Aaron Huslage

Read this recent email from Netflix:

This makes exactly zero sense. How could removing a somewhat useful feature, that some portion of their user base must use, “improve the Netflix website for all our customers”?

When they launched this feature a while back I thought it was great and showed very forward thinking on the company’s part. Customization of queues based on different family members or users within a household is a great idea, and removing this feature without apparent replacement is quizzical at best.

Finally, when you are getting rid of something maybe you should actually copy edit the email that goes out to insure that it makes sense. Amazing. Enjoy your new, improved Netflix!

Every few months there are bloggers out there who seem to completely miss the point and see something of a power grab by our friends at O’Reilly Media. Daya Baran of Bay Area WebGuild penned the latest piece of incendiary nonsense. His post is a rant about how O’Reilly strongarmed WebGuild’s apparent sugardaddy Google into dropping their support for their upcoming event entitled “Web 2.0 Conference & Expo”.

He quotes an email from Google that explains the situation and why they cancelled their sponsorship, notably this sentence: “I asked you three times to change the name of this weeks event in order to maintain the relationship and since you did not budge we will no longer support Webguild.” This says it all to me. Google made a decision not to piss off a strong ally in O’Reilly. That’s it. Baran’s claims to the contrary are patently ridiculous.

Baran says “O’Reilly contacted these old-timers and asked them to demand that WebGuild change the name of our event and conference and to cease supporting WebGuild.” This is probably not the case. Even if it were, it was more than likely in deference to the work of WebGuild that it would have happened. Keeping things under the radar and avoiding the PR flack it got the last time they tried to enforce their intellectual property rights would be in their best interest, after all. Instead of suing WebGuild for using their trademark, they may have just decided to take control of things from the back-end and get the event cancelled. This course of action would not be ideal, but certainly more gentle than previously.

The big deal behind all of this is not O’Reilly’s “model which is based on withholding knowledge and gouging attendees, companies, and sponsors,” as Baran puts it. They are obligated by trademark law to enforce their trademarks. Trademarks become null and void as soon as they are ignored and try as they might, opponents of the “Web 2.0″ trademark will never stop O’Reilly from doing this. The company is a business and as such is required to do what’s in the best interest of its shareholders, not what’s in the best interest of the community at large. If O’Reilly’s intellectual property becomes worthless, that would be one of the worst things possible for the company and its shareholders.

One final note. Baran chose to get personal with my friend Tim O’Reilly. He said, “Presently, O’Reilly is promoting keynote speaker Saul Griffith calling him a “genius” and “a scientist and engineering polymath” without disclosing the fact that he is his son-in-law. When I met him, I cordially introduced myself, however, O’Reilly was a despicable individual. He is a dinosaur whose time has past.” This is completely useless and poor behavior. I wish that Baran would retract this statement and issue an apology. I understand that he is angry over the situation, but this action by Google, and possibly O’Reilly at some low-level, was most certainly not personally targeted against Daya Baran or any of the folks at WebGuild. O’Reilly is nothing if not a professionally run organization with very smart people who don’t deserve that kind of treatment.

“O’Reilly Hate” is nothing new to the company. Any company with a measure of success is bound to have similar issues, but this is getting ridiculous. They are a company and do what’s best for them. Sometimes that means being completely open and sometimes that means they have to make hard decisions. O’Reilly has been great at building community and they will continue to, but people shouldn’t take that as owning a piece of the company or even having a say in what they do.

I am continually amazed at the inability to add basic things to the UIs of media players. I’ll confess to being a mac head and as such iTunes is my preferred program for listening, but I like to play the field once in a while to help remind me why it is so good.

My employer’s operating system comes with what is billed as their best media player ever, and indeed it does work well for playing media, but it should also do a few other things. A good media player organizes your songs intuitively and also allows you to save off frequently listened to tracks and streams. Windows Media Player seems to fall down in the library arena. I can’t for the life of me figure out how to save the stream for KEXP Radio as a favorite. Here’s the UI as it’s playing:

There are no options evident. Even right-clicking shows me a little menu with nothing obvious to add this stream to my library or save it as a favorite.

 With iTunes, however, things are quite different. Here’s the UI:

Here we see a convenient listing of radio stations and all I need to do to allow iTunes to remember it is drag the track to the Music tab on the left. It’s now saved forever. Anything that is playing can be done this way. Dragging the stream to “Library” on Windows Media Player doesn’t do anything obvious for me.

I could go on and on about the hideous UI tragedy that is Windows Media Player. Microsoft keeps wondering why it’s not “winning” at stuff and often overlooks what’s right under its nose. Users hate interfaces that make no sense and don’t do what they want out of the box. You can study this stuff in a vacuum all you want, but the real test is comparative/competitive testing with real-world scenarios. Fear not your competition, but learn from them and make something even better.

There are many places to see roundups of today’s Steve Jobs keynote from the Macworld Expo in San Francisco, so I won’t bore you with the details. I have one major takeaway from today’s keynote. Apple may have lost the thread with the iTunes Store.

Apple created the iTunes Store in a market that was originally hostile to its very existence. The record companies had no clue about how to market music online and Apple had a white-hot device that set the standards for usability, size and a whole host of other features for an entire market segment. Apple created a great webapp , then called the iTunes Music Store, and DRM system called FairPlay and integrated it with their iTunes music player. They shopped it around to the record companies with a price-per-song (99 cents) already in mind. Apple knew that at that price they had no prayer of making much money off the store, but they also knew that selling tunes to the market at that price would make them rich off the sales of iPods. iTunes Music Store was, in essence, a modern loss-leader. This created an entire market and almost every other music store online has followed Apple’s lead in their attempts to compete. Apple wrote the business model for online music sales.

The progression from music to television and movies was deemed by most to be inevitable. Apple soon started to make contacts with the licensing departments at the major TV and movie studios, but their success has not been nearly so easy. Up until today Apple only sold a handful of movies from Disney properties (due to Steve Jobs’ position on the Disney board, this was a no brainer), and those haven’t exactly been blockbusters for Apple. The TV shows were initially a huge hit, but as downloading bootlegged copies for free has become easier these have trailed off and Apple has started to lose major partners in this business (NBC/Universal most notably).

I see the relative failure of movies on iTunes as a failure of Apple to recognize the fundamental differences in markets. The business models are similar between music and movies, but the perception of market realities is not. Music is cheaper to produce and cheaper to sell than movies, with a huge catalog of new and old content that seems to grow almost exponentially year over year. Movies are very expensive to produce, expensive to market and the number of available content tends to be fairly static. The investment in both time and money that the consumer must make to consume a Movie is much much greater than that of Music. This doesn’t even take into account the complexities of marketing different content to different segments of the market (TV series on DVDs vs. Movies, for instance).

The movie studios are narcissistic and vain. They see their industry as very important to the entire world and will not listen to those with new ideas about how to do business. Music companies have been long suffering from their loss of control of the content they produce, they are inherently more willing to listen to those with new ideas about how to make their business viable again.

Apple clearly thought that their success in music would translate directly into a success with movies. They saw their ties with behemoth Disney as being golden. The vanity of the movie studios was not something they saw as a threat to Apple hegemony. Apple’s vanity, ironically made them blind to that of the movie studios. While Apple waited for other studios to come around and let them sell movies on iTunes, others like Amazon and Vudu were more flexible with their terms and allowed the movie companies to set prices and terms for movie sales and rentals online. The going rate for movies online was no longer even a negotiating point for Apple.

So now we’re at today’s announcement of rentals via iTunes. Apple, coming from its position of weakness, had no way of negotiating good pricing or terms for its rentals. They are releasing a product that is overpriced and very restrictive. People don’t want restrictions on how they use content. They want to pay $2 for a movie rental, keep it for however long they want it and watch it in as many sittings as they can.  I think Apple knows this. They had a chance to release a product that would succeed, instead they released a product that is more or less an already proven failure. Apple has ceded the market for video to their more flexible (weaker?) competitors and in so doing have created a situation that is untenable.

Apple should have waited for one of their competitors to fail in the movie game and then gone back to the negotiating table with ample evidence that the pricing and restrictions on content were not proven by the market. They then would have had the upper hand at setting prices and allowed the market to have a new movie rental experience. Instead they released a me-too product that is only differentiated by the ability to watch movies on its own devices.  This is a missed opportunity and one that I believe Apple will come to regret in time.

Sit down at your TV and turn it on. Welcome to one of the most engrained behavioral activities of modern life. It’s also totally obsolete. There is no technical reason to channel surf anymore. Your TV likely has a set-top box that also happens to be a very capable computer. All that power is being wasted on displaying poor quality “guide” data that is patched on top of a linear channel stream filled with content you don’t want to watch. Explain the efficiency of this system. The interaction model is completely useless in this modern age. There is not a single technical reason, aside from lame excuses like “the infrastructure is already there” or “people already know how to make this work”, to keep the current system in place.

The original reasons for TV Channels were technical in nature. Analog signals had to be broadcast in one linear stream over the air on a particular frequency and guardbands had to be placed around those frequencies to make sure one channel didn’t interfere with the other. With the advent of digital distribution and transmission technologies (ATSC, DVB, Digital Cable and Digital Satellite, and others) these frequency limitations have been taken care of. Modern transmission and distribution systems have more in common with computer networks (either wired or wireless) than they do with traditional analog systems. We now stream huge amounts of data around the air and through our cable and telephone systems every day. Companies have built the largest one-way data network ever built.

When you think of it that way, this network has a ton of possibility for innovation. No longer is a TV station able to broadcast only one stream of video and audio, but now they can send out multiple streams at differing bandwidths and for different purposes. No longer are cable systems only able to give you 99 channels of programming, but 500+ with video-on-demand and raw IP networking on top of that. DSL and PON lines to your house send in not only data but TV. All of the purpose-built cable head-end equipment from behemoths like Motorola and Scientific Atlanta is quickly becoming obsolete. We don’t need to constantly stream 500 2mbit/second TV channels 24 hours a day. This one size fits all model is completely useless to most consumers.

So the technology exists to better utilize the over-the-air spectrum we have available along with the huge bandwidth available on telco and cable lines. The rise of TiVo and DVRs proves that people watch TV shows and not channels. They are happy to find a show they like, sit down and watch it without having to go page-by-page through a huge list of junk they don’t care about.

Consumers are also happier if they can watch what they want, when they want it. They don’t want to operate on some faceless network’s schedule, they have busy lives and can only watch when they have time. Timeshifting is important. The availability of many shows from various Internet sources, both legal and not so legal, has made timeshifting easier even though it has drastically lowered the quality bar. Bittorrent counts as one of the most popular ways to download TV and movies and that says a lot about what many consumers want.

Another indicator that TV channels are outmoded is the rapid decline in revenue that the networks have seen over the past few years. People simply aren’t watching channels for long enough every day to make it worthwhile to advertisers. The current system of revenue is based on what networks call Dayparts. This system assumes that by chaining together programs in creative ways on the schedule, a viewer will be less likely to surf and thus become a better target for advertising. The traditional argument by larger broadcast networks for the failure of this model is that people have more choices and are fleeing to cable to get what they want. I think this argument may have held true 10 years ago, but now I think the reason is that technology is starting to catch up with how the viewer wants to watch TV. The viewer simply doesn’t care about the TV network they are watching. It’s not even close to the first thing they think about when choosing what to watch. They care about the program, and now they have the ability to shift things around to meet their time and preferences better. A consumer never even thinks about sitting on one channel for hours on end, but they do assign value to the brand of that channel and what it represents in terms of programming style and editorial value.

I’ve established that the current TV channel system is not cutting it. Consumers want to be able to watch what they want, when they want it with a minimum of fuss. The DVR has gone a long way to fixing this problem, but the EPG and linear distribution mechanism still get in the way.

Let’s think about what it would be like if the user was presented with an ontology instead of a list of channels with programs. The user could search genres, topics, user generated tags, transcripts, descriptions or titles for the programs that interest them. They could watch a small preview of the show and then if they like it, watch the whole thing. Each show would have a branding associated with it that would replace the current channel. This brand would be the network that produced or distributed the show. The program would still have advertisements, but they would be sold more like Internet ads (by impression, click-through or action). At the end of the program, or if the user got tired of watching, they could choose to switch to something else or continue on with similar programs from that network. If the consumer just wants to sit down and watch programs, they can go into a more casual mode that uses their stored preferences, ratings and viewing history to dynamically generate a channel or set of them that is just right.

This interaction model could be very powerful if properly researched and tested. My hunch is that many people would be more than happy to throw out their existing set-top in order to watch this. This is more than just video-on-demand or network DVR, it is a sea change in how people use television. It turns TV into a better platform. It allows for new business models, expanded revenue and high quality distribution with better bandwidth efficiency and higher consumer conversion.

This is technically possible to accomplish now. A sample system could be set up in fairly short order by simply recording the programming of the channels on the air now, leaving in the commercials and promos. It would be a platform to develop the system with real consumers and real advertisers. Networks would still retain their branding and promotion methods, which will remain important to the viewer.

TV needs a kick in the rear end. The business models are horribly broken and now the technology exists to make things better. Consumers are ready and the networks are ready.

I’ve been doing a lot of thinking for the past few days about production values on the web. The advent of social networks, video sites, podcasts and blogs has made them really take a nose dive. We’re back in the age of high-school video production classes, horrid writing and reverb saturated audio. This effect has made it acceptable, if not desirable, for the so-called professional media to embrace as their main aesthetic quality. It’s as if for you to be “cool” you have to make junk productions.

The fact is that in this day and age there is absolutely no excuse to make a poor quality product. The equipment I can buy in my local Best Buy is leaps-and-bounds better than the stuff I could buy 5 years ago. Even a cheap microphone has great quality. A couple of hardware store clip-on lights can properly illuminate a “set”. This stuff is simply not difficult. The only thing it takes to make a video production of very acceptable quality is a decent microphone, camera and some lights.

Take a look at the work of Ze Frank’s “The Show” to see what I’m talking about. He used a decent mic, camera and the lighting available to him in a smart way. It took him all of 10 minutes to set up the day’s shot. Sure, he actually took some time to write what he was going to talk about and memorize it. Sure, he took some time to edit things well. Sure, he’s a very talented and funny guy by nature. But none of these things is difficult to achieve if you’re a reasonably creative person.

On the higher-end are the excellent TED Talks. This is a conference where people pay good money to see really smart people talk about the stuff they do. After the conference they publish a DVD for the members of the TED community and post some number of the talks online for the public. These multi-camera shoots made by professionals, but their techniques are far from difficult for people to achieve with even modest means.

Another good example of decent production values (albeit with poor quality audio) are the productions of Revision3. They are a startup in San Francisco formed by refugees of the now defunct TechTV. They have built a small studio space where they produce simple episodic shows about technology trends. They spend some amount of money on graphics packages, talent and equipment, but I get the impression that they are run on a fairly small budget.

These 3 examples of decent production values are fairly difficult to spot on today’s computer screens. There seems to be a dearth of high-quality productions out there. I wish companies would spend a little time to educate their staffs on how to make good productions. They should start by teaching 3-point lighting, good microphone technique, and editing. These are the bare minimum to get someone started on the path to high quality productions and they take only a day to teach. The harder parts, like writing, take a bit more time, but all of it has significant payoff in the end. If you teach your people how to use the tools you’ve given them you will be rewarded with happy viewers.

The way I see it there has been very little innovation in technology in the past 20 years. We largely do things now the same way we have in the past. This is not to say there isn’t any, there is, but it’s less visible than I feel it should be and at a more incremental pace than I would like. To me true innovation comes from the “big hairy audacious goal” (thanks Mr. Collins) and we certainly haven’t been trying for that lately in many areas.

Much of my daily frustrations come from the fact that we are all too complacent as consumers of technology with what we have. For example: we are more than happy to sit down at our desk, fire up a window to read email, another to read news, another to write a document, etc. This stuff is fundamentally unchanged from the days of the Xerox Star in 1977. We’ve even stretched metaphors to fit new devices (see Windows Mobile, Blackberry, etc.)

And basic UI is only the starting point for what I’m talking about here. Look at my post from earlier this week and you’ll find that three of the ideas listed are based on innovating out of our current situation. These are three things that I think we should have figured out how to do many years ago. There is no technical reason not to do them. The reason things like this haven’t been done is a lack of organizational hubris, vision and political will. No company wants to take on the task of building such things because there is zero immediate positive impact on their bottom lines.

I think it’s time for a company to come up with a BHAG of actually doing these things, and more. The only way to demonstrate a new way of doing something is to actually do it, and that means wresting control of the basic infrastructure from entrenched interests. We have come to a point in the evolution of our economy where one must Acquire to Innovate.

Large media conglomerates will never willingly change their business models to support new user interactions for Televisions. Large telecom companies will never willingly change their business models to support new user interactions for Telephones. They simply can’t.

But we can.

Demonstrations of new interaction models can be done at a small scale by purchasing cable, wireless and telephone companies’ interests in one local market. A company that can focus on building one system the right way, with no distractions or needs for immediate profit. It’s a long bet in a short term world. Build something that people actually love to use, and they will pay you back in spades.

ROI calculations are for people who are risk averse and uninterested in true innovation. ARPU is irrelevant. The era of scarcity is over. Move over big boys it’s time for the geeks to come in.