Ink is to Printer Profit, as eBooks are to ....

Is the time of the stand-alone eBook reader almost past?

Will success and sales figures for Apple's iPad mark the slow and painful extinction of the Kindle, the Nook, Sony Reader, and other single-function devices?

Certainly we're witnessing a precipitous drop in pricing structure, in an effort to compete with Apple … or in an attempt to dump existing ebook reader inventories … I'm not sure which.

Amazon slashed pricing on its Kindle device by almost 30 percent last week, following a similar cut by Barnes and Nobel on their Nook.  The $489 price tag for the Kindle DX puts it within striking distance of the entry level point for Apple's iPad. Comparing features, functions and diversity of user experience, there isn't even a contest there.

But rather than viewing the stand alone ebook reader hardware as a twilight technology, perhaps these same endangered manufacturers should take a look at the inkjet printer market, for some true inspiration.

As Epson, Hewlett-Packard, Brother, and others have found, that revenue stream isn't in the hardware, but rather with the expendables.

I'm talking ink cartridges.

We all know, or at least we've subconsciously sensed, that the steady payment stream from millions of ink customers far outpaces the profit from selling the printers themselves. Even with the current, disposable "when it breaks throw it away and buy another" manufacturing trends, now often would you guess the average home computer user replaces the ink jet printer? Once a year? Every 18 months? And how much does that same user spend on ink in the same time period?

You get the idea.

So, why don't Amazon and Sony and Barnes and Nobel and others apply the same profit model? Mark their hardware down to $29.99 or even give it away, for "nearly free" after rebate … that business model has existed for several years now with lower-end or discontinued printer models. With either industry, the money comes from the evergreen dollar stream on the expendables.  Same could be for the electronic book content itself. An avid reader may only have one Kindle, but that one device generates the desire for dozens, if not hundreds, of electronic softgoods.

And if you recapture a huge share of the eBook market with this strategy, a substantial embedded market of happy device owners might just even tolerate a slight drift upward in the price of downloading and viewing a new release.  Rather than companies sending the prices of their entire eBook catalog in the other direction, just to stay competitive.

The sustainable profit's in the content and associated pricing, dear readers, and not the gizmo itself.

Jim Furrer

Not directly into the brain

I don't own an iPhone.

It's only with idle curiosity that I follow Apple's wide release this week of the Apple iPhone 4. And it wasn't a day before this whole antenna issue popped up, often and everywhere.

Bottom line, cradling the iPhone 4 in the palm of your left hand, and using the right hand for controls, results in a severe drop in signal often to the point of losing the connection.

Pundits blame the sleek metal band circling the device's outside edge, which Apple admits is part of the antenna system, as are the three gaps in this stainless steel band.

You can see one of these critical antenna gaps in this photo.








And when these gaps are compromised, as when clutched by a sweaty hand, the total antenna pattern is compromised. We all are, after all, just walking, talking, big bags of saltwater.

Whether or not Apple can apply a fix isn't my point. My point is the reason this is a problem goes back to the old concern over the "cell phone radiation".

Most of us remember the time when mobile phones had actual stick-out antennas. Always on top of the device, right? And when pressed up to the ear, that antenna did it's dirty duty and blasted it's output right into our unsuspecting skulls. Bad news.

Well, mobile phone design changed fairly quickly, with the antenna morphing from a whip to a stub to a bump, finally embedded into the body of the device itself. And to keep all that nasty radiation furthest from the head, designers now locate the transmitting antenna in bottom of the device.

But that's also the way we as humans grab and hold the darn thing, so it's unavoidable that our hand contact the antenna, which we shouldn't touch as to not compromise transmission.

This topic isn't new, and antenna design specialists and experts have been pointing out this design conundrum for a while now. One of the saner, studied voices comes from Spencer Webb of AntennaSys, Inc.

Webb has a great technical article posted on his blog, and if you're an early iPhone 4 owner you should check it out.

And don't blame Apple. Don't blame AT&T. Don't blame the FCC. This issue is really the result of them watching out for your own health.


Jim Furrer

The elephant and the bitter pill

In case you missed it, on Wednesday federal judge Louis Stanton ruled for Google and against Viacom in a major Digital Millennium Copyright Act case.

In case you weren't following the legal battle, Viacom charged that YouTube … owned by Google … had allowed its users to post and share copyright protected content, including clips from shows with intellectual property owned or controlled by Viacom.

In case you're confused, we're talking programs and characters including SpongeBob Squarepants, Comedy Central, Dora the Explorer, LazyTown, The Hills, Behind the Music and others.

As Chris Thompson points out in Slate's "The Big Money," Viacom corporate emails submitted as defense evidence show that in earlier years Viacom itself had been caught posting its own copyrighted material on the YouTube site, through employees or marketing shops, to create phony viral buzz, as part of its marketing strategy.

Judge Stanton ruled that once Viacom finally notified YouTube as to the existence of over 100,000 copyrighted clips, almost all of the material was pulled by YouTube within 24 hours, under provisions of the DMCA law. The ruling should mark a dead end for Viacom's claims and a major victory or at least vindication for Google … although Viacom's posturing that it will appeal and calls Stanton's decision "fundamentally flawed."

Hah.

And in case you didn't catch Dana Blankenhorn's article back in March on "Smartplanet", Viacom had tried hard four years ago to purchase YouTube for upwards of $1 billion. Blankenhorn calls Google's purchase advantage, "... the elephant in the room. When Viacom was pushing for YouTube, it was primarily with the intent of destroying it. Which was stupid, because someone else would have come along, or Google Video would have become YouTube."

At that time, Viacom fought Google up to the very last second in October of 2006 … even suggesting a joint-partnership … before Google alone snatched the prize for $1.7 billion. Maybe now we see why Viacom asked the courts for "a summary judgment for the period prior to May 2008"?

Emails submitted as court evidence in the trial better paint the scene:

MTVN CEO Judy McGrath telling M&A execs: "Help us get YouTube. We cannot see it go to Fox/NBC" and "I want to own YouTube. I think it's critical asnd if it goes to a competitior!!!!!!!!!!!!!!!!! Even if we have to buy it with a partner to keep it below the line." Then, Viacom CEO Tom Freston: "If we get UTube.... I wanna run it." McGrath: "You'll have to kill me to get to it first." Freston to McGrath: "We know what to do. I know this SUCKS its MADDENING that the revenue isn't there when the content is....but we will fix it and get the stock back up. Accretive digital acquisitions and a big idea or two. Fast."

So now the judge has ruled, with almost nothing going Viacom's way. In light of the revelation that for Viacom, YouTube went from a desperately prized gem to a black and bitter pill with bad aftertaste, perhaps the real elephant in the room is now revealed for all to see.

In case you missed it.


Jim Furrer

How often do you visit the forest?

Two nights ago, I was channel surfing the Comcast Digital Plus service. Out of boredom.

In case you failed to notice, with the Comcast digital set-top box EVERY CHANNEL gets displayed when you surf, even the ones you're not authorized to access ... that screen content "blacked out" but of course the datastream still presenting the name of the channel, the number, and the current program selection anyway.

Read that last one to apparently force upon me "what you're missing by not subscribing to this tier." I suppose this is a marketing scheme, some brilliant idea from another Comcast genius thinking I'll stumble across a show or movie that I'm so very desperate to view, I'll immediately reach for the phone and upgrade so not to miss it.

Right.

What I'm really being shown, with the program title and channel ID for EVERYTHING to which I'm not subscribed, is how repetitious and limited the programming universe really is. I'm happy for the movie studios, and all their "evergreen content" ... titles in their vaults that continue to generate revenue, year after year, be it DVD or PPV or premium channel packages. An ever-green forest of profits. I mean, how often can I possibly refuse to miss another rerun of "Die Hard" 1 or 2 or 3?

Two nights ago, all this surfing brought me to the 1964 Jerry Lewis film from Paramount, "The Patsy." It was running on Showtime's Family channel, a heavily leveraged premium service. This is a movie, now half-a-century old, that in the past ran time and again on over-the-air network television, syndicated local TV off-hour Hollywood movie packages, and even in a DVD home release. A quick check shows it can be purchased outright today for $3.77 from a multitude of retail web sites.

Now how much would you pay?

And yet, this title is presented as Prime Time Premium Cable Programming. Not basic service. Not practically free On Demand. Pay Premium Cable. I'm all for evergreen, but how often should I be expected to visit this forest?

And clicking through the Comcast Universe (near-pun intended) noting all the content I CANNOT view because I don't subscribe, I spot movie after movie after movie I already watched earlier on Encore or Multiplex or Starz or any of the other "pay services" that DO exist in my current tier. So, how does this motivate me to upgrade to additional premium services, when I can already see that a huge portion is stuff I've already recently watched elsewhere? What's my motivation? Why is forcing me to understand everything that's on every channel I CAN'T get such a good idea?

Instead, why can't I have a function that blocks or skips the ID and Current Program display for stuff I don't receive? Did anyone at Comcast every consider THAT option, that I could partake more of the content for which I'm authorized if it was easier and faster to access it? If I didn't need to wade through every single blocked channel in their digital maw?

But, that, apparently, is why Comcast is making the big bucks.

What do I know?


Jim Furrer

Should broadcast TV seek salvation from radio?

While in San Francisco last week, I had a chance to talk with Steve Kotton, the associate director of the School of Multimedia Communications at Academy of Art University. The future of viable local television came up, and Steve (a veteran of the broadcast wars) told what happened at KRON-TV in S.F.

Sold for an unbelievable amount of money, the new owners of KRON soon found themselves -- as a leading NBC affiliate -- embroiled in "reverse compensation" negotiations with the Peacock network. The new owners tried stonewalling, only to find NBC pulling the station's affiliation and giving it to a much smaller station on the edge of the ratings book.

The sheep in wolf's clothing was the new management's ruthless cost-cutting measures, including a massive conversion to cheaper MMJ operations. With backpack journalists replacing reporting teams and resulting staff slicing, KRON is surviving as an independent station -- with a new news infrastructure favoring strong localism in the wide and diverse San Francisco market.

As with many other TV operations around the country, shrinking revenue from ad dollars going to the Internet, and collapsing "eyeball time" from viewers creates a difficult financial balance sheet, when your source of prime programming comes calling to renegotiate a once historically positive compensation cash flow. Today CBS, ABC, Fox and NBC now want their own cut back from the tower owners for carrying net programming. Another dip into the red ink well for local operators.

So where does radio come into play?

As another historical reference -- the situation was similar in the very late 1940s and early 1950s, when network radio was king, and the listeners and advertisers courted broadcast radio for most all electronic entertainment and information. But the upstart television medium siphoned off listeners, making them viewers instead, with loss of sponsors, and even big-name talent to "the box." Collapse of the established profit paradigm brought radio to its knees.

But radio survived, by turning to (1) formatting, and (2) localism. Gone where the national programming and major corporate advertisers, but "going local" radio found it could survive with local ad dollars and by catering to a targeted demographic.

Perhaps broadcast TV is now on the same cusp. Could local TV broadcasters survive without their network fare, through first-run syndicated shows and local origination programming? Think about it. Foregoing national net dollars for a beefed up portion of the local ad market? Offering a concentration on connected and motivated local eyeballs? Reducing cost of increased local presence through mobile device technology?

Is the coming collapse of the second golden age of network television, in reality, the second cycle for formatting and localism for broadcasters?

What do you think?


Jim Furrer

What's Up with that Title?

For years ... decades, really ... I worked in film, television, and video production.

Consistently when gathered about a color monitor, to watch a take or view a program, the engineer or technician or EIC or whoever would always caveat playback with a disclaimer about the color or settings of the video monitor.

"Don't judge the color by that monitor" was always the warning admonished to the audience.

So I thought I'd use that phrase to describe my comments, when I see or hear something of note in mass media, television, and electronic communications in general. The postings here will be my thoughts and opinions.

Colored through my perspective and experience.

You can decide for yourself. But don't judge from this monitor.


Jim Furrer
June 21st, 2010