3D: Not dead, but headed for a niche

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

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

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

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

Content incubators

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Separating the medium from the message

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

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

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

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

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

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

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

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

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

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

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

A new model for video production, take 2

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Google and partners commit to guaranteed Android updates

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

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

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

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

New media has to break its addiction to old media

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

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

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

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

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

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

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

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

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

Thunderbolt strikes Apple's iMacs

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

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

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

Closing the cable television statutory licensing loophole

Over the last few months, FilmOn and ivi, two Internet-based services that retransmitted broadcast television stations from multiple cities, have been effectively shut down by preliminary injunctions issued by a U.S. Federal court. In both cases, the issue was that the U.S. Copyright Office has a regulation dating back more than 20 years (Section 111 of the Copyright Act) permitting cable systems to retransmit broadcast signals locally in return for the payment of statutory royalties to the Copyright Office. That regulation was effectively superseded by the Communications Act of 1996, which requires cable and satellite systems to obtain permission from and pay compensation directly to broadcast stations in order to retransmit their signals.

In ivi's case in particular, the company argued that it was a cable system for the purposes of Section 111 of the Copyright Act, but it wasn't a cable system under the definition of the Federal Communication Commission, and therefore wasn't subject to the Communications Act of 1996. In both ivi's and FilmOn's cases, the Federal court ruled that they weren't cable systems under any established definition, and therefore weren't entitled to take advantage of Section 111. They could negotiate directly with television stations for retransmission rights, as IPTV operators such as Verizon and AT&T do, but they had no right to retransmit their signals under a statutory license.

Both cases are still in litigation and have not been finally decided by the courts, but an action announced last week by the U.S. Copyright Office may may the entire argument moot. The right of satellite services such as Dish Network and DirecTV to retransmit signals from broadcast stations outside a subscriber's local area was renewed last year, in the Satellite Television Extension and Localism Act of 2010 (STELA). A section was included in STELA that requires the statutory licensing requirements in Section 111, as well as additional requirements in Sections 119 and 122 (covering satellite services), to be phased out, and it gives the Copyright Office responsibility for coming up with a phase-out plan. Here's what the section says:

Not later than 18 months after the enactment of this Act, and after consultation with the Federal Communication Commission, the Register of Copyrights shall submit to the appropriate Congressional committees a report containing the following:

1. proposed mechanisms, methods, and recommendations on how to implement a phase-out of the statutory licensing requirements set forth in sections 111, 119, and 122 of title 17, United States Code, by making such sections inapplicable to the secondary transmission of a performance or display of a work embodied in a primary transmission of a broadcast station that is authorized to license the same secondary transmission directly with respect to all of the performances and displays embodied in such primary transmission

2. any recommendations for alternative means to implement a timely and effective phase-out of the statutory licensing requirements set forth in sections 111, 119, and 122 of title 17, United States Code

3. any recommendations for legislative or administrative actions as may be appropriate to achieve such a phase-out

Last week, the Copyright Office announced a timetable for requesting comments and replies to comments to help it formulate a phase-out plan. By the time the FilmOn and ivi cases wind their ways through the Federal court system, it's likely that the phase-out plan will be adopted, and even possible that the phase-out date will be reached. Thus, even if they win in court, there won't be any statutory license, and they'll still have to negotiate station by station for retransmission rights and compensation.

NAB 2011 Part 3: Wireless ENG Backpacks, POV Camcorders, Thunderbolt and Final Cut Pro X

In this third and final installment of highlights from NAB 2011, I'll cover some of the interesting new trends and product categories, and finish with a quick look at Final Cut Pro X.

• ENG Trucks-in-a-Backpack: LiveU pioneered the category of putting encoders and broadband wireless transmitters into a backpack for field use, but there are now many competitors and a variety of approaches. The "traditional" backpack approach was demonstrated by LiveU, TVU and Streambox. These devices take the video output from a camcorder (analog, Firewire, HDMI or SD/HD-SDI), compresses it and sends it to a receiver over the public Internet using multiple USB broadband modems and WiFi adapters (anywhere from seven to fourteen, depending on the manufacturer). The receiver (located at the television station or head-end) takes the various bitstreams sent by the modems and WiFi interfaces, reassembles and decompresses them into a single video output for streaming or broadcast. Each manufacturer has their own approach:
  
  
  • LiveU uses a conventional PC running its proprietary software as the receiver, while both TVU and Streambox have their own dedicated receivers.
  • LiveU and Streambox use channel bonding between the multiple connections in order to get the needed bandwidth, while TVU uses channel aggregation with forward error correction, somewhat similar to the technology developed by Digital Fountain and now sold by Qualcomm, which it claims provides better quality at lower bitrates.
  • TVU and LiveU both use H.264 high profile compression, while Streambox uses its own proprietary codec.
  • Streambox's hardware receiver can support one transmitter at a time, while TVU's can support as many as ten transmitters simultaneously.
  • Streambox offers a "cloud" option for the receiver--customers can transmit video to Streambox's cloud and receive bonded, decompressed video without a local receiver.
  • All three systems are priced in the $30,000-$40,000 range (U.S.) for a single HD transmitter/receiver combination.

• Teradek demonstrated its Cube, a wireless HD H.264 encoder and transmitter about as big as a pack of cigarettes. Unlike the backpack models, the Cube can only transmit via a single WiFi or wired Ethernet interface, or a single USB port that currently works with Verizon's 4G LTE Modem. It's designed for video monitoring on-site and lower-bandwidth ENG applications, but its small size and weight may make it less visible, and certainly easier to move around, than the backpack systems.
  
  Teradek's various Cube models come with HDMI or HD-SDI inputs. They're paired with wireless decoders that are just as small as the receivers, and they can send directly to Livestream's streaming service for broadcast over the Internet. When using Livestream, no local receiver is necessary. Prices for the transmitters and receivers range from $1,490 to $2,190 depending on inputs and interfaces, and they're also available in matched sets for from $2,682 to $3,942.
  
• Comrex showed a working prototype of its Liveshot, a video compressor and transmitter designed to be mounted on ENG camcorders. The Liveshot Portable has two USB ports for broadband or WiFi modems, and HDMI, HD-SDI and analog video inputs. The Liveshot Studio is the receiver. Both devices support intercom/IFB headsets for two-way communication. Pricing hasn't been finalized, and Comrex doesn't expect to ship the Liveshot until late 2011.
  
• POV Camcorders: This was the year that low-cost POV camcorders were accepted by broadcasters and filmmakers. POV camcorders are being used to shoot athlete-perspective footage for skiing, surfing, skateboarding, car and motorcycle racing and skydiving. GoPro's booth was jammed when I was there; the company was selling its HD Hero models that are normally priced at $299.99 for $200, for delivery after the show. GoPro's 3D Hero system, which gangs two HD Heros together in a single waterproof housing and is priced at $99.99, was also a hot seller and one of the least expensive ways to capture 3D action footage. Contour was also exhibiting, showing its ContourGPS and ContourHD POV camcorders, as was V.I.O., with its POV.HD model.
  
• Thunderbolt peripherals: A few companies showed peripherals compatible with Intel's and Apple's Thunderbolt high-speed interface, now available on Apple's MacBook Pros. Matrox will be building Thunderbolt ports into its MXO2 line of video capture and conversion devices starting in July, and it's making available a box that connects Thunderbolt to its existing host interface for MXO2s purchased and shipped before July. The converter box will be priced at $299, with a discount if purchased with an MXO2 device.
  
  LaCie was showing prototypes of its Little Big Disk, the first model that will ship with Thunderbolt interfaces. The Little Big Disk holds 2 SSD or hard disks, and comes with a total capacity of 240GB or 500GB (SSD), or 1TB (7200 rpm hard disk). At NAB, LaCie had four 1TB Little Big Disks daisy-chained together on Thunderbolt as a RAID 0 array, and they claimed that they were getting better throughput than a comparable Fibre Channel array.
  
  Promise Technology's 4- and 6-bay Pegasus disk arrays were displayed in a number of booths, and it appears that Promise is the first company actually shipping Thunderbolt peripherals. As I reported yesterday, Blackmagic Design displayed its UltraStudio 3D video capture and display device with Thunderbolt, priced at $995, for July delivery.
  
• Final Cut Pro X: I didn't attend the FCPUG SuperMeet on Tuesday night, and there are plenty of other reviews of what Apple previewed at the event on the web, so I'm going to limit myself to a few points. First, the new FCP X demonstrates that Apple has been very serious about improving Final Cut Pro; there are many performance improvements (including 64-bit support and GPU acceleration) and new features. Apple also says that FCP X should work on any modern iMac, 17" MacBook Pros and Mac Pros running OS X 10.6 or greater; Thunderbolt isn't necessary (although it will make editing much faster.) In addition, the $299 price through the App Store was a shocker--right before NAB, Avid announced that FCP users could buy Media Composer for $999, which looked like a great price until the SuperMeet.
  
  At the same time, it's important to keep in mind that the version shown in Las Vegas was the same version shown to a small group of outsiders by Apple in February, and the final version isn't scheduled to ship until July, so a lot of work on the product remains to be done. In addition, Apple said nothing about Motion, Color, Soundtrack Pro or Logic, what (if anything) is being done to these programs, whether Apple will still offer a bundle, etc. There's a lot that we still don't know.

NAB 2011 Part 2: Blackmagic Design and the Video Value Proposition

In the interest of transparency, I want to start this post by saying that I've been a fan of Blackmagic Design for years, ever since the company launched its Decklink card in the U.S. market. Blackmagic Design reminds me a lot of what Hyundai has become in the automobile business--not only do you get an excellent product, but you get it at an excellent (and sometimes amazing) price. They carry on in the tradition of fellow Australian company Røde Microphones, which pioneered making high-quality microphones at very reasonable prices, and Atomos, which is selling amazing on-camera video recorders at a fraction of the price of most competitors.

At IBC 2009, Blackmagic announced that it had acquired DaVinci Systems, the maker of some of the most powerful and widely-used professional color correction and restoration systems for film and television. DaVinci Resolve was priced for high-end post-production facilities; an entry-level system was over $100,000 (U.S.) and could easily scale to several hundred thousand dollars as more processing nodes were added. Many industry observers wondered about how DaVinci's high-priced products would fit with Blackmagic's product line, most of which was priced at $1,000 or below. It didn't take long to find out the answer.

At NAB 2010, Blackmagic announced a $995 software-only version of DaVinci Resolve that's compatible with Apple's OSX and runs on most MacBook Pros, iMacs and Mac Pros. The software-only version is only a single processing node and doesn't include a control surface, but it's functionally identical to the product that had sold for $100,000 less than a year earlier. If you want a multi-node system, you can go with a $19,995 Linux version of the software and use it with a variety of third-party control surfaces, but if you want DaVinci's own control surface (which comes with a license for the Mac version), that's priced at $29,995. So, you could now pay less than $50,000 to get exactly the same functionality that you originally paid more than $100,000 for. And, since the Linux license supports multiple CPUs and GPUs, less than $50,000 also gets you the same functionality as those Resolve systems that cost hundreds of thousands of dollars.

Last August, Blackmagic acquired Echolab, the manufacturer of a highly-regarded line of production switchers that had fallen on hard times and declared bankruptcy. Blackmagic continued production of Echolab's two most recent designs, the ATEM 1 M/E with 10 inputs for $19,995, and the ATEM 2 M/E with 18 inputs for $51,995. At the time, I wondered if Blackmagic was going to apply the same cost-reducing philosophy to the ATEM switchers that it did to DaVinci Resolve. Again, I didn't have long to wait.

At this week's NAB, Blackmagic announced the next generation of ATEM:

• ATEM Television Studio, a six-input HDMI/HD-SDI 1 M/E switcher with two built-in media player framestores, two downstream keyers, software control panel, built-in H.264 real-time encoder,  built-in 10-channel multiviewer with HDMI and HD-SDI outputs, separate program HDMI and HD-SDI outputs, and an Ethernet interface, for...$995. That's not a misprint. $995.
  
  Roll a few of these concepts around in your head: A "personal switcher" that's small enough to hold in your hand but has four HDMI and four HD-SDI inputs, any six of which can be active at one time. A built-in hardware H.264 encoder. A built-in multiviewer that can use any off-the-shelf HDMI display. No need whatsoever for any PC slots. A software control panel that runs on Mac or PC. The ability to connect to hardware control surfaces and the Internet via Ethernet. $995. This is an order of magnitude better price/performance than anything comparable that I saw on the show floor.
  
• ATEM 1 M/E: Based on the specifications of the original ATEM 1 M/E, with 4 HDMI and 4 HD-SDI inputs, all of which are active, a separate analog input, frame resynchronizers on every input, HDMI, HD-SDI and analog program outputs, down-converted SDI output, a multiviewer, USB 3.0 and Ethernet interfaces, RS-422 control, and a PC and Mac-compatible software control panel. Plus, it includes stinger and DVE transitions, 6 keyers, built-in media players, etc. Blackmagic completely redesigned the electronics and firmware so that the switcher is small enough that you can hold it in your hand. And the price? $2,495. If you want the ATEM 1 M/E's original control surface, that sells for $4,995. The total is $7,490.
  
  The only feature that Blackmagic deleted from the new version of the ATEM 1 M/E is the second multiviewer, which most customers found redundant, and they added additional features, such as USB 3.0. Then, they cut the price by $12,505. If you can live with a software control panel, they cut the price by $17,500.
  
• ATEM 2 M/E: Take the ATEM 1 M/E and expand it to 16 simultaneous inputs, add a super source multi layering compositing engine, an additional multiviewer and an expanded software control panel. The resulting switcher is 3 RU high instead of 2 RU high for the ATEM 1 M/E, but you can still hold it in your hand. And, it's priced at $4,995. If you want the original ATEM 2 M/E control surface, it's priced at $14,995. The combination is $19,990, for an equivalent to the same switcher that sold for $51,995 at NAB last year.

These are, in many ways, revolutionary products, and the ATEM Television Studio will likely have the most impact of any of them. Consumers who had never even considered the possibility of doing live multicamera production and streaming it on the Internet will have an affordable way to do so. It has the potential of opening up entirely new applications, as do the other two models. All three models are going to put dramatic price pressure on Blackmagic's competitors, who are going to have to either drop their prices to remain competitive or add features to justify the big difference between their prices and Blackmagic's. Finally, we may see third-party control surfaces support the ATEM switchers at prices even lower than Blackmagic's, just as lower-cost color correction control surfaces are now available from a variety of vendors.

There's one final piece necessary if you want to do multicamera live production, especially in large churches, arenas and stadiums, and that's a way to extend the connections between the cameras and the switcher. To handle that, Blackmagic announced the ATEM Camera Converter, which accepts either HDMI or HD-SDI as input along with two microphone inputs. It's also got inputs for a talkback microphone and an output for talkback headphones. It then converts the signals to ride bidirectionally on an optical fiber pair, up to 147,000 ft. (27.8 miles or 44.8 kilometers). At the switcher end, another ATEM Camera Converter provides HDMI and HD-SDI outputs from the optical fiber signal, as well as talkback audio input and output for the director.

And the cost? $595. A pair is needed for each camera, for a total of $1,190. Consider that before now, you would have had to use professional cameras with multicore and optical fiber interfaces that cost tens of thousands of dollars. The ATEM Camera Converter enables you to use any good consumer or prosumer camcorder with an HDMI interface. The combination of the ATEM switchers and Camera Converters will make professional live field production affordable for schools, churches, community cable stations, small-market TV stations and Internet video producers of all kinds.

Just to touch on a few of Blackmagic's other NAB 2011 announcements:

• UltraStudio SDI, a cost-reduced version of the UltraStudio Pro with HD-SDI in, a HDMI 1.4 display output for monitoring, and a USB 3.0 interface, for $395.
• UltraStudio 3D, Blackmagic Design's first device with a Thunderbolt interface, with dual HD-SDI inputs, HDMI input, analog inputs on a breakout cable and HDMI monitor output for 2D ot 3D video capture and display, for $995.
• HyperDeck Studio, a dual-drive uncompressed HD recorder that uses the same 2.5" SSD drives as the new HyperDeck Shuttle I wrote about yesterday. It has HDMI and HD-SDI inputs and outputs, VTR-style deck controls, a jog shuttle dial, a small LCD monitor for time code, audio and video monitoring, and an Ethernet interface. SSD drives can be swapped while the device is running for effectively infinite recording time. The price is $995.
• H.264 Pro Recorder, a real-time H.264 encoder with component, HDMI and HD-SDI inputs, USB output and RS-422 control, for $495.
• And, as for DaVinci Resolve, Blackmagic introduced a new feature-reduced version called DaVinci Resolve 8 Lite, intended for users from whom even $995 is too much money right now. The price? Free.

My point in going into this detail isn't to provide an ad for Blackmagic (although I'm sure that the blog post reads like one), but to make it clear that video technologies that cost tens of thousands of dollars just a year ago, and hundreds of thousands of dollars a few years ago, are now available at a price so low that hobbyists can afford them. Just as making computer power available to consumers at a reasonable price sparked a revolution in the early 1980s, so making video and audio power available at a low price will spark an explosion in how media is produced and who produces it.

In the final part of this series, I'm going to take a look at some of NAB 2011's other interesting new products and trends, including the first Thunderbolt-compatible peripherals, POV cameras, the rise of ENG trucks in a backpack (or a cigarette case), and a brief comment on Apple's forthcoming Final Cut Pro X.

NAB 2011 Part 1: Cameras, Recorders and Lighting

The overarching theme of NAB 2011, at least for me, was "Price is no longer an obstacle". Other people might focus on 3D, which was everywhere in its headache-inducing splendor, but for me, the story was that you can do more for less money than ever before. In the next few posts, I'll deal with some of the most interesting trends and products I saw at the show.

DSLRs, Interchangeable-Lens Camcorders and Accessories

The DSLR trend was very much alive and well at NAB, but individual vendors dealt with it in different ways. For the first time, Canon gave over large portions of its booth to its DSLRs, even though it didn't make any new announcements. You could shoot video of models using 7Ds, 5D Mark IIs and 1D Mark IVs on tripods with cinema heads, alongside Canon's camcorders.

On the other hand, you'd be hard-pressed to know that Sony or Panasonic even makes DSLRs (or EVILs, or whatever acronym you want to use) from what they showed in their booths. However, Sony extensively featured its new F3 and FS100 camcorders that use the E-mount lenses designed for its NEX family of still cameras, as did Panasonic with its AF100 camcorders that use its Micro Four-Thirds sensor and lenses. Sony is clearly trying to make up for lost time against Panasonic; FS100s could be found in booths all over the show floor, even though it isn't officially shipping.

I sat in on a presentation by Gale Tattersall, the Director of Photography for Fox's "House", on Monday as he showed some of the footage shot using Canon 5D Mark IIs for last season's final episode. He stressed that price had absolutely no consideration in his or the producers' decision to go with the Canon DSLRs--it was the quality of the images and the flexibility that the cameras' small size gave for getting shots in extremely cramped locations. Tattersall was back in the booth on Tuesday shooting video with a Canon DSLR and handheld rig.

Every major lens manufacturer was showing prime lenses (and in some cases, zoom lenses as well) for DSLRs: Zeiss, ARRI, Thales Angenieux, Schneider, Cooke and Leica were all well-represented. The words "bargain" and "lens" usually don't go together, although Zeiss was recommending that DSLR users who find its CP.2 line of video prime lenses too expensive should consider using its still prime lenses for video work.

Anyone interested in DSLR rigs could find them in abundance on the show floor. Zacuto, Redrock Micro, Ikan, Cinevate, Genus, D|Focus, Jag35 and Shape were exhibiting, and most of their booths were jammed when I visited. Competition for rigs, follow focuses and viewfinders is intense, driving prices down and product variety up.

In fact, that last sentence could be a summary of the entire market for DSLRs and related products. You can start with a body, such as a Canon T3i or Panasonic GH2 for under $1,000 (U.S.) and add components as you need them. Lenses can be rented as needed and purchased over time. In fact, you're probably better off not buying the top-of-the-line in any component (with the exception of lenses), because prices are falling and capabilities are being added so fast that what's "top-of-the-line" today will be significantly less expensive a year from now.

On-Camera Recorders

Companies such as Vitec's Focus Enhancements and AJA Video have made on-camera recorders for a number of years that are designed to supplement or replace tape and flash memory, enabling longer record times and more reliability. Record times are a particular problem with some DSLRs that permit as little as seven to 14 minutes of recording at a time onto flash memory cards.

At NAB, we saw the next wave: Low-cost, high-resolution recorders that do double (or triple) duty: They also serve as viewfinders and, in some cases, compressors for immediate ingest into editing systems. Here are a few examples:

• Atomos' Ninja can convert 8- or 10-bit HDMI video and audio, compress it on the fly using Apple's ProRes codec, and store it on any 2.5" SATA hard drive or SSD. It's also got 480 x 270 display that can be used for monitoring or playback. U.S. list price is $995.
• Atomos' Samurai has the same basic design and capabilities, but it has a HD-SDI interface instead of HDMI, an 800 x 480 display, and improved audio monitoring capabilities. U.S. list price is $1,495.
• Fast Forward Video's SideKick comes with both HDMI and HD-SDI interfaces, can capture uncompressed 8- or 10-bit 4:2:2 video at up to 220Mbps, can compress on the fly to Apple's ProRes codec, and has a 480 x 272 display. It uses the same 2.5" SATA SSDs as Atomos (it doesn't support hard drives), but unlike Atomos, FFV ships the SideKick with a 128GB SSD, so it's immediately usable right out of the box. U.S. list price is $2,495.00.
• Convergent Design's Gemini 4:4:4 has both HDMI and HD-SDI interfaces, and records 8- or 10-bit 4:2:2 or 4:4:4 video at up to 280Mbps onto one or two (hence the name Gemini) 1.8" SATA SSDs. Video and audio can be recorded on both drives simultaneously (for safety) or can span the two drives for longer recording times. The Gemini also has some sophisticated processing capabilities, including over- and under-cranking and the ability to apply 1D user-definable LUTs. It has a 800 x 480 display. U.S. list price is $5,995.00.

One final option: If you don't want a built-in display or compression, Blackmagic Design introduced the HyperDeck Shuttle, which has both HDMI and HD-SDI interfaces and stores uncompressed 8- or 10-bit 4:2:2 video onto a 2.5" SATA SSD. The SSDs slide into and out of the HyperDeck easily, so they can be swapped in the field. Recorded SSDs can be plugged into any external eSATA or USB dock, leaving the Shuttle mounted on the camera. Best of all, the price of the HyperDeck Shuttle is only $345. (Blackmagic Design introduced so many new products that I'll be covering their announcements in a separate post.)

Lighting

If there was any question that LED lighting has gone mainstream, this year's NAB settled it. Every lighting manufacturer I saw on the floor had LED models. Vitec's Litepanels remains the model for most of the industry, although no one has yet cloned their Sola LED Fresnels. "Clone" is a good word for a lot of the LED lights, especially knock-offs of more-expensive designs built by Chinese manufacturers. There were a number of clones on the floor that are variations of the tunable color temperature designs pioneered by Zylight and Litepanels.

Whether it's fixed color or bi-color, with or without dimming, competition is driving LED prices down into the range of fluorescent lights, and fluorescent prices have dropped into the incandescent range. The color quality of fluorescent bulbs continues to improve--especially compact fluorescents that can replace incandescent bulbs in existing fixtures with much less heat and power consumption. In fact, fluorescents are the best price/performance compromise for a lot of applications--similar power consumption and heat output as LEDs and a much lower price.

In Part 2, I'll review some new products from Blackmagic Design that will redefine customer expectations about what video technology can do, and more importantly, how it should be priced.

Kno-t Again: Intel invests $20 million and takes over Kno's tablet designs

According to The Wall Street Journal's All Things D, Intel Capital and Advance Publications (parent company of Condé Nast) led a new investment round of $30 million in Kno, the Silicon Valley-based startup that planned to ship tablets for the educational market starting late last year. $20 million of the total is coming from Intel. Kno claims that none of the tablets were actually ever shipped to customers, but several hundred were manufactured for Kno by Foxconn. As part of the deal, Intel will acquire ownership of the designs for Kno's tablets and will license them to other manufacturers, so Kno is officially out of the hardware business.

Kno will continue to develop its tablet software and pursue eTextbook licensing deals, but will target existing tablet platforms such as Apple's iPad. It's a smart move by Kno, and probably the only viable option that it had. I wouldn't be surprised if some of the $30 million goes to buy out one or more of Kno's earlier investors who had come on board because they believed in the potential of their tablet.

I still have a hard time believing in Kno's long-term prospects: It can no longer take advantage of the unique capabilities that it had designed into its tablets (for example, the 15" dual touch/stylus displays) to differentiate its offerings, and it has to compete with a variety of eTextbook distributors and publishers, including Chegg, the company co-founded by Kno co-founder Osman Rashid.

The "Family Pass": A way for theaters to combat Premium VOD

A few days ago, I wrote about the firestorm in the U.S. film industry over plans by Fox, Warner Bros., Universal and Sony to make some of their movies available to DirecTV, Comcast and VUDU for a Premium VOD service 60 days after they open in theaters. The premium in-home movies would cost $30 each and would be available for viewing for 48 hours from the time of purchase.

One of the arguments for Premium VOD is that movie tickets for a family cost a lot of money--tickets for a family with two parents and two kids could easily cost more than $30, plus food and drink. However, theaters could lessen the impact with a "Family Pass" that allows two adults and up to four children to see a single film, even at regular showings, for less than $30. That would allow the theaters to compete on price with the Premium VOD service. The theaters would still be able to make their normal concession stand food and drink sales, and they could argue "Why wait 60 days to save a few dollars when you can watch a movie when it's fresh?".

 Theater owners want to keep Premium VOD from gaining traction, and a "Family Pass" might be the way to do so.

Final Cut Pro Users Group SuperMeet kicks its sponsors to the curb

Each year at the NAB Conference, the Final Cut Pro User Group holds a SuperMeet of FCP user groups around the world. It's an unofficial event, in that it's not officially part of the NAB schedule, but it's become known as the signature event for Final Cut users each year. Apple has participated in the event from time to time, but has never been the primary sponsor, and isn't listed as a sponsor for this year's event.

Yesterday, a flurry of rumors broke out about last-minute changes at this year's SuperMeet. Official sponsors of the SuperMeet, including AJA, Autodesk, Avid, Blackmagic Design and Canon, received notices from the event organizers that their presentations were being canceled. Presenters such as director Kevin Smith and DSLR cinematographer Philip Bloom were "uninvited". The SuperMeet webpage deleted a list of all the presenters and presentations, and substituted the following: "The Final Cut Pro User Group Network is excited to have a very special guest presentation at the 10th Annual Las Vegas FCPUG SuperMeet. Come to see a surprise sneak peek at something very special - you really do not want to miss this one!". That's it.

Word began to leak out that Apple plans to use the event to announce its new version of Final Cut Studio, and had demanded that the organizers drop all the other presenters and sponsors from the event. Neither Apple nor the event organizers are saying anything about the changes in the schedule, but it's fairly clear that the SuperMeet will serve as Apple's launch event.

You may ask why Apple didn't just schedule its own event, which it could have completely controlled. The problem is that Apple isn't an exhibitor at NAB, and many conferences (most likely including NAB) have contracts with the hotels that house attendees that prohibit them from making space available for events run by non-exhibitors. Since just about every hotel of any size is offering space through NAB's housing office, that would make them unable to host an Apple event. On the other hand, the SuperMeet organizers are also exhibitors, so they can do whatever they want with their event.

My problem with the whole thing is how the SuperMeet's sponsors are being treated. These are companies that have spent a good deal of money, both this year and in previous years, sponsoring SuperMeet events around the world. They were flying in presenters and paying their fees and expenses, and they were looking forward to having access to the SuperMeet's audience. Now, only a week before NAB, they've all been "kicked to the curb" by the SuperMeet's organizers.

If I were a sponsor, I would think twice (or more than twice) about sponsoring future SuperMeet events. The SuperMeet's organizers have said that sponsors' money, support and loyalty aren't worth as much as the opportunity to host the launch of a new Apple product. That, to me, is a bad bargain for everyone involved.

Dish Network buys Blockbuster for $320 Million

Reuters is reporting that Dish Network, the U.S. satellite video service provider, was the winning bidder for Blockbuster in U.S. Bankruptcy Court. Dish Network acquired Blockbuster for $320 million, of which $228 million in cash will be used to pay off the company's creditors (including movie studios) and bondholders. Blockbuster's total outstanding debt at the time of its bankruptcy was over $1 billion.

Dish Network gets a number of valuable assets as part of acquiring Blockbuster:

• Blockbuster has more than 1,700 stores, many of which Dish will likely close. The remainder, however, will likely start selling Dish's satellite service, streaming video service and hardware to consumers. Dish won't have to compete for shelf space with any other vendors. (Update, April 21, 2011: In a Bankruptcy Court filing earlier this week, Dish Network stated that it plans to keep only 572 of Blockbuster's stores open, although that number is subject to change.)
• Dish will become NCR's partner for its Blockbuster-brand video kiosks. To date, NCR/Blockbuster has done a poor job of competing with Redbox for locations, but Dish may give them access to new retail relationships.
• Blockbuster's set-top box and streaming video programs have largely failed to make any impact on Netflix, but Echostar, Dish's sister company, builds set-top boxes and owns Sling Media, the developer of the Slingbox. Echostar could build support for Blockbuster's streaming video service into its set-top boxes, and build new designs that could compete with Apple TV, Google TV, Roku, Boxee and others.
• Blockbuster has distribution deals with many of the major movie studios that gives it access to their DVDs and Blu-Ray titles 28 days before Redbox and Netflix. Dish could leverage those deals in a variety of ways, in a variety of channels.
• The Blockbuster trademark itself is still very valuable, even though it's been damaged by the company's ongoing bankruptcy. Dish has the option of using the Blockbuster trademark, its own trademarks, or a combination of the two, depending on the situation.

In short, for not a lot of money, Dish Network dramatically expanded its potential market opportunity and channels of distribution.