The Platform is the Message
For years people have been saying that they will watch things in HD, that they would never ordinarily watch. In the 12 years I have been involved in Internet Video in one form or another, I have yet to have anyone ever tell me they will watch something just because its on the internet.
Thats not to say people wont surf the net and sample something they otherwise would not watch. Thats what the internet video aggregation sites are all about. Sampling things you never would other wise watch.
One thing is becoming increasingly clear, while more people are "snacking on Internet video", the real "meal" continues to be TV.
It appears like the Olympics are proving this out and presenting an interesting conclusion, people are starting to define the content they want to watch on each platform. The Platform is the Message to content creators.
Without question, people want to watch big events on their big HDTVs. There is a reason why 30pct of homes and quickly growing now have HDTVs.....they like to watch them. With a 73" HDTV from Mitsubishi down to about $2200 bucks, its easy to see why and the pricing of all HDTVs continuing to fall, its a trend thats not going to end anytime soon. Watching an event like the Olympics, just about any sporting event and even big shows like American Idol and Dancing with the Stars benefit. ESPN has issued research saying their ratings across the board are up 47 to 50pct every month in HDTV households.
I think the real question of the Olympics isnt "whats the impact of the Internet", its "whats the impact on viewing of HDTV ?". If and when NBC releases numbers regarding ratings in HDTV households, I wouldnt be shocked if the numbers are 75pct higher. People with big, beautiful TVs that they spent a lot of money on, want a reason to watch them. This could go down as the year the Olympics reinvigorated TV.
if programmers understand that people will watch different programs on different platforms, we can stop playing the game of trying to replace TV.
Programmers will create content differently for every platform, from cellphone, even to movies. In the movie world , its pretty simple to see that big movies, with big special effects look great and sound great in theaters. Same with 3D. Thats an experience even a 73" HDTV cant recreate fully
Events look great on HDTVs, whether they are sports, shows or movies.
Quick hits and short clips are great for the internet. Sure some people will watch shows that perform better on other platforms on the net. We all use what we have available when its our only choice. Which is why so much video consumption online is in the office. Its our only choice.
replays and breaking news and anything that helps us kill time are what we will use our MIDS, PDAs, and phones for.
The platform is the message from viewers to content providers.
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Thats not to say people wont surf the net and sample something they otherwise would not watch. Thats what the internet video aggregation sites are all about. Sampling things you never would other wise watch.
One thing is becoming increasingly clear, while more people are "snacking on Internet video", the real "meal" continues to be TV.
It appears like the Olympics are proving this out and presenting an interesting conclusion, people are starting to define the content they want to watch on each platform. The Platform is the Message to content creators.
Without question, people want to watch big events on their big HDTVs. There is a reason why 30pct of homes and quickly growing now have HDTVs.....they like to watch them. With a 73" HDTV from Mitsubishi down to about $2200 bucks, its easy to see why and the pricing of all HDTVs continuing to fall, its a trend thats not going to end anytime soon. Watching an event like the Olympics, just about any sporting event and even big shows like American Idol and Dancing with the Stars benefit. ESPN has issued research saying their ratings across the board are up 47 to 50pct every month in HDTV households.
I think the real question of the Olympics isnt "whats the impact of the Internet", its "whats the impact on viewing of HDTV ?". If and when NBC releases numbers regarding ratings in HDTV households, I wouldnt be shocked if the numbers are 75pct higher. People with big, beautiful TVs that they spent a lot of money on, want a reason to watch them. This could go down as the year the Olympics reinvigorated TV.
if programmers understand that people will watch different programs on different platforms, we can stop playing the game of trying to replace TV.
Programmers will create content differently for every platform, from cellphone, even to movies. In the movie world , its pretty simple to see that big movies, with big special effects look great and sound great in theaters. Same with 3D. Thats an experience even a 73" HDTV cant recreate fully
Events look great on HDTVs, whether they are sports, shows or movies.
Quick hits and short clips are great for the internet. Sure some people will watch shows that perform better on other platforms on the net. We all use what we have available when its our only choice. Which is why so much video consumption online is in the office. Its our only choice.
replays and breaking news and anything that helps us kill time are what we will use our MIDS, PDAs, and phones for.
The platform is the message from viewers to content providers.
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Categories: Blogs
You Don't Live in the World You Were Born Into....
No matter what year you were born, by the time you finish high school, its a completely different world. Today's high school seniors were born prior to the World Wide Web, wireless internet, digital phones, and changes in world politics that were never imagined.
Compare the technology, political, social world we live in today, and you realize quickly. None of us are born in to the world we live in.....
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Compare the technology, political, social world we live in today, and you realize quickly. None of us are born in to the world we live in.....
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Categories: Blogs
From the NBA to Europe ?
Could there be anything better for the NBA ?
The more NBA players in Europe the better. The movement of players is taking away the stigma and fear that younger players perceive when they are asked to play in Europe before signing an NBA contract. Knowing that they will be competing against Josh Childress, Earl Boykins, Carlos Arroyo, et al, and getting a chance to get real minutes, AND make good money is a win for everyone.
I know a lot of people think a team that loses a player could get really hurt by the move. In reality, if a team truly has a good handle on your skill level and ability to contribute to the team, they will pay to that level. If they arent sure, then the player going to Europe is a huge win. The player gets paid, but more importantly, the team gets to further evaluate the player in a high pressure situation.
High pressure ? Absolutely. When you are the highest paid American player on your team overseas, you better be a star that produces, on a team that wins. If as a player, you improve your game (and the 2 a day practices over there give you that opportunity), then you can come back to the states after a shorter season and your value will have improved. If you are a player that went over to be the star and didnt star... Well, you probably will have a long career in another country.
From the NBA team's perspective, not only do we get additional evaluation time, but we still retain the same rights we had the day before you left, and I dont want to speak for any other team, but the hardest part of a player leaving is his going to a team you compete with and having to see him and read about it all the time. When a player defects overseas and you still hold the same rights, its not nearly that bad.
And one last question thats been getting asked a lot. What about a guy getting far more overseas than he could get paid in the NBA ? Yes, yes, yes. Nothing better than competition for the NBA.
With the exchange rate, 25mm a year paid in Euros is the equivalent of about 12mm paid in Euros just a few years ago. So NBA players look like bargains. If we lose a few players, thats not a bad thing. in fact a couple All Stars going over there is a GREAT GREAT thing.
Let me explain why. Lets say for the sake of example a couple players got 25mm, 50mm or whatever a year pay and they play on teams that just dominate. They rip apart every team they face. What happens next ? People wonder who the best teams in the world are. When that discussion becomes serious, the NBA and those winning overseas teams get paid.
European Soccer has done a phenomenal job of inventing tournaments that drive huge revenues and TV dollars. This would allow the NBA to do the same thing. Take a Christmas break, or do it in the summer , where the top 6 records in the league play the top 6 teams over there , with the revenues from the event being split primarily among the participant teams rather than equally among all NBA teams. Not only would that be a great revenue source for all the teams involved, but it would create a huge economic incentive for the other 24NBA teams and all overseas team to become top tier teams.
Then of course we could create our own World Cup type tournament every 4 years.
ALl of this could open the door to create more NBA owned competition. I'm not saying it would be easy or automatic. Quite a few parties that dont always see eye to eye would have to come to agreement, But the timing for all of that is right and its an amazing opportunity for players, leagues and teams alike.
Who would have ever thunk that the combination of Josh and the drop in the dollar could create such a wonderful opportunity.Permalink | Email this | Linking Blogs | Comments
The more NBA players in Europe the better. The movement of players is taking away the stigma and fear that younger players perceive when they are asked to play in Europe before signing an NBA contract. Knowing that they will be competing against Josh Childress, Earl Boykins, Carlos Arroyo, et al, and getting a chance to get real minutes, AND make good money is a win for everyone.
I know a lot of people think a team that loses a player could get really hurt by the move. In reality, if a team truly has a good handle on your skill level and ability to contribute to the team, they will pay to that level. If they arent sure, then the player going to Europe is a huge win. The player gets paid, but more importantly, the team gets to further evaluate the player in a high pressure situation.
High pressure ? Absolutely. When you are the highest paid American player on your team overseas, you better be a star that produces, on a team that wins. If as a player, you improve your game (and the 2 a day practices over there give you that opportunity), then you can come back to the states after a shorter season and your value will have improved. If you are a player that went over to be the star and didnt star... Well, you probably will have a long career in another country.
From the NBA team's perspective, not only do we get additional evaluation time, but we still retain the same rights we had the day before you left, and I dont want to speak for any other team, but the hardest part of a player leaving is his going to a team you compete with and having to see him and read about it all the time. When a player defects overseas and you still hold the same rights, its not nearly that bad.
And one last question thats been getting asked a lot. What about a guy getting far more overseas than he could get paid in the NBA ? Yes, yes, yes. Nothing better than competition for the NBA.
With the exchange rate, 25mm a year paid in Euros is the equivalent of about 12mm paid in Euros just a few years ago. So NBA players look like bargains. If we lose a few players, thats not a bad thing. in fact a couple All Stars going over there is a GREAT GREAT thing.
Let me explain why. Lets say for the sake of example a couple players got 25mm, 50mm or whatever a year pay and they play on teams that just dominate. They rip apart every team they face. What happens next ? People wonder who the best teams in the world are. When that discussion becomes serious, the NBA and those winning overseas teams get paid.
European Soccer has done a phenomenal job of inventing tournaments that drive huge revenues and TV dollars. This would allow the NBA to do the same thing. Take a Christmas break, or do it in the summer , where the top 6 records in the league play the top 6 teams over there , with the revenues from the event being split primarily among the participant teams rather than equally among all NBA teams. Not only would that be a great revenue source for all the teams involved, but it would create a huge economic incentive for the other 24NBA teams and all overseas team to become top tier teams.
Then of course we could create our own World Cup type tournament every 4 years.
ALl of this could open the door to create more NBA owned competition. I'm not saying it would be easy or automatic. Quite a few parties that dont always see eye to eye would have to come to agreement, But the timing for all of that is right and its an amazing opportunity for players, leagues and teams alike.
Who would have ever thunk that the combination of Josh and the drop in the dollar could create such a wonderful opportunity.Permalink | Email this | Linking Blogs | Comments
Categories: Blogs
How to increase video viewership
In 9th grade, my social studies teacher taught me that the greatest marketing slogan ever were the words "rinse and repeat " that they put on shampoo bottles. There is absolutely no reason to wash your hair twice, but if anyone does, they are that much closer to buying another bottle.
A simple, and maybe as effective option for video ? Allow for downloads.
I was watching video on a news site and wanted to keep a copy of the video. This was original video to the station, so there were no copyright issues. So there was no reason for them not to allow a download.
The crazy part is that since they were using flash, it was progressive download. The video is there on the hard drive, its just a matter of making it easy for the end user to rewatch the video. Again and again and again..
Many of the major video sites have added this option, but its amazing that newspaper, TV and other sites that have recently added video, for the most part do not.
With online video, maybe adding the word "Save" to Share & Replay might not double viewing, but every additional local view not only can increase revenue, but it can eliminate paying for bandwidth for those users who go back to the original link and stream the video again.
Im just saying..
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A simple, and maybe as effective option for video ? Allow for downloads.
I was watching video on a news site and wanted to keep a copy of the video. This was original video to the station, so there were no copyright issues. So there was no reason for them not to allow a download.
The crazy part is that since they were using flash, it was progressive download. The video is there on the hard drive, its just a matter of making it easy for the end user to rewatch the video. Again and again and again..
Many of the major video sites have added this option, but its amazing that newspaper, TV and other sites that have recently added video, for the most part do not.
With online video, maybe adding the word "Save" to Share & Replay might not double viewing, but every additional local view not only can increase revenue, but it can eliminate paying for bandwidth for those users who go back to the original link and stream the video again.
Im just saying..
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Categories: Blogs
A Note to the MPAA = Promotion works better than prevention
The Motion Picture Association of America is doing their best to follow in the footsteps of their brethren at the RIAA and make business harder for its members. They, Im guessing at the direction of some lawyers of their member companies, want to try to make cable and satellite companies shut off the "analog hole" when showing movies that are being released to TV prior to their DVD release. In the MPAA's own words "Distribution over insecure outputs would facilitate the illegal copying and redistribution of this high value content, causing untold damage to the DVD and other 'downstream' markets."
The MPAA is staring right in the face of a paradox and they must make a choice. They can continue to invest in the war on Digital Piracy (as opposed to physical DVD piracy, which can be monitored and slowed by confiscating actual DVDs and duplication equipment), or they can invest in promoting the fun of going to the movies.
Invest in a positive message that can get people more excited about their member products and the unique experience offered in theaters, or send a message that your customers are crooks and pirates. Invest in a message that could generate more revenues for your members, or invest in the cost of trying to close the "analog hole" which costs taxpayers money as you waste legislative time, consumers money, as you waste the time and money of cable, satellites and telcos who will fight this effort or spend millions having to adopt it, and of course drive up the cost of the movie going experience because of all the above.
I have more than 1 billion dollars invested in the entertainment industry. I get to see our content distributed illegally online. I get a daily report of all the torrents and other files available online. You know what I think about that ? So what. Thats what i think. Its collateral damage. Unlike music, it takes time to upload and download movies. People with more time than money will steal content. THey werent going to pay for it otherwise. People with a conscious will pay for the content. Fortunately that is most people.
For all the money the RIAA wasted on trying to stop digital piracy, about all they acccomplished was explaining to everyone exactly where and how to steal music. Please do not make the same mistake. Right now its a hassle to unitlize the analog hole to copy movies. Most people have no idea how to do it, particularly for HD delivered movies. Please do not go through a big process of teaching people exactly what the analog hole is in hopes of getting companies to prevent its use. All you are going to do is turn on the lightbulb for many who would otherwise not have a clue.
The theatrical exhibition industry just experienced a phenomenal several weeks with The Dark Knight setting record after record. People by the 10s of millions went to the theater, many multiple time to enjoy the unique experience of going to a movie. Could you please, please, please use the money you are going to spend fighting the unfightable and instead spend it on promoting the fun of going to the movies ? More people going to the movies is more people getting excited about movies. More people getting excited about movies means more people watching movies on TV, which is good for revenues, and more people buying DVDs or legal downloads of the movies. Again, good for revenues.
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The MPAA is staring right in the face of a paradox and they must make a choice. They can continue to invest in the war on Digital Piracy (as opposed to physical DVD piracy, which can be monitored and slowed by confiscating actual DVDs and duplication equipment), or they can invest in promoting the fun of going to the movies.
Invest in a positive message that can get people more excited about their member products and the unique experience offered in theaters, or send a message that your customers are crooks and pirates. Invest in a message that could generate more revenues for your members, or invest in the cost of trying to close the "analog hole" which costs taxpayers money as you waste legislative time, consumers money, as you waste the time and money of cable, satellites and telcos who will fight this effort or spend millions having to adopt it, and of course drive up the cost of the movie going experience because of all the above.
I have more than 1 billion dollars invested in the entertainment industry. I get to see our content distributed illegally online. I get a daily report of all the torrents and other files available online. You know what I think about that ? So what. Thats what i think. Its collateral damage. Unlike music, it takes time to upload and download movies. People with more time than money will steal content. THey werent going to pay for it otherwise. People with a conscious will pay for the content. Fortunately that is most people.
For all the money the RIAA wasted on trying to stop digital piracy, about all they acccomplished was explaining to everyone exactly where and how to steal music. Please do not make the same mistake. Right now its a hassle to unitlize the analog hole to copy movies. Most people have no idea how to do it, particularly for HD delivered movies. Please do not go through a big process of teaching people exactly what the analog hole is in hopes of getting companies to prevent its use. All you are going to do is turn on the lightbulb for many who would otherwise not have a clue.
The theatrical exhibition industry just experienced a phenomenal several weeks with The Dark Knight setting record after record. People by the 10s of millions went to the theater, many multiple time to enjoy the unique experience of going to a movie. Could you please, please, please use the money you are going to spend fighting the unfightable and instead spend it on promoting the fun of going to the movies ? More people going to the movies is more people getting excited about movies. More people getting excited about movies means more people watching movies on TV, which is good for revenues, and more people buying DVDs or legal downloads of the movies. Again, good for revenues.
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Hosted Internet VIdeo - More censored than any platform ?
I was going to write a post about how similar the porn industry is to that of web video. The commonalities are striking. Find a hot girl with hopefully a big personality and put her as the focus of the show. Find the least expensive video equipment you can and using low cost production methods, quickly release as many videos as possible. Every now and then a hit pops out, but the key is volume. In the porn biz, its pay per view/subscription, for the internet video business its free with ads or maybe some money from Itunes. Not so different, are they ?
But thats not for this post. It occurred to me that its possible to find porn. Its possible to find PG 13 type videos,but its really difficult to find R rated videos. Sure there are Playboy or Mr SKin type sites that will titillate us, and there are the sites where college kids go wild, but thats not what Im referring to. Where are the internet videos that cover grown up subject matters, where nudity "that contributes to the subject matter" isn't considered gratuitous or pornographic ?
You cant post that kind of material on Youtube , Myspace, Yahoo or AOL Video. So where will user generated content geared towards a more "mature" audience go ? Dailymotion ? Or does internet hosted video never get past PG - 13 ? Has internet hosted video evolved into the most censored medium of our generation ? If you really want to go beyond PG 13, do you have to host it yourself on your own website ?
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But thats not for this post. It occurred to me that its possible to find porn. Its possible to find PG 13 type videos,but its really difficult to find R rated videos. Sure there are Playboy or Mr SKin type sites that will titillate us, and there are the sites where college kids go wild, but thats not what Im referring to. Where are the internet videos that cover grown up subject matters, where nudity "that contributes to the subject matter" isn't considered gratuitous or pornographic ?
You cant post that kind of material on Youtube , Myspace, Yahoo or AOL Video. So where will user generated content geared towards a more "mature" audience go ? Dailymotion ? Or does internet hosted video never get past PG - 13 ? Has internet hosted video evolved into the most censored medium of our generation ? If you really want to go beyond PG 13, do you have to host it yourself on your own website ?
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The Life of a Story ? The 3s
I started this blog more than 4 years ago because I wanted to respond to a story that I felt misrepresented the email exchange I had with the reporter. My concern then, was that reporters in the traditional news media, in this case the Dallas Morning News had sufficient power to create whatever perception they wanted to about whoever they wrote about. This blog was a way to combat that.
That was during a time when newspapers and televisions perceived themselves to have more impact than the internet, and they were right. The topics they wrote and reported about, and the perceptions they left had a far longer shelf life and messaging impact than they do today. To this day, my day of making blizzards at Dairy Queen is referenced frequently, as if it happened recently, although it happened more than 7 years ago. To this day, it seems that every mention of me, whether it relates to basketball or not has to mention my being fined by the NBA in some manner, although the only time I have been fined in the last 5 years was during the 2006 playoffs. There have been multiple other stories about me that have drawn headlines, but few people are going to remember them.
Today's media presumes that our memories are short, and that we need continuous shots of adrenaline generating headlines in order to get our attention. Whether its the paparazzi following a starlet doing the exact same thing over and over again, or the search for the latest rehab relapse, no story is expected to remembered past dinner the next day.
I'm not saying this is a bad thing. It's a reflection of the significant increase in competition for subscriber, viewer/reader and advertiser attention and dollars. If thats the best way you can come up with to compete, go for it.
Of course, the constant chase of headlines can create misery for those people being chased, but it has lead to a rule of thumb that offers a light at the end of the tunnel for anyone under media scrutiny. The life of a story in this media world is 3 weeks. Not 2 weeks and 6 days, and not 3 weeks and 1 day. 3 Weeks. For anyone who is getting attention they would not like, if you can just deal with it, and not generate any new news or stories about yourself, than all the attention will go away in 3 weeks.
In 3 weeks, unless you do something new, even the media gets bored with the story. They run out of ridiculous headlines. They cant get even the smallest blogs to reference them. The juice runs dry and by then someone else has is the story. More importantly, if you can stay out of the news for a while, your 3 week run will have been completely forgotten.
Its also important to recognize that the 3 weeks rule does not apply to good news. If you cure the common cold, save a person from drowning, feed the poor, or do something nice that does get a headline, it will not be carried forward for 3 weeks. You will get 1 day in the news, and then 10 blogs will write about it, and then after 3 days, it will be forgotten by all by those involved in the story and your friends and relatives.
Whats the point of all of this ? Planning and understanding. If you find yourself in the media for any reason, just remember the rule of 3s, 3 days or 3 weeks. Then it all goes away
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That was during a time when newspapers and televisions perceived themselves to have more impact than the internet, and they were right. The topics they wrote and reported about, and the perceptions they left had a far longer shelf life and messaging impact than they do today. To this day, my day of making blizzards at Dairy Queen is referenced frequently, as if it happened recently, although it happened more than 7 years ago. To this day, it seems that every mention of me, whether it relates to basketball or not has to mention my being fined by the NBA in some manner, although the only time I have been fined in the last 5 years was during the 2006 playoffs. There have been multiple other stories about me that have drawn headlines, but few people are going to remember them.
Today's media presumes that our memories are short, and that we need continuous shots of adrenaline generating headlines in order to get our attention. Whether its the paparazzi following a starlet doing the exact same thing over and over again, or the search for the latest rehab relapse, no story is expected to remembered past dinner the next day.
I'm not saying this is a bad thing. It's a reflection of the significant increase in competition for subscriber, viewer/reader and advertiser attention and dollars. If thats the best way you can come up with to compete, go for it.
Of course, the constant chase of headlines can create misery for those people being chased, but it has lead to a rule of thumb that offers a light at the end of the tunnel for anyone under media scrutiny. The life of a story in this media world is 3 weeks. Not 2 weeks and 6 days, and not 3 weeks and 1 day. 3 Weeks. For anyone who is getting attention they would not like, if you can just deal with it, and not generate any new news or stories about yourself, than all the attention will go away in 3 weeks.
In 3 weeks, unless you do something new, even the media gets bored with the story. They run out of ridiculous headlines. They cant get even the smallest blogs to reference them. The juice runs dry and by then someone else has is the story. More importantly, if you can stay out of the news for a while, your 3 week run will have been completely forgotten.
Its also important to recognize that the 3 weeks rule does not apply to good news. If you cure the common cold, save a person from drowning, feed the poor, or do something nice that does get a headline, it will not be carried forward for 3 weeks. You will get 1 day in the news, and then 10 blogs will write about it, and then after 3 days, it will be forgotten by all by those involved in the story and your friends and relatives.
Whats the point of all of this ? Planning and understanding. If you find yourself in the media for any reason, just remember the rule of 3s, 3 days or 3 weeks. Then it all goes away
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Categories: Blogs
How to Jumpstart the Economy - Tax Free Small Businesses
I can't remember how many companies I have started in my life. It's quite a few. Many have worked, some haven't. The one thing I know with certainty is that at no time prior to starting a company did capital gains or income tax percentages ever impact whether or not I would start a business. As any entrepreneur will gladly tell you, you have to have income before you are taxed, so how much you pay on your earnings is a good problem to have, and a better problem is how much you have to pay on capital gains.
What has impacted my decision on whether or not to start a business is the amount of paperwork involved and the local, state and employer taxes involved. Its complicated and expensive to start even the smallest business in the real world. The real world of course is different than the Internet world. The state of business, and in particular, entrepreneurship in the US has devolved into two worlds, the Internet and the real world.
In the Internet world, all you have to do is setup an account with an ad network, put it on your website, generate some traffic and they send you a check. Which is exactly what I did with the Google SearchBox below. No licenses, no tax id, no announcements in the newspaper. It took me minutes. Its exactly what millions of people do as well and its created an entire Internet economy that lives off of Google, Yahoo, MIcroSoft, AOL, Ebay and others. Its the entrepreneurs path of least resistance, which is exactly why most take this route.
Compare that with setting up a real world business. This is from the State of Texas: (Which I am proud to say makes it far easier than most states to start a business).
Step 1:Legal Structure and Registrations
Step 2:Business Tax Responsibilities
Step 3:Licenses Permits and Registrations (Note to State of TX, this link was broken, I had to find the destination page )
Step 4:Business Employer Requirements
As an entrepreneur , I can tell you that working through the requirements of these four steps is scary and intimidating. Why ? Because to merely start your business, you have to deal with lawyers and accountants, which not only costs a lot of money, but more importantly, requires you to trust those lawyers and accountants to make decisions that could have make or break consequences on your business. You may have the best idea with the ability to execute on that idea, but one little snafu by these professionals and your business is down the tubes.
Even worse, if you mess up on any of this, you could get in legal trouble. You could get sued, or find yourself in the middle of some legal nightmare.
Then of course, there is the financial reality of having to pay all of the business and employer taxes.
Contrast the above to what it takes to start a business on the Internet. Sure, Internet businesses are supposed to follow all the above steps in one manner or another, but they don't. Sure, when an Internet site hires people they are supposed to treat them like employees in the real world, but they don't. On the Internet, there are no employees, only contractors and consultants. No one pays employee taxes until they are big enough to have something to lose if they get caught.
Which brings us back to How to Jump Start the Economy.
If you want to see an immediate re invigoration of the economy, open the door back up for individual entrepreneurs to enter the real world without fear and without an immediate financial burden that pre empts their ability to be successful.
If we really want to stimulate job creation in this country, take the same approach to small business with 25 or fewer employees that we take to Internet taxes. Outlaw them.
No taxes of any kind on small businesses with 25 or fewer employees. No employer payroll tax. No state or local taxes. No taxes on earnings. Nada. The business owners will pay income taxes on their personal income they pay themselves, but not corporate earnings
The only taxes they would collect and remit are sales taxes, the employee's portion of payroll taxes and of course they would still file personal income taxes on their individual earnings.
Make this available only to individuals, and only for a single company (to prevent gaming the system by having multiple 25 employee and under companies)
The impact on the economy would be amazing and immediate. Those without jobs would be able to work for themselves, they would be able to join together and start companies. They would be able to take risks with far less capital. Sweat Equity would be all it takes to start a business.
Not only would we see hundreds of thousands of new businesses started seemingly overnight, with millions of new hires, but from those new businesses would come new ideas that hopefully would give us our next "Internet", an engine for economic growth that super cedes today's ideas.
In today's climate, its politically expedient to volunteer taxpayer money as a solution to all problems. That's wrong. Instead, we should open the door to our country's Intellectual capital and the entrepreneurial energy that separates us from the rest of the world. Make it easy for entrepreneurs to do what entrepreneurs do, and great things happen. Voters and politicians alike seem to have forgotten what has made this country an economic powerhouse.
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What has impacted my decision on whether or not to start a business is the amount of paperwork involved and the local, state and employer taxes involved. Its complicated and expensive to start even the smallest business in the real world. The real world of course is different than the Internet world. The state of business, and in particular, entrepreneurship in the US has devolved into two worlds, the Internet and the real world.
In the Internet world, all you have to do is setup an account with an ad network, put it on your website, generate some traffic and they send you a check. Which is exactly what I did with the Google SearchBox below. No licenses, no tax id, no announcements in the newspaper. It took me minutes. Its exactly what millions of people do as well and its created an entire Internet economy that lives off of Google, Yahoo, MIcroSoft, AOL, Ebay and others. Its the entrepreneurs path of least resistance, which is exactly why most take this route.
Compare that with setting up a real world business. This is from the State of Texas: (Which I am proud to say makes it far easier than most states to start a business).
Step 1:Legal Structure and Registrations
Step 2:Business Tax Responsibilities
Step 3:Licenses Permits and Registrations (Note to State of TX, this link was broken, I had to find the destination page )
Step 4:Business Employer Requirements
As an entrepreneur , I can tell you that working through the requirements of these four steps is scary and intimidating. Why ? Because to merely start your business, you have to deal with lawyers and accountants, which not only costs a lot of money, but more importantly, requires you to trust those lawyers and accountants to make decisions that could have make or break consequences on your business. You may have the best idea with the ability to execute on that idea, but one little snafu by these professionals and your business is down the tubes.
Even worse, if you mess up on any of this, you could get in legal trouble. You could get sued, or find yourself in the middle of some legal nightmare.
Then of course, there is the financial reality of having to pay all of the business and employer taxes.
Contrast the above to what it takes to start a business on the Internet. Sure, Internet businesses are supposed to follow all the above steps in one manner or another, but they don't. Sure, when an Internet site hires people they are supposed to treat them like employees in the real world, but they don't. On the Internet, there are no employees, only contractors and consultants. No one pays employee taxes until they are big enough to have something to lose if they get caught.
Which brings us back to How to Jump Start the Economy.
If you want to see an immediate re invigoration of the economy, open the door back up for individual entrepreneurs to enter the real world without fear and without an immediate financial burden that pre empts their ability to be successful.
If we really want to stimulate job creation in this country, take the same approach to small business with 25 or fewer employees that we take to Internet taxes. Outlaw them.
No taxes of any kind on small businesses with 25 or fewer employees. No employer payroll tax. No state or local taxes. No taxes on earnings. Nada. The business owners will pay income taxes on their personal income they pay themselves, but not corporate earnings
The only taxes they would collect and remit are sales taxes, the employee's portion of payroll taxes and of course they would still file personal income taxes on their individual earnings.
Make this available only to individuals, and only for a single company (to prevent gaming the system by having multiple 25 employee and under companies)
The impact on the economy would be amazing and immediate. Those without jobs would be able to work for themselves, they would be able to join together and start companies. They would be able to take risks with far less capital. Sweat Equity would be all it takes to start a business.
Not only would we see hundreds of thousands of new businesses started seemingly overnight, with millions of new hires, but from those new businesses would come new ideas that hopefully would give us our next "Internet", an engine for economic growth that super cedes today's ideas.
In today's climate, its politically expedient to volunteer taxpayer money as a solution to all problems. That's wrong. Instead, we should open the door to our country's Intellectual capital and the entrepreneurial energy that separates us from the rest of the world. Make it easy for entrepreneurs to do what entrepreneurs do, and great things happen. Voters and politicians alike seem to have forgotten what has made this country an economic powerhouse.
@import url(http://www.google.com/cse/api/branding.css);
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My FCC Presentation on the Future of Digital Media
Its hard to get much said in a 5 minute limit, but hopefully I made a few points that got people thinking.
Thank you for allowing me to offer this presentation on the Future of Digital Media. Its great to be back in Pittsburgh. A city that continues to grow in its vibrance, entrepreneurial spirit and verve to continually reinvent itself. Im proud to have grown up here.
The future of any technology can be defined by the economic opportunities it creates. One just look around Pittsburgh to see the explosion in the number of businesses built around advances in medical technology to see the importance of entrepreneurs focusing on new technology. The impact has been enormous.
Which brings us to today. What are the opportunities in front of us to get excited about in the digital media field ?
The first thing to understand is that digital media is not synonymous with the internet. There is a vast and growing world of digital media opportunities that exist outside the internet. Here are some examples:
1. While the wonders of the internet often keep us glued to our screens and at home, they also contribute to our need to get away. One of the shortest term opportunities is out of home entertainment. One opportunity that will expand is the use and implementation of 3D entertainment. While its not unusual for movies to be produced in 3D, there is a market for other types of 3D entertainment that is ready to take off. The Dallas Mavericks did a live 3D broadcast of one of our games this past season that we broadcast to a local movie theater enabled with a 3D digital projector. It was a huge success, fans loved it, 3D glasses and all, and have asked for more. We have seen the same demand for other types of content as well. Fortunately, there are not any production trucks dedicated to 3D live programming, so we are looking at building one.
From games to gaming to concerts to plays to specially developed events. 3D will be a mainstay of the future of digital media. Using entertainment as the starting point, the technology will advance, decline in price, and applications will be developed that will expand the use of 3D from entertainment to corporate to medical and personal and more. 3D is and will continue to be an exciting digital media application for a long time to come.
In order to support future digital media applications such as 3D, the networks that will carry them will need to evolve. That evolution will lead to new and exciting digital media applications, but will require new protocols and a far greater integration into the fixed routers of existing networks.
2. The second opportunity is with application specific networks. Unfortunately, the best networks cant be all things to all people and applications, which is exactly what the internet has to be. Not only does it have to be all things to all people, it has to be dumbed down to continue to be open for everyone and anyone. i believe we will see an expansion of networks that are optimized for specific protocols, performance guarantees and applications.
The most obvious example of this is are satellite and digital cable networks. These networks are optimized for broadcast and on demand applications at as high a quality as their bandwidth can support. They also have become platforms for application development and are starting to see increasingly robust toolsets. Unlike the internet, which is best delivery effort, with no promises or guarantees, the networks which deliver our digital TV are optimized to be reliable to five 9s with near instantaneous delivery.
These networks create unique opportunities for interactive applications, and for the delivery of content to mass audiences. There are open, or reasonably open standards such as Docsis 3.0/Tru 2Way that are now becoming available to any and all developers. I would strongly recommend that those of you who are looking at digital media applications to consider the opportunities available on these networks which already reach almost every home in the US.
That said, while platforming on an advanced media network is enticing, there are risks here. The consolidation of ownership among video distributors , who own both the networks and content could create roadblocks of discrimination towards their own products, or for the products of major media corporations with considerable market clout. These could preclude small programmers and entrepreneurs. Which is why HDNet is supportive of a shot clock to resolve these conflicts and to encourage those here to consider applying these same conflict resolution elements to not just content, but to software developments as well. However, even with these risks, as an entrepreneur, I think application development on proven digital media networks is a great opportunity for myself and others
There is one last point I would like to make in my allotted time. The one area of digital media that will create the greatest opportunity for entrepreneurs is the ability to develop and or control applications on fixed routers on internet connected networks. As those who want to see better performance of digital media, particularly live streaming over the internet will realize, best performance will come from utilizing application specific protocols such as multicast. This will create significant demand that will quickly and easily outstrip providers ability to support the demand. This will have the affect of putting ISPs in the role of gatekeeper for determining who gets the ability to broadcast over the internet vs who has to deliver content on a one to one, unicast basis. At some point in time, someone will realize that the holy grail of distribution of digital media over the internet will come from partnering with the many ISPs to enable multicasting and its related protocols, and to peer them as an unwired network. It wont be cheap, fast or easy, but it would be a game changer.Permalink | Email this | Linking Blogs | Comments
Thank you for allowing me to offer this presentation on the Future of Digital Media. Its great to be back in Pittsburgh. A city that continues to grow in its vibrance, entrepreneurial spirit and verve to continually reinvent itself. Im proud to have grown up here.
The future of any technology can be defined by the economic opportunities it creates. One just look around Pittsburgh to see the explosion in the number of businesses built around advances in medical technology to see the importance of entrepreneurs focusing on new technology. The impact has been enormous.
Which brings us to today. What are the opportunities in front of us to get excited about in the digital media field ?
The first thing to understand is that digital media is not synonymous with the internet. There is a vast and growing world of digital media opportunities that exist outside the internet. Here are some examples:
1. While the wonders of the internet often keep us glued to our screens and at home, they also contribute to our need to get away. One of the shortest term opportunities is out of home entertainment. One opportunity that will expand is the use and implementation of 3D entertainment. While its not unusual for movies to be produced in 3D, there is a market for other types of 3D entertainment that is ready to take off. The Dallas Mavericks did a live 3D broadcast of one of our games this past season that we broadcast to a local movie theater enabled with a 3D digital projector. It was a huge success, fans loved it, 3D glasses and all, and have asked for more. We have seen the same demand for other types of content as well. Fortunately, there are not any production trucks dedicated to 3D live programming, so we are looking at building one.
From games to gaming to concerts to plays to specially developed events. 3D will be a mainstay of the future of digital media. Using entertainment as the starting point, the technology will advance, decline in price, and applications will be developed that will expand the use of 3D from entertainment to corporate to medical and personal and more. 3D is and will continue to be an exciting digital media application for a long time to come.
In order to support future digital media applications such as 3D, the networks that will carry them will need to evolve. That evolution will lead to new and exciting digital media applications, but will require new protocols and a far greater integration into the fixed routers of existing networks.
2. The second opportunity is with application specific networks. Unfortunately, the best networks cant be all things to all people and applications, which is exactly what the internet has to be. Not only does it have to be all things to all people, it has to be dumbed down to continue to be open for everyone and anyone. i believe we will see an expansion of networks that are optimized for specific protocols, performance guarantees and applications.
The most obvious example of this is are satellite and digital cable networks. These networks are optimized for broadcast and on demand applications at as high a quality as their bandwidth can support. They also have become platforms for application development and are starting to see increasingly robust toolsets. Unlike the internet, which is best delivery effort, with no promises or guarantees, the networks which deliver our digital TV are optimized to be reliable to five 9s with near instantaneous delivery.
These networks create unique opportunities for interactive applications, and for the delivery of content to mass audiences. There are open, or reasonably open standards such as Docsis 3.0/Tru 2Way that are now becoming available to any and all developers. I would strongly recommend that those of you who are looking at digital media applications to consider the opportunities available on these networks which already reach almost every home in the US.
That said, while platforming on an advanced media network is enticing, there are risks here. The consolidation of ownership among video distributors , who own both the networks and content could create roadblocks of discrimination towards their own products, or for the products of major media corporations with considerable market clout. These could preclude small programmers and entrepreneurs. Which is why HDNet is supportive of a shot clock to resolve these conflicts and to encourage those here to consider applying these same conflict resolution elements to not just content, but to software developments as well. However, even with these risks, as an entrepreneur, I think application development on proven digital media networks is a great opportunity for myself and others
There is one last point I would like to make in my allotted time. The one area of digital media that will create the greatest opportunity for entrepreneurs is the ability to develop and or control applications on fixed routers on internet connected networks. As those who want to see better performance of digital media, particularly live streaming over the internet will realize, best performance will come from utilizing application specific protocols such as multicast. This will create significant demand that will quickly and easily outstrip providers ability to support the demand. This will have the affect of putting ISPs in the role of gatekeeper for determining who gets the ability to broadcast over the internet vs who has to deliver content on a one to one, unicast basis. At some point in time, someone will realize that the holy grail of distribution of digital media over the internet will come from partnering with the many ISPs to enable multicasting and its related protocols, and to peer them as an unwired network. It wont be cheap, fast or easy, but it would be a game changer.Permalink | Email this | Linking Blogs | Comments
Categories: Blogs
The Way to Save Internet Video
There is a lot of money being spent trying to turn internet video into something its not. Its not TV. It's certainly not going to be HDTV. What is shocking about the entire attempt to turn the internet into a tv/HDTV distribution medium is how much people lie to themselves about what is actually happening.
First of all, 100pct of the internet video that you see offered on the net as HD, is not HD. Plain and simple. What is HD video ? HD Vidoe is video you can watch on a screen of ANY size and say..."that looks good, almost as good as it can get ". What is currently being passed as HD, is video that looks pretty good because its being played on a small PC or Laptop screen and for the big timers, even a 17" screen. Well guess what, everything and anything coded at 2mbs and above is going to look good on a small screen. But looking good on a small screen doesn't cut it. In fact, video that looks its best on a 27" TV is not going to cut it. For those of you who don't see it that way, do some research on fhe history of Fox's Wide Screen broadcasts and see how owners of HDTVs 40" in above felt about those broadcasts compared to what they got from other networks. In a nutshell, WideScreen is gone. The quality wasn't good enough.
I'm not going to go on my 19th nervous tangent about why video over the net has problems and HD over the net is not going to happen. Instead, I will give the quick and dirty on what should happen.
There are already multiple digital distribution systems in place that distribute video, in SD and HD to our homes in place. Not only can they get the signal to our home with 99pct uptime and zero buffering but there are any number of systems in place that allow the signals to be distributed around our homes. In other words, Tv as TV works.
Which leads to the solution.
Move the video cloud to the node and encode and insert into the traditional video distribution systems.
Rather than Hulu sending its video directly across the net to your PC, and let the end user figure out how to watch and distribute from there, it should send it to a box hosted by your cable/telco and possibly even satellite provider, which then transcodes the video and places it on the existing TV distribution system and sends it across a channel branded with your name and the name of the file to your TV.
The net result is that having subscribed to this "Internet Video to your TV" system for a buck or two per month, you will notice that on your electronic programming guide there is a subset of channels with your name on them. When you click on a video at your favorite site, that video can easily be rerouted to the server at the node, transcoded into the right format and shown on your TV's programming guide as "mark cuban channels" - 001 Diet Coke and Mentos -002 Cat Flushing Toilet 003 - Softball game, etc. All you have to do is watch cable/telco/sat TV like you have always watched tv. Watching video anywhere in your house will be that easy.
Of course it will take coordination between the video sites and the video distributors, but that really should be easy. Even FTP would get it done.
This approach should result in a far better use of capital for them, and more importantly, it moves video off of the last internet mile, where bandwidth is constrained, to their new Switched Digital Video last mile , which is far less constrained now, and should quickly become completely unconstrained for long tail content.
if done right, it could also replace all local DVR storage. If you think about it, its pretty stupid to have redundant storage in every home. Paying for those ever growing hard drives, even with falling cost per bits, adds up to a lot of money . Moving that storage to a video cloud at the node or even on the backbone would make set top boxes smaller, cheaper and more flexible. The Network DVR , with space for remotely loaded internet video should be the way of the future.
In addition, this approach could expand our ability to customzie our TV viewing experience. Why cant we create playlists of our favorite shows? I personally would love to create a playlist, customized with a picture of my daughter, her name as the channel name, with a playlist or on demand list of shows that are appropriate for her. When there are videos of group activities like her ballet recitals, it would be great if we could mark the video as sharable with others we designate, or other parents could do the same, and we could easily watch them on our TV.
The video distribution networks already in place are designed to move gigabits of data simultaneously to millions of homes. As these distribution networks go to IP and Switched Digital Video, they will be able to integrate back to internet sites and to interact and offer more advanced customization and cloud based applications with far more sophistication and flexibility than the internet and the web can offer around video. As middleware like Tru2Way becomes more popular, and more TVs support it, the applications on our TVs will multiply quickly.
There is no reason to re invent TV over the net when TV distributed as TV works, and all the technology is in place to move video from the net to TV distirbution networks.Permalink | Email this | Linking Blogs | Comments
First of all, 100pct of the internet video that you see offered on the net as HD, is not HD. Plain and simple. What is HD video ? HD Vidoe is video you can watch on a screen of ANY size and say..."that looks good, almost as good as it can get ". What is currently being passed as HD, is video that looks pretty good because its being played on a small PC or Laptop screen and for the big timers, even a 17" screen. Well guess what, everything and anything coded at 2mbs and above is going to look good on a small screen. But looking good on a small screen doesn't cut it. In fact, video that looks its best on a 27" TV is not going to cut it. For those of you who don't see it that way, do some research on fhe history of Fox's Wide Screen broadcasts and see how owners of HDTVs 40" in above felt about those broadcasts compared to what they got from other networks. In a nutshell, WideScreen is gone. The quality wasn't good enough.
I'm not going to go on my 19th nervous tangent about why video over the net has problems and HD over the net is not going to happen. Instead, I will give the quick and dirty on what should happen.
There are already multiple digital distribution systems in place that distribute video, in SD and HD to our homes in place. Not only can they get the signal to our home with 99pct uptime and zero buffering but there are any number of systems in place that allow the signals to be distributed around our homes. In other words, Tv as TV works.
Which leads to the solution.
Move the video cloud to the node and encode and insert into the traditional video distribution systems.
Rather than Hulu sending its video directly across the net to your PC, and let the end user figure out how to watch and distribute from there, it should send it to a box hosted by your cable/telco and possibly even satellite provider, which then transcodes the video and places it on the existing TV distribution system and sends it across a channel branded with your name and the name of the file to your TV.
The net result is that having subscribed to this "Internet Video to your TV" system for a buck or two per month, you will notice that on your electronic programming guide there is a subset of channels with your name on them. When you click on a video at your favorite site, that video can easily be rerouted to the server at the node, transcoded into the right format and shown on your TV's programming guide as "mark cuban channels" - 001 Diet Coke and Mentos -002 Cat Flushing Toilet 003 - Softball game, etc. All you have to do is watch cable/telco/sat TV like you have always watched tv. Watching video anywhere in your house will be that easy.
Of course it will take coordination between the video sites and the video distributors, but that really should be easy. Even FTP would get it done.
This approach should result in a far better use of capital for them, and more importantly, it moves video off of the last internet mile, where bandwidth is constrained, to their new Switched Digital Video last mile , which is far less constrained now, and should quickly become completely unconstrained for long tail content.
if done right, it could also replace all local DVR storage. If you think about it, its pretty stupid to have redundant storage in every home. Paying for those ever growing hard drives, even with falling cost per bits, adds up to a lot of money . Moving that storage to a video cloud at the node or even on the backbone would make set top boxes smaller, cheaper and more flexible. The Network DVR , with space for remotely loaded internet video should be the way of the future.
In addition, this approach could expand our ability to customzie our TV viewing experience. Why cant we create playlists of our favorite shows? I personally would love to create a playlist, customized with a picture of my daughter, her name as the channel name, with a playlist or on demand list of shows that are appropriate for her. When there are videos of group activities like her ballet recitals, it would be great if we could mark the video as sharable with others we designate, or other parents could do the same, and we could easily watch them on our TV.
The video distribution networks already in place are designed to move gigabits of data simultaneously to millions of homes. As these distribution networks go to IP and Switched Digital Video, they will be able to integrate back to internet sites and to interact and offer more advanced customization and cloud based applications with far more sophistication and flexibility than the internet and the web can offer around video. As middleware like Tru2Way becomes more popular, and more TVs support it, the applications on our TVs will multiply quickly.
There is no reason to re invent TV over the net when TV distributed as TV works, and all the technology is in place to move video from the net to TV distirbution networks.Permalink | Email this | Linking Blogs | Comments
Categories: Blogs
Free is only good if someone else is paying for it. .
Everyone wants to give everything away for free. Thats the way the internet should work, right ? Wrong. Let me change the conventional wisdom a little bit with this :
Free is only good if someone else is paying for it.
We dont want to waste our time with a product or service if its not worth anything. We want things of value, and we dont want to waste of lot of time trying to determine if what is being offered is something we would use or consume. The easiest way to make the determination ? See if anyone else is using it and paying for it.
When we see enough other people actually paying, and how much they are paying, that becomes our "due diligence" and market pricing mechanism. It also becomes part of the decision tree as to whether or not we would prefer a free version , or are willing to pay. For some, it becomes the determining factor on whether or not they are willing to steal rather than pay.
Which translates to the conventional wisdom that free is the way to go on the web as being wrong. I think many websites are making a huge mistake by going free only for their products. The real upside comes from being a hybrid, with both free and for pay versions.
When people actually pay for your product, you define a value to everyone. First you have to keep your paying customers happy. They want their money's worth. Which in turn, keeps you improving the product and the service surrounding it. Just as importantly, it creates a revenue stream for your company. Always remember this. Without a revenue stream, you have no company.
Of course, you can sell advertising around the product. But while culture of the web is such that most of us understand that if you get something for free, you accept advertising or limited features in return.
The challenge for businesses is figuring out what the right balance of price vs features and advertising is.
At Filesanywhere.com,an online disk storage company, we have a variety of offerings from free to thousands of dollars, depending on the needs of the customer. It works great because the perceived value of the free version is off the charts because everyone knows they are getting a subset of a product that is worth thousands of dollars to corporations. Its a bargain to them when they can start with the free version, see if it meets their needs, and then choose the higher end offerings if they need or want them.
On the other hand, I have tried versions of competitors of theirs, that are offered exclusively for free, and some of the products were good, but the advertising was so intrusive, it wasnt worth the hassle and I didnt have an option out.
The challenge of pricing and product options is going to become more and more complex in a digital world. Because the cost of creating and distributing one more unit of a digital product, whether its a song, movie or piece of software or anything else is essentially nothing , its very , very tempting to want to give it away and generate revenue via advertising or elsewhere. Thats a huge mistake.
Whenever you have people willing to pay for a version of your product. Take their money and return them a great product and value. Not only will that revenue act as a cash source foundation for your company, but it will define the value of your product to those who only want a free version. That in turn will create even more demand for both and leave you with happier customers
Permalink | Email this | Linking Blogs | Comments
Free is only good if someone else is paying for it.
We dont want to waste our time with a product or service if its not worth anything. We want things of value, and we dont want to waste of lot of time trying to determine if what is being offered is something we would use or consume. The easiest way to make the determination ? See if anyone else is using it and paying for it.
When we see enough other people actually paying, and how much they are paying, that becomes our "due diligence" and market pricing mechanism. It also becomes part of the decision tree as to whether or not we would prefer a free version , or are willing to pay. For some, it becomes the determining factor on whether or not they are willing to steal rather than pay.
Which translates to the conventional wisdom that free is the way to go on the web as being wrong. I think many websites are making a huge mistake by going free only for their products. The real upside comes from being a hybrid, with both free and for pay versions.
When people actually pay for your product, you define a value to everyone. First you have to keep your paying customers happy. They want their money's worth. Which in turn, keeps you improving the product and the service surrounding it. Just as importantly, it creates a revenue stream for your company. Always remember this. Without a revenue stream, you have no company.
Of course, you can sell advertising around the product. But while culture of the web is such that most of us understand that if you get something for free, you accept advertising or limited features in return.
The challenge for businesses is figuring out what the right balance of price vs features and advertising is.
At Filesanywhere.com,an online disk storage company, we have a variety of offerings from free to thousands of dollars, depending on the needs of the customer. It works great because the perceived value of the free version is off the charts because everyone knows they are getting a subset of a product that is worth thousands of dollars to corporations. Its a bargain to them when they can start with the free version, see if it meets their needs, and then choose the higher end offerings if they need or want them.
On the other hand, I have tried versions of competitors of theirs, that are offered exclusively for free, and some of the products were good, but the advertising was so intrusive, it wasnt worth the hassle and I didnt have an option out.
The challenge of pricing and product options is going to become more and more complex in a digital world. Because the cost of creating and distributing one more unit of a digital product, whether its a song, movie or piece of software or anything else is essentially nothing , its very , very tempting to want to give it away and generate revenue via advertising or elsewhere. Thats a huge mistake.
Whenever you have people willing to pay for a version of your product. Take their money and return them a great product and value. Not only will that revenue act as a cash source foundation for your company, but it will define the value of your product to those who only want a free version. That in turn will create even more demand for both and leave you with happier customers
Permalink | Email this | Linking Blogs | Comments
Categories: Blogs
How Youtube Can Fix Their Revenue Problem
It appears that Youtube can only monetize about 4pct of its content. Which leads to the question of "how can Youtube monetize the other 96pct of its content ?"
The answer, believe it or not lives within Youtube and begins with another question: "Can Youtube generate enough traffic per video to cover the cost of reviewing content for copyright violations ?" After all, Google is the king of traffic generation and monetization, right ?
Now before you go all crazy and flaming about how many gazillion hours per minute of video is uploaded to Youtube and how it would be impossible to determine what videos had materials that is public domain, has already licensed content , is fair use, etc, etc,.. do some basic math.
If its estimated that Youtube will generate about 200mm in revenue around 4pct of its content, is it feasible to think that using a combination of manual and automated review, they could jump that to 20pct and increase their revenues by 500mm dollars ?
Would it cost more or less than 500mm per year to hire, train and put in place a datacenter that has enough people to take a quick look at the 10minutes or less videos, and if they are unsure if its copyright clean for any reason, run it through the content fingerprint database that Google already has in place? If the video passes, it goes to encoding and gets posted. If not, the same process that takes place when a takedown notice is posted againat a video is initiated. Someone has to prove they have the rights to the video before its posted.
Its that simple.
Realize that they are aleady doing this process for the 4pct of videos they do monetize.The 4pct have licenses from the content owner/distributor to Youtube. Youtube has to make sure that the person representing himself as the owner truly is. So they go through this process already and 4pct of videos is no small number. So they think the numbers work for those videos, so why shouldnt it work for all videos ?
At this point, someone says... why not just look for the videos that are starting to generate the most views and get in touch with them , sign a license and glom on some advertising ? Thats a problem under the DMCA. Youtube employees pretty much are not allowed to review their site for unlicensed user uploads. If they take a peak, and the video they look at has what appears to be obviously infringing content, they have to check it out and if its infringing, take it down.
So the Youtube cure is simple. Review videos first. Run them through the same process they use for the 4pct they have confirmed and only post those that pass.It should be a no brainer. After all, If Google cant leverage all their traffic and monetization skills to allow Youtube to continue to thrive after this change and finally generate revenue, who can ? IF Google cant generate enough traffic for qualified videos to cover this cost, why would content owners want to license their content to Google to put on Youtube ?
Of course, there is the risk that by introducing this process, Youtube loses its crown as the ultimate video destination. Its a tough situation to be in, when your mind is on your money and your money is on your mind..But sometimes you have to decide between the crown and the cash
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The answer, believe it or not lives within Youtube and begins with another question: "Can Youtube generate enough traffic per video to cover the cost of reviewing content for copyright violations ?" After all, Google is the king of traffic generation and monetization, right ?
Now before you go all crazy and flaming about how many gazillion hours per minute of video is uploaded to Youtube and how it would be impossible to determine what videos had materials that is public domain, has already licensed content , is fair use, etc, etc,.. do some basic math.
If its estimated that Youtube will generate about 200mm in revenue around 4pct of its content, is it feasible to think that using a combination of manual and automated review, they could jump that to 20pct and increase their revenues by 500mm dollars ?
Would it cost more or less than 500mm per year to hire, train and put in place a datacenter that has enough people to take a quick look at the 10minutes or less videos, and if they are unsure if its copyright clean for any reason, run it through the content fingerprint database that Google already has in place? If the video passes, it goes to encoding and gets posted. If not, the same process that takes place when a takedown notice is posted againat a video is initiated. Someone has to prove they have the rights to the video before its posted.
Its that simple.
Realize that they are aleady doing this process for the 4pct of videos they do monetize.The 4pct have licenses from the content owner/distributor to Youtube. Youtube has to make sure that the person representing himself as the owner truly is. So they go through this process already and 4pct of videos is no small number. So they think the numbers work for those videos, so why shouldnt it work for all videos ?
At this point, someone says... why not just look for the videos that are starting to generate the most views and get in touch with them , sign a license and glom on some advertising ? Thats a problem under the DMCA. Youtube employees pretty much are not allowed to review their site for unlicensed user uploads. If they take a peak, and the video they look at has what appears to be obviously infringing content, they have to check it out and if its infringing, take it down.
So the Youtube cure is simple. Review videos first. Run them through the same process they use for the 4pct they have confirmed and only post those that pass.It should be a no brainer. After all, If Google cant leverage all their traffic and monetization skills to allow Youtube to continue to thrive after this change and finally generate revenue, who can ? IF Google cant generate enough traffic for qualified videos to cover this cost, why would content owners want to license their content to Google to put on Youtube ?
Of course, there is the risk that by introducing this process, Youtube loses its crown as the ultimate video destination. Its a tough situation to be in, when your mind is on your money and your money is on your mind..But sometimes you have to decide between the crown and the cash
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Categories: Blogs
You Just Dont Get It
I just want to put it out there to save everyone and anyone who deals with me time. If at any point in time you utter the words "Just Don't Get It" or "Just Doesn't Get It" in any conversation with me, I will not do business with you.
If you try to justify your business, idea, proposal or whatever and in the course of conversation you utter these words, you have just proven to me that you are lazy. That rather than discussing the merits of another position, you think I'm stupid enough to dismiss that position because you want me to.
If you truly understand your topic its really easy to stand behind your position with facts and well thought concepts. If you have no idea what you are talking about, the other side "just doesn't get it"
Call it a Mark Cuban rule of investing. If these words come up in any way shape or form, they just dont get "it". "It" being an investment of my time or moneyPermalink | Email this | Linking Blogs | Comments
If you try to justify your business, idea, proposal or whatever and in the course of conversation you utter these words, you have just proven to me that you are lazy. That rather than discussing the merits of another position, you think I'm stupid enough to dismiss that position because you want me to.
If you truly understand your topic its really easy to stand behind your position with facts and well thought concepts. If you have no idea what you are talking about, the other side "just doesn't get it"
Call it a Mark Cuban rule of investing. If these words come up in any way shape or form, they just dont get "it". "It" being an investment of my time or moneyPermalink | Email this | Linking Blogs | Comments
Categories: Blogs
The Internet Hammer and the everything Nail
There is an old saying that I try to always remind myself of "When You Have a Hammer, Everything Looks Like a Nail"
Its always very easy, and even more tempting to try to take a utility that is readily available at minimal cost and use it as a technology that is the solution to everything. Has there been any of the world's ills that someone hasnt suggested can be cured by using the internet ?
From Education to Healthcare to Entertainment to Sports to Security to Corporate everything and just about anything and everything else. If Robitussin cant cure it, the Internet will. Of course the internet was not the first cure all for the worlds ills. The list is long. Im sure for the longest time fire was the cure all, but even in more modern times there is an exciting list.
In no particular order, electricity was a marval, and it benefited from Metcalfe's Law. Other beneficiaries of the network effect were the telegraph, roads and highways, railroads, airplanes and airports among others. With the exception of the telegraph, all went from technological miracle that reformed the world, to utilities that we can't live without, but we no long consider amazing. Is there any doubt that businesses and fortunes were built on these and other technologies and that kids coming out of school were considered ahead of the curve if they were educated in the latest and greatest ?
In just the past 20 years, knowing how to program in cobol, fortran and assembly language went from desirable by every major employer and a "great major" in school, to a worthy job, but with a chain to a desk and some really really old code to stare at every day. Database programming was the key to development riches. Its still valuable, but nothing like the opportunities of the 80s. Same can be said of C and Basic.
If you know everything there was to know about Novell networks and Lotus Notes, you could easily earn a living. Today, you better have expanded your skill set.
From Dbase to Clipper to ASP to PHP, scripting languages have built worthy applications on top of the network of choice of their day. The nature of scripting languages is that they always will be replaced by something better at some point. What happens to all those PHP apps in place today ?
No matter what the technology, language or platform, it has a limited shelf life and will use its position as "the Hammer" until it loses it.
For the past 15 years, everyone who "gets it" has tried to use the Internet to fix or create whatever they think "the next big thing " is. How much longer until there is something new that comes along and makes Web X.0 on the net look old and tired ?
Personally, I think Web 2.0 already is tired. When social networking or Twittering ,applications that are nice to have, but not a need to have, are the best we can do. We ain't doing much. Lets get real. As much fun as Twittering can be, shouldn't we all be able to agree that if its the latest and greatest application, the Internet has Jumped the Shark ?
We saw the same thing in the "PC Revolution". Back in the 80s, we waited anxiously as new desktops came out with ever increasing chips and hard drives, which when combined with ever improving programming languages, created an excitement over new software programs. Yes little Billy, there used to be a time when we wanted to see what new Word Processor or Spreadsheet or Database would come out to topple the incumbent market leader.
There was a time when there was an interesting, if not an exciting battle between Harvard Graphics and Powerpoint. Talk about ancient history. When was the last time you even looked to see if there were any new desktop apps available ? Ok maybe if you are a gamer you care. But thats it.
When was the last time a non gamer even cared about how fast a processor was for desktops and whether or not there were new desktops coming out ? Any excitement we have at all for is reserved for the shrinking of laptops and new hand held phones or devices
The PC Revolution is over. Dead. Its now just the PC Evolution.
Anyone who thinks the same wont happen to the Internet is not paying attention.
Which is exactly why its so much fun to write on this blog and tweak all the internet bigots out there. Yes, all of you who think that the Internet is the ultimate Hammer and that every problem that technology can touch is a nail, you are Internet Bigots.
Me, I believe that all internet sites are created equal, that the world has already moved past the Internet as magic to the internet as utility stage. I believe in morning walks, sipping diet peach snapple, the beauty of a jump shot ripping the cords and that if most of the world thinks the Internet is the Hammer, the solution to everything, that is the exact reason why it is not. I believe that there is something far, far better , that will have far more utility to all of us and is on the tip of the tongue of some kid out there somewhere and I will have a blast looking for it and hopefully finding it first, which will be a lot more fun than trying to compete with Facebook or Google.
In mean time, Im going to enjoy tweaking all the Internet Bigots out there, simply because its fun
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Its always very easy, and even more tempting to try to take a utility that is readily available at minimal cost and use it as a technology that is the solution to everything. Has there been any of the world's ills that someone hasnt suggested can be cured by using the internet ?
From Education to Healthcare to Entertainment to Sports to Security to Corporate everything and just about anything and everything else. If Robitussin cant cure it, the Internet will. Of course the internet was not the first cure all for the worlds ills. The list is long. Im sure for the longest time fire was the cure all, but even in more modern times there is an exciting list.
In no particular order, electricity was a marval, and it benefited from Metcalfe's Law. Other beneficiaries of the network effect were the telegraph, roads and highways, railroads, airplanes and airports among others. With the exception of the telegraph, all went from technological miracle that reformed the world, to utilities that we can't live without, but we no long consider amazing. Is there any doubt that businesses and fortunes were built on these and other technologies and that kids coming out of school were considered ahead of the curve if they were educated in the latest and greatest ?
In just the past 20 years, knowing how to program in cobol, fortran and assembly language went from desirable by every major employer and a "great major" in school, to a worthy job, but with a chain to a desk and some really really old code to stare at every day. Database programming was the key to development riches. Its still valuable, but nothing like the opportunities of the 80s. Same can be said of C and Basic.
If you know everything there was to know about Novell networks and Lotus Notes, you could easily earn a living. Today, you better have expanded your skill set.
From Dbase to Clipper to ASP to PHP, scripting languages have built worthy applications on top of the network of choice of their day. The nature of scripting languages is that they always will be replaced by something better at some point. What happens to all those PHP apps in place today ?
No matter what the technology, language or platform, it has a limited shelf life and will use its position as "the Hammer" until it loses it.
For the past 15 years, everyone who "gets it" has tried to use the Internet to fix or create whatever they think "the next big thing " is. How much longer until there is something new that comes along and makes Web X.0 on the net look old and tired ?
Personally, I think Web 2.0 already is tired. When social networking or Twittering ,applications that are nice to have, but not a need to have, are the best we can do. We ain't doing much. Lets get real. As much fun as Twittering can be, shouldn't we all be able to agree that if its the latest and greatest application, the Internet has Jumped the Shark ?
We saw the same thing in the "PC Revolution". Back in the 80s, we waited anxiously as new desktops came out with ever increasing chips and hard drives, which when combined with ever improving programming languages, created an excitement over new software programs. Yes little Billy, there used to be a time when we wanted to see what new Word Processor or Spreadsheet or Database would come out to topple the incumbent market leader.
There was a time when there was an interesting, if not an exciting battle between Harvard Graphics and Powerpoint. Talk about ancient history. When was the last time you even looked to see if there were any new desktop apps available ? Ok maybe if you are a gamer you care. But thats it.
When was the last time a non gamer even cared about how fast a processor was for desktops and whether or not there were new desktops coming out ? Any excitement we have at all for is reserved for the shrinking of laptops and new hand held phones or devices
The PC Revolution is over. Dead. Its now just the PC Evolution.
Anyone who thinks the same wont happen to the Internet is not paying attention.
Which is exactly why its so much fun to write on this blog and tweak all the internet bigots out there. Yes, all of you who think that the Internet is the ultimate Hammer and that every problem that technology can touch is a nail, you are Internet Bigots.
Me, I believe that all internet sites are created equal, that the world has already moved past the Internet as magic to the internet as utility stage. I believe in morning walks, sipping diet peach snapple, the beauty of a jump shot ripping the cords and that if most of the world thinks the Internet is the Hammer, the solution to everything, that is the exact reason why it is not. I believe that there is something far, far better , that will have far more utility to all of us and is on the tip of the tongue of some kid out there somewhere and I will have a blast looking for it and hopefully finding it first, which will be a lot more fun than trying to compete with Facebook or Google.
In mean time, Im going to enjoy tweaking all the Internet Bigots out there, simply because its fun
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Categories: Blogs
Ruh Roh - Porn could sink Youtube in Viacom case....
"Google will have to turn over every record of every video watched by YouTube users, including users' names and IP addresses, to Viacom, which is suing Google for allowing clips of its copyright videos to appear on YouTube, a judge ruled Wednesday."
Viacom wants to know whether copyrighted or user generated content is more popular. Thats nice to know. What will really tip the balance of power in this case, now that every viewing instance will be in Viacom's possession, is the answer to how Youtube deals with porn.
Who identifies the porn on Youtube ? According to Youtube, its regular users who police the site. Personally, I dont believe it. Whether its individuals or technology that keep porn off of Youtube, it really doesn't matter. If Viacom can use this data to show that Youtube manages the presentation of porn in any way, then they lose their DMCA protection.
Which means they lose their case to Viacom.Permalink | Email this | Linking Blogs | Comments
Viacom wants to know whether copyrighted or user generated content is more popular. Thats nice to know. What will really tip the balance of power in this case, now that every viewing instance will be in Viacom's possession, is the answer to how Youtube deals with porn.
Who identifies the porn on Youtube ? According to Youtube, its regular users who police the site. Personally, I dont believe it. Whether its individuals or technology that keep porn off of Youtube, it really doesn't matter. If Viacom can use this data to show that Youtube manages the presentation of porn in any way, then they lose their DMCA protection.
Which means they lose their case to Viacom.Permalink | Email this | Linking Blogs | Comments
Categories: Blogs
NBC vs Fanboys vs Sports Talk Radio vs The Olympics
I enjoyed the conversations discussing my position on NBA Players in the Olympics. The sports world is its own social network where much is said , written and quickly forgotten about anything and everything that can be argued about. My last post included.
The sports world however is on an amateur scale when it comes to arguing for the sake of arguing compared to the world of technology fanboys. They are about to see just how overmatched they are
It all starts with this "No Olympics video is allowed to be shown online on any website other than NBCOlympics.com"
Translated, this means that no Olympics video is allowed on Youtube, Veoh or any video sharing site. It means that if you are an Olympic athlete and you want to post video of your Gold Medal winning, world record performance on your Facebook or Myspace page, those sites may just get a takedown notice saying you dont have those rights, leaving the dreaded "this video has been removed....." text in its place.
If you stayed up all night to watch an amazing finish to an event that you wanted to share with friends, forgettaboutit. Unless you plan on making an expensive fair use legal argument, you re going to be running afoul of the NBC legal department.
For all things Olympics video online, its NBCOlympics.com or nothing.
All of which is fighting words to the very vocal the internet and Youtube can do no wrong fanboys. They will scream, yell and comment spam and response video to the point of hyperventilation. They will do interviews on every sports, technology and cable news show. It will become a multi platform, multi media issue. They will be loud
It will also send the message to the sports world that the Olympics is driven by money. A fact that will resonate every time someone watches the Olympics, except hopefully between the gun and the tape and the starting and ending whistles of events. Which of course means it will be sports talk radio fodder 24x7 on every radio dial in every city in America with ESPN segments everywhere covering the "controversy"
The Olympics will of course be a major topic of conversation this summer, it will be interesting to see how much of the conversation will be about the athletes and which world, technology or sports will have more influence on NBC and their policies.
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The sports world however is on an amateur scale when it comes to arguing for the sake of arguing compared to the world of technology fanboys. They are about to see just how overmatched they are
It all starts with this "No Olympics video is allowed to be shown online on any website other than NBCOlympics.com"
Translated, this means that no Olympics video is allowed on Youtube, Veoh or any video sharing site. It means that if you are an Olympic athlete and you want to post video of your Gold Medal winning, world record performance on your Facebook or Myspace page, those sites may just get a takedown notice saying you dont have those rights, leaving the dreaded "this video has been removed....." text in its place.
If you stayed up all night to watch an amazing finish to an event that you wanted to share with friends, forgettaboutit. Unless you plan on making an expensive fair use legal argument, you re going to be running afoul of the NBC legal department.
For all things Olympics video online, its NBCOlympics.com or nothing.
All of which is fighting words to the very vocal the internet and Youtube can do no wrong fanboys. They will scream, yell and comment spam and response video to the point of hyperventilation. They will do interviews on every sports, technology and cable news show. It will become a multi platform, multi media issue. They will be loud
It will also send the message to the sports world that the Olympics is driven by money. A fact that will resonate every time someone watches the Olympics, except hopefully between the gun and the tape and the starting and ending whistles of events. Which of course means it will be sports talk radio fodder 24x7 on every radio dial in every city in America with ESPN segments everywhere covering the "controversy"
The Olympics will of course be a major topic of conversation this summer, it will be interesting to see how much of the conversation will be about the athletes and which world, technology or sports will have more influence on NBC and their policies.
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Categories: Blogs
The NBA and the Olympics
This is my original post on the NBA and the Olympics. One thing I will add to it is for each and every blogger who so desires to undertake a simple test. On your blog, add a picture of the Olympics 5 Rings and a picture of your favorite player in their Olympic uniform. Underneath the pictures, add the caption, "My Official Olympics Update" and then chronicle that player in the Olympics with pictures from the official Olympics website. Show your patriotism and pride... that is until the you get a takedown letter or a Cease and Desist ordering you to take it down.
Thats how much about country and pride the Olympics is these days....
A 2nd item to generate some thought is the concept of players and coaches "And 1ing" their nationalities in order to be able to participate or to better market themselves. Whats "And 1ing" ? Being born and/or raised in one country but leveraging a ancestral link to another country where your odds are better to make the team. So for instance, your great, great grandfather was born in Upper Slobobia. in order to play on the Upper Slobobian basketball or handball team, you get a passport from there. Thats "And 1ing". Adding a nationality so that you can play on their team.
Or what about giving up citizenship from your native country to come here and play on our team. Is that what we want to root for as we face an onslaught of commercials on one of who knows how many cable networks that GE will be filling with Olympic programming ?
Are we sure the Olympics is about patriotism and pride ? Or is it about commercialism ? Im certaintly not against GE and the US Olympic Team making as much money as they possibly can on the game. More power to them. But lets not lie to ourselves about what is going on.
Here is my original post from more than 4 years ago.
NBA and the Olympics
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Thats how much about country and pride the Olympics is these days....
A 2nd item to generate some thought is the concept of players and coaches "And 1ing" their nationalities in order to be able to participate or to better market themselves. Whats "And 1ing" ? Being born and/or raised in one country but leveraging a ancestral link to another country where your odds are better to make the team. So for instance, your great, great grandfather was born in Upper Slobobia. in order to play on the Upper Slobobian basketball or handball team, you get a passport from there. Thats "And 1ing". Adding a nationality so that you can play on their team.
Or what about giving up citizenship from your native country to come here and play on our team. Is that what we want to root for as we face an onslaught of commercials on one of who knows how many cable networks that GE will be filling with Olympic programming ?
Are we sure the Olympics is about patriotism and pride ? Or is it about commercialism ? Im certaintly not against GE and the US Olympic Team making as much money as they possibly can on the game. More power to them. But lets not lie to ourselves about what is going on.
Here is my original post from more than 4 years ago.
NBA and the Olympics
Once again I was asked about my position on NBA players and the Olympics. One question from 1 reporter usually leads to followups form 100 more. So in the interest of disclosure, fairness and time, I decided to post the response here and save myself some time.....
In the sports marketing world, advertisers usually have a set sports marketing budget. Each advertiser gets pitched by all the different sports entities competing for those dollars. Among those competitors are both the Olympics and NBA. One of the beauties of the NBA pitch is that our athletes are so recognizable, personable and respected. The ability for an advertiser to connect their products to KG, Tim Duncan, Shaq, Dirk, etc, individually, or by buying sponsorship or commercials in game, is a huge selling point for us. It should be a huge selling point exclusively available to the NBA, but unfortunately that is no longer the case.
When the NBA was broadcast on NBC, it was far less of an issue. With NBC as the home of the Olympics and the NBA broadcast partner, there were a ton of cross promotional and selling opportunities. NBC could promote the Olympics in NBA games, and promote the NBA in the Olympics broadcasts. NBC could require advertisers to buy NBA advertising in order to get Olympic advertising,or vice versa. There were untold win - win scenarios by having both the Olympics and the NBA together at NBC.
That obviously is not longer the case. The NBA is now on ESPN/ABC and TNT. They are paying us a lot of money in a deal that has been working well for all invovled. What in the world are we doing helping our partners competition ? Why are we giving our most valuable manpower to a huge business, the Olympics so they can try to take revenue away from the NBA and our partners ?
Lets put this in basketball terms...Would you trade KG, TD, Peja, Jermaine and 10 more all stars , and pay their salaries in case they get hurt , for ..........nothing.
In exchange for providing our best players to the Olympics, the value we are supposed to receive is increased visibility and demand for the NBA, its players and merchandise. The value of which can be quantified as the total revenues received annually by each team from international TV and merchandise sales.
I wont tell you what that number is,but I can tell you it wouldnt pay the salary of a player signed for the million dollar exception this year.
So we are subsidizing the US Olympic committee by:
- Providing players that we pay for
- Reducing the amount of advertising dollars available to the NBA and our broadcast partners by allowing advertisers to use our players via Olympic broadcasts and programs
- Putting our most valuable players at risk, with the possibility of having to pay their salaries even if they are unable to perform,or to perform at the previous levels
- Potentially cheating our fans and customers who make investments in our league, teams and products, with players who are worn down or injured from their Olympic experience
- Whats even crazier is that the USA fans who buy our tickets and pay the players salary probably wont even get to see our stars in more than the Gold medal game. If that !
Where is the logic in any of this ?
I understand that players want to represent their countries. Thats great. Lets put toegether an NBA organized and sanctioned international competition that we can control and profit from. We can allow any country to enter a team, and let NBA players represent their country.
If its that important, lets also expand the exhibitions the NBA plays in and against other countries. Im all for international play as long as its in the context of an NBA program that gives consideration to the core NBA fan, customer and partner first and foremost.
If you agree, call your favorite team and tell them you dont want your players participating in the Olympics. You want them getting ready for the next season. And then order your season tickets :)
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Categories: Blogs
Hulu is kicking Youtube's Ass
It is coming up on 2 years post my declaration that only a moron would buy Youtube and that Google was crazy for actually going through with it.
In that period of time, while Youtube traffic has skyrocketed, they have been steadfast in their admission that they haven't been able to monetize Youtube's traffic in a profitable manner. Youtube has become the poster child for the old saying "we are losing money on every sale, but we will make it up in volume". To the Youtube fan club, its inconceivable that any website with so much traffic and marketshare could be in anything but an enviable position. The fan boys would be increasingly wrong. The Youtube business model is broken and there is no light at the end of the tunnel as they are currently constructed.
The reason is Hulu.
Hulu doesn't serve up more videos than Youtube. They aren't even remotely close in number of total users or videos served. But there is one area in which Hulu is just stomping up and down Youtube, and another in which Hulu is laughing at Youtube all the way to bank.
Lets start with the 2nd, Hulu laughing at Youtube. Youtube has presented to Hulu something that we can simply call The Youtube Arbitrage. Whats the Youtube Arbitrage you ask ? Simple. Hulu posts clips, not full episodes, clips on its Youtube channel and elsewhere on Youtube. Those clips are preroll AND overlays AND post rolls promoting Hulu and its full episodes of shows and movies. All of which costs Hulu the ginormous cost of ....nothing. From which it generates traffic to its Hulu site on which it sells, to the point of often selling out, display and preroll ads. That's the ultimate arbitrage. We pay you nothing, and you send us traffic that generates ad revenue for us.
Which leads us to the one area, OK lets say two areas that Hulu is just stomping all over Youtube;
1. Revenue Per Video
2. Revenue Per User
Hulu has one HUGE advantage over Youtube, it has the right to sell advertising in and around every single video on its site. It can package and sell any way that might make its customers happy. Youtube on the other hand, has that right for only the small percentage of the videos on its site that it has a licensing deal with. For probably 99pct or more of the videos on the site, Youtube isn't supposed to know what they even are.
How can that be ? Because Youtube hides behind the Digital Millennium Copyright Act. Hulu is a media site that presents videos with advertising. It can do whatever it wants. Youtube ts a hosting service. Its not allowed to know what videos are uploaded by users and its not allowed to generate revenue against those videos. It can only sell advertising around videos it has licenses to.
Which leads to a question and a prediction.
The Question: Which site currently has more monetizable video and traffic, Youtube or Hulu ? I don't know the answer. I'm guessing that its already a close race and may even be in Hulu's favor. I do know that Youtube's need for more monetizable traffic is why they added the check box for Partner Videos. Notice that those are the only videos that you see ads next to.
The Prediction: That by next year, not only will Hulu have more monetizable traffic than Youtube, but it will have more total revenues than Youtube as well. It wouldn't sup rise me if they are already at a higher annual run rate than Youtube.
All of which puts Youtube in a VERY BAD spot. Because Hulu can monetize 100pct of their growing traffic, they should be in a position to pay for the best content available. Not a lot of money, but even with the tiniest of guaranteed payments to producers, they will not only attract better content than Youtube, but they will also increase the cost to Youtube for the content they want most to license. Furthermore, because Hulu knows exactly what they have on the site and can sell 100pct of it, their professional sales force will be in a better position to package and sell bigger and more profitable ad solutions.
It will be interesting to see how Youtube responds.
As it stands today however, there is no doubt that Hulu, if it doesn't already, will have more monetizable traffic and greater revenues than Youtube going forward.
Which means that the more traffic Hulu generates, the more money it makes. The more traffic Youtube generates, the more money it loses.. Maybe they think they will make it up with even more volume ?
I'm sure the fan boys are convinced they will.
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In that period of time, while Youtube traffic has skyrocketed, they have been steadfast in their admission that they haven't been able to monetize Youtube's traffic in a profitable manner. Youtube has become the poster child for the old saying "we are losing money on every sale, but we will make it up in volume". To the Youtube fan club, its inconceivable that any website with so much traffic and marketshare could be in anything but an enviable position. The fan boys would be increasingly wrong. The Youtube business model is broken and there is no light at the end of the tunnel as they are currently constructed.
The reason is Hulu.
Hulu doesn't serve up more videos than Youtube. They aren't even remotely close in number of total users or videos served. But there is one area in which Hulu is just stomping up and down Youtube, and another in which Hulu is laughing at Youtube all the way to bank.
Lets start with the 2nd, Hulu laughing at Youtube. Youtube has presented to Hulu something that we can simply call The Youtube Arbitrage. Whats the Youtube Arbitrage you ask ? Simple. Hulu posts clips, not full episodes, clips on its Youtube channel and elsewhere on Youtube. Those clips are preroll AND overlays AND post rolls promoting Hulu and its full episodes of shows and movies. All of which costs Hulu the ginormous cost of ....nothing. From which it generates traffic to its Hulu site on which it sells, to the point of often selling out, display and preroll ads. That's the ultimate arbitrage. We pay you nothing, and you send us traffic that generates ad revenue for us.
Which leads us to the one area, OK lets say two areas that Hulu is just stomping all over Youtube;
1. Revenue Per Video
2. Revenue Per User
Hulu has one HUGE advantage over Youtube, it has the right to sell advertising in and around every single video on its site. It can package and sell any way that might make its customers happy. Youtube on the other hand, has that right for only the small percentage of the videos on its site that it has a licensing deal with. For probably 99pct or more of the videos on the site, Youtube isn't supposed to know what they even are.
How can that be ? Because Youtube hides behind the Digital Millennium Copyright Act. Hulu is a media site that presents videos with advertising. It can do whatever it wants. Youtube ts a hosting service. Its not allowed to know what videos are uploaded by users and its not allowed to generate revenue against those videos. It can only sell advertising around videos it has licenses to.
Which leads to a question and a prediction.
The Question: Which site currently has more monetizable video and traffic, Youtube or Hulu ? I don't know the answer. I'm guessing that its already a close race and may even be in Hulu's favor. I do know that Youtube's need for more monetizable traffic is why they added the check box for Partner Videos. Notice that those are the only videos that you see ads next to.
The Prediction: That by next year, not only will Hulu have more monetizable traffic than Youtube, but it will have more total revenues than Youtube as well. It wouldn't sup rise me if they are already at a higher annual run rate than Youtube.
All of which puts Youtube in a VERY BAD spot. Because Hulu can monetize 100pct of their growing traffic, they should be in a position to pay for the best content available. Not a lot of money, but even with the tiniest of guaranteed payments to producers, they will not only attract better content than Youtube, but they will also increase the cost to Youtube for the content they want most to license. Furthermore, because Hulu knows exactly what they have on the site and can sell 100pct of it, their professional sales force will be in a better position to package and sell bigger and more profitable ad solutions.
It will be interesting to see how Youtube responds.
As it stands today however, there is no doubt that Hulu, if it doesn't already, will have more monetizable traffic and greater revenues than Youtube going forward.
Which means that the more traffic Hulu generates, the more money it makes. The more traffic Youtube generates, the more money it loses.. Maybe they think they will make it up with even more volume ?
I'm sure the fan boys are convinced they will.
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Categories: Blogs
My New Favorite Saying:
Today is the youngest you will ever be. Act like it.
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Why Tiered Broadband is a Wonderful Thing and ASIVS
When it comes to broadband internet access, you can have speed or large volumes of data transfer. You can't have both. One certainty in the broadband world is that for those of us with cable or DSL modems connecting us to the internet, there is still a finite amount of bandwidth available. When a user consumes a disproportionate and significant amount of bandwidth, it can and will slow down everyone. I hate that.
If the choice is between your being able to download more movies or other video and my getting the best possible speed from my internet connection, I'm thrilled when you get kicked off. It can't happen soon enough. Speed is what I need. Take all your P2P downloads and get the hell off my internet.
I have no sympathy for bandwidth hogs. You all are productivity killers for the rest of us. People who are working, people who are trying to play games, people who are in virtual worlds, people who are networking, people who are just trying to watch a Youtube video or their favorite TV show, you all are the reason why we get incredibly annoyed by slowdowns and buffering.
Leave and take your bit torrent client with you.
Its been amusing to read all the blog posts with the math telling all of us just how many standard def or high def movies tiered subscribers will be limited to. You can have 2 or 3 of your favorite SD TV shows per day, or X number of HD movies per month. Say what ?
I have news for all of you that want to dedicate their internet connections to downloading movies. There is a new and exciting development. Its called an Application Specific Integrated Video Service (ASIVS) . What is an ASIVS ? Its a computer dedicated specifically to downloading and playing both standard definition and high definition video. You connect it to a network that is dedicated to delivering GIGABITS PER SECOND of high quality video with ZERO buffering. Its amazing, it always works and connects right to your standard def or High Definition TV, easily. Most of the systems I have seen have a pretty good programming guide and scheduling system and they will let you download AS MUCH VIDEO AS YOU WANT , limited only by the size of its hard drive!!
If you haven't heard of the ASIVS, its because most people call it a DVR.
If downloading TV shows is so important to you, add a DVR to your cable or satellite service for 5 bucks a month and download all you want. If you want to watch those shows on your laptop, connect the composite video out in your DVR to the composite in on your laptop. Same with movies.
Cant download movies illegally, tough.
The internet is a great resource for unlimited quantities of video. Downloading video is an internet given right. Using he internet to fill up your PC turned DVR at the expense of the performance of every user around you is not.
Im a heavy internet user. I'm online hours per day. To me, the promise of the internet comes not from how many bits I can download, its in finding new ways to leverage the utility and stability of the internet as a platform for new applications. The performance of the net is key to new applications working and gathering users. Internet consumers avoid new applications that are slow. Even when they don't realize that the application is slow because the latency on their net segment has skyrocketed because of bandwidth hogs disproportionate consumption of bits.
Now some of you might think that the reasonable solution for all of this is for your provider to create as much last mile bandwidth as is necessary to make everyone happy, with no limits on use and at a low price. In a lot of respects, I would agree with you. It would be nice if every network were upgraded so that the amount of bandwidth available to us would be bottomless. Nice, but not here and now.
Until that day comes, the only real option is to push the bandwidth hogs to slow usage periods and create packages that allow for increased consumption of bandwidth during off hours, or to push them off typical ISP network. If tiered broadband offerings enable that. I say thank you.
Speed is what I need. If that means that those 5 pct of users that consume 65pct of bandwidth are kicked off or charged per bit to reduce their consumption.... so be it.
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If the choice is between your being able to download more movies or other video and my getting the best possible speed from my internet connection, I'm thrilled when you get kicked off. It can't happen soon enough. Speed is what I need. Take all your P2P downloads and get the hell off my internet.
I have no sympathy for bandwidth hogs. You all are productivity killers for the rest of us. People who are working, people who are trying to play games, people who are in virtual worlds, people who are networking, people who are just trying to watch a Youtube video or their favorite TV show, you all are the reason why we get incredibly annoyed by slowdowns and buffering.
Leave and take your bit torrent client with you.
Its been amusing to read all the blog posts with the math telling all of us just how many standard def or high def movies tiered subscribers will be limited to. You can have 2 or 3 of your favorite SD TV shows per day, or X number of HD movies per month. Say what ?
I have news for all of you that want to dedicate their internet connections to downloading movies. There is a new and exciting development. Its called an Application Specific Integrated Video Service (ASIVS) . What is an ASIVS ? Its a computer dedicated specifically to downloading and playing both standard definition and high definition video. You connect it to a network that is dedicated to delivering GIGABITS PER SECOND of high quality video with ZERO buffering. Its amazing, it always works and connects right to your standard def or High Definition TV, easily. Most of the systems I have seen have a pretty good programming guide and scheduling system and they will let you download AS MUCH VIDEO AS YOU WANT , limited only by the size of its hard drive!!
If you haven't heard of the ASIVS, its because most people call it a DVR.
If downloading TV shows is so important to you, add a DVR to your cable or satellite service for 5 bucks a month and download all you want. If you want to watch those shows on your laptop, connect the composite video out in your DVR to the composite in on your laptop. Same with movies.
Cant download movies illegally, tough.
The internet is a great resource for unlimited quantities of video. Downloading video is an internet given right. Using he internet to fill up your PC turned DVR at the expense of the performance of every user around you is not.
Im a heavy internet user. I'm online hours per day. To me, the promise of the internet comes not from how many bits I can download, its in finding new ways to leverage the utility and stability of the internet as a platform for new applications. The performance of the net is key to new applications working and gathering users. Internet consumers avoid new applications that are slow. Even when they don't realize that the application is slow because the latency on their net segment has skyrocketed because of bandwidth hogs disproportionate consumption of bits.
Now some of you might think that the reasonable solution for all of this is for your provider to create as much last mile bandwidth as is necessary to make everyone happy, with no limits on use and at a low price. In a lot of respects, I would agree with you. It would be nice if every network were upgraded so that the amount of bandwidth available to us would be bottomless. Nice, but not here and now.
Until that day comes, the only real option is to push the bandwidth hogs to slow usage periods and create packages that allow for increased consumption of bandwidth during off hours, or to push them off typical ISP network. If tiered broadband offerings enable that. I say thank you.
Speed is what I need. If that means that those 5 pct of users that consume 65pct of bandwidth are kicked off or charged per bit to reduce their consumption.... so be it.
Permalink | Email this | Linking Blogs | Comments
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