Wanna buy TV Guide for $1?

Wanna buy TV Guide for $1? Not a copy of the magazine at the newsstand, the ENTIRE MAGAZINE? According to Multichannel News, that's what OpenGate Capital just did, and Macrovision, the company that owned the magazine, gave OpenGate a $9.5 million loan at 3% interest to take it off its hands. Macrovision got the magazine when it purchased Gemstar-TV Guide International earlier this year for around $2.8 billion, and it's no secret that they've been shopping the magazine to buyers ever since. Circulation has dropped from around 20 million in the 1970s to 3.2 million today, and the magazine is bleeding cash--it's expected to lose from $20 to $23 million this year, and lost at least than much for the last two years.

Even with the losses, I find it hard to believe that another publisher couldn't have integrated TV Guide with its operations and saved a lot of money. The problem could have been TV Guide's publishing model, where they do a unique edition for every television market, combined with national editorial content. Unfortunately, this is probably the beginning of the end of the magazine.

Apple: Good news, bad news and no news

Apple announced its updated MacBooks and MacBook Pros yesterday. Here's my take on the announcements:

• No news: With very few exceptions, everything that Apple announced yesterday had already been leaked in detail. There was a time when Apple could keep secrets. No more.
  
  
• Bad news: Even with the LED backlit displays, multitouch-enabled touchpads without mouse buttons and cases carved out of a single block of aluminum, there was little in yesterday's announcement to generate excitement. Despite switching to Nvidia chip sets and graphics controllers, the performance of the MacBooks and MacBook Pros still lags behind that of comparably priced notebooks from other manufacturers.
   
• Good news: Steve Jobs shared the stage with COO Tim Cook and head of design Jonathan Ive. As I wrote about earlier this month, one way for Apple to avoid manipulation of its stock price through rumors about Steve Jobs's health is to demonstrate that it has a strong management team. The company is starting to do that.

One has to be concerned about the direction that Apple's new product development is taking. There's a real sense of incremental improvement in the iPhone, iPods and now the MacBooks. The last earth-shaking announcement was the original iPhone, which feels like it occurred decades ago. I hope that we'll see something really new, not just improved, soon.

Identifying the survivors

With the recession in full force, and warnings from multiple venture capitalists to their investments to "batten down the hatches," it's probably time to start think about which Internet companies will survive and which won't. The dot-com collapse left us with a few world-class survivors: Amazon.com, eBay, Google and Yahoo! (I'm focusing on U.S. companies, but there obviously are others, such as Baidu in China.) In the worst case, who would emerge as leaders after a Web 2.0 collapse?

Right now, there are only two that I'd be willing to put good money on: Facebook and MySpace (MySpace is of course part of News Corporation, but I'm looking at them as an independent entity in this case.) Some of the specialty social media networks, such as LinkedIn, are likely to survive through acquisition. The online video space is already turning into a boulevard of broken dreams, as it did in the original bubble. Sites that are already affiliated with an "old media" company will probably make it through, because they have strong capital bases for support, but most standalone sites are dead meat. The costs of streaming bandwidth compared to available advertising revenues are simply too high. Some of the independent blog networks will also make it, because they've always made do with limited capital, and their costs are so low. In short, anything not named Google that's dependent on advertising revenues and isn't already profitable or at least cash-flow positive will be hanging on by its fingernails, if it hangs on at all.

There will also be the e-commerce segment leaders, such as Zappos, that will probably make it, but they're going to have to survive in a market with consumers who spend less and have less credit. There are lots and lots of infrastructure services out there--far too many for the market to support, and most of them will go away.

I'll stop at this point--any suggestions on sites that I missed?

I'm looking for work!

You may have noticed an increase in the frequency of my blog posts recently. That's because I'm looking for work. The jobs that I have many years of experience in are:

• Product Management
• Product Marketing
• Market Research/Industry Analysis
• Writing and Editing

Full-time, part-time, permanent or contract are all fine with me.  I'm located in Silicon Valley, so jobs there are preferred (especially if they're part-time and/or contract). I'd relocate for the right full-time permanent position.

If you've got a job, if you know someone who has a job, or if your last name is Job (or Jobs), let me know! Email me at lfeldman@feldmanfile.com. You can see my LinkedIn profile at http://www.linkedin.com/in/lenfeldman, and download my full resume at http://tinyurl.com/5wa3pd.

Spam free, as free as the wind blows...

Those of you who visited my other blog "Feldman Off Topic" last week may have noticed a warning from Google: "Danger Will Robinson! Hormel canned meat products ahead! Proceed at your own risk!". Well, an actual human being read the blog and decided that it's spam-free, so it's back in all of its poorly-written glory.

WiMax: A little too late?

Sprint officially launched its WiMax high-speed wireless service on October 8th, and now the notebooks with built-in WiMax are streaming out from Acer and Toshiba. WiMax is significantly faster than 3G networks, but for now, it's only available in Baltimore, and Sprint plans to roll it out in seven more cities in the next six months. The problem is that Sprint is bleeding money, and even though Intel, Google, Comcast, Time Warner Cable and Bright House Networks have committed to invest $3.2 billion in the business to be created by the merger of Sprint's XOHM WiMax business with Clearwire, those companies may not go through with their investments given the state of the U.S. economy.

WiMax, with real-world download speeds of 2 to 4Mb/second, is only an appetizer on the way to true 4G service, which will provide speeds upwards of 100Mb/second. Those 4G services will probably not start rolling out until 2012 at the earliest. However, if the current recession delays widespread deployment of WiMax to 2010 or later, WiMax may prove to be only a transitional technology, much as Sprint's earlier wireless broadband service couldn't survive once cable and telephone companies built out their networks.

Eyespot joins the deadpool

I received the following email this afternoon:

We deeply regret to inform you that Eyespot Corporation will no longer be able to continue serving you.

For our users at eyespot.com, we're no longer allowing you to upload new videos. You can retrieve your uploaded video and mixes by going to your mymedia gallery and clicking the download link below the video thumbnail. 

For our business customers in the eyespot video network, your site will continue operate unaffected for a limited period of time. We encourage you to migrate your video solution to one of our competing providers in the video mixing (e.g. http://corp.kaltura.com/) and video publishing space (e.g. http://www.fliqz.com/) immediately. We'll soon be providing you with the means of downloading your community videos from within your dashboard at http://eyespot.com/partnerDashboard].

We have spent three years providing over a hundred thousand of you with a unique video experience. We believed that by putting creative tools and rights-cleared media into the hands of influencers and connectors, Eyespot would enable social media and participation culture like no other company. 

After playing over two hundred million of your video creations, we have to stop. After assembling possibly the most potent team in digital media ever, we're now moving on.

Thank you all for being apart of our community over the past three years.

Jim Kaskade 
President & CEO

Eyespot.com followed the tried-and-true path of first targeting consumers, and when that didn't work, shifting focus to businesses. That didn't work either, so now they're going out of business, and I fear that many others will follow. It's overwhelmingly hard to monetize video on the Internet, and only a handful of sites have the traffic necessary to attract advertisers. In Eyespot's case, according to their email, they claimed just over 100,000 unique users over three years--not enough to make the business attractive to either advertisers or investors.

I hate to see any business fail, and I wish the management and employees of Eyespot well. This is a terrible time to be out of work. I'm afraid that many, many others are going to follow them into unemployment.

UPDATE, October 12, 2008: According to an email that I received last night, Eyespot's service will shut down for good at midnight on October 15th. According to the email, users must retrieve any content that they've uploaded to Eyespot's servers before then, or it will be lost.

Where have all the subscribers gone?

Cable operators in the U.S. have been experiencing subscriber losses for the past year or so--nothing terrible, but enough to raise eyebrows. Satellite providers haven't done much better: Dish is losing subscribers, and DirecTV is barely holding even. Verizon and AT&T entered the market about two years ago with FiOS and U-Verse respectively, but their gains don't completely explain the losses from other service providers. And, as I discussed in a previous post, AT&T is literally giving away money to get people to try U-Verse, so its rate of market growth must have tapered down to almost nothing. So, what's really happening?

I've got to admit that I don't know; all I can do is speculate. Television viewing in general is declining, as people find more and more things to do with their time. The increase of video content on the Internet can substitute for programming available on television. DVDs provide an evening of entertainment for as little as a dollar. Video services in the U.S. are relatively expensive relative to many other countries, including most of Europe and Asia. For cash-strapped families, premium packages are simply too expensive for the value they offer.

With all of the other options available, are the video services becoming luxury items rather than necessities? I think that they're becoming just that for many people. The switch to digital broadcasting might actually accelerate the change, if broadcasters aggressively program their subchannels and insure a good signal throughout their coverage areas. I expect to see cable, satellite and IPTV operators all lower their prices significantly, although it might require subscribers to call in order to find out about the better deals. In fact, it could start looking like the long distance telephone market several years ago, when subscribers played one company against the other in order to get the best rates.

Eric Schmidt: The Internet is a "cesspool"

Image by Eric Schmidt / Google
via CrunchBaseAccording to this article from Advertising Age, at a meeting with magazine executives yesterday at the Googleplex, "The internet is fast becoming a "cesspool" where false information thrives, Google CEO Eric Schmidt said yesterday." Schmidt's solution is to bring more magazines and other old media sources onto the Internet, where their trusted editors can make the decisions on what is right and wrong, and on what information Internet users are entitled to get.

Schmidt's words might have gone down well with the magazine publishers in the audience, but it runs counter to the Internet serving as a forum for the expression of information and ideas, and it trivializes the ability of Internet users to tell fact from fiction. (And, as anyone who followed the false Steve Jobs heart attack story last week knows, it was CNN that gave the story legs and helped it to do so much damage.)

It is, in fact, this "cesspool" that makes so much money for Google. It's the blogs, websites and email that Google places its AdSense text, banner and video ads on. It's the millions of videos uploaded to YouTube that Google sells advertising against. So what, exactly, is Eric Schmidt saying?

If he wants to put his money where his mouth is, here's what he should do:

• Drop all AdSense ads from Blogger (the posts there might be incorrect.)
• Screen all websites getting AdSense or DoubleClick ads on a regular basis for accuracy, and drop those whose content is deemed to be insufficient of Mr. Schmidt's standards.
• Screen all YouTube postings for accuracy, good taste, and whatever Mr. Schmidt seems to feel is wrong, and delete those found wanting. Better yet, why not save money and shut down Blogger and YouTube altogether?
• Stop putting ads in Gmail (the contents of the mail might be inaccurate or offensive.)

Schmidt can't do these things because his advertising revenue would drop by half overnight. Google makes most of its money by selling search ads against, hosting and delivering the contents of that cesspool.

AT&T's latest tactic for U-Verse: Free money!

AT&T is willing to buy U-Verse subscribers, at $200 a pop. Here's the deal, according to xchange Magazine: Sign up for a mid- or high-tier IPTV service package (starting at $59/month), keep it for at least a month, and get back $200. The most expensive of the three packages starts at $119/month, and in all three packages covered by this plan, subscribers get three set-top boxes, including one DVR, and additional set-top boxes are $5/month. Subscribers don't need to commit to any long-term contracts, or to bundles with phone or high-speed Internet. The program ends on January 31, 2009.

In other words, if you sign up for the lowest tier of service covered under this plan, you get a month of free service and $140 in your wallet. I don't think that AT&T expects everyone to throw out their current cable or satellite service in order to get the $200, but at least for a significant number of users, the $200 will cover their cable or satellite bills while they try AT&T's U-Verse service. Their hope is that a lot of those users will be sold on U-Verse, and will then drop their incumbent video service.

Given my suspicious nature, I've got to wonder why AT&T is offering this fairly incredible deal. I don't track subscriber counts anymore, but AT&T's subscriber growth must be slowing down dramatically. This plan will be an excellent way to boost the company's subscriber count by the end of the year. How many of those new subscribers will stick around after their first month is anyone's guess.

I can't see any of the major cable or satellite providers matching AT&T's deal, and I'm not sure that they have to. Comcast has for some time been running an unpublicized "hold at any cost" program to keep its subscribers from defecting to competitors, offering no-cost upgrades and free service. In the markets where Comcast and AT&T compete, I'd expect them to offer free service to those customers who ask to cancel in the face of AT&T's deal--"Keep your Comcast service for the next two months for free, and compare it with your AT&T service; we think that you'll prefer Comcast." Other operators are likely to do the same thing. The result will be lots of double-counted subscribers, but no one will really know how effective AT&T's promotion will be until well into next year, when we see how many of the subscribers bought by AT&T stay with them when the money runs out.

Stupidity through obscurity

Yes, I'm angry that Google has decided to block "Feldman Off Topic" by declaring it a "spam blog", when it's no such thing. I'm also angry that Google will neither explain why a blog has been categorized as spam, nor explain what to do to keep a blog from being so characterized. It's a lot like Google's vaunted PageRank algorithm: "We won't tell you how it works, in order to keep people from gaming the system, but trust us."

There's a term, "security through obscurity", that means that something is deemed to be secure either because its algorithms are themselves secret, or the product is so unpopular that no one would even bother breaking it. When these "obscure" security techniques do get exposed to critical examination, it's often found that they're not secure at all, and the primary purpose of "obscuring" them was to keep people from finding out just how badly they had been designed. I have a suspicion that Google's "spam blog" detector falls into this category.

Google seems to like open source and transparency when it suits them, and is all for obscurity when it doesn't.

Google has blocked my new blog

I've been notified that Google has blocked my new blog, "Feldman Off Topic", because its computers think that it's a spam blog. Regular readers of this blog will remember that Google also flagged this blog as spam, even though it had been in operation for more than three years and had been approved for AdSense long ago. It took three tries and more than two months to get Google to even review this blog manually, which they eventually did, and concluded that it contains no spam.

Now, Google has upped the stakes. They have locked Feldman Off Topic from public viewing, and I'm unable to post anything to the blog, even for future viewing when (or if) a human actually reads it. The company claims that it's their systems, using "fuzzy" logic (not the real fuzzy logic, just unexplainable rules) that make the decisions. Any traffic that might have been coming to that blog is shot, and possibly lost for good.

It would make much more sense for the company to make the initial process of creating a blog more rigorous, and to put more of an upfront review process in place, than to let people create blogs and then block them, willy-nilly, for no reason that the company can (or is willing to) explain. The only reason that it makes sense to have blogs in Blogger at this point is that it gets their postings better rankings in Google Search. Google denies that as well, but the results speak for themselves. Blogger's features and capabilities have long been trailing those of WordPress, Movable Type, TypePad and other platforms.

So, I stick with Blogger simply to get more eyeballs. That's a very big reason, but not the only reason, to use a blogging platform. When will someone at Google figure out that its blog spam detection algorithms suck?

Kindle, Meet Kindle 2

Image via CrunchBaseThe Boy Genius Report strikes again, and comes up with a trove of photos of Amazon's still-unannounced Kindle 2. I'll let you go over to their report for the details, but it certainly has a cleaner design than the original model. The basic functionality of the original Kindle appears to be intact (it still has an EV-DO modem), but the SD card slot for expansion memory is gone.

I continue to have a number of problems with the current generation of e-readers, the new Kindle 2 included. First, it's essential that they be open to as many document formats as possible, so that as many publishers as possible can access them. Second, they've got to support many different methods for loading content, including USB, WiFi and Bluetooth at a minimum. 2G and 3G wireless modems are fine, but they should be an add-on, and support for multiple carriers should be available. With Bluetooth compatibility, most modern mobile phones can serve as a wireless modem for the e-reader.

There are two other things that I'd really like to see, but that await future technology. The first is a full 8 1/2" by 11" or A4 display, and the second is full color. The fundamental premise of most e-readers is that books are the only things that people want to read, hence a large screen size and color are unnecessary. I would love to have an e-reader that can show me a full, readable magazine page at a time. I'd be willing to compromise color for size. The Plastic Logic e-reader addresses most of my concerns (except color), but I'm withholding judgment until it goes into production.

Is Best Buy becoming the place to get mobile phones?

In mid-August, Best Buy and Apple announced that Best Buy would sell the 3G iPhone, starting September 7th. Now, The Boy Genius Report says that Best Buy will also get the Palm Treo Pro, RIM BlackBerry Pearl Flip 8220 and T-Mobile G1. Last May, Best Buy invested more than $2 billion to buy 50% of the Carphone Warehouse, the biggest seller of mobile phones in Europe. Go to any High Street (shopping area) in the UK, and you'll see one or more Carphone Warehouse stores there. They compete successfully with mobile operator-owned stores across Europe. Best Buy is tapping into the merchandising knowledge of Carphone Warehouse (with which it has had a joint marketing venture since 2006) to expand its mobile presence in the U.S., and it seems to be succeeding in its goal to become the place to go for hot new phones.

Another ridiculous Apple rumor, and how to stop them

Today, someone spread a rumor that Steve Jobs had a heart attack, and the price of Apple's stock briefly tanked until the company made a statement that Jobs is fine. Spreading false rumors is a time-tested way for short-sellers to drop the price of a stock without actually selling it. I don't know if Apple is on the "no short sales" list, but if it is, this may have been someone's way to get around the SEC rule.

The problem is the belief that if anything happens to Jobs, Apple is doomed. That's silly, of course--Apple has thousands of very talented people, and the product design, development and marketing process will continue. However, what Apple doesn't have in place is a visible line of succession, which makes the company vulnerable to rumors and manipulation. To squelch these rumors, Apple needs either to appoint a President as a clear successor to Steve Jobs, or to make Tim Cook, Apple's COO, a lot more visible. I don't know Cook, but from his background, he's an operations guy (which is what makes him a good COO). It would help Apple to make him more visible, or to promote someone from inside the organization to the President position. The key is to make it clear that Apple's design, engineering and marketing, as well as its future product planning, is in safe hands.

The one thing that's going to be very difficult to replace under any circumstances is Steve Jobs's ability to present, and sell, his products. There is virtually no one on the planet who is as good as him at making a presentation. (The ones who are couldn't run a major corporation.) Whether it's Tim Cook or a new President, they need to share stage time with Jobs at new product introductions, to show that they share his vision and have his confidence.

Any CEO can get hit by a bus--s**t happens. One of GE's great strengths over the years has been its ability to develop managers and deal with succession. When Jack Welch was preparing to retire, he had several highly-qualified and highly-visible candidates to replace him. (The highly-visible part can be a drawback; after Welch chose Jeff Immelt to replace him, most of the other candidates left GE to run other companies.) I think that it's time for Apple to deal with these recurring rumors by making its line of succession clear and visible.

A new blog

As you may know, I've been writing this blog since 2005. Recently, I began posting some articles related to the economy and politics, and my readership sank. When I went back to technology topics, my readership rebounded. Clearly, you want me to stay on topic. However, there's so much going on in the world that frustrates and alarms me that I can't keep my mouth shut. Hence, I've created a new blog, called "Feldman Off Topic", for the things that I can't write about in The Feldman File. I hope that you enjoy it, or at least find some interesting ideas.

NBC @Home: One last Olympics post

Yes, the Olympics are over, but the technology background stories are still coming out, so here's a summary of some of the interesting facts:

• For the first time, all of the video was shot digitally and sent to U.S. viewers over a Gigabit network provided by Cisco.
  
• Video was ingested into an Omneon MediaGrid SAN in Beijing, and then only those portions that were needed for editing into on-air content were mirrored to a MediaGrid in the U.S. via Omneon's ProCast Content Distribution Network.
  
• All of the on-air content shown on NBC Universal's cable networks and Telemundo stations was edited in the U.S. The commentators for all of the events shown on these cable networks were located in the U.S., not China. Most of them were working in Studio 8H, the studio normally used for "Saturday Night Live," watching the events on HD monitors.
  
• Virtually all of the highlights clips and packages were produced at NBC headquarters in New York.
• There are more details in the current issue of TV Technology Magazine, available online.

It's now possible to foresee an Olympics where the vast majority of production and post-production occurs at the network's headquarters, not on site (assuming, of course, that the host country's broadcaster provides plenty of high-quality feeds.) Of course, there aren't very many events on the scale of the Olympics, but no matter the size of the event, the fewer people and less equipment that you need to send to a location, the better.

A great Android article

There's a fairly long article on Gizmodo by John Mahoney about Android that's worth reading. To boil it down to its essence, Mahoney's argument is that Android will succeed because 1) It's truly open, 2) It's not tied to a metaphor that just doesn't work well, such as porting the Windows UI to phones, and 3) It will (or at least should) be upgraded on a regular cycle, much like Ubuntu Linux. By comparison, the iPhone has a great UI, but it's limited by what Apple will and won't allow developers to do.

How well Google realizes Android's potential will be determined to a great extent by how open the platform remains: If service providers exercise their abilities to limit the functionality of Android applications, much of the appeal of the platform will be lost.

The big crush is coming

Notice that I said "crush", not "crash", although given what's been happening today, we may get one of those as well. No, what I'm talking about is the crushing together of multiple camera product categories. I've recently written about the new Canon 5D Mark II, which is a pro still camera with what appears to be very good HD video capabilities. Earlier, I wrote about the marked improvements in camera phones, and how those phones are making a lot of point & shoot cameras obsolete. I've also written about the growth of the point & shoot YouTube camcorder category, best exemplified by Pure Digital's Flip Video Ultra and Mino under-$200 camcorders.

So here's what I think is going on:

• Prosumer camcorders are going away, to be replaced by digital SLRs that have HD video capabilities. Why? Interchangeable lenses, for one thing. There's no prosumer camcorder that you can buy today with interchangeable lenses for less than $5,000, but the new Canon 5D Mark II will sell for less than $3,000 without a lens when it ships. The video capabilities on Nikon's new D90 (list price under $1,000) may leave a lot to be desired, but the problem is fixable. Panasonic will be in the market with an AVCHD-compatible version of its new G1, also for around $1,000, early next year. Sony, if it can get over its burning fear of competing with itself, should have a product in the market before too long as well. In short, price and interchangeable lenses will kill the prosumer camcorder as we know it.
  
• Camera phones will kill the market for point & shoot cameras. Samsung's new Pixon just hit the market with an 8 megapixel camera (as well as video capabilities), and there are 10 and 12 Megapixel models on their way. I've never been a big fan of camera phones, but both image quality and user interfaces are improving dramatically. Of course, the "hottest" phones, the 3G iPhone and the new G1, both have pretty schlocky cameras. Who cares? They may have a role to play, but for now, people are buying them for their smartphone capabilities, not their cameras.
  
• The Flip Video class of point & shoot camcorders will continue to eat everyone's lunch in the under-$1,000 camcorder market, for two reasons: Price and simplicity.

It's interesting that the most aggressive moves have come from Nikon, a company with no camcorder market share to protect, and Pure Digital, a company that made throwaway digital cameras until a couple of years ago. (Not to mention Nokia, a company with no camera business, and Samsung, with a fairly recent entry into the camera market.) When you have no existing market share to protect, you can do radical things that fundamentally change the market. I expect CES next January and NAB next April, as well as the cameras and camcorders that we carry around in the future, to look quite a bit different, thanks to these companies.

DirecTV Gets AT&T Contract

The waiting game is over: According to this report from Reuters, DirecTV will replace Dish as the supplier of AT&T's satellite video service, effective January 31, 2009. Existing Dish/AT&T customers will continue to receive service after that date, but my assumption is that they'll deal directly with Dish, rather than AT&T, if they want to make any changes. As you may recall, it was less than a year ago that AT&T decided to drop DirecTV's service in favor of Dish, but at the same time, left the door open to reconsider its decision.

AT&T's decision isn't a surprise, but it nonetheless puts additional pressure on Dish, which has been losing money and subscribers. However, it does free Dish to compete more aggressively against both AT&T's satellite and U-Verse services, which it may have felt constrained to do so long as there was a chance that the company would retain its partnership with AT&T.