Uncategorized

What the Diamond Rio Told Us

In 1998, MP3 players were pretty crappy. With 32 MB of flash memory, my little Diamond Rio could hold only a handful of songs. Few people had the foresight to envision a world with a better device, with more memory, let alone to predict how such a device could upend the music business. Everyone assumed the labels would rule the world forever (indeed their revenues peaked two years later).

In 2003, SMS messaging traffic was burgeoning in Europe and Asia, and beginning to offer European and Asian wireless carriers at fat, margin rich stream of revenues. Symbian semi-smart phones were just coming on to the market, but few people had the foresight to envision a world with a better device, one open to the Internet, let alone foresee how these devices might give rise to a world of replacement services like iMessage and $19B apps like WhatsApp that would obliterate the carriers SMS rents. Everyone assumed the powerful wireless carriers would rule indefinitely.

Here we are in 2014, and you see similar dynamic playing out with the television. Today’s tablets and connected TV devices are  the Diamond Rios or the Symbian smartphones of our day; if you’re paying careful attention, and have some vision, you can get a glimpse of the future. But some of the smartest analysts remain unpersuaded by these early developments and are the most bearish about the prospects for change (I’m thinking particularly of Peter Kafka & Ben Evans, both of whom I admire).

The argument they make for the status quo can essentially be paraphrased as follows:

  • Television network & cable executives know change is afoot, they’re smart (“unlike the labels”) and they’re not about to let someone eat their lunch.
  • They control the good content, and the distribution networks, and aren’t about to turn over there business to some upstart interloper (c.f., Intel Media).
  • Consumers haven’t really changed their habits that much; they seem to really like TV and continue to watch a lot of it.
  • Ipso facto, change is unlikely to come.

Their skepticism has some merit. Having been at this for nearly 20 years, trust me, I understand it.

*****

Change rarely arrives in the form we expect; not some zero sum disruption of  new winners and displaced losers, but usually something more complicated and nuanced. The iPod and iTunes store did transform the music industry, but did so with the labels (who, while much smaller than they were, continue to exert dominant influence on the business).

The iPhone and Android have given us new messaging apps like WhatsApp, Line, and WeChat, and demolished the carriers margin-rich SMS revenues, but in many ways they’ve only deepened our dependency on our wireless networks and the carriers who operate them.

Foreseeable changes in distribution transformed these businesses, gave rise to new empires, and co-opted or bolstered old businesses at the same time. This is the fate that awaits the television business.

As we begin to connect the Internet to billions of TV viewing screens (not just TVs, but also tablets) the television business will be transformed. It would be a mistake to conclude that because the future isn’t yet here, change is unlikely to come.

But it won’t come in the tidy zero-sum disruption narrative we’ve been told to expect. Old businesses will continue to thrive as they take advantage of and in some ways co-opt the new distribution platform.  And big new companies will be birthed.

Indeed, one already has; it’s called Netflix.

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Uncategorized

What We’re Building with Showyou

Some announcements from us at Showyou this morning:

1. A first-rate version of Showyou on the web, with the biggest collection of hand-picked videos on the Internet — over 105 million, all picked by our users and their friends and people they follow on Twitter, Facebook, YouTube; and

2. An update that brings our already great Android app to parity with our award-winning iPhone and iPad apps.

These new products, together with the Channel Platform we launched in June and our iOS apps, make Showyou something bigger than an app or website — it’s an end-to-end video platform:

  • Built by viewers, not uploaders;
  • Organized by taste, point-of-view, and interest;
  • That complements and indeed builds on top of existing, fantastic video services from YouTube and Vimeo;
  • But that gives both viewers and publishers choices and options, too;
  • That is mobile-first but works across all the screens and devices that matter to you, including your PC;
  • And that offers an experience that is as easy and fun and enjoyable to use as your TV.

Yesterday, I wrote about who might disrupt TV through the prism of Clayton Christensen’s “jobs-to-be-done” framework.

In case it’s not clear: our ambition is to make Showyou one of those services. We’ve applied for the job of entertaining you. Anytime (but especially in the evenings and on the weekends when you have some free time and want to relax); anywhere; on any device.

What should you expect when you turn on Showyou? That’ll you always find something interesting, entertaining, inspiring, and informative. Something you want to watch; with videos and channels related to your interests, your tastes, or from people who have a point-of-view you appreciate.

One other thing about the new Showyou.com? It’s maybe the most beautiful place on the Internet to watch a video. Enjoy.

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Uncategorized

Who Disrupts TV?

A few months ago, @monkbent (Ben Thompson) had a good series of posts about the disruption of TV.  In his last post of the series, he looked at television through the prism of Clayton Christensen’s “jobs-to-be-done” framework: What are the jobs we hire TV to do? [1]

The disruption to TV will happen, Ben argued, when different services come along that do these same jobs better and more cheaply.

It’s a handy framework for thinking through what the future of TV might look like, and applying it some of the disruptors start to come into focus.

For example, many of us have already hired Hulu+ and Netflix — with their reasonably deep catalogs of  on-demand movies and TV shows — to entertain us in the evenings and on weekends. [2] As both of these services continue to grow their subscriber bases, they’ll be able to take on the other jobs cable networks do — fund the creation of great, compelling, original shows. Indeed, Netflix has already had success with House of Cards and Orange is the New Black.

Some people have hired services in completely different categories  — games (on phones or consoles) and social networks (on phones, computers) especially.

At Showyou we’ve felt for a long while that the biggest, most likely disruptive force would be the the massive amount of online programming that is finally being made available on screens we actually use in the evenings and on the weekend — the television and new television-replacement screens (tablets, especially, but also PCs and mobile phones).

That makes YouTube another obvious potential winner in the contest to disrupt TV. And indeed YouTube already accounts for 17% of downstream traffic in the evening  over “fixed access” networks (broadband wires coming into our homes).

But for many, using YouTube instead of TV still feels like too much work, with too little payoff; too much leaning forward when you want to lean back. The conceit of “video discovery” services has been that if you could just organize all this, they’d be among the winners, but that hasn’t happened yet. [3]

Whether you are YouTube or a startup, we think you have to do the following to have a shot at bringing the bounty of the Internet, and disrupting TV as a result:

1. Make your service as easy as TV

A huge part of the appeal of the television is that we don’t have to think too hard. Grab the remote and your off. Stated in a different way: one of the jobs TV does is that it allows us not to think. Your service has to do that too, or it won’t be hired.

2. Focus on “the what” not the “how”

People need to know what specific job they’re hiring you to do. When you say you’re delivering “videos picked by friends,” or “videos from your social networks,” you’re describing the how, not the what. Give people a reliable, tangible, concrete way to understand the programming they’re going to get to watch; how I’m going to be entertained, inspired, or informed by the programming. [4]

3. There is no first screen

People will expect your service to be everywhere. We may still turn to the television more than any other screen, but it’s hold on our lives is slipping with each passing month. There is no first screen anymore. In our house, most video viewing happens across iPads and PCs. The TV is only rarely on. That’s not the national norm, yet, but it’s most certainly the direction we’re headed.

4. Aggregation Wins

You need to deliver something of sufficient value and depth that people will want to use your service multiple times a week, for an hour or two at a time.

Netflix, Hulu, and YouTube of course all do this. The landscape favors aggregators. Not only for the depth of programming they offer, but also the consistency and quality of experience. The winners in this space will need to make simple, fun-to-use services across multiple platforms (iOS, Android, web, and connected tv devices) that connect and interoperate with other online services.

The great, unknown question is how many services we’ll hire to replace TV. That’s where the metaphor of “channels-becoming-apps” breaks down. It’s unlikely we’ll each hire 20-30 apps to replace TV. It seems more likely we’ll hire between 5-10; a few that do the job of giving us premium, subscription-funded TV shows & movies (Hulu+, Netflix, maybe Amazon Prime) and a few to help us watch the rest of the Internet.

The winners, whomever they are, will be giant businesses. The Time Warners, Disneys, News Corps of the future.

NOTES

1. I’d argue it’s this, mainly: To entertain us in the evenings and on the weekends; to give us a way to escape and to relax after a day at work or in school. Ben suggests other specific jobs: to educate us, to inform us, to give us live coverage of sports, and to story-tell.

2. You could be pedantic and argue that Netflix and Hulu aren’t really disrupting TV, they’re simply delivering TV over IP. But the disruption we’re talking about is of cable television and its cost & economic structure.  And Netflix and Hulu, even if they largely deliver traditional television and movie programming, provide a cheaper and better experience than television (watch when you want, on the device you want, where you want).

3. Hunter Walk and I discussed this in an online dialogue in the spring (read our dialogue here and here). Christensen’s “jobs to do” framework might be helpful here, too. It may sound counter-intuitive in this age of abundance, but it’s not clear “discovery” is not a job that needs doing. The problem isn’t that we don’t know what to watch; the problem is that there is too much we want to watch with too limited time. Another problem: media discovery — for video, music, news — speaks to the “how,” but what we want is the “what.” That may sound like sophistry, a semantic argument, but consider Pandora. People often describe it as music discovery. But Pandora consistently, emphatically talks about the what, not the how. That is an “Internet radio” service. The music genome algorithm that makes Pandora work — the discovery part — is a means, not the end.

4. One of the reasons we’ve focused so hard on “channels” with Showyou is to address this. We want you to know what you’re getting — a channel oriented around taste or point-of-view (from a person or publisher you follow on Showyou), or interest (more about this tomorrow).

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Uncategorized

Apple’s Secret Social Network

I occasionally blog here about the mobile habits of my 15-year-old daughter and her friends. With two teens in the house, I get to do extensive anthropological research disguised as parenting.

Over the past six months, I’ve seen the following pattern emerge:

Instagram is used in a highly curated, edited way. It’s the public performance of your life.

Facebook is also used in a highly curated, edited way like Instagram.

Snapchat is used  throughout the day for quick status updates (usually in the form of silly selfies).

But the service that she and her friends use most frequently is iMessage. Not SMS. Not WhatsApp. Not Kik. iMessage.

We know that US teens have expressed strong preference for iPhones.  Android phones simply will not do. I think the iPhone is perceived as better, cooler, and (crucially) fancier  — but I also suspect the desire for an iPhone is subtly reinforced by the fact that their peer group is using iMessage.

If this anecdotal trend I’ve observed is indeed widespread, I think the launch of a cheaper 5c could be a powerful move, one that helps to drive lock-in among teens because of the importance of iMessage in their lives.

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Uncategorized

The New Remote Control

When our app Showyou was first launched, a number of people described it as a new kind of “remote control for web video.” As we improved and refined our service, people continued to describe Showyou that way. Again. And again.

That wasn’t an accident — we bet big and early on Apple TV and Airplay. Indeed, we began work on Showyou literally the week Airplay to the Apple TV was announced, and we have always thought that the phone and the tablet would be the gateway devices to the TV. We wanted — and still want — Showyou to be a service you can use and enjoy on your tablet or phone, or that you can use to control your TV.

We’ve learned a couple of things along the way. First, while we still totally believe that this is the future of TV it’s been slow going so far. Apple TV is still in many ways a hobby product for Apple. Airplay is not yet mainstream. And it’s still way too clunky and cumbersome.

More importantly, we’ve learned that the television is just another screen, not necessarily the “first” screen. As I tweeted with my friend Mark Donovan yesterday, the first screen is now just the screen you happen to be watching. Sometimes that’s your TV, sometimes it’s your smartphone or tablet or your PC. For years people expected some grand unification of the proverbial “living room” with some magical device that brings everything together. But instead  the opposite has occurred;  we now watch video on a wider range of devices, in a wider range of places. The combination of new devices and new services has liberated us from the couch.

So it’s with that context I took in the Chromecast announcement yesterday. Until we have the device in our hands, can play with it, can build services around it, it’s too soon to say if it will be as disruptive as reported.

Still, I couldn’t help but get excited (and feel a little tinge of vindication) with Google’s announcement. If nothing else, it’s confirmation of the vision we latched on to two three years ago. Google has joined Apple in putting their chips down, in a big way, on the tablet/phone/pc as the gateway to the TV. If the device works as well as advertised, and gives developers as much control and power as reported, it should be hugely disruptive. And if nothing else, this ought to focus the folks at Apple on the need to make Apple TV more than a hobby product (one assumes this is in the works).

And all of this activity further weakens the moat built up around the TV — a moat that has largely kept the Internet out. It’s no longer a question of whether Internet-delivered programming will get to the TV or how. It’s just a matter of  when we reach the tipping point (i.e., where we start to watch more programming over the Internet than via cable & satellite).

The $35 Chromecast and $99 Apple TV also make this clear: your new remote control isn’t a device, it’s a set of services. Aggregators with economies of scale. Netflix is almost certain to be one winner (with the most paying subscribers for a video service on the Internet) and YouTube another (with the most viewers for free, ad-supported programming). There will be a handful of others; other big subscription-focused services (Hulu, perhaps a few others around sports) and other big, free ad-supported services.

Over the past couple of years, some folks thought you could become the new remote control by building a better app, or having a nicer interface. That’s necessary, but not at all sufficient. We’ve always felt that winning in the new world, being one of the remote controls you use, would require more than a nice interface. That you’d have to make it incredibly easy to tune into the things you like, that you care about. And that requires lots and lots and lots of data to do it right, to do it well.

The services that win will be the services with the best data. I’m bullish about Showyou for many reasons, but among the biggest reasons we think we’ll be one of the key remote controls is the data we’ve been stockpiling. More on that soon.

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Internet

Dinner Time Lectures and the NSA

For the past couple of years I’ve delivered what seems the same lecture roughly every fortnight to my kids:

Privacy on the Internet is an illusion. Don’t ever post or sharing anything anywhere you don’t want 1000s, or 1,000,000s of people to read or know. When you’re on the Internet, act like you would if you were in a crowded public place.

I wasn’t warning about this them out of concern some all-seeing all-knowing government program. Instead, my concern for them was about more real, tangible, and nefarious snooping — by big companies who are in business to get us to share more in order to sell that data. Gail Collins perfectly nails it with this line in her column today:

The other side is worried about privacy, but the public is resigned to the idea that some Big Brother is monitoring their communications. After all, we live in a world where you can e-mail your husband about buying new kitchen curtains and then magically receive an online ad from a drapery company.

Of course, the drapery company ad makes it all seem so benign. But imagine you tell a friend you’ve got cancer via gmail. An ad is displayed because the advertiser bought the keyword cancer, and it catches your attention. You click on the ad,  and the company that bought the ad now knows your IP address. If they have a lot of data and are clever, they may be able to triangulate and figure out pretty precisely who you are. Somewhere, in some database owned by some company, the keyword “cancer” gets put next to your name, your IP address, and any other data they might have (your LinkedIn profile, your Facebook page, your home address, your detailed travel patterns). Who knows where it ends up.

So all you people shouting from the rooftops now about the NSA — where were you over the last decade as people were seduced into uploading their most intimate details in the relentless pursuit of profit? Or looked the other way when Google started putting ads next to our private communications?

Plus: all that sits between you and the information you send over “apparently” private networks or services is a sloppy or disgruntled employee, or a smart hacker. Spend time with any developer who knows the dark corners of the Internet and you’ll discover that vast swaths of private data are available for purchase, trade, barter. Your life is already for sale, potentially to people with far more disturbing and nefarious motives than our government. Let Mat Honan introduce you to Cosmo the God to give you a flavor.

Which leads me to the NSA and what they’re doing.

For the last 48 hours, my Twitter feed has been in full-on mob mode. Now, I may eventually join the mob. But for now I’m withholding judgment. I want to to know more, learn more. It feels like we’re at the beginning of this story, not the end. And all credit to  Glenn Greenwald for that — he’s done what real journalists do, and that’s going to force us to have a real discussion. And my bet is that Obama will engage; these kinds of debates play perfectly into his cool, hyper-rational approach.

But I’m not entirely sure that debate will play out the way we expect.

Because there are hard questions and tough facts and huge tradeoffs involved here. Try, if you can, to put yourself in the shoes of someone who works at the NSA, or FBI, or the White House. Your charged with protecting people, and there is a worst-case scenario that haunts you every day. The Black Swan event. I’m not talking about garden variety terrorism — underwear bombers, pressure-cooker or pipe-bomb makers, or even plane-hijackers. But instead, some massively devastating event like a nuclear explosion or deployment of a biological weapon or agent. Something so horrible and awful and at such a scale that we can’t possibly imagine it. What do you do?

Now, at this juncture, I know what’s coming — “Oh, sure, there you go terror monger. Just go yell ‘terrorism’ to justify the spying, like Bush and Cheney. Nazi.” And it’s true that one of the most horrible legacies of the Bush administration is the legitimacy of this reaction —  they lied about Iraq having nuclear weapons, and used that lie to get us into a war we shouldn’t have entered. They used scare tactics to justify erecting a monstrous national security state that we have to continue to live with.

But before the Bush administration, the thing that scared the hell out of people in the Clinton administration and the Congress was this possibility of someone getting a “loose nuke” or biological weaponry and using it to devastating effect. Real adults had these very real worries long before 9-11. Serious investigative journalists wrote serious pieces about just this kind of threat, and how, as a country, we were asleep at the switch and not very alive to the threat. Take just take a second to imagine a nuclear device going off in New York City. Are we willing to accept some level of risk of that happening? Or, is the potential devastation of such an event so off-the-chart we should tolerate no risk at all?

Some people may say the risks of this happening are extremely low. The threat is wildly overblown. And that should be part of the debate for sure. For those of you who argue this, I’d like to introduce you to Pakistan, an incredibly unstable country and proud owner of at least 100 nuclear warheads.

But, I hope analysis of the threat is a big part of the debate we’ll have. And that we talk about our options, including how we can or should use the NSA, and what constraints should be put on those efforts so that they’re not misused or abused.

Until all the facts are in, and until we have that debate, I’ll watch Twitter roar but I’m going to withhold final judgment. In the meantime, maybe we should direct some of our energy and focus towards Google, Facebook, Apple, Microsoft and Yahoo and how they use our data for purely commercial purposes. I suspect that might turn out to be far more frightening.

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Television, Video

Pulling on a Thread

A dozen years ago, I helped to lead a team that created one of the first “over-the-top” video and audio subscription offerings on the Internet.

For $10 a month, you got a decent package of audio and video programming. Nothing special by today’s standards, but it was the reasonably compelling for the time. [1] The service grew to millions of subscribers, generated hundreds of millions of dollars in revenues for our company, and generated millions of dollars a year in revenues to our media partners. It was a pioneering service for the time, but it also had lots of flaws and challenges and I certainly made my share of mistakes (a post for another day, or not).

In the making and operating of this service we stumbled on an interesting idea. We did the thing cable-killers dream about; we un-bundled the bundle.

We gave people a choice — buy the programming as part of our overall subscription bundle, or just buy the specific programming you want on an a la carte basis. For example, you could buy an MLB stand-alone subscription or you could get it as part of our bundle. [2]  In addition to giving people a choice,  we learned it also maximized revenues — for us and our partners. Everyone won.

A group of us started to push an effort internally to turn our subscription service into a subscription platform — let anyone offer and sell stand-alone subscriptions powered by our infrastructure and delivered through our player. That we could, and should, open up what we had built, and let 1000s of flowers bloom.

Unfortunately, the company behind the service decided to make other efforts including the Rhapsody music service, casual gaming, and sales of audio and video delivery software to big companies a higher priority than the video subscription business.

Would we have succeeded if we got to pursue this? I don’t know. But  the notion of making a platform that would give makers of programming — from big companies all the way to individual film-makers — the tools to create and distribute their own “channels” over-the-top and make money from that has been rumbling around in my head ever since.

When we launched Showyou in 2011, we started with the challenge of finding and watching video (“discovery” in the parlance of the Internet pros). We wanted to first focus on making an app that was as easy to use as your TV, but more rewarding.

But from the start we knew discovery – while necessary — was probably not sufficient. And plus we had bigger and broader ambitions as a team. We wanted to use the Showyou app as the platform for a more audacious move  — an over-the-top, tablet- and mobile-centric video distribution platform. And over the past couple of years, that raw idea from a long time ago got re-worked, shaped into something new and different and better by our team.

And that’s the Showyou Channel Platform, which we announced today. It enables anyone — from the biggest media conglomerate to an independent filmmaker — to build a beautiful video channel for the iPad (iPhone & Android coming soon) and make a living from that if they want. As we’ve stated before, our primary focus in on new programming made for and delivered on this new medium.

Of course, YouTube does some of this now with their channel program. And Showyou very much complements those efforts, and works seamlessly with YouTube. But what we are doing is also different in fundamental ways.

Just as we put the viewer in control with our app, we put the channel-maker in control with our  platform. You decide where to host your video. If you want to sell ads, you’re in charge of that, too. You decide who your advertisers and sponsors are. You keep the money you make. It’s your channel. It’s your business.

To be even more clear about what we’ve launched and are building: it’s an over-the-top video distribution platform for the future; one designed specifically for tablets and smartphones; where anyone can build a channel; where you can host your channel anywhere; a platform with  discovery, social sharing and virality built-in; where you control your business and business model; and where you keep the revenues from your efforts.

It’s a start.

Twelve years is a long time to chew on an idea. Ideas alone are worth nothing, of course. But if you pull on a thread long enough, and maybe you’re lucky enough to be with the right team, at the right time, with the right product, to try to make it happen. Exciting, that.

So it’s with real pleasure I get to type this today:

On Showyou, it’s your channel. Go build it.

1. This was at RealNetworks, and the offering was called RealOne. Programming in the US included live audio and copious video highlights for every MLB game; live audio, some live video and copious video highlights for every NBA game; CNN and ABC News on demand video; multiple live streams from the then-enormously Big Brother show; FoxSports highlights and shows; dozens of high-quality internet radio stations (you could eventually add Rhapsody for an added fee); and much more. We also offered packages in the UK and Europe with video and live audio for the Champions League, live cricket, live Rugby, BBC News, classic BBC shows, reality programming from Endemol, and more.

2. 2.  Let it be recorded for posterity that Real got MLB started with their fine efforts in premium audio & video delivered over the Internet and powered most of the back-end for that the first 2-3 years.

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