Tuesday, September 30, 2014

Rabbit season? Duck season? No, another pilot season!

In Los Angeles, actors, writers, producers and networks are getting ready for the madness that's known as pilot season. If you're unfamilar with the term, pilot season is when pilots for new televsion shows are approved for production by networks. There's a mad dash that starts in January to complete scripts, cast actors and shoot the pilots. With that in mind, networks are already getting a head start by "greenlighting" (approving) some new shows.

I'd like to propose some new shows for 2015-16. I'll start with what's called a logline (a one-sentence description of the show,) followed by some of the pitch to the network:
  • "You're The Judge": We take people off the street, put them in judicial robes and let them decide cases between real litigants, with binding decisions.

    This show doesn't deal with the kind of namby-pamby disputes that you might see on "Judge Judy." Think about "Rowe v. Wade" or "Brown vs. Board of Education" decided by a plumber with no legal training whatsoever. Or, all the "Apple vs. Samsung" patent lawsuits decided in 30 minutes by a hairdresser.

    In the same vein...
  • "Kids' Court": Disputes between first-graders are decided by a judge who's also a first grader, with binding decisions AND an appeals court.

    Remember those playground arguments you had when you were a kid? Were you bullied by someone? "Kids' Court" will let first-graders argue their cases in from of a first-grade judge. It's kids arguing and trying to understand the law at the level of most daytime television viewers! And, in a unique twist, the losers will be able to appeal their case to an appeals court with three third-grade judges. Think of it--a snowball fight case could fill two complete episodes!
  • "Hatewatch": The cast from "Mystery Science Theater 3000" makes on-screen snarky remarks during the second showing of an existing network series.

    Why should Tweeters have all the fun? "Hatewatch" brings the lovable professional hate watchers from "MST3K" together with YOUR bad shows! Instead of just burning off the remaining episodes, let "Hatewatch" set them on fire! And, it's incredibly inexpensive--you can use the showing rights you've already paid for, and the "MST3K" comments don't need much in the way of production value. Come to think of it, they don't need ANY production value.
  • "Life With the Joneses": A family situation comedy written by everyone who ever wrote for "The X Files," "Twin Peaks" and "Lost".

    What would a conventional family sitcom look like if it was written by the writers of some of the strangest, most elliptical shows ever seen on U.S. television? Pay us to find out!
  • "Detroitia": A fun-loving romp through the twee areas of America's most depressed major city.

    IFC's "Portlandia" has been so successful in communicating Portland's culture that even parts of the city that weren't twee before it went on the air are now twee. "Detroitia" will bring the same lighthearted point of view to Detroit. A male-female couple will visit Detroit's many overpriced, gentrified neighborhoods while trying to avoid arsons, abandoned buildings and physical assault. (What? Detroit doesn't have any overpriced, gentrified neighborhoods? Never mind.)
  • "Reality Island": The heads of reality programming for all the major television and cable networks fight to the death on a desert island.

    Each season, all of the top reality programmers at all the major television and cable networks are sent to an isolated desert island, with only enough food and water to last two weeks (but all the knives, guns and poisons they want.) When the food and water run out, they'll have only their wits and the dead bodies of their companions to live on. Waters around the island will be mined, and anti-aircraft guns will shoot down any helicopters that try to rescue programmers. The winner returns to his or her job; the networks employing the losers have job openings.
If you like any of the ideas, please feel free to use them. Somewhere, Paddy Chayefsky will be laughing.

Sunday, September 28, 2014

Why I'm not racing to buy a Ultra HD TV...yet

Over the last 18 months, there's been an explosion of products for creating and editing 4K video, from cameras and switchers to editing and compositing software. Costs have declined dramatically: A few years ago, there was only a handful of cameras that could do 4K, and they were priced in the mid- to high-five figures. Today there are 4K cinematography-quality cameras priced as low as $2,000, and GoPro is said to be planning to release its 4K HERO 4 sport camera the week of October 5th, probably at a price below $400. (Update, Sept. 29) GoPro announced three new sports cameras today, with prices. The new HERO 4 Black is the 4K/30fps model, and it will sell for $500, not the $400 I estimated. However, it will ship on October 5th.

4K consumer televisions are becoming more common, and again, much less expensive. In late 2012, there were only two 4K televisions for sale in the U.S. market, and they were priced at $20,000 and $25,000 respectively. Today, the average selling price for an Ultra HD TV (the new name for 4K video) in North America is just under $2,000, and 50" Seiki and TCL models can be had from Amazon for under $450. Vizio has just started shipping its P-series Ultra HD TVs, which are claimed to be comparable to more expensive models from the top manufacturers; its 50" model sells for $1.000.

The better models from the first tier TV manufacturers (including Vizio) should have excellent picture quality, refresh rates of 120Hz or more, and a good upscaler that resizes conventional HD video to Ultra HD without distortion. However, independent researchers have found that, at the normal distances that viewers sit when watching their televisions, there's almost no meaningful difference in the perceived quality of a HDTV and Ultra HD picture. This chart explains how it works:

There was a huge jump in quality between analog TVs and even 720p HDTV. If you had a 50" set, you could see the full difference at 10 feet; with 1080p, you saw the full benefit over 720p at about six feet. However, with Ultra HD, you won't even begin to see any improvement over HD until you're about five feet from the TV, and you won't get the full benefit until you're only about 3 1/2 feet away (a little more than a meter.) At that distance, the television picture is filling most of your field of vision. So, I'm not planning to buy any of this generation of Ultra HDTVs. The reason is that there's a new technology not too far down the road that will provide a much more dramatic improvement over conventional HD picture quality than Ultra HD provides by itself.

This new technology is called High Dynamic Range, or HDR. HDR expands the contrast range of television pictures. Imagine that you're outside on a bright sunlit day. You can see well-illuminated objects quite clearly, and you can also see what's in shadow. That's because your eye has a contrast range of about 1,000,000:1 (20 f-stops.) LCD televisions have a much lower contrast ratio--Rtings.com tested a variety of 2014 HDTVs and found that the highest contrast ratio, 5,268:1, was measured on a Toshiba L3400U. Manufacturers like to claim much higher ratios--for example, in its current E-series, Vizio claims a contrast ratio of 500,000:1, but Rtings.com measured it at 4,581:1. Still very good for a current-generation HDTV, but less than 1% of the advertised contrast ratio.

Even video cameras don't have the same contrast range as the human eye. The Arri Alexa XT. one of the most popular cameras for episodic television and high-end movie production, has a 16,384:1 contrast range. However, through HDR technology the contrast range can be extended significantly, to as much as 262,144:1 (18 f-stops.) That's still not as wide as what the eye can see, but it's dramatically better than anything ever seen on consumer television sets. Even plasma TVs, which have a much wider contrast range than LCDs (up to 13,000:1) are nowhere near what HDR can represent.

One of the several companies developing HDR technology for consumer television, Dolby, claims that its Dolby Vision technology will provide a dynamic range of as much as 200,000:1. Other companies developing HDR technology for video include Technicolor, Philips and the BBC. In addition to more dynamic range, Dolby and its competitors are implementing bigger color spaces (simply put, displays built using their systems will be able to display more colors than current televisions.)

One of the big reasons why HDR isn't in the consumer market yet is that existing formats for transmitting video don't support the increased dynamic range and bigger color spaces from the HDR system developers. These formats, if they're used for over-the-air broadcasting, usually have to be approved and standardized by each country's governmental broadcasting authority (the FCC in the U.S., Ofcom in the U.K., etc.) These standardization processes take time, and they take more time when there are multiple vendors competing to set the standard. In the U.S., it took almost five years for the competing companies to agree to work together on one digital television standard, and another five years for manufacturers to begin shipping digital televisions that were compatible with the standard.

Implementation of HDR is likely to be much less painful and take significantly less time than the move from analog standard definition television to digital HD. However, it will take several years, and it's likely that some TV manufacturers will release HDR TV sets using different, incompatible formats. HDR system vendors also have to design their HDR formats so that they're 100% compatible with today's formats, so that HDTVs already in use will simply ignore the HDR portion of the signal. Backward compatibility is never easy to do, and that's why digital HDTV had to be a clean break from the earlier analog SD formats.

So, unless my HDTV dies prematurely, I'm not going to buy an Ultra HD until the television industry settles on a single HDR format, either through government agency decisions or the rise of a de facto standard. There's a huge quality difference between HDTV and Ultra HD with HDR--a difference that you'll clearly see in retail stores and in your living room.

Saturday, September 27, 2014

Hey Kids! Let's Build "The Machine"!

(Updated October 4, 2014) If you follow me on Twitter, you probably know that I'm a rabid fan of CBS's "Person of Interest", a wonderfully-written drama about the dystopia of permanent, continuous surveillence disguised as a "crime of the week" thriller. It has several key human characters, but the character that drives the show isn't human at all--it's a computer, or more correctly, a whole bunch of computers, called "The Machine." The fundamental purpose of The Machine is to identify threats to U.S. national security wherever they may be, so that they can be "neutralized" (and we all know what that means.) Last season, The Machine was displaced, but not eliminated, by another system based on Artificial Intelligence software. This new system, called Samaritan, uses quantum processors that Samaritan's builders, Decima Technologies, stole from the NSA.

This season, POI is focusing on the impact and ethics of AI. Showrunners Jonathan Nolan and Greg Plagerman see AI as potentially having the same magnitude of effect on the world as the atomic bomb, and call AI's development our era's Manhattan Project. I'm not sure that a system like The Machine needs Manhattan Project-scale development in the state-of-the-art of AI in order to fulfill its primary objective.

Here are the key functions that both The Machine and Samaritan perform:
  • Signals Intelligence: Both systems are connected to all of the same sources and feeds as the NSA, CIA, FBI and presumably National Reconissance Office (NRO), Defense Intelligence Agency (DIA) and other U.S. and Five Eyes (U.S. plus Canada, U.K, Australia and New Zealand) country sources. That means that it can get virtually every phone call, email, text, tweet, webpage and app data transfer anywhere in the world. It can geolocate any mobile phone call, and turn the microphones of certain mobile phones on for surreptitious listening, even if the phone itself is turned off.
  • Image Recognition: They can access the images from security cameras around the world, and use those images to recognize peoples' faces. It can also, presumably, categorize the actions in the images and analyze them to determine whether or not they represent threatening behavior.
  • Database: They have massive databases of all the data they've collected, as well as a lot of historical data.
  • Pattern Recognition and Classification: The systems have to be trained, or train themselves, on previous patterns of activity that indicate a threat. So, for example, they would be given every piece of information related to the 9/11 attack: Who the terrorists were, where they came from, where they traveled to, who they met, who they talked to, where they lived, how they trained, etc. Those data would then be analyzed to build a pattern that indicates a terrorist event being planned. That pattern would be modified with new information continuously. Other patterns, based on subsequent terrorist attacks and changes in terrorist behavior, would be identified. Then, as the systems see current activity, they'll try to match it with previous patterns and calculate the probability that what's going on is actually leading up to an attack. Both systems probably also have the ability to learn from previous attacks and make inferences about the activity even if no previous attack is well-matched. If a probable attack is identified, the systems alert human analysts and provide their analysis and underlying data. 
  • Voice Response and Recognition: Both systems have voice response interfaces and accurate voice recognition.
In addition to these functions, both The Machine and Samaritan are what's called in the AI community "Hard AI." Hard AI has the ability to reason and independently solve problems without human intervention. Beyond that, Hard AI is self-aware--conscious, although its form of consciousness may not look or act like human consciousness.

That's a lot for any system to do, so where are we now (at least in developments that the public knows about?):
  • Signals Intelligence: All the databases and sources that I listed above exist. The problem comes in access and coordination. The Five Eyes countries have extensive data sharing systems, but not all of their data are shared with all of the other partners, not all of the data are in online databases, and we can't assume that U.S. intelligence agencies have 100% of the functionality of other Five Eyes intelligence services available to them. For example, a Five Eyes member may have the ability to get geolocation information, caller identity and even the content of a phone call, but it may not have the legal authority to provide all of that information to the U.S. in real time. In addition, non-Five Eyes countries such as Russia and China may have the ability to limit, disrupt or completely block U.S. and Five Eyes access to their signals. That would keep a system like The Machine from getting every signal, everywhere, in real time.
  • Image Recognition: This is the biggest problem for building a Machine-like system today, not because the quality of image (face) recognition is unacceptable (it's getting better every day) but because of the scarcity of networked security cameras. In New York, where POI is shot, you'd say that the last sentence is dead wrong, because there are security cameras everywhere. New York police had real-time access to 6,000 public and private security cameras and 220 license plate cameras last year, and the ACLU reports that Chicago police had access to 22,000 security cameras last year, but it's not clear how many of them offered real-time access.

    When you get beyond those two cities and a handful of others, including London, the number of cameras per 1,000 residents goes down significantly. However, even in the high-camera cities, there are many cameras on private property and in buildings that are not accessible from the Internet, either because they're on a private network or they're not networked at all. Getting images from these cameras requires physical access to the cameras or video recorders. Sometimes, the local police department or FBI has to take the entire video recorder to its facilities in order to copy the video. So, the real-time acquisition of video from every security camera everywhere simply isn't possible today.
  • Database: The initial capacity of the NSA's Bluffdale, UT Data Center has been estimated to be between 3 and 12 exabytes (3 and 12 million terabytes,) and that's just one site. Storage developers are starting to think in terms of zettabytes (1000 exabytes) and even yottabytes (1 million exabytes.)
  • Pattern Recognition and Classification: The world leader in this technology so far (at least the one that we know publicly) is Palantir, which was a spin-off from PayPal's fraud detection team. The company has two publicly-disclosed products: Gotham, which is a data management system for management and analysis of complex datasets containing both structured and unstructured data that can be both quantitative and qualitative. Metropolis is for model-based analysis of structured, quantitative data. Both systems require analyst and Palantir engineer inputs: Gotham requires Palantir engineers to build the model that maps all the data together, and analysts to query the data and develop their own hypotheses and conclusions, while Metropolis requires analysts to create and modify models.

    The functionality of both The Machine and Samaritan is a combination of both Gotham and Metropolis--they can build models that incorporate all types of data, not just quantitative. In addition, they have the ability to build and modify their own models. It's likely that The Machine's creator, Harold Finch (Michael Emerson,) initially trained it before it took over the task of model building and analysis.
  • Voice Response and Recognition: Both voice response and voice recognition are mature but still improving technologies. As an example, the voice recognition in Apple's Siri hasn't been as good as that in Google Now, in large part because Siri does its recognition on the mobile device, while Google does it on its own computers with dramatically more horsepower. 
So, where does that leave us in building an all-knowing, all-seeing AI security system? We've still got a long way to go, but all the pieces are there. Voice and image recognition use both AI and non-AI technologies. There are some image processing systems that can analyze video to identify anomalies and threats. To my knowledge, there are no pattern recognition and classification systems that work on multiple types of data and that build and test models without human intervention, but research on neural network training and optimization methods (backpropgation, for example) is making big strides, fast enough that we may be five years away from a commercially-viable Machine. All of this is with processors using a conventional von Neumann architecture; it doesn't need quantum processors, although they could eventually dramatically speed up parts of the problem best suited to superposition and entanglement.

Also, let me be clear: The resulting system won't be conscious. We don't yet even have a consensus scientific definition of consciousness. This system would be what's called Soft AI: It can solve a specific problem that's it's been programmed to handle, but it's not self-aware. It may be able to analyze data and make decisions about a class of problems, and it may be able to hold a conversation, but beyond that, it will only do other things if it's programmed to do so by its developers. I'd hope that its developers will have seen "War Games" or "Colossus: The Forbin Project" and don't give it the ability to launch ICBMs all by itself.

It doesn't hearten me that the biggest obstacles to building The Machine or Samaritan are time, politics and bureaucracy, not fundamental science, but I can only hope that the benefits to medicine, science, education and engineering outweigh the risks to civil liberties.

Thursday, September 25, 2014

Comcast-Time Warner Cable: Would it really be anti-competitive?

As you probably know, Comcast and Time Warner Cable have agreed to merge. Many consumer groups and some of the companies' content providers and competitors are opposing the merger, while it's hard to find proponents that aren't either getting funding from one of the two companies or are "Astroturf" organizations created to support the merger. However, is the Comcast-TWC merger really anticompetitive? A big part of the answer depends on whether you're looking at the multichannel video services market today, or a few years from now.

If you look at the situation today, whether or not the merger is anticompetitive depends on who you are. If you're another cable company, it's not anticompetitive at all. The reason is that cable operators all have local franchises to be the exclusive cable supplier in the areas they serve. So, Comcast doesn't compete with TWC, which doesn't compete with Cox, which doesn't compete with Charter, etc. The reason for exclusivity is that it was so expensive for a cable operator to lay the wires, put in the plant and equipment, and service customers, that it was uneconomical to do so unless they could serve all the customers in an area without competition.

If you look at Comcast's and TWC's non-cable competitors, the merger is likely to have a modest impact at most. Existing Comcast and TWC customers will still be customers of the merged company, and can switch to a competitor if they want to. It's likely that Comcast will improve TWC's plant and equipment, and improve its cable and Internet services, which would make the combined company a stronger competitor in TWC markets. If you're an existing Comcast or TWC customer, your competitive situation isn't likely to change much, either. The new company will still supply your cable service, most likely your wireline Internet service, and possibly your phone service as well. The same competitors you could switch to will still be there.

However, if you're a program supplier to Comcast and TWC, your situation is likely to change substantially. The reason is that the merged company will have around 30 million subscribers and will be by far the biggest cable and Internet provider in the U.S. (If the AT&T acquisition of DirecTV is approved, that company will have at least as many video subscribers as Comcast-TWC, but DirecTV, which has the lion's share of subscribers, doesn't provide its own Internet service--it resells services from local Internet Service Providers.) The merged company will be the only way for program suppliers (television and cable networks, and movie distributors offering titles for Video on Demand (VOD)) to reach about 1/3rd of all U.S. households. That will give the new company enormous power to negotiate preferential licensing and retransmission fees, and will also give it additional power to negotiate non-fee terms and conditions, such as limitations on content providers' ability to license their content to other service providers. In addition, given that Comcast owns NBC Universal, it can give preferential treatment to NBCs broadcast and cable networks and Universal's movies and television shows similar treatment in its VOD systems, which would put other content providers at a competitive disadvantage.

If you're an Internet content provider, such as Netflix, the merged company will be by far the biggest single provider of ISP services to your customers in the U.S. There's strong evidence that Comcast was throttling the bandwidth available to Netflix subscribers until Netflix agreed to pay for a peering agreement with Comcast. The combined company would have even more power to extract payments from Internet companies.

That's today's situation, but what about tomorrow? Netflix is a nationwide (now also international) service; it can reach everyone in the U.S. who has either wired or wireless high-speed Internet access. Roku, Apple, Sony and others sell set-top boxes and devices that offer similar access to video over the Internet. Verizon, which has long operated its FiOS IPTV service which offers a cable-like video service and high-speed Internet, recently acquired Intel's OnCue Over-The-Top (OTT) Internet video platform. Verizon is expected to use OnCue as the basis of a nationwide video service that will operate over its wireless network, and possibly over the Internet as well. That would give Verizon a nationwide footprint, and would enable it to offer video services in almost every U.S. market. Sony and Dish are also rumored to be in the planning stages for a similar Internet service. Intel's attempt to launch OnCue was stymied by pressure from the cable industry to prevent its program suppliers from licensing their content to Intel, and the same pressure is suspected as the reason why Apple has not yet launched its long-rumored HDTV and video service.

What happens if OTT service and program suppliers find a way to launch viable services that can compete with cable? The video services market could change radically. Instead of today's three or four competitors (the incumbent cable operator, DirecTV, Dish, and depending on where you live, either Verizon or AT&T,) there could be many more:
  • T-Mobile and Sprint could use their networks to deliver video to households.
  • I've written that there's evidence that Netflix is planning to offer live programming in addition to its VOD offerings; they could expand into a full cable competitor.
  • Sony and Apple could offer their own services.
  • The existing cable operators could directly compete with each other for subscribers using OTT.
With the exception of Verizon, Sprint, T-Mobile and (if it doesn't acquire DirecTV,) AT&T, all of the other new competitors will have to go through telco ISPs or cable operators in order to get to consumers' homes. If cable operators set prices and/or terms & conditions that make servicing their customers with OTT video unprofitable or too complex, these new competitors could be killed in the womb. That's why I suggest that regulators set and enforce two conditions on both the Comcast-TWC and AT&T-DirecTV deals:
  1. Both combined companies must offer all OTT services access to their Internet networks and subscribers under fair, reasonable and non-discriminatory (FRAND) terms.
  2. Both combined companies must remove all clauses in their contracts with program suppliers that prohibit them from licensing their content to competitors, or that place significant restrictions on such licenses. In addition, they're prohibited from signing contracts with any such clauses in the future, and from using their influence and market power to informally persuade program suppliers not to deal with competitors.
Both conditions would last for five years from the day that each combined company finalizes its merger and begins operating as a single company. That would give competitors enough time to build their market presence and establish viable businesses, and also give the telecom industry five years to develop new ways for the OTT services to reach consumers without having to go through the incumbent cable operators.

Monday, September 22, 2014

What to do about the NFL?

Last Saturday, I wrote about the ever-widening Ray Rice scandal and how the NFL's handling of that and other domestic violence cases is very similar to how the League covered up for years the long-term damage done by traumatic brain injuries. Today, both Baltimore Ravens owner Steve Bisciotti and head coach John Harbaugh issued statements denying some of the allegations of ESPN's "Outside the Lines" report. One of the two reporters on the story, Don Van Natta, Jr., a multiple Pulitzer Prize winner, said that he and ESPN stand by the story. Van Natta is expected to file a written response to the Ravens' denials soon.

In his public comments, Bisciotti claimed that the source for the ESPN story was Ray Rice and his associates. However, Van Natta claims that he and reporter Kevin Van Valkenburg interviewed more than 20 sources over 11 days. Given the level of detail in the ESPN report, it's inconceivable that the network would have run the story without independent confirmation. Rice and his associates had to be considered biased sources, so running their claims without independent confirmation would have been foolhardy (except for those situations where Rice was the only one in a meeting who was willing to comment on it, such as the closed-door meeting between Ray and Janay Rice and NFL Commissioner Roger Goodell.)

If the ESPN report is all, or even just substantially true, serious reform needs to happen within the NFL, the Baltimore Ravens, and possibly, even in the Baltimore City and County State Attorneys' offices. Here are some practical steps that can be taken:

  • Commissioner Roger Goodell and the entire senior staff of the NFL should be fired, and replaced with a new Commissioner with a) An impeccable reputation, and b) No current personal or professional connection with any NFL team owner. That Commissioner will then appoint the remaining members of the League's top management.
  • In an article published today, "New Yorker" staff writer Ben McGrath noted that the NFL is classified as a "nonprofit trade organization" by the IRS--A nonprofit that pays its Commissioner $44 million a year, and that pays its top leadership a significant fraction of the total annual payroll for all the players in the NFL. The IRS should strip the NFL of its nonprofit status, and if the IRS is unwilling or unable to do so, the U.S. Congress should step in and do it.
  • The Baltimore State's Attorneys who gave Ray Rice permission to enter a no-jail diversion program usually used for non-violent drug cases, Ravens owner Steve Biscotti and other team executives should be investigated for obstruction of justice, bribery and influence peddling. If Maryland Attorney General Doug Gansler is unwilling to take the case or unable to do so because of a conflict of interest, Maryland Governor Martin O'Malley should appoint an independent prosecutor.
These are practical steps that the League, the IRS and Maryland's top law enforcers should take to reform the NFL and find out, to the satisfaction of a judge and jury, who actually participated in the decision to give Ray Rice a slap on the wrist for beating his (soon to be) wife. The NFL and its team owners may hope that by spreading enough cash around and letting things stretch out, the entire affair will eventually blow over. Everything eventually blows over--the question is, "What will be left standing when the wind dies down?"

Saturday, September 20, 2014

Football: Boxing with more clothes

I've been following the Ray Rice domestic abuse scandal, and ESPN's "Outside the Lines" unit released a damning story on Friday that details a cover-up by top executives and the team owner of the Baltimore Ravens, and NFL Commissioner Roger Goodell's efforts to avoid seeing the video of Rice hitting his girlfriend (now wife) in the elevator. By the time Goodell met with Rice and now-wife Janay, Baltimore executives believed (or in their words, "assumed") that Goodell had seen the video. Based on that belief or assumption, Rice truthfully told Goodell that he hit and knocked out Janay. My belief is that whether or not Goodell saw the tape, he had enough evidence from Rice's own confession to give him a lifetime suspension.

The abysmal way that the NFL handled the Rice case and other cases of domestic violence is of a piece with how the league handled the impact of brain concussions. For years, the NFL minimized the effect of brain injuries on its players, even as evidence of long-term personality and cognitive changes was piling up, and players with traumatic brain injuries were committing suicide. The doctor who found evidence of chronic traumatic encephalopathy (CTE) in the brain of deceased former Steelers center Mike Webster was libeled and slandered by the NFL, with the intention of destroying his credibility. The doctor that the NFL appointed to head its own research into traumatic brain injuries was a rhematologist and a physician for the New York Jets with no training in or experience with brain injuries. The researchers under that doctor then proceeded to release 16 studies that claimed that there were no chronic brain injuries that were caused by playing football, and that it was even fine to allow a player who had received a concussion to continue playing in that same game once he'd recovered.

Earlier this year, the NFL settled a lawsuit filed by more than 4,500 former players who claimed that they had suffered long-term damages from concussions they'd received while playing. The NFL set up a $675 million or more fund to pay compensation to injured players, $75 million for baseline testing and $10 million for research and education. However, the NFL was able to avoid having to pay anything to players with neurobehavioral problems unless they can also prove that they have cognitive impairments.

All of this brings me to an inescapable conclusion: The NFL isn't interested in the welfare of its players, nor is it interested in the welfare of its players' families or significant others. Its sole concern is the maintenance and improvement of the financial interests of team owners. My headline made a comparison with boxing. Boxers, like football players, often suffer severe physical injuries, the most visible of which involve the head and brain. Boxers, like football players, have a reputation for violence, both inside and outside their sport. Top boxers, like football players, are paid a lot of money. The fight promoters who stage boxing matches are seen as largely venal people who care only about money and who care about the boxers' welfare only because their fights have to be licensed by a state boxing commission. Boxing has a terrible reputation, but the damage caused by boxing has never been a secret; the term "punch-drunk," defined by Merriam-Webster as "Suffering cerebral injury typically marked by mental confusion, incoordination, and slurred speech and usually resulting from minute brain hemorrhages caused by repeated head blows in boxing," was first used in 1918. Some of the best books and movies about boxing have used the symptoms of CTE in descriptions of boxers' behavior and personalities.

It's become clear to me that under the NFL, football is boxing with more clothes, and team owners are fight promoters with more money. Would you trust that an investigation of a group of boxing promoters being led by two boxing promoters who are part of the group, and being overseen by a former government employee who's being paid by the group of boxing promoters, would be impartial and comprehensive? I doubt it. That's why I have so little trust in the self-examination of the NFL's handling of Ray Rice by two team owners and Robert Mueller.

Update, September 21: The two team owners who are running the investigation of the NFL's handling of the Ray Rice case are John Mara of the New York Giants and Art Rooney II of the Pittsburgh Steelers. Ben Roethlisberger, the Steelers' quarterback, has been accused of sexual assaults twice: In 2008, a former casino host at the Lake Tahoe Harrahs claimed that she had been raped by Roethlisberger. That case was settled out of court with a gag order on both the plaintiff and defendant. Another charge of sexual assault was lodged in March 2010, this time by a student in Georgia. No charges were filed, but the NFL suspended Roethlisberger for six games. However, the suspension was lifted after four games.

Roethlisberger works for Rooney. So far as we know, the Steelers took no action against Roethlisberger as a result of either charge. Mara and Rooney are related by marriage (that's where the actress Rooney Mara gets her name.) Given the Steelers' acceptance of Ben Roethlisberger's behavior, the relationship between Rooney and Mara, and both of their complicity with years of NFL behavior, can we really put any trust into their investigation?

Monday, September 15, 2014

With the FS7, Sony finally learns to cannibalize itself

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

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

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

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

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

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

Saturday, September 13, 2014

Sometimes risk is the safer option

This is a blog post that I'd much prefer not having to write, but I've learned some lessons that could be very helpful to others. I'll first describe what I did, and then, what I should have done.

In late January of this year, I ended a multi-year consulting project. Much of my role in the project was done in the fall of 2013, and to be fair, I was expecting my client to end my contract as early as October. They were a great client to work with, but I had been thinking about what my next move would be for more than a year. I worked almost my entire career on the West Coast, and I really wanted to get back there if I could. Given the cost of living in Silicon Valley, I decided to look at Portland as the place to move; I started my career working for HP in Corvallis, Oregon, 90 miles south of Portland.

When my project ended in January, I had a lot of money set aside to pay income taxes; more than enough to pay for the move and several months of rent and utilities. However, I decided that it would be very risky for me to pick up and move to Portland without having a job lined up. In addition, I was convinced that I could find a new job or project in the Chicago area within a month or two. So, I stayed here, applied to jobs and took calls from recruiters. Unfortunately, from February to today, I've had exactly one job opening that resulted in onsite interviews, and the client ended up hiring none of the candidates, including me. I burned through the tax money to the point that it was insufficient to pay for a move, so I was stuck here. I ended up selling some of my belongings, and then my car, in a last-ditch attempt to move, but that fell through.

Now, I've got three job prospects, two in the Chicago area and one on the West Coast, and I'm hoping that one of them turns into a real job. I've also been working on a crowdfunded Internet of Things project since May. However, in hindsight, when my project ended in late January, I should have immediately booked a flight to Portland to find an apartment, and then moved. Moving without a firm job offer or contract in hand seemed like the much riskier option at the time, but in reality it would have been no worse than the situation I'm in right now. In fact, given that Portland has a far superior public transit system than the far northwest suburb of Chicago in which I live, it would have been better because there's an excellent chance that I could have sold my car if I'd needed to without having to buy a replacement.

The lesson is that you should look at the worst-case scenario for all the options available to you, not just what you believe to be the most likely scenario. In my case, I compared the worst-case for Portland with the most likely case for Chicago. If I had compared the worst-case for both locations, I would have moved immediately. Given my background and experience, I have a much better fit with the companies and markets along the West Coast than I do with Chicago. I could have lived in Portland and either worked full-time for a technology company there or consulted for firms from Seattle to San Diego.

Staying in Chicago, which I believed to be less risky, turned out to be the much riskier option. I made the mistake because I didn't judge both risks equally. Keep that in mind when you're making a major business or personal decision.

Friday, September 12, 2014

Detroit, Pittsburgh, and the value of diversification

I just watched Anthony Bourdain's visit to Detroit for his show "Parts Unknown." Bourdain showed plenty of what's come to be known as "Ruin Porn": Abandoned, burned-out buildings and entire neighborhoods that have been leveled. He also found signs of hope and recovery, although he made it clear that he doesn't believe that Detroit will come back to anything resembling its previous form. Government corruption played a massive part in the decline of the city, but there was another factor that was far more important in leading Detroit to where it is now: An almost complete dependence on the automobile industry for the city's and region's economy.

My hometown is Beaver Falls, PA, thirty miles from downtown Pittsburgh. I went to school and college in the Pittsburgh area. When I was growing up, steel was the sole major industry in Beaver Falls and most of Beaver County. There was a Valvoline refinery in Freedom, along the Ohio River, and the world's first commercial nuclear reactor was running in Shippingport, also on the Ohio, but beyond that there was steel and steel fabrication. Pittsburgh was long known as "Steel City," and the headquarters of both U.S. Steel and the United Steelworkers Union are still there. However, Pittsburgh was almost never wholly dependent on steel. It also was the corporate center for coal; coke, made from coal, is an essential part of steelmaking, but coal was at one time used for heating and steam engines, and is still a critically-important (although rapidly declining) fuel for power generation. CONSOL Energy, one of the country's biggest suppliers of coal and natural gas, is headquartered in the city.

Alcoa (Aluminum Corporation of America,) the largest producer of aluminum in the U.S., recently moved its corporate headquarters to New York but has kept its operational headquarters in Pittsburgh. Like Alcoa, Bayer, the German chemical and pharmaceutical giant, had its U.S. headquarters in Pittsburgh until a couple of years ago, but it still maintains major operations in Pittsburgh. PPG Industries, one of the largest suppliers of paints, coatings and glass in the U.S., is headquartered in a landmark building in Pittsburgh. The city was the home of Westinghouse Electric and is still the home of Westinghouse Air Brake, both companies founded by George Westinghouse. Westinghouse Electric is now reduced to its nuclear plant division, majority owned by my old employer Toshiba, and a trademark licensed to a variety of companies by CBS. However, for decades, Westinghouse was General Electric's biggest competitor and one of the biggest makers of televisions, radios, major appliances and industrial electrical equipment, along with power plants of all types. It also owned the world's first (or second, depending on your opinion) commercial radio station, KDKA, which led to Westinghouse Broadcasting, one of the biggest non-network-owned radio and television station operators in the U.S. As one of its last acts, Westinghouse Electric acquired CBS and took the CBS name, which is why CBS licenses the Westinghouse name to others. Westinghouse Air Brake, now known as Wabtec, is still alive and well and headquartered in the Pittsburgh area.

Pittsburgh was and still is the home of H.J. Heinz. Many people in Great Britain think that Heinz is a British company because it sells so many products there, but it's from Pittsburgh. Rockwell International, now known as Rockwell Automation and Rockwell Collins, was based in Pittsburgh until 1988, and was at one time #27 on the Fortune 500. Candy maker D.L. Clark, maker of Clark and Zagnut bars, was based in Pittsburgh until 1999. It's also the home of PNC Financial, previously Pittsburgh National Bank, one of the biggest banks in the U.S., the University of Pittsburgh Medical Center (UPMC), one of the top transplantation centers in the world, and Carnegie Mellon University, one of the top 10 engineering schools in the U.S. Carnegie Mellon, in turn, has attracted Apple, Bosch, Disney, Google, Microsoft, Oracle, Seagate and Yahoo! to open R&D centers in and around the city.

My point is that Pittsburgh had, and still has, a very diverse economy. When the U.S. steel industry collapsed in the early 1980s, Pittsburgh was hard hit. Every steel mill in the city closed, but the city survived because it had so many other industries to fall back on. Today, the steel mills have been torn down, converted into parks or repurposed as offices and retail space. Other towns around Pittsburgh weren't so lucky. My hometown, and the other towns that were almost totally dependent on steel, were decimated. What were once thriving downtowns are now mostly ghost towns, perhaps not as bad as you'd see in Detroit, but close. Detroit was much like Beaver Falls, on a vastly bigger scale: Just about every business made cars, made parts for cars or sold goods and services to the people making cars and car parts. When the car industry collapsed, there was nothing else big enough in the Detroit economy to compensate.

I've read pundits who say that there should be dozens of Silicon Valleys around the world, each focusing on a single technology or industry. Silicon Valley, however, has a diverse economy--semiconductors, computers, instruments, software, online services, consumer electronics, video games, pharmaceuticals, health care, and automobiles (previously GM, Ford and Toyota, now Tesla.) The Valley is in a constant state of reinvention, because it has such a diverse set of businesses and skills. A "Silicon Valley" focusing on a single technology or industry will be as vulnerable as Detroit was.

If Detroit is ever to recover even a part of its former glory, it has to make attracting and keeping a diverse set of industries its top priority, after reliably providing public services to its citizens. Diversification is the right formula for any city or region that wants to maintain its economic viability for generations.

Wednesday, September 10, 2014

When is a watch not a watch?

Apple's announcements yesterday were guaranteed to stimulate feedback from pundits everywhere, myself included. The Apple Watch introduction has generated a lot of interesting feedback, both because it's a new product and category for Apple, and because it's competing in an established market. A few writers have speculated that the Apple Watch spells doom for high-end watch brands such as Rolex, Omega and TAG Heuer. I don't think it does, because the Apple Watch competes in a completely different market than the high-end watches.

Comparing the Apple Watch to, say, a TAG Heuer Carrera Calibre 16 chronograph, is like comparing a Honda Odyssey minivan to a Lamborghini Huracan, or like comparing a food processor and microwave oven with a gourmet kitchen. Neither one is a great analogy, to be sure, but both get the point across. People will buy the Apple Watch, as they buy other smartwatches, to be an extension of their smartphones. Timekeeping is just one of many functions that they expect a smartwatch to perform. Buyers of the Calibre 16, on the other hand, are buying the watch for two reasons: 1) To keep time, and 2) To demonstrate their taste (and that they can afford a Calibre 16.) The TAG Heuer watch, which is relatively inexpensive for a high-end watch, is priced at $4,950. It's a mechanical watch with a Swiss made movement that can run up to 42 hours without rewinding.

Everyone in the watch industry knows that electronic movements are more accurate, more convenient and less expensive than mechanical movements. In fact, the widespread introduction of quartz movements by Seiko and Citizen decimated the mechanical watch industry in the 1970s and 1980s. The mechanical watch makers that survived did so by making their watches more sophisticated and more expensive. Their watches evolved from functional timepieces into collector's items and works of art. Someone who buys an A. Lange & Sohne Tourbillion Perpetual Calendar Handwerkskunst for $357,700 (that's not a misprint) is willing to trade off the inconvenience of winding for the chance to own a gorgeous watch that only a handful of people in the world can afford or appreciate. The Apple Watch, on the other hand, will be an heirloom to be enjoyed until the Apple Watch 2 comes out in a year or two.

The Apple Watch, and all the other smartwatches out there, are gadgets and compete with other gadgets for consumers' dollars. High-end mechanical watches compete in a completely different category. That's not to say that I'd be surprised if Rolex, Omega or Tissot releases their own smartwatch to participate in the category, but it's still not going to compete with their high-end mechanical watches--it will be for people who find the Apple name on their smartwatch to be too pedestrian.

Tuesday, September 09, 2014

Apple gets its mojo back...for now

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

iPhone 6

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

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

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

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

Apple Watch

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

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

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

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