Last weekend's release of the latest Harry Potter demonstrates yet again how the power of the imagination trumps manufactured entertainment every time. JK Rowlings latest installment sold over 6 million copies of the new HP series within 24 hours of its much anticipated release. Scholastic, Rowling's publisher, expects to sell nearly 30 Million copies during the first few months of the release. That's nearly double the 18 million sold of the previous HP installment. It appears that with each release in the series the audience for Our Boy Harry, and their insatiable appetite for all things Harry, multiplies exponentially.
In this era of over-hyped multiplatinum video game/DVD/CD/mashup/podcast/PSP/ringtone releases, hats off to old media's ability to capture the headlines and-- most importantly-- the fertile imagination of millions the world over by the simple application of black type to white paper.
Viva Gutenberg!
Thursday, July 21, 2005
Monday, July 11, 2005
Citizen Journalist Coming of Age
Coverage of last week's London bombings demonstrated yet again how the landscape for photo journalism is shifting. While no one disputes the power and importance of professional photojournalism, the most memorable--and timely-images from last week's attack were captured not by well known news agencies but by average citizens armed with above average imaging technology namely camera phones. The lead image on Friday's New York Times (as shown, image left credit: Alexander Chadwick/AP) featured subway train survivors navigating from the blast site through the darkness of a London Underground tunnel. Within hours of the blasts cameraphone users blogged over 300 images to Flickr that bore witness to the latest terror atrocity.Beyond the near-real time access these images provided the news media, the significance of this event points to the ever increasing awareness that common citizens have to the power of wireless distribution of images and the multiplier impact of the web to reach worldwide audiences. This behaviour would suggest that as citizens are increasingly empowered with enabling technology they will use that technology to accelerate-- and monetize-- distribution of their personal images. The implications for professional photographers and agencies--especially photo-j's and celebrity-- are disruptive to the conventional way of doing business and will need to be addressed.
During the last 12 months some of the most memorable--and impactful-- images of world events (Abu Garib prison, the Asian Tsunami, London bombings) were captured by citizen journalists. Industry colleagues (and venture capitalists) who are asking whether or not average user (i.e. non professional) images can be turned into commercial content licensing businesses need look no further than the early success of Flickr (news and event), iStockphoto (commercial stock) and Digital Railroad (editorial and commercial stock) to see how these innovators are taking advantage of this emerging trend.
Friday, July 01, 2005
Steve Jobs: "Stay Hungry, Stay Foolish"
Like so many others, I've long been an admirer of Steve Jobs not only for his work as an innovator, but his tenacity and staying power. (And for anyone who has ever seen him pitch new products from the stage at MacWorld, he is a also the world's greatest salesman.) The text below is a transcript from a commencment speech he delivered last month at Stanford where Jobs provides insight to the personal values that have shaped his life and career. This is good stuff.
"I am honored to be with you today at your commencement from one of the finest universities in the world. I never graduated from college. Truth be told, this is the closest I've ever gotten to a college graduation. Today I want to tell you three stories from my life. That's it. No big deal. Just three stories.
The first story is about connecting the dots. I dropped out of Reed College after the first 6 months, but then stayed around as a drop-in for another 18 months or so before I really quit. So why did I drop out?
It started before I was born. My biological mother was a young, unwed college graduate student, and she decided to put me up for adoption. She felt very strongly that I should be adopted by college graduates, so everything was all set for me to be adopted at birth by a lawyer and his wife. Except that when I popped out they decided at the last minute that they really wanted a girl. So my parents, who were on a waiting list, got a call in the middle of the night asking: "We have an unexpected baby boy; do you want him?" They said: "Of course." My biological mother later found out that my mother had never graduated from college and that my father had never
graduated from high school. She refused to sign the final adoption papers. She only relented a few months later when my parents promised that I would
someday go to college.
And 17 years later I did go to college. But I naively chose a college that was almost as expensive as Stanford, and all of my working-class parents' savings were being spent on my college tuition. After six months, I couldn't see the value in it. I had no idea what I wanted to do with my life and no idea how college was going to help me figure it out. And here I was spending all of the money my parents had saved their entire life. So I decided to drop out and trust that it would all work out OK. It was pretty scary at the time, but looking back it was one of the best decisions I ever made. The minute I dropped out I could stop taking the required classes that didn't
interest me, and begin dropping in on the ones that looked interesting.
It wasn't all romantic. I didn't have a dorm room, so I slept on the floor in friends' rooms, I returned coke bottles for the 5¢ deposits to buy food with, and I would walk the 7 miles across town every Sunday night to get one good meal a week at the Hare Krishna temple. I loved it. And much of what I stumbled into by following my curiosity and intuition turned out to be priceless later on.
Let me give you one example: Reed College at that time offered perhaps the best calligraphy instruction in the country. Throughout the campus every poster, every label on every drawer, was beautifully hand calligraphed. Because I had dropped out and didn't have to take the normal classes, I decided to take a calligraphy
class to learn how to do this. I learned about serif and san serif typefaces, about varying the amount of space between different letter combinations, about what makes great typography great. It was beautiful, historical, artistically subtle in a way that science can't capture, and I found it fascinating. None of this had even a hope of any practical application in my life. But ten years later, when we were designing the first Macintosh computer, it all came back to me. And we designed it all into the Mac.
It was the first computer with beautiful typography. If I had never dropped in on that single course in college, the Mac would have never had multiple typefaces or
proportionally spaced fonts. And since Windows just copied the Mac, its likely that no personal computer would have them. If I had never dropped out, I would have never dropped in on this calligraphy class, and personal computers might not have the wonderful typography that they do. Of course it was impossible to connect the dots looking forward when I was in college.
But it was very, very clear looking backwards ten years later. Again, you can't connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something - your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.
My second story is about love and loss. I was lucky – I found what I loved to do early in life. Woz and I started Apple in my parents garage when I was 20. We worked hard, and in 10 years Apple had grown from just the two of us in a garage into a $2 billion company with over 4000 employees. We had just released our finest creation - the Macintosh - a year earlier, and I had just turned 30. And then I got fired. How can you get fired from a company you started?
Well, as Apple grew we hired someone who I thought was very talented to run the company with me, and for the first year or so things went well. But then our visions of the future began to diverge and eventually we had a falling out. When we did, our Board of Directors sided with him. So at 30 I was out. And very publicly out. What had been the focus of my entire adult life was gone, and it was devastating. I really didn't know what to do for a few months. I felt that I had let the previous generation of entrepreneurs down - that I had dropped the baton as it was being passed to me. I met with David Packard and Bob Noyce and tried to apologize for screwing up so badly. I was a very public failure, and I even thought about running away from the valley. But something slowly began to dawn on me – I still loved what I did. The turn of events at Apple had not changed that one bit. I had been rejected, but I was still in love. And so I decided to start over.
I didn't see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life. During the next five years, I started a company named NeXT, another company named Pixar, and fell in love with an amazing woman who would become my wife.
Pixar went on to create the worlds first computer animated feature film, Toy Story, and is now the most successful animation studio in the world. In a remarkable turn of events, Apple bought NeXT, I retuned to Apple, and the technology we developed at NeXT is at the heart of Apple's current renaissance. And Laurene and I have a wonderful family together. I'm pretty sure none of this would have happened if I hadn't been fired from Apple. It was awful tasting medicine, but I guess the patient needed it.
Sometimes life hits you in the head with a brick. Don't lose faith. I'm convinced that the only thing that kept me going was that I loved what I did. You've got to find what you love. And that is as true for your work as it is for your lovers. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven't found it yet, keep looking. Don't settle.
As with all matters of the heart, you'll know when you find it. And, like any great relationship, it just gets better and better as the years roll on. So keep looking until you find it. Don't settle.
My third story is about death. When I was 17, I read a quote that went something like: "If you live each day as if it was your last, someday you'll most certainly be right." It made an impression on me, and since then, for the past 33 years, I have
looked in the mirror every morning and asked myself: "If today were the last day of my life, would I want to do what I am about to do today?" And whenever the answer has been "No" for too many days in a row, I know I need to change something. Remembering that I'll be dead soon is the most important tool I've ever encountered to help me make the big choices in life. Because almost everything – all external expectations, all pride, all fear of embarrassment or failure - these things just fall away in the face of death, leaving only what is truly important.
Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.
About a year ago I was diagnosed with cancer. I had a scan at 7:30 in the morning, and it clearly showed a tumor on my pancreas. I didn't even know what a pancreas was. The doctors told me this was almost certainly a type of cancer that is incurable, and that I should expect to live no longer than three to six months. My doctor advised me to go home and get my affairs in order, which is doctor's code for prepare to die. It means to try to tell your kids everything you thought you'd have the next 10 years to tell them in just a few months. It means to make sure everything is buttoned up so that it will be as easy as possible for your family. It means to say your goodbyes. I lived with that diagnosis all day.
Later that evening I had a biopsy, where they stuck an endoscope down my throat, through my stomach and into my intestines, put a needle into my pancreas and got a few cells from the tumor. I was sedated, but my wife, who was there, told me that when they viewed the cells under a microscope the doctors started crying because it turned out to be a very rare form of pancreatic cancer that is curable with surgery. I had the surgery and I'm fine now. This was the closest I've been to facing death, and I hope its the closest I get for a few more decades. Having lived through it, I can now say this to you with a bit more certainty than when death was a useful but purely intellectual concept:
No one wants to die. Even people who want to go to heaven don't want to die to get there. And yet death is the destination we all share. No one has ever escaped it. And that is as it should be, because Death is very likely the single best invention of Life. It is Life's change agent. It clears out the old to make way for the new. Right now the new is you, but someday not too long from now, you will gradually become the old and be cleared away. Sorry to be so dramatic, but it is quite true. Your time is limited, so don't waste it living someone else's life. Don't be trapped by dogma - which is living with the results of other people's thinking. Don't let the noise of other's opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.
When I was young, there was an amazing publication called The Whole Earth Catalog, which was one of the bibles of my generation. It was created by a fellow named Stewart Brand not far from here in Menlo Park, and he brought it to life with his poetic touch. This was in the late 1960's, before personal computers and desktop publishing, so it was all made with typewriters, scissors, and Polaroid cameras. It was sort of like Google in paperback form, 35 years before Google came along: it was idealistic, and overflowing with neat tools and great notions.
Stewart and his team put out several issues of The Whole Earth Catalog, and then when it had run its course, they put out a final issue. It was the mid-1970s, and I was your age. On the back cover of their final issue was a photograph of an early morning country road, the kind you might find yourself hitchhiking on if you were so adventurous. Beneath it were the words: "Stay Hungry. Stay Foolish." It was their farewell message as they signed off. Stay Hungry. Stay Foolish. And I have always wished that for myself.
And now, as you graduate to begin anew, I wish that for you. Stay Hungry. Stay Foolish. Thank you all very much."
"I am honored to be with you today at your commencement from one of the finest universities in the world. I never graduated from college. Truth be told, this is the closest I've ever gotten to a college graduation. Today I want to tell you three stories from my life. That's it. No big deal. Just three stories.
The first story is about connecting the dots. I dropped out of Reed College after the first 6 months, but then stayed around as a drop-in for another 18 months or so before I really quit. So why did I drop out?
It started before I was born. My biological mother was a young, unwed college graduate student, and she decided to put me up for adoption. She felt very strongly that I should be adopted by college graduates, so everything was all set for me to be adopted at birth by a lawyer and his wife. Except that when I popped out they decided at the last minute that they really wanted a girl. So my parents, who were on a waiting list, got a call in the middle of the night asking: "We have an unexpected baby boy; do you want him?" They said: "Of course." My biological mother later found out that my mother had never graduated from college and that my father had never
graduated from high school. She refused to sign the final adoption papers. She only relented a few months later when my parents promised that I would
someday go to college.
And 17 years later I did go to college. But I naively chose a college that was almost as expensive as Stanford, and all of my working-class parents' savings were being spent on my college tuition. After six months, I couldn't see the value in it. I had no idea what I wanted to do with my life and no idea how college was going to help me figure it out. And here I was spending all of the money my parents had saved their entire life. So I decided to drop out and trust that it would all work out OK. It was pretty scary at the time, but looking back it was one of the best decisions I ever made. The minute I dropped out I could stop taking the required classes that didn't
interest me, and begin dropping in on the ones that looked interesting.
It wasn't all romantic. I didn't have a dorm room, so I slept on the floor in friends' rooms, I returned coke bottles for the 5¢ deposits to buy food with, and I would walk the 7 miles across town every Sunday night to get one good meal a week at the Hare Krishna temple. I loved it. And much of what I stumbled into by following my curiosity and intuition turned out to be priceless later on.
Let me give you one example: Reed College at that time offered perhaps the best calligraphy instruction in the country. Throughout the campus every poster, every label on every drawer, was beautifully hand calligraphed. Because I had dropped out and didn't have to take the normal classes, I decided to take a calligraphy
class to learn how to do this. I learned about serif and san serif typefaces, about varying the amount of space between different letter combinations, about what makes great typography great. It was beautiful, historical, artistically subtle in a way that science can't capture, and I found it fascinating. None of this had even a hope of any practical application in my life. But ten years later, when we were designing the first Macintosh computer, it all came back to me. And we designed it all into the Mac.
It was the first computer with beautiful typography. If I had never dropped in on that single course in college, the Mac would have never had multiple typefaces or
proportionally spaced fonts. And since Windows just copied the Mac, its likely that no personal computer would have them. If I had never dropped out, I would have never dropped in on this calligraphy class, and personal computers might not have the wonderful typography that they do. Of course it was impossible to connect the dots looking forward when I was in college.
But it was very, very clear looking backwards ten years later. Again, you can't connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something - your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.
My second story is about love and loss. I was lucky – I found what I loved to do early in life. Woz and I started Apple in my parents garage when I was 20. We worked hard, and in 10 years Apple had grown from just the two of us in a garage into a $2 billion company with over 4000 employees. We had just released our finest creation - the Macintosh - a year earlier, and I had just turned 30. And then I got fired. How can you get fired from a company you started?
Well, as Apple grew we hired someone who I thought was very talented to run the company with me, and for the first year or so things went well. But then our visions of the future began to diverge and eventually we had a falling out. When we did, our Board of Directors sided with him. So at 30 I was out. And very publicly out. What had been the focus of my entire adult life was gone, and it was devastating. I really didn't know what to do for a few months. I felt that I had let the previous generation of entrepreneurs down - that I had dropped the baton as it was being passed to me. I met with David Packard and Bob Noyce and tried to apologize for screwing up so badly. I was a very public failure, and I even thought about running away from the valley. But something slowly began to dawn on me – I still loved what I did. The turn of events at Apple had not changed that one bit. I had been rejected, but I was still in love. And so I decided to start over.
I didn't see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life. During the next five years, I started a company named NeXT, another company named Pixar, and fell in love with an amazing woman who would become my wife.
Pixar went on to create the worlds first computer animated feature film, Toy Story, and is now the most successful animation studio in the world. In a remarkable turn of events, Apple bought NeXT, I retuned to Apple, and the technology we developed at NeXT is at the heart of Apple's current renaissance. And Laurene and I have a wonderful family together. I'm pretty sure none of this would have happened if I hadn't been fired from Apple. It was awful tasting medicine, but I guess the patient needed it.
Sometimes life hits you in the head with a brick. Don't lose faith. I'm convinced that the only thing that kept me going was that I loved what I did. You've got to find what you love. And that is as true for your work as it is for your lovers. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven't found it yet, keep looking. Don't settle.
As with all matters of the heart, you'll know when you find it. And, like any great relationship, it just gets better and better as the years roll on. So keep looking until you find it. Don't settle.
My third story is about death. When I was 17, I read a quote that went something like: "If you live each day as if it was your last, someday you'll most certainly be right." It made an impression on me, and since then, for the past 33 years, I have
looked in the mirror every morning and asked myself: "If today were the last day of my life, would I want to do what I am about to do today?" And whenever the answer has been "No" for too many days in a row, I know I need to change something. Remembering that I'll be dead soon is the most important tool I've ever encountered to help me make the big choices in life. Because almost everything – all external expectations, all pride, all fear of embarrassment or failure - these things just fall away in the face of death, leaving only what is truly important.
Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.
About a year ago I was diagnosed with cancer. I had a scan at 7:30 in the morning, and it clearly showed a tumor on my pancreas. I didn't even know what a pancreas was. The doctors told me this was almost certainly a type of cancer that is incurable, and that I should expect to live no longer than three to six months. My doctor advised me to go home and get my affairs in order, which is doctor's code for prepare to die. It means to try to tell your kids everything you thought you'd have the next 10 years to tell them in just a few months. It means to make sure everything is buttoned up so that it will be as easy as possible for your family. It means to say your goodbyes. I lived with that diagnosis all day.
Later that evening I had a biopsy, where they stuck an endoscope down my throat, through my stomach and into my intestines, put a needle into my pancreas and got a few cells from the tumor. I was sedated, but my wife, who was there, told me that when they viewed the cells under a microscope the doctors started crying because it turned out to be a very rare form of pancreatic cancer that is curable with surgery. I had the surgery and I'm fine now. This was the closest I've been to facing death, and I hope its the closest I get for a few more decades. Having lived through it, I can now say this to you with a bit more certainty than when death was a useful but purely intellectual concept:
No one wants to die. Even people who want to go to heaven don't want to die to get there. And yet death is the destination we all share. No one has ever escaped it. And that is as it should be, because Death is very likely the single best invention of Life. It is Life's change agent. It clears out the old to make way for the new. Right now the new is you, but someday not too long from now, you will gradually become the old and be cleared away. Sorry to be so dramatic, but it is quite true. Your time is limited, so don't waste it living someone else's life. Don't be trapped by dogma - which is living with the results of other people's thinking. Don't let the noise of other's opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.
When I was young, there was an amazing publication called The Whole Earth Catalog, which was one of the bibles of my generation. It was created by a fellow named Stewart Brand not far from here in Menlo Park, and he brought it to life with his poetic touch. This was in the late 1960's, before personal computers and desktop publishing, so it was all made with typewriters, scissors, and Polaroid cameras. It was sort of like Google in paperback form, 35 years before Google came along: it was idealistic, and overflowing with neat tools and great notions.
Stewart and his team put out several issues of The Whole Earth Catalog, and then when it had run its course, they put out a final issue. It was the mid-1970s, and I was your age. On the back cover of their final issue was a photograph of an early morning country road, the kind you might find yourself hitchhiking on if you were so adventurous. Beneath it were the words: "Stay Hungry. Stay Foolish." It was their farewell message as they signed off. Stay Hungry. Stay Foolish. And I have always wished that for myself.
And now, as you graduate to begin anew, I wish that for you. Stay Hungry. Stay Foolish. Thank you all very much."
Tuesday, June 28, 2005
A Supreme Victory for Copyright Holders
Yesterday's unanimous ruling in the Metro Goldwyn-Mayer Studios v. Grokster case represents a long overdue victory for copyright holders. Grokster's specious argument that restricting its rights to distribute its P2P software would contradict the Court's wastershed Betamax ruling was revealed by the judges for the smoke screen that it was.
Grokster's assertion that it should not be held liable for how its technology is deployed by users would suggest that Grokster was in a business analogous to general purpose software development and the company was an innocent bystander in some egregious mis-use of its technology. The justices got it right and overtly stated that Grokster's "acted with a purpose to cause copyright violations." Moreover the justices found "substantial evidence" that the company's products encourages users to illegally swap copyrighted movies and music.
Grokster's other assertion that such a ruling would stifle the creativity of technology innovators was merely a fear mongering tactic as opposed to a factual accounting of how innovators who work within the boundaries of intellectual property law are not only prospering, but giving consumers what they want. One need look no further than Apple's success with iTunes, Yahoo's subscription music service, and NetFlix DVD rental business to see how innovators who respect copyright innovate their way forward to profitability.
The genie is out of the bottle and certainly P2P is not about to go away. I for one would be delighted to see legitimate P2P companies like Weedshare and SnoCap flourish in this new environment. Hopefully yesterday's ruling will make the way clear for innovation in digital media distribution that works in concert with the interests of artists and copyright holders.
Thank you Justices for getting it right.
Grokster's assertion that it should not be held liable for how its technology is deployed by users would suggest that Grokster was in a business analogous to general purpose software development and the company was an innocent bystander in some egregious mis-use of its technology. The justices got it right and overtly stated that Grokster's "acted with a purpose to cause copyright violations." Moreover the justices found "substantial evidence" that the company's products encourages users to illegally swap copyrighted movies and music.
Grokster's other assertion that such a ruling would stifle the creativity of technology innovators was merely a fear mongering tactic as opposed to a factual accounting of how innovators who work within the boundaries of intellectual property law are not only prospering, but giving consumers what they want. One need look no further than Apple's success with iTunes, Yahoo's subscription music service, and NetFlix DVD rental business to see how innovators who respect copyright innovate their way forward to profitability.
The genie is out of the bottle and certainly P2P is not about to go away. I for one would be delighted to see legitimate P2P companies like Weedshare and SnoCap flourish in this new environment. Hopefully yesterday's ruling will make the way clear for innovation in digital media distribution that works in concert with the interests of artists and copyright holders.
Thank you Justices for getting it right.
Sunday, June 12, 2005
Microsoft & Hollywood: Did Anyone Think Win - Win?
When Microsoft released Halo 2 last year and racked up Hollywood-like box office numbers in its first week of release, it's easy to understand (and forgive) if the execs in Redmond experienced a little rush to the head and perhaps a momentary lapse in judgment believing that the market value of their videogame title "should" be equated to proven box office brands like Spielberg and Cruise or franchises like Star Wars or Spiderman. Surely, once the blush was off the rose and the champagne uncorked, cooler heads would prevail and recognize that, while Microsoft had in fact created a blockbuster videogame, that fact in no way should give the software giant the license to negotiate with Hollywood with the same hubris it displays as the dominant player in the software industry. Wanna bet?
As reported in the June 10th edition of the NY Times, Microsoft's MO was on full display in the disclosure of how it went about negotiating film rights for Halo 2 with the major studios. Rather than recognize (and perhaps humbly submit) that Microsoft was a new kid on the block in Hollywood and, using the bait of an admittedly valuable property, attempt to build long term sustainable relationships with worthy partners who shared their passion for marketing great games, Microsoft elected to play hardball. The Times reported that Microsoft hired a writer to write the screenplay for the Halo movie, invited execs from the major studios to read it and then offered the following terms: The studios would have 24 hours to provide a signed commitment to produce the screenplay Microsoft commissioned, pay a $10MM advance (non-refundable), invest a minimum of $75MM in production (not including actors fees), pay 20% of box office receipts, and pay all travel fees for up to 60 Microsoft execs so that Microsoft could maintain creative control during production. Oh, and for the privilege of producing the movie, the winning bidder foregoes all merchandising rights.
Predictably, once hearing of these terms, 4 of the 6 potential studios dropped completely from the bidding. The Times reported that the two studios who chose to bid, Fox & Universal, submitted terms that equated to half of what Microsoft demanded and have yet to sign an agreement as both sides consider further concessions.
Beyond the sport of Microsoft bashing-- one in which I rarely partake- not to mention the hubris that one can only assume is attached to such an aggressive posture, this episode particularly intrigues me because, if the Times reporting of events and terms are accurate, it appears the folks at Microsoft engaged in some of the most ill-conceived negotiating strategies ever recorded.
Did the person in charge of the negotiations at Microsoft pause for a moment to think that maybe they didn't know the highest value the film rights to this popular game title could command in an open bid market? Did anyone consider that a $10MM advance was too low? Did anyone consider that the titans of Hollywood, who perhaps know one or two things about what it takes to produce a blockbuster movie, consider Microsoft's requirement for "total creative control" as unacceptable? Did anyone think that maybe Microsoft should take the long view and-- assuming Microsoft is confident they will have a string of hit game titles worthy of future development-- engage potential partners in Hollywood with a little more--dare I say-- respect?
In short, did anyone think win-win?
Apparently not. Sure, in the end maybe securing 50% of everything they demanded will satisfy Microsoft so they can claim victory. But, one of the cardinal rules of negotiating is never let the buyer be the one to say "no" to your terms; the seller should always have the last word and say "yes" or "no". Microsoft's obscenely one-sided posture from the outset predicated the buyer would say "no" and Microsoft would have to respond lest they lose the deal (and since 75% of the eligible bidders dropped out, the "no's" were heard loud and clear). Hence, Microsoft may claim victory, but they will never know if they got the best deal. They will never know if they got the best partner. They will never know if they got the best terms. What they got was a reputation that will not serve them in obtaining better terms in the future. What they got was a deal valued at 1/2 of what they wanted. What they got is the deal to which all parties ultimately said "no."
Too bad. It could have been a win-win.
As reported in the June 10th edition of the NY Times, Microsoft's MO was on full display in the disclosure of how it went about negotiating film rights for Halo 2 with the major studios. Rather than recognize (and perhaps humbly submit) that Microsoft was a new kid on the block in Hollywood and, using the bait of an admittedly valuable property, attempt to build long term sustainable relationships with worthy partners who shared their passion for marketing great games, Microsoft elected to play hardball. The Times reported that Microsoft hired a writer to write the screenplay for the Halo movie, invited execs from the major studios to read it and then offered the following terms: The studios would have 24 hours to provide a signed commitment to produce the screenplay Microsoft commissioned, pay a $10MM advance (non-refundable), invest a minimum of $75MM in production (not including actors fees), pay 20% of box office receipts, and pay all travel fees for up to 60 Microsoft execs so that Microsoft could maintain creative control during production. Oh, and for the privilege of producing the movie, the winning bidder foregoes all merchandising rights.
Predictably, once hearing of these terms, 4 of the 6 potential studios dropped completely from the bidding. The Times reported that the two studios who chose to bid, Fox & Universal, submitted terms that equated to half of what Microsoft demanded and have yet to sign an agreement as both sides consider further concessions.
Beyond the sport of Microsoft bashing-- one in which I rarely partake- not to mention the hubris that one can only assume is attached to such an aggressive posture, this episode particularly intrigues me because, if the Times reporting of events and terms are accurate, it appears the folks at Microsoft engaged in some of the most ill-conceived negotiating strategies ever recorded.
Did the person in charge of the negotiations at Microsoft pause for a moment to think that maybe they didn't know the highest value the film rights to this popular game title could command in an open bid market? Did anyone consider that a $10MM advance was too low? Did anyone consider that the titans of Hollywood, who perhaps know one or two things about what it takes to produce a blockbuster movie, consider Microsoft's requirement for "total creative control" as unacceptable? Did anyone think that maybe Microsoft should take the long view and-- assuming Microsoft is confident they will have a string of hit game titles worthy of future development-- engage potential partners in Hollywood with a little more--dare I say-- respect?
In short, did anyone think win-win?
Apparently not. Sure, in the end maybe securing 50% of everything they demanded will satisfy Microsoft so they can claim victory. But, one of the cardinal rules of negotiating is never let the buyer be the one to say "no" to your terms; the seller should always have the last word and say "yes" or "no". Microsoft's obscenely one-sided posture from the outset predicated the buyer would say "no" and Microsoft would have to respond lest they lose the deal (and since 75% of the eligible bidders dropped out, the "no's" were heard loud and clear). Hence, Microsoft may claim victory, but they will never know if they got the best deal. They will never know if they got the best partner. They will never know if they got the best terms. What they got was a reputation that will not serve them in obtaining better terms in the future. What they got was a deal valued at 1/2 of what they wanted. What they got is the deal to which all parties ultimately said "no."
Too bad. It could have been a win-win.
Thursday, June 02, 2005
Online Advertising and The Competition
Internet advertising revenues continues to rebound from the bubble heyday. In 2000 online ads reached $8BB. Post-bubble, internet advertising took a nose dive as advertisers cut back online spending by more than 50%. With the passing of time and the demonstrated real-time effectiveness of paid search, 2005 is on track to exceed $14BB in online ad spending. However, in spite of these impressive gains, internet advertising continues to be the poor cousin to traditional media (network and cable television tracks at $160BB in ad revenues; print advertising and outdoor represent another $20BB in North America alone).
All of these facts represent positive trends for online advertising. As a result investors continue to be bullish as evidenced by the positive gains in search and online media stocks in Q2. However, given the constraint at the macro level of the total pool of advertising dollars spent annually (not to mention the inevitable cyclical nature of the ad business), online advertising will not enjoy an unfettered run at grabbing ad dollars:
Television is the 900LB gorilla and is not standing still: Television executives understand that the franchise is under attack and are not standing still. Interactive TV --long a pipe dream-- has finally arrived on satellite and cable. DirectTV and Comcast among others are rolling out these services with advertisers like Sony and Daimler Chrysler and are creating one:one conversion relationships for its advertisers-- just like the web. Moreover, technological innovation, such as VNU and Arbitron's Apollo PPM joint program ("portable people meter"), will help broadcast advertisers close the gap on cause and effect between the media we see and the products we buy. Finally, broadcasters, understand that they need to start delivering greater value if they are going to maintain their share of wallet. Just witness ABC's recently closed upfront performance. Based on the strength of their programming (last year's Lost and Desperate HW's were unexpected hits), ABC opted to take a modest 6% gain over last years rates (and close up $600MM in upfront commitments) rather than extend the upfront period in the hopes they could simply negotiate higher rates. ABC has made the bet that it will rely on the strength of its programming (sports and entertainment) and secure premium rates in the future as opposed to trying to sell the farm now.
In Store Digital Signage: With the proliferation of sub-$1000 (and soon sub-$500) flat screen displays connected to satellite or wireline networks, retailers are capturing greater revenue per square foot when digital signage is in place. A recent pilot with Bell Canada demonstrated a 9% lift in products sales where in-store digital signage was present as compared to standard paper signs. Expect marketers to divert ever greater share of ad spending to digital signage promotions as they now have the ability to reach customers during "the decisive moment" of buying.
Mobile Advertising: Much as broadcasters subsidized programming with advertising, carriers are doing the same using promotion dollars to leverage the value of their networks. Branded content, games and more will be paid for not by subscribers, but by advertisers. And with the truly intimate relationship marketers have the potential to create via mobile handsets, it will be an irresistible pull for ad dollars to be dedicated to the mobile market. And, yes, it will all be permission based.
Internal competition: Over time the efficacy of online advertising may well prove to suppress the percentage of ad dollars dedicated to online spending. The internet's unique ability to deliver highly targeted-- and infinitely measurable results (no fuzzy Neilsen or Arbitron ratings to interpret) lets marketers realize their nirvana: measuring actual results for every dollar spent. Television and print have always relied on the luxury of their inherent inefficiency to artificially protect expensive space rates. Online advertising has no such place to hide. Advertisers see exactly what they get, but they will only pay for what they get-- nothing more--- because they won't need to.
All of these facts represent positive trends for online advertising. As a result investors continue to be bullish as evidenced by the positive gains in search and online media stocks in Q2. However, given the constraint at the macro level of the total pool of advertising dollars spent annually (not to mention the inevitable cyclical nature of the ad business), online advertising will not enjoy an unfettered run at grabbing ad dollars:
Television is the 900LB gorilla and is not standing still: Television executives understand that the franchise is under attack and are not standing still. Interactive TV --long a pipe dream-- has finally arrived on satellite and cable. DirectTV and Comcast among others are rolling out these services with advertisers like Sony and Daimler Chrysler and are creating one:one conversion relationships for its advertisers-- just like the web. Moreover, technological innovation, such as VNU and Arbitron's Apollo PPM joint program ("portable people meter"), will help broadcast advertisers close the gap on cause and effect between the media we see and the products we buy. Finally, broadcasters, understand that they need to start delivering greater value if they are going to maintain their share of wallet. Just witness ABC's recently closed upfront performance. Based on the strength of their programming (last year's Lost and Desperate HW's were unexpected hits), ABC opted to take a modest 6% gain over last years rates (and close up $600MM in upfront commitments) rather than extend the upfront period in the hopes they could simply negotiate higher rates. ABC has made the bet that it will rely on the strength of its programming (sports and entertainment) and secure premium rates in the future as opposed to trying to sell the farm now.
In Store Digital Signage: With the proliferation of sub-$1000 (and soon sub-$500) flat screen displays connected to satellite or wireline networks, retailers are capturing greater revenue per square foot when digital signage is in place. A recent pilot with Bell Canada demonstrated a 9% lift in products sales where in-store digital signage was present as compared to standard paper signs. Expect marketers to divert ever greater share of ad spending to digital signage promotions as they now have the ability to reach customers during "the decisive moment" of buying.
Mobile Advertising: Much as broadcasters subsidized programming with advertising, carriers are doing the same using promotion dollars to leverage the value of their networks. Branded content, games and more will be paid for not by subscribers, but by advertisers. And with the truly intimate relationship marketers have the potential to create via mobile handsets, it will be an irresistible pull for ad dollars to be dedicated to the mobile market. And, yes, it will all be permission based.
Internal competition: Over time the efficacy of online advertising may well prove to suppress the percentage of ad dollars dedicated to online spending. The internet's unique ability to deliver highly targeted-- and infinitely measurable results (no fuzzy Neilsen or Arbitron ratings to interpret) lets marketers realize their nirvana: measuring actual results for every dollar spent. Television and print have always relied on the luxury of their inherent inefficiency to artificially protect expensive space rates. Online advertising has no such place to hide. Advertisers see exactly what they get, but they will only pay for what they get-- nothing more--- because they won't need to.
Friday, May 20, 2005
Image Industry Consolidation and The DNA Factor
After nearly a three year pause in activity, consolidation in the image licensing business has begun anew. The past 12 months have seen all three of the industries top players investing significant sums in acquisitions. Corbis' acquisition of ZEFA and the Roger Richman Agency, Jupiter Media's (Nasdaq: JUPM) acquisition of Comstock and Dynamic Graphics, and Getty Images (NYSE: GYI) recent announcement of Digital Vision and Photonica all send a clear signal that leading companies in the content licensing business have resumed their bullish outlook on the future of the industry.
And no wonder: Getty's rise to dominance can be almost singularly attributed to their effective execution of an industry roll-up strategy (initiated in 1995 with the acquisition of Tony Stone Images). Moreover, Getty has also demonstrated that by their nearly flawless integration of these companies, that partners and shareholders can realize greater value through effective execution of a roll-up strategy.
For competitors, partners and investors alike, acquisitions provide insight to the buyer's business and the buyer's DNA, aka strategy and approach, to the market:
Corbis: This Bill Gates-owned company (and the distant #2 player in the industry at $170MM as compared to Getty's $700MM) has been active in acquisitions and their inherent DNA - slow to innovate and avoid risk -- seems to be playing out again. The ZEFA acquisition, while certainly a move that bolsters revenue was done primarily to preserve market share and remain competitive in Europe with Getty. ZEFA adds little to Corbis' ability to innovate and as such is low risk/low return. Similarly, The Roger Richman Agency acquisition, while strengthening Corbis' rights clearance business (and appealing to their trained-as-a-lawyer CEO), the bottom-line effect will be minimal due to the nature of the rights clearances business. While Corbis will no doubtedly enjoy the spotlight of managing rights of famous artists and celebrities, rights clearance by definition is a labor intensive business fraught with complexities and therefore will be near impossible to automate or scale.
Jupiter Media: By contrast, Jupiter's DNA is an internet media company and their acquistions reflect this fact: While also pursuing acquisitions for content and market share, Jupiter is primarily using acquisition to accelerate adoption of a "subscription licensing" model very different from Getty and Corbis. Subscription revenue is something media companies live and die by (and highly desireable as a preferred model for business operators "to see revenue" in the future). And, unlike, Getty or Corbis, Jupiter sees itself as a pure internet play and is using it's acquisitions to enhance its position as such. Evidence of this strategy taking effect can be found in the superior Alexa rankings for the collective Jupiter properties when compared to Getty and Corbis (not to mention traffic generated to and from Jupiter's numerous affiliates). In short order, measured by acquisition, traffic and total revenue, Jupiter's DNA has guided the company in becoming the 3rd largest player in the industry.
For its part, Getty knows a good thing when it sees it. Its recent acquisitions reinforce Getty's DNA: acquire, integrate for efficiency, improve margin and generate free cash flow. Some have argued that Getty paid too much for Digital Vision (Getty paid $165MM; it has been rumored that only a year ago DV was to be had for less than half this amount). Don't bet on it: Jonathan and Co. are investment bankers by training. They ran the numbers, amortized the acquisition cost and will deliver to The Street exactly what it wants: Greater margins. By no longer paying DV a royalty for images sold, Getty gets to realize 100% of every sale and gross margins upward of 70%. The recent Photonica acquisition reflects a similar rationale: The Photonica acquisition not only buys Getty better margin, (Photonica, like DV, is also an existing Getty image partner) but will also give Getty a stronger footprint in the Japanese and the larger Asian markets which it greatly covets.
When looking at the acquisitions through the lens of a company's DNA, a very clear and consistent picture emerges. Competitors, partners, customers and investors should take note.
And no wonder: Getty's rise to dominance can be almost singularly attributed to their effective execution of an industry roll-up strategy (initiated in 1995 with the acquisition of Tony Stone Images). Moreover, Getty has also demonstrated that by their nearly flawless integration of these companies, that partners and shareholders can realize greater value through effective execution of a roll-up strategy.
For competitors, partners and investors alike, acquisitions provide insight to the buyer's business and the buyer's DNA, aka strategy and approach, to the market:
Corbis: This Bill Gates-owned company (and the distant #2 player in the industry at $170MM as compared to Getty's $700MM) has been active in acquisitions and their inherent DNA - slow to innovate and avoid risk -- seems to be playing out again. The ZEFA acquisition, while certainly a move that bolsters revenue was done primarily to preserve market share and remain competitive in Europe with Getty. ZEFA adds little to Corbis' ability to innovate and as such is low risk/low return. Similarly, The Roger Richman Agency acquisition, while strengthening Corbis' rights clearance business (and appealing to their trained-as-a-lawyer CEO), the bottom-line effect will be minimal due to the nature of the rights clearances business. While Corbis will no doubtedly enjoy the spotlight of managing rights of famous artists and celebrities, rights clearance by definition is a labor intensive business fraught with complexities and therefore will be near impossible to automate or scale.
Jupiter Media: By contrast, Jupiter's DNA is an internet media company and their acquistions reflect this fact: While also pursuing acquisitions for content and market share, Jupiter is primarily using acquisition to accelerate adoption of a "subscription licensing" model very different from Getty and Corbis. Subscription revenue is something media companies live and die by (and highly desireable as a preferred model for business operators "to see revenue" in the future). And, unlike, Getty or Corbis, Jupiter sees itself as a pure internet play and is using it's acquisitions to enhance its position as such. Evidence of this strategy taking effect can be found in the superior Alexa rankings for the collective Jupiter properties when compared to Getty and Corbis (not to mention traffic generated to and from Jupiter's numerous affiliates). In short order, measured by acquisition, traffic and total revenue, Jupiter's DNA has guided the company in becoming the 3rd largest player in the industry.
For its part, Getty knows a good thing when it sees it. Its recent acquisitions reinforce Getty's DNA: acquire, integrate for efficiency, improve margin and generate free cash flow. Some have argued that Getty paid too much for Digital Vision (Getty paid $165MM; it has been rumored that only a year ago DV was to be had for less than half this amount). Don't bet on it: Jonathan and Co. are investment bankers by training. They ran the numbers, amortized the acquisition cost and will deliver to The Street exactly what it wants: Greater margins. By no longer paying DV a royalty for images sold, Getty gets to realize 100% of every sale and gross margins upward of 70%. The recent Photonica acquisition reflects a similar rationale: The Photonica acquisition not only buys Getty better margin, (Photonica, like DV, is also an existing Getty image partner) but will also give Getty a stronger footprint in the Japanese and the larger Asian markets which it greatly covets.
When looking at the acquisitions through the lens of a company's DNA, a very clear and consistent picture emerges. Competitors, partners, customers and investors should take note.
Friday, May 13, 2005
Lessons in Hardball
Earlier this year, I read the book "Hardball, Are You Playing to Play or Playing to Win?” by George Stalk and Rob Lachenauer published by HBS Press. The authors cite numerous case studies and reveal explicit boardroom strategies of companies (Frito Lay, Dell, Citibank among others) who use their dominant market position to block or, in some cases, crush would-be competitors. Having worked for two companies that held dominant positions in their respective markets, I can speak from first hand experience how maintaining a hardball focus provides winning results. Conversely, I've also been part of two companies who held, and then lost, their dominant position, because they lost the hardball edge.
Watching this week's events unfold with the announcement of Yahoo!'s new Unlimited Music subscription service, let's take a look at some effective hardball strategies at work:
1) Leveraging dominant market position as world's # 1 digital media portal: Yahoo! is unequaled in its market position. Some will argue that whether or not Yahoo! makes money from music subscription fees (and I'm sure they will), the recently announced music service will retain and draw even more qualified and targeted traffic for Yahoo! to sell to its advertisers and partners and THAT's ultimately what drives Yahoo!'s business. This strategy is analogous to what many successful retailers do in aggressively discounting certain products (described as "impulse purchases" -- low price music CDs are often deployed in this fashion) that in turn attract customers, then make them linger in the store longer to the consider the purchase of the more expensive-high margin products where the retailers really make their money.
2) Market leaders use price to their advantage: While lower price is an obvious tactic, market leaders who have profitable businesses can completely undermine and obliterate nascent competitors by using low price to buy market share. This is a page right out of Wal-Mart and Costco's playbook and a strategy that virtually pre-clude competitors from entering their space. Moreover, it will force the hand of current competitors to respond if they are to survive.
3) Hardball players move markets: Just take a look at how Napster's stock price got hammered after the Yahoo! announcement. Lower stock price means less capital and resources to respond to the hardball tactic. And to think, just 4 months ago on SuperBowl Sunday Napster-to-Go literally swept both Apple and Real off the headlines and had analysts and columnists everywhere lauding their brilliant strategy.
Hardball? You bet. Yahoo!'s move this week qualifies them for the Cy Young.
Watching this week's events unfold with the announcement of Yahoo!'s new Unlimited Music subscription service, let's take a look at some effective hardball strategies at work:
1) Leveraging dominant market position as world's # 1 digital media portal: Yahoo! is unequaled in its market position. Some will argue that whether or not Yahoo! makes money from music subscription fees (and I'm sure they will), the recently announced music service will retain and draw even more qualified and targeted traffic for Yahoo! to sell to its advertisers and partners and THAT's ultimately what drives Yahoo!'s business. This strategy is analogous to what many successful retailers do in aggressively discounting certain products (described as "impulse purchases" -- low price music CDs are often deployed in this fashion) that in turn attract customers, then make them linger in the store longer to the consider the purchase of the more expensive-high margin products where the retailers really make their money.
2) Market leaders use price to their advantage: While lower price is an obvious tactic, market leaders who have profitable businesses can completely undermine and obliterate nascent competitors by using low price to buy market share. This is a page right out of Wal-Mart and Costco's playbook and a strategy that virtually pre-clude competitors from entering their space. Moreover, it will force the hand of current competitors to respond if they are to survive.
3) Hardball players move markets: Just take a look at how Napster's stock price got hammered after the Yahoo! announcement. Lower stock price means less capital and resources to respond to the hardball tactic. And to think, just 4 months ago on SuperBowl Sunday Napster-to-Go literally swept both Apple and Real off the headlines and had analysts and columnists everywhere lauding their brilliant strategy.
Hardball? You bet. Yahoo!'s move this week qualifies them for the Cy Young.
Wednesday, May 11, 2005
Hey Kid - 5 CDs or 800,000 Tracks-- Which One Do you Want?
As an avid listener (and collector) of digital music, I've always believed in owning the tracks I listen to and haven't seriously considered buying into any of the music subscription services-- until today. Yahoo! Announced their Yahoo! Music Unlimited service at the remarkable price of $4.99 month giving access to over 800,000 tracks from the major labels.
When I pause to think about how I can best leverage my investment of gear (computer, home WiFi network, broadband connection and integration with my existing home stereo), I start to salivate at the possibility of pumping 800,000 tracks through my system. Moreover, when I consider my additional (and ongoing) investment of time (purchasing CDs, downloading, ripping tracks), $5 a months sounds like a no brainer.
Has the promise of music subscription finally been realized? This one will he interesting to watch.
When I pause to think about how I can best leverage my investment of gear (computer, home WiFi network, broadband connection and integration with my existing home stereo), I start to salivate at the possibility of pumping 800,000 tracks through my system. Moreover, when I consider my additional (and ongoing) investment of time (purchasing CDs, downloading, ripping tracks), $5 a months sounds like a no brainer.
Has the promise of music subscription finally been realized? This one will he interesting to watch.
Friday, May 06, 2005
"Daddy, Does the Music Come From Your Cell Phone?"
Driving my 6 year old daughter to an after school event, we were listening to music from my iPod through my car stereo. (Apple teamed with BMW to make a neat adapter cable that allows you to tuck away the iPod in the glove box and operate the player's functionality though the existing car stereo controls-- I love it). My daughter only cares about the music ( huge Beatles fan) and not the technology that makes it work. But as I pulled into the drive, turned off the ignition and grabbed my Treo cell phone, even she made the natural connection between the portability of the cell phone and the infinite enjoyment of being able to take your music with you EVERYWHERE.
She's not alone in her observation: A recent Consumer Mobility Study by In-Stat/MDR finds that 11.4% of US mobile subscribers are very or extremely interested in moving beyond basic ringtones and purchasing more full-featured music/audio services for their wireless phones including music and news/talk content available as downloadable content or on demand. The most popular service concept is the ability to download MP3s or other digital music files directly to wireless handsets, followed closely by the ability to listen to streaming music on demand.
Here are just a few of the activities underway that are helping to bring her vision to the market today:
Robust storage capacity is here: SanDisk says, in 2005, phone manufacturers will introduce 200 new phone models with memory card slots. Samsung Electronics has developed a cell phone that runs on Microsoft's Windows Mobile operating system and includes a 3GB hard drive. The drives in the Samsung phones are similar to those used in some portable digital music players, such as Apple Computer's iPod Mini, and the phone maker is employing them so that it can offer similar music player functions on the handsets.
Best of both worlds - Dual Track Download: Loudeye (NASDAQ: LOUD) in partnership with Nokia and O2 recently announced functionality for users that download a full track to their mobile device will simultaneously receive a “dual download” of the same track sent to their desktop optimized for playback on a PC or other portable device. This service will allow users to “synchronize their mobile music collection with their PC. Tracks optimized for transmission over mobile networks are typically in the 500 to 750K range which are considerably smaller than the average MP3 file which for a 4 minute track typically weighs in at 4-5MB.” (Excerpt from Loudeye company press release, 3/9/05)
P2P Goes Mobile: Using Melodeo’s peer-to-peer feature, (www.melodeo.com) users select a song from the play list of tracks on their mobile phone. They can then send the full track to another user with a Melodeo-enabled mobile phone located within Bluetooth range. The song file, which is DRM protected, pops up on the recipient’s mobile phone and he or she can listen to a 30 second preview of the song. If the person likes it, he or she can easily choose to purchase it and the Melodeo server then sends a decryption key via the carrier’s network to unlock the song, and bill the purchase to the recipient’s account. Melodeo has launched the service with tracks licensed exclusively from Warner Music. (Adapted from Melodeo press release, 2/10/05)
She's not alone in her observation: A recent Consumer Mobility Study by In-Stat/MDR finds that 11.4% of US mobile subscribers are very or extremely interested in moving beyond basic ringtones and purchasing more full-featured music/audio services for their wireless phones including music and news/talk content available as downloadable content or on demand. The most popular service concept is the ability to download MP3s or other digital music files directly to wireless handsets, followed closely by the ability to listen to streaming music on demand.
Here are just a few of the activities underway that are helping to bring her vision to the market today:
Robust storage capacity is here: SanDisk says, in 2005, phone manufacturers will introduce 200 new phone models with memory card slots. Samsung Electronics has developed a cell phone that runs on Microsoft's Windows Mobile operating system and includes a 3GB hard drive. The drives in the Samsung phones are similar to those used in some portable digital music players, such as Apple Computer's iPod Mini, and the phone maker is employing them so that it can offer similar music player functions on the handsets.
Best of both worlds - Dual Track Download: Loudeye (NASDAQ: LOUD) in partnership with Nokia and O2 recently announced functionality for users that download a full track to their mobile device will simultaneously receive a “dual download” of the same track sent to their desktop optimized for playback on a PC or other portable device. This service will allow users to “synchronize their mobile music collection with their PC. Tracks optimized for transmission over mobile networks are typically in the 500 to 750K range which are considerably smaller than the average MP3 file which for a 4 minute track typically weighs in at 4-5MB.” (Excerpt from Loudeye company press release, 3/9/05)
P2P Goes Mobile: Using Melodeo’s peer-to-peer feature, (www.melodeo.com) users select a song from the play list of tracks on their mobile phone. They can then send the full track to another user with a Melodeo-enabled mobile phone located within Bluetooth range. The song file, which is DRM protected, pops up on the recipient’s mobile phone and he or she can listen to a 30 second preview of the song. If the person likes it, he or she can easily choose to purchase it and the Melodeo server then sends a decryption key via the carrier’s network to unlock the song, and bill the purchase to the recipient’s account. Melodeo has launched the service with tracks licensed exclusively from Warner Music. (Adapted from Melodeo press release, 2/10/05)
Wednesday, May 04, 2005
70,000,000,000 Images: Coming To A Hard Drive Near You
At the recent CTIA Wireless conference in New Orleans, Dan Carp, CEO of Kodak, gave the keynote addressed and shared this staggering statistic: During the next 12 months, over 70BB (that's Billion with a "B") digital images will be captured worldwide. Kodak estimates about 1/2 of those images will be taken with camera phones; the other 1/2 with digital cameras.
Since hearing this statistic (and observing recent activity in the M&A arena) the implications of such rapid global adoption of the digital image platform creates significant opportunities for companies--both large and small-- to introduce products and services that help users edit, manage, share, print and distribute their digital image content. One area in particular that deserves exploration is archival storage.
During the last 3 years since adopting digital capture, I personally have amassed a collection of over 5,000 digital images. While I am delighted with the flexibility and speed (not to mention creative freedom) digital has provided me, I am also nervous as hell: Will my images stand the test of time so that my kids and their kids will be able to enjoy all of the special memories long after the current media I use for storage is obsolete? (Currently, I use several storage mechanisms including serial external hard drives for real time back-up and a combination of DVD/CD for archival storage.)
Archival storage of images is not a new problem: During the past 15 years, I've been part of several leading edge companies that have developed both the expertise and invested in very sophisticated (and very expensive) state-of-the-art digital archive systems to manage and preserve millions of images. But what about Soccer Mom? Who will she turn to? Can we really expect consumers to have the patience and/or foresight to recognize that the digital images they are creating today must be proactively archived and managed in order to preserve their digital memory for future generations?
Life used to be simple: My father's brother captured images of my parent's 1959 wedding on his Brownie camera using Kodakchrome 25 film. Last week, or 46 years later, I loaded those same images into a slide carousel (which I was informed Kodak has stopped manufacturing) and projected them on a screen for my children and family to enjoy. The colors were brilliant, the images sharp and the memories, most important, were/are intact.
With digital capture, some companies (esp. those who make a their living from selling ink, chemistry and paper) would like you to believe that the only way to preserve memories is to make a print. And I agree-- printing is the only guarantee I can think of that provides this security. But in many ways, printing makes me feel like I'm taking a step backwards.
Companies that can provide solutions for real-time, state of the art storage-and most importantly, those that can create or leverage a brand identity that resonates with "longevity" and "permanance" stand a good chance of filling the void between the smart card, the hard drive and the photo album. Moreover, let's not be satisfied with static storage-- the winner should also allow customers to better leverage the unique attributes of digital content to share, search, edit, and distribute their images within a real-time dynamic architecture.
After all, 70,000,000,000 images deserve to live somewhere-- let's find them a home.
Since hearing this statistic (and observing recent activity in the M&A arena) the implications of such rapid global adoption of the digital image platform creates significant opportunities for companies--both large and small-- to introduce products and services that help users edit, manage, share, print and distribute their digital image content. One area in particular that deserves exploration is archival storage.
During the last 3 years since adopting digital capture, I personally have amassed a collection of over 5,000 digital images. While I am delighted with the flexibility and speed (not to mention creative freedom) digital has provided me, I am also nervous as hell: Will my images stand the test of time so that my kids and their kids will be able to enjoy all of the special memories long after the current media I use for storage is obsolete? (Currently, I use several storage mechanisms including serial external hard drives for real time back-up and a combination of DVD/CD for archival storage.)
Archival storage of images is not a new problem: During the past 15 years, I've been part of several leading edge companies that have developed both the expertise and invested in very sophisticated (and very expensive) state-of-the-art digital archive systems to manage and preserve millions of images. But what about Soccer Mom? Who will she turn to? Can we really expect consumers to have the patience and/or foresight to recognize that the digital images they are creating today must be proactively archived and managed in order to preserve their digital memory for future generations?
Life used to be simple: My father's brother captured images of my parent's 1959 wedding on his Brownie camera using Kodakchrome 25 film. Last week, or 46 years later, I loaded those same images into a slide carousel (which I was informed Kodak has stopped manufacturing) and projected them on a screen for my children and family to enjoy. The colors were brilliant, the images sharp and the memories, most important, were/are intact.
With digital capture, some companies (esp. those who make a their living from selling ink, chemistry and paper) would like you to believe that the only way to preserve memories is to make a print. And I agree-- printing is the only guarantee I can think of that provides this security. But in many ways, printing makes me feel like I'm taking a step backwards.
Companies that can provide solutions for real-time, state of the art storage-and most importantly, those that can create or leverage a brand identity that resonates with "longevity" and "permanance" stand a good chance of filling the void between the smart card, the hard drive and the photo album. Moreover, let's not be satisfied with static storage-- the winner should also allow customers to better leverage the unique attributes of digital content to share, search, edit, and distribute their images within a real-time dynamic architecture.
After all, 70,000,000,000 images deserve to live somewhere-- let's find them a home.
Tuesday, May 03, 2005
What is ShabuStation?
Welcome to ShabuStation. Like many of us, I've been lurking in and around blogs for several years now. Truth be told I have exploited the power of blogs for commercial purposes beginning in 2002 when I published a weekly blog for a software company I used to run. But to date, I have avoided creating a personal blog. That is until today.
Given my 20+ year background in and around the distribution of digital content, my small (but growing) group of industry colleagues in technology, media and content seem to be in ever-more animated dialogue about the exciting possibilities taking place in our industry. I couldn't agree more and have initiated this blog in the hopes to capture some of the more salient points which emerge from these discussions at ShabuStation.
What is ShabuStation: On my first visit to Japan in 1998, I had the privilege of enjoying dinner at the home of a colleague where I was introduced to "Shabu-Shabu." To enjoy this method of dining, you take thinly sliced pieces of raw meat, fish or vegetables grasped between chop sticks and quickly dip the selected item into a hot broth. This action has the effect of cooking the meat or fish before you eat. In Japanese, this type of cooking is called "Shabu-Shabu" or "swish-swish" and hence while I won't pretend to do deep-dive analysis of the digital media industry (there are others who do a much finer job than I), I will hopefully attempt to provide quick dips or tastings as I come across them. These tastings will be provided for you to enjoy, dismiss or deride. Of course, the intended purpose of blogs is to encourage two-way dialogue so that all participants may expand our horizions on any given subject. Thank you in advance for your help in achieveing this objective.
Eat in peace.
Best, Mark
Given my 20+ year background in and around the distribution of digital content, my small (but growing) group of industry colleagues in technology, media and content seem to be in ever-more animated dialogue about the exciting possibilities taking place in our industry. I couldn't agree more and have initiated this blog in the hopes to capture some of the more salient points which emerge from these discussions at ShabuStation.
What is ShabuStation: On my first visit to Japan in 1998, I had the privilege of enjoying dinner at the home of a colleague where I was introduced to "Shabu-Shabu." To enjoy this method of dining, you take thinly sliced pieces of raw meat, fish or vegetables grasped between chop sticks and quickly dip the selected item into a hot broth. This action has the effect of cooking the meat or fish before you eat. In Japanese, this type of cooking is called "Shabu-Shabu" or "swish-swish" and hence while I won't pretend to do deep-dive analysis of the digital media industry (there are others who do a much finer job than I), I will hopefully attempt to provide quick dips or tastings as I come across them. These tastings will be provided for you to enjoy, dismiss or deride. Of course, the intended purpose of blogs is to encourage two-way dialogue so that all participants may expand our horizions on any given subject. Thank you in advance for your help in achieveing this objective.
Eat in peace.
Best, Mark
Life After iPod: The Future of Digital Music
Digital distribution of music is here to stay and not a day goes by that someone, somewhere isn't creating new ways to deliver music to the people. I've been priviliged to be part of a team working on behalf of the MIT Enterprise Forum, Seattle Chapter to bring together a group of music industry, technology and artist thought-leaders who will discuss their respective views beginning 5:30PM, Wed, May 18th at the Bellevue Hyatt in Bellevue, WA. Our panel includes:
Presenting Musical Artist:
Dave Dederer, guitarist, singer and songwriter, The Presidents of the United States of America
Expert Panelists:
David Ring, Universal Music , Senior V.P. Business Affairs & Business Development
Bill Valenti, Melodeo, CEO
Robert Acker, RealNetworks, Vice President, Music Services
Moderator:
Michael Malone, Founder of AEI Music Network, board member DMX Music
Our program will explore opportunities and challenges in the emerging world of digital music. This program will explore the impact of digital distribution on the artists and how they are likely to respond to the changing environment. Specific questions that will be addressed in the program include:
1. How do musicians/artists take advantage of new technology and new platforms to get music to their fansand while maximizing revenue and protecting their creative property?
2. When will digital music sales comprise a significant percentage of total music sales?
3. Where will the growth in digital music sales come from? Is mobile the answer?
4. Between artists and listeners, what opportunities exist for digital music entrepreneurs?
For those friends and colleagues working in the digital content industry this is an event not to be missed. If you will be in Seattle on May 18th, I urge you to attend and be part of this stimulating conversation. Register online at http://www.mitwa.org. See you there.
Presenting Musical Artist:
Dave Dederer, guitarist, singer and songwriter, The Presidents of the United States of America
Expert Panelists:
David Ring, Universal Music , Senior V.P. Business Affairs & Business Development
Bill Valenti, Melodeo, CEO
Robert Acker, RealNetworks, Vice President, Music Services
Moderator:
Michael Malone, Founder of AEI Music Network, board member DMX Music
Our program will explore opportunities and challenges in the emerging world of digital music. This program will explore the impact of digital distribution on the artists and how they are likely to respond to the changing environment. Specific questions that will be addressed in the program include:
1. How do musicians/artists take advantage of new technology and new platforms to get music to their fansand while maximizing revenue and protecting their creative property?
2. When will digital music sales comprise a significant percentage of total music sales?
3. Where will the growth in digital music sales come from? Is mobile the answer?
4. Between artists and listeners, what opportunities exist for digital music entrepreneurs?
For those friends and colleagues working in the digital content industry this is an event not to be missed. If you will be in Seattle on May 18th, I urge you to attend and be part of this stimulating conversation. Register online at http://www.mitwa.org. See you there.
Sunset at Ecola State Park, Canon Beach, Oregon, USA
Test
From time to time I'll post personal work. This image was taken at sunset during a family trip to the Oregon Coast. Click on the image to see more at flickr.com
From time to time I'll post personal work. This image was taken at sunset during a family trip to the Oregon Coast. Click on the image to see more at flickr.com
Subscribe to:
Posts (Atom)
Posts
