3D isn't the "Hail Mary" pass that the movie industry was looking for.

That doesn't mean that 3D is dead, but it does mean that the studios will have to become a lot more selective about the movies they release in the format. 3D needs to be reserved for "event" movies that can truly take advantage of the effect--the novelty of 3D for its own sake has worn off. Studios also have to drop 2D to 3D conversions; the audience has caught on, and we're rapidly approaching the point where it will cost more to do the conversions than the incremental revenues that movies will earn with 3D.

The studios also have to, once and for all, get over their spending addictions. DVD sales underwrote a wild period of production and marketing cost escalation, but since the Great Recession, the studios have been looking for replacements for DVD revenues like crack addicts looking for a fix. It's time for the studios to go into rehab. Average production costs of $150 million or more have got to drop to more reasonable amounts. The studios can easily afford 3D becoming a niche format for special events, but only if they bring their spending in line with market realities.

Content incubators

Many readers are familiar with the current generation of technology incubators, best represented by Y Combinator and TechStars. They provide seed funding, experienced mentors, office space and equipment, primarily for startups working on web-based services, as well as app and software developers. In return, they take an equity stake in participating startups. Content startups don't often get into these programs, and the mentors that participate usually have little or no experience in content-related businesses.

What's needed is a new type of incubator specifically for content and content-related technology startups. Here's what would be included in a typical content incubator:

• Like technology incubators, content incubators would provide seed funding, although the amount might be less than that usually given by technology incubators.
• The mentors would come from incumbent media (publishers, editors and writers from print, station managers and program directors from radio, and station, programming and news directors from television), new media, and Internet/software technology, as well as financial and legal counselors.

The facility would have the typical desks and offices that you'd see in a tech incubator, but it would also have editing, production and post-production facilities:

• A divisble newsroom with workstations running print and broadcast newsroom software
• Print layout and design workstations
• Audio and video webcasting studios
• A news/talk studio for live or recorded video webcasts
• A performance space studio seating 100-200 for concerts, comedy and talk shows with audiences
• Video and audio production equipment similar to what I've previously written about for webcasting
• Editing suites for audio and video post-production, and for video graphic design
• Software workstations for app and software development

The idea, in short, is to provide content startups with the mentors and facilities that they need to develop their concepts and produce examples. The startups would use the incubator's facilities, equipment and in-house team for production and editing. They get a very low cost, low risk way of trying out new ideas, and the incubator gains equity in the businesses.

A look at "The X Factor" Chicago auditions (Updated)

(Updated 2 June 2011 to include comments on the dismissal of show judge Cheryl Cole). I attended a taping of auditions for "The X Factor" last Thursday at the Sears Centre Arena, located in Hoffman Estates, IL, just outside Chicago. The auditions were for the U.S. version of "The X Factor", which will premiere on Fox in September. I won't give any spoilers; instead, I'll focus on some of the technical and production aspects of the show.

The Sears Centre Arena is one of several sports and concert arenas in the Chicago area, and it was well-suited for the taping. The producers effectively cut the arena in half with a floor-to-ceiling cloth partition that formed the backdrop for the performance stage. The arena was made to look and sound like a concert, with the usual lighting, speakers and amps, albeit with lower sound levels. According to Simon Cowell, there were more than 3,000 people watching the taping.

The producers used seven cameras in the arena. Two were positioned in the audience and equipped with long zoom lenses for covering the performers. Three were positioned stage left for shooting the four judges (Simon Cowell, Paula Abdul, Cheryl Cole and L.A. Reid). A crane-mounted camera was used for overhead shots of performers, the judges and audience, and a seventh camera was used for audience reaction shots. Additional cameras (not visible from the arena) were used backstage for interviews with show hosts Nicole Scherzinger and Steve Jones, the performers and their families. There were two multiviewers positioned stage left to show the outputs of the various cameras on a single screen, but it appeared that they were being used by producers, not the show's director.

Prior to the start of taping, production teams shot interviews and raw footage of some of the performers and their families outside the arena. The editors on the show are going to have a lot of work, simply due to the volume of footage produced by all those cameras in the course of a 3 1/2 hour taping. (Keep in mind that this was only one of four tapings scheduled for Chicago. Multiple tapings were held earlier in the month in Los Angeles, and four more tapings will be done in June in each of four locations: New Jersey, Miami, Dallas and Seattle.)

From the taping that I saw, it's not clear how much "The X Factor" differs from the format of "American Idol" (I haven't seen the U.K. version of the show). As mentioned above, there are four judges, and three of them have to say "yes" in order for an individual singer or group to pass through to the next round in Los Angeles. Given the number of individuals and groups that went through from the taping I attended, there are going to be many performers going to L.A. by the time the auditions end next month.

Since I originally wrote this post, judge Cheryl Cole has been dropped from "The X Factor". There's been no official statement from either the show's producers or the Fox network as to why she's been dropped, but there are a number of rumors:  Her Geordie dialect might be too difficult for U.S. audiences to understand, her weight, and a lack of chemistry with the other judges. I had no trouble whatsoever understanding her, and although I was in the "cheap seats", I couldn't see anything that would indicate that she has a weight problem. However, I and other people sitting around me commented on a lack of chemistry.

Simon and Paula came out and immediately continued where they had left off on "American Idol". Their playful (and sometimes not so playful) friction was exactly what the audience expected. Early in the taping, it seems like there were two panels--Simon and Paula, and Cheryl and L.A. Reid. As the night went on, L.A. Reid synced up with Simon and Paula, and his personality started to come alive, but Cheryl seemed to be left out.

Fox executives probably got a chance to see rough edits of the footage from the four Chicago tapings, and saw the same thing that we saw in the audience. The vast majority of the U.S. audience neither knows nor cares who Cheryl Cole is--I'm not saying that as an insult, it's simply reality--and host Steve Jones pointed out that no one in the audience in Chicago probably knew who he was. "The X Factor" is too important to Fox and its producers for them to take any chance with the show's popularity. In addition, they had a short break before taping 16 more auditions in four more cities throughout the month of June. If they were to make any on-screen personnel changes, they needed to make them quickly, before the June tapings began.

Separating the medium from the message

Wikipedia defines the word medium as follows: "In communications, a medium is the storage and transmission channel or tool used to store and deliver information or data." It's the means of getting information from point A to point B, not the content or structure of that information. However, it's virtually impossible to consider a medium without including its usual content and structure. For example, we have expectations of what we're going to hear when we turn on the radio, and what we're going to see when we turn on the television. We don't expect to find the nameplate and headline of a newspaper on an inner page; we expect to find them on the front page.

Content and structure have been an integral part of our understanding of what a medium is, until we got to the Internet era. The Internet is a medium that can reproduce the content and structure of radio, television, movies, compact discs, books and newspapers. The Internet decouples the physical medium from its content and structure.

The Internet's flexibility is both a blessing and a curse. It makes it relatively easy to copy the content and structure of other media, but history shows that copying one medium into another isn't a successful long-term strategy. Radio copied theater, concerts and vaudeville, but it didn't come into its own until unique styles of entertainment were developed specifically for radio. Television initially copied radio and the media that radio itself originally copied, but like radio, television didn't take off until artists started taking advantage of television's unique capabilities.

The Internet can be a replacement for today's radio and television, with the added benefit of time-shifting, but with its sometimes tinny sound and small displays, it's a poor substitute. You can make a website or app look just like a newspaper page, but experience shows that people read in a different way online than they do in print. Despite apps, most magazines available online look just like their print editions, with a few additional features. These "digital magazines" are often very hard to read, requiring lots of zooming (some readers only allow one level of zoom), panning and scrolling.

One can argue that webpages are themselves a unique form of structure, if not content; with the exception of interactivity, they're an amalgam of text, audio and video forms that existed well before the web itself. What are some of the other unique capabilities of Internet media that can differentiate them from existing forms?

• Interactivity: Video games and interactive CD-ROMs predate the web, but the web brings interactivity to a new level, and mobile apps are accelerating the trend.
• Multi-way creation: Instead of the "one creator to many consumers" model inherent in incumbent (old) media, the Internet enables many creators to reach a few or many consumers. It also enables creators to interact with each other, and makes the roles of creators and consumers fluid--one can become the other, and one can play both roles simultaneously.
• Support for most kinds of existing media: The temptation to simply copy one medium's content and structure onto the Internet is great, but the ability to integrate the capabilities of multiple mediums into a single composition is very powerful.
• No gatekeepers: Creators can reach consumers and other creators inexpensively, without having to go through distributors, retailers and networks.
• Low production and distribution cost: The Internet has helped to drive the cost of the software and services needed for content creation down to a tiny fraction of the prices paid by old media companies, and Moore's Law has driven down the prices and increased the capabilities of the devices needed to create and access the content.

Simply taking a radio show and moving it to the Internet, either as a webcast or simulcast, won't cause the Internet to displace radio; it only creates a poor substitute. The same goes for television. Magazines that simply reproduce the content of their print editions in electronic form aren't reversing their downward circulation and advertising revenue trends--the best they're doing is slowing down the decline. Newspapers aren't adding enough extra value on the Internet to make their paywalls work.

One-to-many media don't work on the Internet, or more accurately, they don't work well enough to maintain the business models of incumbent media companies. Native Internet media have to be highly interactive and incorporate an audience of content creators, not just content consumers. If any content consumer can instantly and painlessly become a creator of virtually any kind of content, and if consumers of that content can in turn create their own content, that's when Internet media becomes very different than any incumbent media.

Twitter, YouTube and The Huffington Post are all early examples of true Internet media, although they have limitations:

• Twitter's is the kinds of content that can be delivered in-line with its 140-character messages (which itself is a limitation).
• YouTube's is the amount of effort necessary to create a video that doesn't look amateurish.
• The Huffington Post's is that it's very text-based; the HuffPo is adding more video, but it's primarily produced in-house and represents a regression to the "one-to-many" model. Also, anyone can submit posts to the HuffPo, but that doesn't mean that they'll be accepted.

If you think about how those three companies' models can be mixed and improved, you can come up with some very interesting new visions of Internet media.

A new model for video production, take 2

Last August, I wrote an entry about how new technologies and the vastly improved quality of consumer- and prosumer-grade video and audio equipment would allow producers to build an HD webcasting studio with four automated cameras, a camera control unit and a production switcher for around $47,000. In that iteration of the design, I specified Panasonic's IP cameras and switcher. I also included a very inexpensive Zoom audio mixer/recorder, four Line 6 digital wireless microphones, four Litepanels LED lights and some other equipment.

After I returned from NAB last month, I reworked the budget and replaced many of the components with new, lower-priced models. For example, I replaced the Panasonic cameras with Canon XA10 camcorders--not automated, but for my money, they give a better picture and are much more flexible--and then went with third-party pan/tilt heads and controllers. The Panasonic switcher, which was bare-bones in the extreme, was replaced with Blackmagic Design's ATEM 1 M/E, which is better in just about every possible dimension.

I also dramatically improved the audio mixer, moving from the Zoom R24 to a PreSonus 16.4.2. By judiciously swapping out components (but without replacing anything with junk and without losing any functionality), I added four teleprompters, an intercom, a broadcast graphics server and a complete talk show call-in phone system, while actually saving $1,000 on the original system. That's in a bit more than eight months.

My goal is to get a studio built with this new design by the end of the year for a startup I'm working on. IBC, the other big broadcasting conference of the year, will be held in September. Who knows what else we'll see there, and what more you'll be able to do with $50,000?

Why the Burson-Marsteller/Facebook blow-up won't change anything

You've probably read about Facebook's botched attempt to smear Google by planting stories about alleged privacy threats in a little-used Google service called Social Circle. Facebook hired public relations firm Burson-Marsteller to plant the stories, and the PR firm assigned two recently-hired former journalists, Jim Goldman and John Mercurio, to execute the plan.

The two reporters-turned-flacks had no success in getting the story picked up by conventional media outlets--in fact, Goldman's pitch to USA Today turned into a story not about Google but about Burson-Marsteller's fevered attempt to convince the magazine to write negatively about Google. When USA Today independently investigated Burson-Marsteller's claims, it found them to be "largely untrue", at which point Goldman stopped talking to the newspaper. As an alternative, Burson-Marsteller turned to bloggers. Mercurio pitched the story to blogger and security expert Chris Soghoian, going so far as to offer to assist in the writing of the blog post, which Mercurio would then pitch to a variety of sites, including the Huffington Post. Soghoian asked Mercurio who his client was, Mercurio refused to answer, and Soghoian published his email correspondence with Mercurio on the web.

Dan Lyons at The Daily Beast picked up on the story, and got Facebook to confirm that it was the client behind Burson-Marsteller's efforts. Once Lyons' story hit the web, interest in what had happened exploded. Burson-Marsteller announced that, in essence, the problem was all due to Facebook, and it would no longer work for the firm. Facebook announced that it hadn't instructed Burson-Marsteller to plant the Google story in the way the PR firm attempted, but that it (Facebook) was justified in its actions, in large part because Google was mining Facebook's own data in order to offer Social Circle.

Industry observers were expecting both Burson-Marsteller and Facebook to fire some of their employees as a result of the fiasco, but it hasn't happened so far. In fact, Burson-Marsteller has announced that it won't fire anyone, but will give the involved employees "additional ethics training." The question is, why not fire them? The probable reason is that any employee who Burson-Marsteller fired would file suit against the company for wrongful termination. The discovery process for the suit would in turn reveal that Burson-Marsteller management approved the plan, and possibly even conceived of it in the first place. It would further reveal that Burson-Marsteller runs these kinds of campaigns for its clients on a regular basis, and that the problem with this particular campaign wasn't that it violated the company's ethical standards as actually practiced, but that the company and its client got caught.

But what about the ex-journalists who executed the scheme, Jim Goldman and John Mercurio? They were almost certainly hired specifically for their journalism experience and connections. Goldman was most recently CNBC's Silicon Valley reporter, and worked for a number of publications and networks over the years, including the San Jose Mercury News, Silicon Valley's hometown newspaper. Mercurio was most recently the Executive Editor of the National Journal's Hotline, and prior to that was Political Editor for CNN; Burson-Marsteller itself claims that Mercurio has more than 20 years of journalism experience.

Shouldn't Goldman's and Mercurio's decades of journalistic experience have led them to conclude that the campaign they were executing on behalf of Facebook was unethical? And if it didn't, will a few hours of ethics training make either man any more ethical? (Update, May 18, 2011: According to Burson-Marsteller's own website, Jim Goldman got a B.A. degree from Brown University in Ethics in Political Journalism and Political Philosophy. I guess the saying that "most people don't retain much of what they learned in college" must be true, at least in Goldman's case.)

My belief is that neither man objected because Burson-Marsteller's tactics are, in fact, common practice. They no doubt were on the receiving end of such campaigns, and quite possibly actively participated in them as journalists. They saw no ethical conflict because that's how things are actually done.

The reputation of the journalism profession in the U.S. has fallen to the level of used car salespeople. If you want to know why, you need to go no further than to consider how many other reporters and editors with Goldman's and Mercurio's ethical standards, or lack thereof, are writing the news that you're reading, listening to and watching. If those two men are in any way representative of the journalists employed by this country's media outlets, the journalistic profession deserves its reputation.

As for Facebook, no one should be surprised that it would be behind a smear campaign, and that it would react with righteous indignation when asked to apologize for its conduct. Anyone who has followed Facebook knows that the company has a habit of regularly changing its privacy controls and rules to make it harder for users to control how much of their information is made public, and of positioning users' losses of privacy as "improvements" until third parties reveal the truth. To say that Facebook is "ethically challenged" would be an understatement.

Given all that, I have no expectation that this fiasco, compared by Dan Lyons to a Keystone Kops episode, will result in any meaningful changes at either Burson-Marsteller or Facebook, other than that both companies will work harder not to get caught in the future.

Want to know why Xoom and PlayBook are struggling? Watch their ads

It's well-known that sales of Motorola's Xoom Android tablet have been disappointing. RIM hasn't yet announced any sales figures for its PlayBook tablet, but the early word is that its sales are also very slow. If you want to know the reason for both products' struggles, all you have to do is look at their television ads and compare them to those from Apple for the iPad 2. I'm not talking about the "artistic" value of the ads--I'm talking about the content, and what that content says about the products.

Motorola and Verizon have two Xoom ads on U.S. television; the content of both are similar, but I'll focus on the more current version. It starts with a man with an angry/aroused look on his face, breaking a notebook computer into four parts, which turns into a Xoom. Then he holds the Xoom in front of himself, still with that angry/aroused look. The commercial switches to a close-up of the screen, and a hand moving quickly between a movie, mail, a game, a video call, another movie...you get the picture. Then, it finishes with Angry/Aroused Man holding the Xoom in front of himself again.

The PlayBook ad dispenses with Angry/Aroused Man--all it shows is a close-up of the screen and a hand moving between various windows: A movie. Some images. A game. Another movie. Yet another movie. And then, the PlayBook tagline. It doesn't show a single business-oriented application, not even email, even though that's RIM's strength.

Compare that with Apple's long-running campaign for the iPad, and now the iPad 2. Apple's commercials show apps. Every commercial shows a different set of apps, for education, entertainment, medicine, business and so on. And that's the key to why the iPad 2 continues to sell extremely well, and the Xoom and PlayBook are struggling.

Both Motorola and RIM released their products well before they were ready. In the Xoom's case, the Honeycomb version of Android itself was rushed out, and developers didn't have sufficient time to build tablet-aware apps. The PlayBook shipped without native email, calendar and directory apps. That functionality is supplied by a user's BlackBerry phone, but for whatever reason, RIM decided not to show it. (If you're not a BlackBerry user, the only way to get that functionality today on a PlayBook is with web applications.)

Apple focuses on all the different ways in which an iPad 2 can be used. Motorola and RIM, without the library of tablet apps that Apple has, are focusing on eye candy. Both companies appear to have approached the tablet market in much the same way as PC manufacturers approach the PC market: Their job is to supply good hardware. The operating system is taken care of by Microsoft, and the applications are taken care of by everyone else, so they focus on the hardware. Motorola and RIM, by and large, got the hardware right: Big, viewable displays, fast dual-core processors, front and back cameras, etc. RIM, with its QNX acquisition, got the operating system right, while Motorola relied on Google, which didn't quite get there with Honeycomb.

What neither Motorola nor RIM got right was the apps, and that's the point of differentiation for tablets. The lesson for tablet manufacturers: If all you can show in your television ads are movies and games, you're not ready to ship.

Google and partners commit to guaranteed Android updates

Google's I/O 2011 conference opened this morning in San Francisco, and the company made a number of announcements, including a new version of Honeycomb (3.1) for both tablets and Google TV, a preview of Ice Cream Sandwich (4.0), which is scheduled for release late this year, a new music service, specifications for interfacing to a variety of hardware devices, and a home automation initiative. However, perhaps the most important announcement was made concerning a policy for device updates.

One of the biggest drawbacks to the Android platform, both for users and developers, has been the lack of an official policy on which version of Android devices are released with, and when (or if) existing devices get updated to new versions of Android. As of today, Google has finally addressed the problem in partnership with some (but not all) of the members of its Open Handset Alliance. Vodafone, all four national U.S. mobile carriers (Verizon, AT&T, Sprint and T-Mobile), as well as handset manufacturers Samsung, HTC, LG, Motorola and Sony Ericsson have committed to provide timely upgrades for 18 months from the date that their new Android devices are released, so long as the devices are capable of supporting the upgrades.

It's not yet clear what "timely" means, but it's likely to mean anywhere from a few weeks to a few months after a new version of Android is released. Also, the 18-month period starts when a new device is released, not when a consumer purchases it, so this policy will encourage consumers to purchase Android devices shortly after they're released (and penalize those who buy a device fairly late in its life). In addition, it still doesn't compare to Apple's track record for iOS upgrades.

Nevertheless, this new policy is a big win for both consumers and developers. Consumers can purchase with reasonable assurance that their devices will remain current for at least 18 months, and developers can have a reasonable assurance that apps written for the latest version of Android will be adopted by customers much more quickly than in the past.

New media has to break its addiction to old media

People have been trying to turn the Internet into a new medium that can compete on an equal footing with television, radio, newspapers, etc. since the Netscape days of the mid-1990s. So, fifteen years on, what have we accomplished?

• Netflix has more subscribers than Comcast, but it lives or dies based on which television networks, cable networks and movie studios are willing to do business with it, what shows they're willing to supply, when they're willing to supply them and at what cost.
• Hulu has much the same problem, even though it's owned by three of the four major U.S. television networks.
• YouTube is trying to cut distribution deals with many of the same television networks, cable networks and movie studios as Netflix and Hulu.
• Pundits spend an inordinate amount of time discussing how much The New York Times and The Wall Street Journal are charging for access to their newspapers online, whether paywalls work, how to circumvent paywalls, etc.
• Hearst, Condé Nast and Time Warner will offer their eMagazines on the iPad if they can only get a business deal worked out with Apple. Meanwhile, News Corporation's "The Daily" is on the iPad and is losing money.
• Clear Channel is building its own clone of the Pandora streaming music service and plans to launch it this summer.

The "new media" has largely become a repackaging of old media for Internet delivery: Old wine in new bottles. Almost all of the content on the Internet that's economically viable comes from old media companies.

In order for content to be economically viable, it has to have two key attributes:

1. It has to attract a large audience, and
2. It has to be repeatable--audiences have to be willing to come back day after day, week after week

Content that repeatably attracts large audiences can be sold to national advertisers, which generates the revenues necessary to create more content and make the business attractive to investors. Viral videos, like those found on YouTube, meet the first criteria: A popular viral video can get millions of views. The problem is that they're not repeatable. The vast majority of viral videos are "one-hit wonders". Google has found that it's possible, but very difficult, to sell advertising against viral videos. Many advertisers don't want their ads to run alongside "objectionable" content, yet it's that same objectionable content that makes many videos go viral.

On the other hand, webcast networks like TWiT and Revision3 get audiences that come back week after week for original shows, but the audiences aren't big enough to generate a lot of advertising revenue. They make enough money to make a nice living for a few people, but not enough to attract investors.

That's why new media companies keep turning to old media companies to get their content. The problem is that old media companies don't want to risk their existing revenue streams, even if those revenue streams are already being eroded. If you're an Internet company and your business plan depends on convincing old media companies to license their content to you, you're starting with two strikes against you. Even worse, your biggest suppliers are in a position to become your biggest competitors, if they aren't already competing against you.

New media companies have to break their dependence on old media, and the only way to do that is to produce original content in new forms that old media companies can't, or won't, duplicate.

Thunderbolt strikes Apple's iMacs

As I forecast last year (albeit a month or so later than forecast), Apple has launched its line of Sandy Bridge-based iMacs. The four models range in base price from $1,199 to $1,999. Two displays are available: 21.5" and 27", and the models are further differentiated by their base amount of RAM, hard disk space (with or without SSDs) and graphics cards. As with the current MacBook Pros, Apple has gone "all in" with AMD and only offers Radeon 67XXM (Mobile) GPUs. The base processor for all the iMacs is Intel's Core i5 with quad cores (no more dual-core models), and the top-of-the-line model in either 21.5" or 27" can be equipped with a Core i7 quad-core CPU for an extra $200.

The 21.5" models come with a single Thunderbolt/Mini Displayport connection, while the 27" models come with dual Thunderbolt/Mini Displayport connections. The 21.5" models support 8GB of RAM, and the 27" models support 16GB. Studio Daily "tricked out" the top-of-the-line 27" model with an i7 processor, 16GB of RAM (keep in mind that third-party RAM is much less expensive than Apple's), 2TB of hard drive and a 256GB SSD, and came up with a price of $3.818.00. It's not as much of a bargain as is $1,995, but it's still a nice savings over a comparably-equipped Mac Pro.

The full power of the new iMacs will be released over the next few months, when peripheral manufacturers start delivering Thunderbolt-compatible devices, and when Apple ships Final Cut Pro X. AJA Video and Blackmagic Design displayed Thunderbolt-compatible video capture devices at NAB, while Promise Technology displayed Thunderbolt-compatible RAID arrays and La Cie showed individual Thunderbolt hard drives and SSDs. You might want to wait until some real-world benchmarks and reviews are published before buying a new iMac, to see if Thunderbolt's throughput and flexibility are really sufficient for high-end video editing.