Livestream announces new family of production switchers and a new trend: The DIY switcher

Two years ago, Blackmagic Design threw a grenade into the broadcast production switcher market with its repackaging and aggressive repricing of Echolab's Atem switchers, along with its introduction of the $995 Atem Television Studio. Since then, other switcher vendors have been trying to figure out how to respond; some have lowered prices or introduced new products, while others have ignored the competition, in the hope that it'll go away.

Now, there's a new trend that promises to drop prices even lower while increasing flexibility. For lack of a better term, I call it the "Do-It-Yourself," or DIY, switcher trend. You may recall that last year, Livestream announced a switcher, portable computer and display integrated into a single box, called the HD500, priced at $8,500. The HD500 combines custom-designed switching software written by Livestream with off-the-shelf audio/video I/O cards from Blackmagic Design. Then, earlier this year, Livestream unbundled its switcher software into a $1,999 package that requires a fairly powerful Windows PC but can work with any Blackmagic Design video capture cards and devices--it can even drive the company's Atem switchers.

Today, Livestream dramatically expanded its product line, starting with the $6,999 HD50--a switcher in a mini-PC chassis that uses Blackmagic Design Decklink Quad and Decklink Studio video cards to provide essentially the same functionality as the HD500 in a smaller package, without the built-in display. The HD50 competes directly with Newtek's $4,995 Tricaster 40, but the HD50 has a big advantage--all of its inputs can be HDMI or HD-SDI, while the Tricaster 40 is limited to component and composite inputs. In addition, Livestream launched two new rack-mounted switchers, the HD900, priced at $14,999 with 9 inputs, and the HD1700, priced at $24,999 with 17 inputs. The HD900 and HD1700 are based on rack-mounted PCs with off-the-shelf Blackmagic Design video cards and Livestream's proprietary software.

Livestream isn't the only company that's playing the DIY game: Telestream, whose Wirecast software has been used for several years for low-end, inexpensive switching solutions, has partnered much more closely with Matrox, and supports the Matrox family of video cards and devices in much the same way as Telestream does with Blackmagic. Finally, Blackmagic recently released an API that allows anyone to write software that drives its Atem switchers.

We're on our way to switchers that start as nothing more than tower PCs. They'll make it simple for groups of inputs to be added by inserting video capture cards. Need five more inputs? Drop in another video capture card. Need more functionality? There's an app store where you can buy add-ons from the switcher vendor or third-parties. What we don't have yet is a good selection of third-party switcher control surfaces, but they're likely to start showing up soon, possibly as early as next month's NAB conference.

There will always be a market for integrated switchers, especially in smaller sizes that are easy to connect to a notebook computer via Ethernet. However, for the middle ground between the huge switchers used in the largest studios and production centers, and the small, portable, integrated switchers, there's a lot of room for PC-based, easily expandable switchers.

Hulu: Here we go again

You may recall that in June of last year, Hulu put itself up for sale, in part because of strategic disagreements between joint venture partners Disney and News Corp. (NBCUniversal, the third partner in Hulu, is prevented from taking an active management role as part of the terms of Comcast's deal to acquire NBCUniversal.) In October, Hulu's owners cancelled the sale because of "disappointingly low offers." That didn't solve the strategic differences between the partners, however. Today, All Things Digital reported that Guggenheim Partners, Yahoo and Amazon, possibly among others, are considering making offers to acquire Hulu--even though the partners haven't announced that it's for sale. The smell of blood in the water is just too strong.

I'll keep this brief: The reason that the offers for Hulu were disappointingly low last year was that the partners were unwilling to offer Hulu's buyers long-term access to their content. Exactly the same issue will arise if Hulu is put up for sale again. Hulu is effectively worthless without its content. With the exception of Guggenheim Partners, all of the potential bidders already have their own video infrastructure, players and apps. There was a time when Hulu's player was head and shoulders above anyone else's, but that's simply not the case anymore.

The purchase price of Hulu will have to include three to five years' of the partners' content, along with assurances that their content will continue to be available after that time at a price that Hulu's buyer can afford. If the content isn't there, any potential deal will fall apart.

This could turn into the Mergers & Acquisitions equivalent of Lucy pulling the football away from Charlie Brown at the last minute every year. Fox Sports could broadcast "Who Wants To Buy Hulu?"--just put Cleatus the robot into an Armani pinstripe suit, give the play-by-play to Fox Business, and you're all set. For now, all we can do is sit back and watch the action.

When companies get into trouble, CEOs do what they know best

Bryan Goldberg, the founder of the Bleacher Report, wrote a post for PandoDaily last week titled "You don't want experts. You want jacks-of-all-trades." His argument is that expertise in a single area is insufficient when companies increasingly depend on a confluence of skills for success. Further, expertise is much less transferable than it first appears. He points to AOL, JCPenney and Oracle as examples of companies that hired CEOs specifically for their expertise--with the results being far less than what each company's investors expected.

I'd like to propose a corollary to Goldberg's argument, which is that when a company gets into trouble, its CEO almost always falls back on their primary area of expertise. Outside of technology companies, CEOs tend to come disproportionately from two departments: Legal and Finance. (Why anyone thinks that being a lawyer is great preparation for running a company is beyond me--no insult intended to lawyers.) When a company gets into trouble, the CEO falls back on his or her experience. CEOs who started as lawyers look to litigation as their primary strategy for dealing with problems. That explains why so many record and movie companies turned to suing accused pirates as their primary strategy for dealing with digitization.

CEOs who have a financial background tend to turn to cost controls first as their way of dealing with problems. Every dollar that a company saves goes directly to its bottom line, while each dollar of increased sales may only add a few cents to the bottom line. Unfortunately, cost controls often have long-term negative impacts on companies. Layoffs, hiring freezes, capital investment freezes and divestment of underperforming businesses are all typical cost-cutting tactics that work well in the short run, but may leave the company unprepared to take advantage of future growth opportunities.

So, how do CEOs who come from other specialties respond to problems? CEOs with sales backgrounds generally pressure their organizations to sell more. Those with marketing backgrounds will focus on advertising campaigns, promotions, new product introductions and line extensions (for example, new flavors of corn chips) in order to generate revenues. CEOs with engineering backgrounds try to innovate their companies out of trouble with new technologies and products.

CEOs will, of course, use tactics that are the purview of other specialties if they have to. Cost controls are everyone's favorite (unless you're one of the people laid off,) because they get big results quickly. Steve Jobs wasn't a lawyer, nor is Tim Cook, but litigation was, and is, a key part of both men's attempts to slow down competitors. CEOs who've rotated through a variety of functions have a bigger quiver of arrows to choose from, but few companies give much more than lip service to developing their managers by rotation. So long as schools keep turning out specialists, and companies keep hiring them while giving short shrift to real management development, we'll continue to have companies led by people who see the world through the filter of their specialty.

How to podcast like the best

Over the last month, I've been dealing with either a herniated disc or arthritis (I haven't yet spent an hour in a tube getting an MRI to find out which one.) Laying down with a capsaicin patch on my back, there's not much to do but listen to something, and the something I listen to most often is podcasts. The ones I find myself enjoying the most are Jeff Garlin's "By The Way," and Alec Baldwin's "Here's The Thing." There are other podcasts that I listen to, but Garlin's and Baldwin's are consistently the best. Here are a few suggestions for how to produce great podcasts, based on their shows:

• It's quality, not quantity: Some hosts seem to be in a race to produce as many podcasts as they can before they die, but as of this writing, Garlin has produced only six shows, and Baldwin has done only 38 since October 2011--about one every two weeks. It's much better to do fewer but better shows, than to stay on an aggressive schedule and produce a bunch of mediocre shows with a gem here and there.
• It's the guests, stupid: No matter how good an interviewer is, what matters are the guests. You can only talk to yourself for so long before the audience gets bored. For their part, Garlin and Baldwin get great guests.
• Book guests that you like: If you're interviewing someone that you don't like, respect or care about, your audience can hear it in the interview. Some hosts go after big-name guests, under the assumption that famous guests will draw an audience, but then the interviews turn out poorly. The chemistry between the host and guest is far more important than the guest's fame or status.
• Leave the audience wanting more, not wanting to change the channel: Podcasts seem to have gotten longer and longer over time--80 minutes isn't unusual, and some can run for two hours. It's impossible for most hosts to maintain an interesting conversation for that long, so some introduce games, contests, etc., which for most listeners is the signal to turn off the podcast. In my opinion, 45 minutes to an hour is a good length for a podcast; no show should be longer than 80 minutes. If you really, truly have enough material to go longer, make the remainder of the podcast into a bonus episode.
• Consider building a "company" of recurring guests: In the early days of U.S. late-night television talk shows, before most guests came on to promote their latest movie or television show, Steve Allen, Jack Paar, Johnny Carson and Dick Cavett had recurring guests, such as Norman Mailer, Truman Capote and Groucho Marx. These guests were such great conversationalists and had so many stories that they entertained audiences for years, even without new books or movies. 
• Don't supplicate yourself to guests: It's easy to turn into a "fanboy" when you interview a guest who you admire, but sometimes, it's uncomfortable for both the guest and the audience. It's fine to tell the guest that you're a fan of their work before you start recording, but once the interview begins, you and your guest are equals. That's what your audience, and most guests, expect. (On the other hand, if a guest expects you to "kiss up" to them during the interview, that's likely to turn into compelling audio when you confound their expectations. An interview that goes badly can sometimes be exciting and edgy for your audience--remember David Letterman's classic interview with Joaquin Phoenix.)
• Don't be afraid to dump an interview: Even the best interviews have to dump an interview from time to time. Perhaps you or your guest is having a bad day, or you get into an interview and realize that there's absolutely no chemistry between you and the guest. If you record an interview and after listening to it find that there's no way to cut it into a usable form, it's no sin to say "Sorry, I was having a bad day, and we can't send the interview out." It's better to kill a bad interview than to air it and disappoint your listeners (unless its very badness makes it funny or compelling, as in the previous bullet point.)

If you follow these rules (and are a good interviewer to begin with,) your podcasts have a much greater chance for success. 

ROI: The Innovation Killer

Why is it that established companies seem to have so much trouble with responding to (or developing their own) innovative products and services? Why have so many companies, both big and small, seemingly given up on solving big problems, and are instead happy to make incremental improvements to existing products? One big reason, in my opinion, is the focus in American business on Return on Investment, or ROI. Return on Investment is a measure of how much money, measured as a percentage, a given investment will return over time. The money comes from cost savings, increased sales, or both. Companies evaluate investments against a target Rate of Return that they set. If a proposed investment is expected to meet or exceed the company's Rate of Return, the company makes the investment; otherwise, it doesn't.

It's fairly straightforward to calculate the expected ROI for a new product or capital investment that's very similar to products that you (or others) already sell, or capital investments that you (or others) have already made. If you're Proctor & Gamble and you're considering introducing a new flavor of Crest toothpaste, you have a huge database of historical information about how much it cost to develop new toothpaste flavors, put them into production and market them, and how well they sold over time. If you're Amazon and you're considering building three new warehouses, you know with great accuracy how much it cost to build similar warehouses in the past and how long it took to break even on those investments.

On the other hand, consider what IBM had to deal with when it decided to launch its own personal computer in 1981. Its experience with building mainframe computers was useless in projecting the costs of developing, manufacturing and marketing a personal computer. The personal computers that had sold to date were intended for hobbyists, which was a very small market. IBM had very little information with which to calculate the ROI for its personal computer.

The more innovative a product is, the more it represents a discontinuity (a break from previous technologies, goods and services,) the less reliable are its Return on Investment calculations. To reduce risk, most companies will assign such investments a relatively low ROI. Then, when they compare the ROI with the company's target Rate of Return, they'll kill the project if the ROI is below the Rate of Return. Company managers can guarantee that the project will be killed by deliberately putting conditions on the ROI calculation that will force it to be below the Rate of Return.

Big companies innovate by accepting projects that have risky ROI calculations, or by ignoring the ROI analysis altogether. Bell Labs was able to invent the transistor because there was no requirement that John Bardeen, Walter Brattain and William Shockley work on projects that would generate a predictable amount of revenue in a predictable time. Texas Instruments and Fairchild Semiconductor invented the integrated circuit in parallel, not because they knew what the ROI would be, but because they believed that the opportunity would be tremendous. IBM's decision to move ahead with its PC despite the company's ROI requirements led to market leadership for nearly two decades. On the other hand, Xerox's Palo Alto Research Center invented laser printers, Ethernet and graphical user interfaces but ended up seeing its inventions commercialized by others.

Companies that hold every project to a strict Return on Investment calculation are likely to create only incremental improvements to existing products and processes--lots of "singles and doubles." Companies that are willing to ignore ROI in search of a greater goal are the ones that at least have a chance for true innovation--the "home runs" that can define, or redefine, an industry.