Ever since Tivo hit the market in 1999, it has been a tough uphill battle for them to achieve their growth goals. Some said that their problem was that the were trying to sell a product that came across as a very expensive VCR. Others said that you really had to have one in your home for a week or so before you appreciated how cool it was. Still others claimed that the idea of Tivo suggesting what you would like to watch was too weird for people to believe. Although all these are true to some extent, I think that the critical problem has been the subscription fee.
You see, the Tivo business model was built around a data connection between your machine and their servers. Not only did they use that to collect information on what people were watching, with a long range plan to sell that information to the networks, they needed that connection to update your onscreen program guide. Tivo made the strategic decision that they were going to provide it over a phone connection and charge $12.95 per month, (or you could choose a one-lump-sum “lifetime” subscription fee of only $300!). The subscription approach looks good on a business plan with a huge projected subscriber base, but how about all those people out there who already have that link set up through their cable or satellite subscriptions? Will they be willing to pay an extra $13 per month for the same programming information they already get? Tivo bet the farm that they would.
That $13 extra per month is precisely why I decided to get my first DVR two years ago through Dish Network, rather than commit myself to Tivo. I paid $189 for my Dish DVR (after rebate) and the normal $5 per month fee for the extra receiver (I think all cable and satellite plans charge you some small monthly fee for additional set top boxes).
What has happened since then is that most cable and satellite companies now offer some sort of combination DVR / set top box. I haven’t checked with all the cable companies, but my satellite provider doesn’t charge any more for a DVR set top box than it does for any other set top box. So you are only paying for the benefit of piping all your TV channels into another room, not for the DVR functionality.
Although Tivo has been trying hard to set up agreements with cable and satellite providers (they have one with Direct TV), it appears that those guys are smart enough to understand that they don’t really need Tivo and that many of their customers may resist the added fees. Consequently it came as no big surprise when Direct TV announced that they will start selling their own non-Tivo DVRs (like Dish Network does). Given Tivo’s continuing financial problems, one wonders what the outlook is for all those people who paid a lump sum for a lifetime subscription? Being in the technology business, I always chuckle when I see the word “lifetime” associated with any sort of tech product.
But at the same time I feel strangely bad for the Tivo company. They picked a memorable name that rapidly became synonymous with digital video recording, did an excellent job on their software, and introduced an incredible product that is changing the way people watch TV. If the company eventually goes under, it will make a good case study for Business Strategy 101.
Tuesday, February 22
Wednesday, February 9
High Speed Internet - How Much is it Worth?
I’ve commented a couple of times on the emergence of free WiFi in various places, but it seems to be growing faster than I expected. The number of places offering free wireless internet connections is apparently growing exponentially. There are even whole commercial zones set up as hot spots, to encourage people to shop and dine there. I live near Long Beach California where in their downtown area you can sit at an outdoor cafe on Pine Avenue and check you e-mail or surf the net for free, compliments of the city and a consortium of businesses. Before long free WiFi will be a normal accepted cost of doing business. It will be a component of good service.
During each new phase of technological progress, the expectations of consumers ratchet up a notch. Remember when the fax machine was the necessary new thing to be in business? Then it was computers; now if a business doesn’t have a website, people are likely to get suspicious, thinking that they may not be legitimate or that they are in trouble financially. Personally I get annoyed if a business doesn’t provide at least the basic information online about their hours, directions to the place and other details about their business. My reaction is that they aren’t very serious about providing good service.
To me this proliferation of free internet service is an encouraging sign for all of us – even those who don’t use the free WiFi at this point. Why? Because it puts pressure on the big internet services to lower their prices for DSL and Cable. No matter who you are, $40 - $50 is a lot of money to spend on high speed internet service for home use - especially if you are already spending a fair amount on regular phone service, cellphone service, cable or satellite TV, etc.
Given the availability of free internet service, I can see a whole lot of people who own laptops opting for the occasional trip to the coffee shop down the street, to log on for free and check e-mail. Eventually, they may be able to get it right from their apartment if they live in an urban neighborhood where there are several businesses transmitting nearby.
It’s interesting how markets overlap, and create competition where you might not expect. Just as traditional toy makers compete for consumer dollars with the manufacturers of non-toy products, so do the sellers of home internet service now compete with commercial establishments that are giving it away for free. Internet service is rapidly becoming a commodity as the “information highway” extends to every aspect of our lives.
During each new phase of technological progress, the expectations of consumers ratchet up a notch. Remember when the fax machine was the necessary new thing to be in business? Then it was computers; now if a business doesn’t have a website, people are likely to get suspicious, thinking that they may not be legitimate or that they are in trouble financially. Personally I get annoyed if a business doesn’t provide at least the basic information online about their hours, directions to the place and other details about their business. My reaction is that they aren’t very serious about providing good service.
To me this proliferation of free internet service is an encouraging sign for all of us – even those who don’t use the free WiFi at this point. Why? Because it puts pressure on the big internet services to lower their prices for DSL and Cable. No matter who you are, $40 - $50 is a lot of money to spend on high speed internet service for home use - especially if you are already spending a fair amount on regular phone service, cellphone service, cable or satellite TV, etc.
Given the availability of free internet service, I can see a whole lot of people who own laptops opting for the occasional trip to the coffee shop down the street, to log on for free and check e-mail. Eventually, they may be able to get it right from their apartment if they live in an urban neighborhood where there are several businesses transmitting nearby.
It’s interesting how markets overlap, and create competition where you might not expect. Just as traditional toy makers compete for consumer dollars with the manufacturers of non-toy products, so do the sellers of home internet service now compete with commercial establishments that are giving it away for free. Internet service is rapidly becoming a commodity as the “information highway” extends to every aspect of our lives.
Wednesday, February 2
Ho Hum
A lot is being made about “video on the go” technologies at the recent CES show in Las Vegas. Several newsletters seem to view this as a big new thing worthy of shouting about. For me, it is nothing more than an interesting technology to watch- one of those long term evolutionary processes that are constantly struggling for traction. Nothing revolutionary about it at all, just the slow natural progression from VCRs to VCD players to DVD players, and now to downloadable movies off the internet.
What makes it boring to me is that the path is strewn with failed formats and standards, products that quickly become obsolete, and a sense that lately it seems to be more about marketing than real consumer demand. Yes, consumer demand is what put a VCR in every house, and demand is responsible for DVD players eclipsing VCRs finally, but the whole thing about watching videos on your cellphone or on the LCD built into your car just seems a little forced and contrived to me.
Do I really need to install a $3000 video system in my SUV so my kids don’t have to suffer through entertainment withdrawal on their 30 minute trip to school? And who is really going to spend money to subscribe to and watch “Lost in Translation” on a 1.2” cellphone screen? To be fair, what will probably happen is that people will subscribe to a mini-video service, one that sends cartoons or little funny short movies over the cellphone, or through the satellite radio system (I’m sure I’m not the only one to think of this). There are a number of producers of these mini movies working round the clock already, hoping that there is a market out there. And of course, you will get mini commercials as well, count on it.
Don’t get me wrong, I’m all in favor of early adopters helping to pull the technology into the next phase, and I understand how marketing people much prefer to tout new features rather than come up with creative campaigns. But I must admit that I am going through a period where the rate of change is getting to me, along with all the people who are soooo certain that X and Y are the next great thing.
Maybe I’m still suffering from some lingering Luddite reaction to all the marketing and sales hyperbole that I experienced at CES. Maybe I should retire to the woods and clear my head for a while so when I come back to civilization I can once again be entranced by all the cool technology that is coming down the pipeline. Time to do some fly fishing.
What makes it boring to me is that the path is strewn with failed formats and standards, products that quickly become obsolete, and a sense that lately it seems to be more about marketing than real consumer demand. Yes, consumer demand is what put a VCR in every house, and demand is responsible for DVD players eclipsing VCRs finally, but the whole thing about watching videos on your cellphone or on the LCD built into your car just seems a little forced and contrived to me.
Do I really need to install a $3000 video system in my SUV so my kids don’t have to suffer through entertainment withdrawal on their 30 minute trip to school? And who is really going to spend money to subscribe to and watch “Lost in Translation” on a 1.2” cellphone screen? To be fair, what will probably happen is that people will subscribe to a mini-video service, one that sends cartoons or little funny short movies over the cellphone, or through the satellite radio system (I’m sure I’m not the only one to think of this). There are a number of producers of these mini movies working round the clock already, hoping that there is a market out there. And of course, you will get mini commercials as well, count on it.
Don’t get me wrong, I’m all in favor of early adopters helping to pull the technology into the next phase, and I understand how marketing people much prefer to tout new features rather than come up with creative campaigns. But I must admit that I am going through a period where the rate of change is getting to me, along with all the people who are soooo certain that X and Y are the next great thing.
Maybe I’m still suffering from some lingering Luddite reaction to all the marketing and sales hyperbole that I experienced at CES. Maybe I should retire to the woods and clear my head for a while so when I come back to civilization I can once again be entranced by all the cool technology that is coming down the pipeline. Time to do some fly fishing.
Saturday, January 22
A Glimpse of Paris
My daughter has settled in Paris for the spring semester, arriving two weeks ago. She is staying in a lovely private home arranged by the American University there as a part of an exchange program with U.C. Berkeley. What an experience for her - I’m envious!
So what does this have to do with a blog on technology? Read on.
In preparation for her trip there, we tried to find out if she would have some kind of broadband access from her apartment, hoping that we could sign her up for a VOIP phone number and hook in the adapter there so she could call home for free and vice versa. But of course we soon found out that broadband was not available, in fact, it is apparently not nearly as common a thing in private homes there. So, we told her to start looking for cheap calling cards.
She also started wondering about how she was going to get her assignments. At Berkeley, everyone is online - everyone. They sign up for classes online, get their assignments, turn in their assignments, they collaborate in groups online for projects and they communicate with their professors online. They even take tests and quizzes online in some cases. The internet is totally integrated into the school experience and every student is expected to have access to a computer and the internet.
No so at the American University in Paris. Here they don’t even have a system for the students to sign up for classes online. It’s all done on paper, so you don’t know what classes are open or not until you submit your requests in person. Seems pretty archaic to me. So at this university, the students get their assignments in lecture, turn in their assignments on paper the same way, and make appointments to see the professor via phone. It’s all quite traditional and civilized and I suppose there is nothing wrong with it from an educational perspective. But it is fascinating to me that Berkeley is so far ahead technologically. After all, one expects the major capitals of the world to be at the forefront of technology, or at least close, and the large universities in those cities to be examples for all to follow.
So, on her third day there, my daughter noticed an internet cafe a block from her apartment, and resigned herself to going there to check her e-mail and tell us when she would call. Apparently this is how a great many people in Paris use the internet. We still have them in the U.S. but they are rapidly becoming obsolete.
But then something extraordinary happened. For some reason my daughter decided to move her computer closer to the window in her room and voila’ a window popped up on her screen saying that her laptop had found a wireless network. Apparently the college, which is about a half block away has a wireless network broadcasting with a strong signal. She clicked “ok” and she was online! No authentication whatsoever.
How I found out about all this is I got an e-mail from her all excited that she is online. She was experiencing definite signs of internet withdrawal, but now everything is right with the world again. Now we can chat online and exchange pictures daily using Picasa and Hello (both excellent and free thanks to Google) and the phone bills look they may now be manageable.
As the title of this post says, this is only a glimpse of Paris, and I suspect that the city is really much more technologically advanced than these comments would suggest. It will be interesting to follow my daughter’s education in French culture and to see how such a fiercely nationalistic country steeped in tradition deals with the pressures of ever-changing technology. I will post an update in a few months as more data flows across the Atlantic.
So what does this have to do with a blog on technology? Read on.
In preparation for her trip there, we tried to find out if she would have some kind of broadband access from her apartment, hoping that we could sign her up for a VOIP phone number and hook in the adapter there so she could call home for free and vice versa. But of course we soon found out that broadband was not available, in fact, it is apparently not nearly as common a thing in private homes there. So, we told her to start looking for cheap calling cards.
She also started wondering about how she was going to get her assignments. At Berkeley, everyone is online - everyone. They sign up for classes online, get their assignments, turn in their assignments, they collaborate in groups online for projects and they communicate with their professors online. They even take tests and quizzes online in some cases. The internet is totally integrated into the school experience and every student is expected to have access to a computer and the internet.
No so at the American University in Paris. Here they don’t even have a system for the students to sign up for classes online. It’s all done on paper, so you don’t know what classes are open or not until you submit your requests in person. Seems pretty archaic to me. So at this university, the students get their assignments in lecture, turn in their assignments on paper the same way, and make appointments to see the professor via phone. It’s all quite traditional and civilized and I suppose there is nothing wrong with it from an educational perspective. But it is fascinating to me that Berkeley is so far ahead technologically. After all, one expects the major capitals of the world to be at the forefront of technology, or at least close, and the large universities in those cities to be examples for all to follow.
So, on her third day there, my daughter noticed an internet cafe a block from her apartment, and resigned herself to going there to check her e-mail and tell us when she would call. Apparently this is how a great many people in Paris use the internet. We still have them in the U.S. but they are rapidly becoming obsolete.
But then something extraordinary happened. For some reason my daughter decided to move her computer closer to the window in her room and voila’ a window popped up on her screen saying that her laptop had found a wireless network. Apparently the college, which is about a half block away has a wireless network broadcasting with a strong signal. She clicked “ok” and she was online! No authentication whatsoever.
How I found out about all this is I got an e-mail from her all excited that she is online. She was experiencing definite signs of internet withdrawal, but now everything is right with the world again. Now we can chat online and exchange pictures daily using Picasa and Hello (both excellent and free thanks to Google) and the phone bills look they may now be manageable.
As the title of this post says, this is only a glimpse of Paris, and I suspect that the city is really much more technologically advanced than these comments would suggest. It will be interesting to follow my daughter’s education in French culture and to see how such a fiercely nationalistic country steeped in tradition deals with the pressures of ever-changing technology. I will post an update in a few months as more data flows across the Atlantic.
Friday, January 21
Narrow Minded Geeks
I confess - I’m guilty of it just like many other people. What I’m talking about is the state of mind that people fall into when they start to think that the rest of the country is just like them, with the same problems and the same choices.
The actual truth is a lot different, and for me it takes a regular Whack on the Side the Head (to borrow a phrase from Roger von Oech) to keep me from regressing into the stereotyping trap.
So while I was talking to Virgil the other day (he’s a friend who lives in the eastern part of L.A. about 30 miles away from me), I got my Whack administered when he told me he can’t get broadband in his neighborhood. Their cable company doesn’t offer broadband and he was told that his house was two blocks outside of the boundary where he could get DSL. He even checked into a satellite uplink setup and they still want over $500 for the equipment and about $75/month.
Now this just didn’t make sense to me because we both live in the metropolitan area of LA. It’s not like he lives out in some rural valley where you schedule your trips into town. We’re talking one of the largest urbanized areas of the world – the proverbial concrete jungle that goes on for a hundred miles. Furthermore, Virgil lives in a pretty nice neighborhood of middle to upper class suburban homes where you would expect the demand to be pretty high for broadband.
I guess what struck me the most was that I’ve had DSL for over three years and I guess I just assumed that everyone in the LA area had a choice of either DSL or cable broadband if they wanted it.
I started thinking: If Virgil can’t get broadband in Los Angeles, then how can broadband be spreading so fast through out the country? It makes me suspicious of industry statistics that claim 50% of home internet users now have broadband. Seems sort of unlikely now doesn’t it? If you go to the website DSL reports, you can do a test to see if your house is within 18,000 feet of the central office, which is apparently the limit for reliable DSL service. For those of you who forgot your high school math, that’s about 3 ½ miles.
Now I know that there are a heck of a lot of homes in this country that are more than 3 ½ miles from a central phone office, and who also don’t have broadband cable running all the way out to their houses. These rural folks have electricity, and phone service and they get their TV from a little satellite dish mounted on the side of the barn. Maybe these numbers are extrapolations from polls taken in urban areas, or maybe they have users mixed up with households. For instance, I have one DSL account, 4 people who share it, and 7 different e-mail addresses. The statistics could vary quite a lot depending on which one of those numbers you are counting.
Sometimes I think that the enormous tech industry in the U.S. is so totally insular and hyped up on themselves that they have completely forgotten about the guy who works all day at some regular non-technical job and is struggling to protect his own version of “the simple life.” He doesn’t have 3 computers networked to a DSL modem with internet connections to a media server and wireless connections to his internet enabled refrigerator. He doesn’t even own a laptop and can’t imagine why someone would lug one to Starbucks to surf the net. The only thing that really connects this guy to the high tech industry on a personal level is his cellphone, which he bought so his wife can contact him when he is out on a job to ask him to buy milk on his way home.
After braving the crowds at CES in Las Vegas a couple weeks ago, I’m pretty sure that the majority of technical enthusiasts (i.e. geeks) that I saw there have very little contact with the folks who are labeled “late adopters.” Maybe it would be a good idea to set up a revolving program to send all these account executives of high tech firms out to roam the country in a mobile home for a month each. They would certainly get a whole new perspective on the broad profile of the American consumer. I’ll drive.
The actual truth is a lot different, and for me it takes a regular Whack on the Side the Head (to borrow a phrase from Roger von Oech) to keep me from regressing into the stereotyping trap.
So while I was talking to Virgil the other day (he’s a friend who lives in the eastern part of L.A. about 30 miles away from me), I got my Whack administered when he told me he can’t get broadband in his neighborhood. Their cable company doesn’t offer broadband and he was told that his house was two blocks outside of the boundary where he could get DSL. He even checked into a satellite uplink setup and they still want over $500 for the equipment and about $75/month.
Now this just didn’t make sense to me because we both live in the metropolitan area of LA. It’s not like he lives out in some rural valley where you schedule your trips into town. We’re talking one of the largest urbanized areas of the world – the proverbial concrete jungle that goes on for a hundred miles. Furthermore, Virgil lives in a pretty nice neighborhood of middle to upper class suburban homes where you would expect the demand to be pretty high for broadband.
I guess what struck me the most was that I’ve had DSL for over three years and I guess I just assumed that everyone in the LA area had a choice of either DSL or cable broadband if they wanted it.
I started thinking: If Virgil can’t get broadband in Los Angeles, then how can broadband be spreading so fast through out the country? It makes me suspicious of industry statistics that claim 50% of home internet users now have broadband. Seems sort of unlikely now doesn’t it? If you go to the website DSL reports, you can do a test to see if your house is within 18,000 feet of the central office, which is apparently the limit for reliable DSL service. For those of you who forgot your high school math, that’s about 3 ½ miles.
Now I know that there are a heck of a lot of homes in this country that are more than 3 ½ miles from a central phone office, and who also don’t have broadband cable running all the way out to their houses. These rural folks have electricity, and phone service and they get their TV from a little satellite dish mounted on the side of the barn. Maybe these numbers are extrapolations from polls taken in urban areas, or maybe they have users mixed up with households. For instance, I have one DSL account, 4 people who share it, and 7 different e-mail addresses. The statistics could vary quite a lot depending on which one of those numbers you are counting.
Sometimes I think that the enormous tech industry in the U.S. is so totally insular and hyped up on themselves that they have completely forgotten about the guy who works all day at some regular non-technical job and is struggling to protect his own version of “the simple life.” He doesn’t have 3 computers networked to a DSL modem with internet connections to a media server and wireless connections to his internet enabled refrigerator. He doesn’t even own a laptop and can’t imagine why someone would lug one to Starbucks to surf the net. The only thing that really connects this guy to the high tech industry on a personal level is his cellphone, which he bought so his wife can contact him when he is out on a job to ask him to buy milk on his way home.
After braving the crowds at CES in Las Vegas a couple weeks ago, I’m pretty sure that the majority of technical enthusiasts (i.e. geeks) that I saw there have very little contact with the folks who are labeled “late adopters.” Maybe it would be a good idea to set up a revolving program to send all these account executives of high tech firms out to roam the country in a mobile home for a month each. They would certainly get a whole new perspective on the broad profile of the American consumer. I’ll drive.
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