Liquid Rhymes

With the recent announcement of Google TV and the rumors that Apple is seriously working on a new version of Apple TV, I did a little thinking about where Google and Apple are thinking strategically here.

Apple’s current Apple TV offering has been fairly underwhelming, and has sold that way: CEO Steve Jobs was quoted in early 2009 noting that the industry and Apple TV are essentially “a hobby”. The product is a small PC-like box, running a modified version of Apple’s OSX Front-Row product, allows users to purchase downloadable TV shows at $2.99 in HD ($1.99 for non) and rent movies for $3.99 in HD, and it will play back your movies stored on your hard drive (both from it’s small internal as well as streaming from your PC or Mac). Additionally, it also streams your music and photo collections to your TV. There is very little internet integration, and no DVR integration.

My take on AppleTV is it’s fairly incremental: it doesn’t replace my DVR, it doesn’t bring any “must-have” content to the table, and it doesn’t provide any great internet integration. Apple’s approach was to work with Hollywood and secure deals to bring the content they control to the device as downloads – I think of this as a lot like Apple being a cable company: providing the content, but doing it one piece of content at a time. Someone who only watched shows (and no sports) that Apple offered could conceivably get rid of cable and consume content from Apple TV, but they’d be missing a ton.

Google’s vision for it’s foray into TV is more grandiose: a software platform that OEM electronic manufacturers can use to build set-top boxes that integrate with your existing system (DVR and cable box via IR blaster), and will integrate web and existing content together. It will allow you to use Google TV to search content across your DVR and the web, and choose to display any of that content on the TV. The software is Android (yes, the same on the mobile phone), and it comes with a full featured browser that will allow you to access the web on the phone. In that respect, this could be a pretty sweet system: you have your existing content on your DVR and cable system, and now you can bring the web’s content on (presumably from places like Hulu with a subscription) easily.

Google’s vision appears to be to enter the living room by doing something similar to what it did with web search: bring together existing content from various places (cable TV, web, etc.) and display this, with one device, on your TV. With this approach Google is not trying to be a cable company (like I have accused Apple of), but I believe is attempting to become more of “Google for TV” – searching and finding content wherever is exists and displaying it easily on your TV. In some sense this is a lot like Clicker, who are trying to be the “TV Guide of the Internet”. Of course, the vision is larger as Google TV integrates your existing content as well, and is aiming to hit you where you want to watch TV – your living room.

A few months ago I read a blog entry that suggested that all entrepreneurs should read Positioning: the Battle for Your Mind, a book which the author described as the “bible of marketing”. I bought the book at the time, but didn’t end up getting around to read it until today. The book, written advertising experts Jack Trout and Al Reis, was written in the 1980’s, and describes the idea of “positioning”, where a product or concept is advertised in such a way as to guide the consumer of the message around the product in a certain direction. The book was written in the 1980’s, so they cite a key example of Avis positioning themselves as “Avis is #2, and we try harder” as the canonical example of how positioning can be used to effectively advertise a product.

As the book was written in the 1980’s some of the examples cited seem out of date and perhaps incorrect (example: IBM is by far the leader in computing – really?), but the book reinforces some excellent points about how to market and position products and brands in consumer’s minds.

I got to thinking about how this applies to the startup and internet space, and I think a lot of the lessons still hold. One of the examples the authors consistently come back to is the problems Xerox had branching out beyond copiers. They wanted their brand to stand for more than copying, and entered markets like computing and communications, finding only failure. I think the same is true for a lot of today’s internet landscape: brands get positioned and then think that it’s easy to change and broaden, but in reality it’s very difficult to change in user’s minds.

I think myspace is a great example of this: it was positioned very well as a place where younger people (teens) and bands (music) go, and subsequently the feature set was tailored for this space. The mainstream and more grown-up crowd reacted to this “ghetto-ization” by fleeing the service to the up-and-coming Facebook, which currently owns the social networking space. Facebook, while riding high now (the NYT just reported they’ve been valued by Elevation Partners at $23B), may have it’s own positioning issues itself if they try to branch out beyond search.

Another instance is eBay. The internet auction site remains a giant, largely built on the huge lead they developed and the network effect that came with it. However, a number of attempts have tried to take eBay into a more premium space (newer, flashier goods), but have made little progress. It will be very difficult for eBay to try to become more upscale when the position the consumer already has for eBay is that of a large online flea market.

Google is an interesting case for a number of reasons:

• They never advertised their brand, but it has become synonymous for search strictly through word-of-mouth
• They are derided as a “one-trick-pony”, despite having a number well-trafficked services: search (of course), email, chat, maps, and chrome.
• While some of these services do have traffic, nearly all their revenue is derived from sponsored search. Google argues that all of these peripheral products drive traffic to search, which is hard to argue with the success of the toolbar business.

That said, Google continues to launch products against market leaders, such as Checkout (launched against paypal), Knol (launched against wikipedia), and a rumored new foray into social networking (to compete against Facebook). I think that it will be exceptionally difficult for Google to pull it off, and Positioning explains why: once you are known for one product, and someone else is well positioned as the market leader in another product, it will be very difficult for a consumer to be persuaded to choose your product.

Last week I decided that some of the stuff I had sitting at home were taking up a bit too much room and so decided to get rid of it. Among the clutter at the house I decided I wanted to get rid of my last cell phone, a Verizon LG Dare, my old PS2 + games, and a unopened DVD box set of Lost Season 2 (which I had received as a gift but already had).

Among my options to rid myself of this old stuff I considered:

• Selling on ebay – I’d done this before with fairly good results, as far as I remembered
• Selling on craigslist – sell locally, which I’ve done before for things like tickets
• Giving to the goodwill – a solid option without monetary upside (except a tax deduction)

Knowing that ebay has a large marketplace I decided I to go with that route. I listed my three items on ebay, and I noted a couple of things have changed:

• ebay now has a nice system of matching an item to a stock description and category. This is great, and I assume a response to Amazon’s zshops catalog – it’s a great way to bring the structured catalog to the crazy bazaar that is ebay
• ebay limits your shipping prices for certain items based on it’s category and place in the catalog. This is probably great for buyers, as they know what they’ll pay, and possibly good for sellers as they will gouge less on shipping and possibly get higher prices for the items. On the other hand what this might do is just shift a higher price to the bid amount, leading to higher fees for ebay. I assume that’s what’s going on here. I got stung by this, read on to find out more
• ebay charges 15 cents per image listing that you host on their page. If you want to host your images elsewhere you can do that but you’ve got to edit HTML to do it. I did that, but I can see why others might not want to
• It took me a while to list my items: the steps which give the better user experience (finding categories to put the items in, selecting shipping details) take more time to list. I think I spent a little over an hour taking pictures and listing the items

I picked a 5 day auction, so on the day of the auction I madly refreshed my listings to see what would happen. True to my memory of before, the bids accelerated rapidly in the waning minutes of the auctions. The PS2 increased nearly $20 (about 40% of the ending price) in the last 5 minutes. After it was over I found:

• The PS2: sold for $58.50 (plus $15 shipping)
• Lost sold for $10.50 (plus $3 shipping)
• The LG Dare sold for $58.50

After the auction two of the buyers paid quickly: the PS2 buyer and Lost buyer. The LG Dare buyer emailed me to explain her 17 year-old brother was actually the one bidding, and he would pay me next week after he gets paid. She advised that if I could I might be better off re-listing the item – I’m not sure if that’s possible, so I emailed ebay to see what they advise, and I’ll update this when I hear back.

Because the PS2 came with so many things (18 games, the console, a headset, etc.) I wanted to charge around $20 for shipping. However, ebay caps the shipping amount to $15 so this was all I was able to list. When I went to the shipping place (a Postal Annex) I had originally packed it in a large box that I had laying around. Imagine my shock when the initial quote given was $46! I quickly inquired as to why, and having being told that the problem was the box size, downgraded to a smaller box, the smallest which would accomodate the PS2 and accessories. The end damage, however, totalled $32 after $24 for shipping, $4.09 for the box, and $3 for packing peanuts and “handling”. That’s $17 more than ebay would let me charge for shipping, and a significant percentage of my $58.50 selling price (29%). The PS2 sold for $73.55 with shipping, and after subtracting $31.87 for shipping and $2.43 for paypal’s fee I’m looking at $39.25 before paypal’s fees.

The Lost DVD was a similar issue – I purchased a USPS mailer envelope (with padding) and priority mail shipping to get a tracking number. This totalled over $7 when the maximum I was allowed to charge by ebay was $3. With the Lost DVD after paypal’s 69 cent fee for handing I’m only netting $5.80 for the unopened set, and that’s before ebay’s fees.

The shipping, of course, took nearly an hour out of my day. So I’m looking at nearly 2 hours of my time, a PS2, and a Lost DVD set for around $45. ebay’s policy of maxing the shipping costs below the sellers actual costs is going to help buyers, and possibly sellers who do lots of volume and have low shipping costs, but screws the small time seller.

Next time I’ll turn to craigslist or the goodwill.

I wrote this in March 2010 in my old blog, so I’m porting over

I’ve recently come around to the idea that I may not need my “Comcastic” cable TV anymore. My Comcast bills are seemingly always a shock when I open them and see that I owe $130 a month for internet service and fairly basic TV service. What am I getting for my $130?

• Their basic “hi-speed” internet package – pretty quick, at least when compared to the DSL I had before
• The basic cable package with HD, or as I put it: “your cheapest HD package with ESPN”
• An HD DVR , because I can’t stand having to schedule my life around the show times.

More recently, however, I realized the following about my TV watching:

• I don’t watch many sporting events anymore because the bay area teams *SUCK*. Yes, you: warriors, A’s, Giants, and Niners.
• Most programs I watch are on network TV: Lost, the PBS News Hour,  The Office, and every once in a while American Idol.
• I watch a few more shows like Friday Night Lights, Mad Men, and Dexter, but I watch them on disc or through Netflix Streaming.

Why Cable Sucks

The thing that’s so infuriating about cable is that you pay for tons of channels that you never watch – the list is so ridiculously long: HGTV, Bravo, MTV, Blah blah blah. I will not watch those shows unless I’m unbelievably bored and too hung over to read a book or something. Looking at the list above I realize that what I really need is netwok TV, which can ostensibly be pulled down via an old school antenna (rabbit ears style – who remembers those?), a DVR, and Netflix Streaming.

What I Really Need

Netflix Streaming I have with my PS3, so I’ve got that box checked.

Now where do I get a TV tuner and DVR from? Turns out that my TV – a panasonic plasma – doesn’t have a TV tuner, so I’ve got to get one of those. One option could be a Tivo – they just announced some new models, and they look pretty sweet. They do all of this:

On top of being able to record and navigate through cable, FiOS, or regular antenna TV, the TiVo Premiere connects to the internet to bring you streaming video from Netflix, Amazon, Blockbuster; streaming music from Rhapsody and Live 365; and it can transfer downloaded content to your laptop or mobile device.

Unfortunately what it also comes with is a $300+ price tag and a $13 a month service charge. It’s just switching masters, albeit to a much cheaper one!

P.S. Where the hell is Hulu? My guess is Hulu’s content providers gave Tivo the big f-u just like Boxee got it.

Hmm, what’s this HTPC Thing?

After some Googling and bitching to friends I discovered there are a wealth of computer-based options that might be able to fill the tuner + DVR role. Turns out there are a lot of software options that do this type of thing, including MythTV and Windows Media Center. Whenever I tell people that Windows comes with a DVR I get a blank stare: what? How? But apparently Windows Media Center is actually a really awesome piece of software. You need a PC with a TV Tuner card, and suddenly your windows machine turns into a pretty sweet DVR.

So now I just need a PC to hook up to the TV, and a TV Tuner card. Looks like the newest crop of low-cost HTPC machines center around the Intel Atom Processor (a really cheap low cost processor) and the NVidia ION graphics processor. A few of the options I’ve seen are:

• Acer Aspire Revo – the 3610 includes the dual core Atom 330 processor, 2GB of RAM, a 160GB drive, the Ion graphics processor, and Windows 7 home premium.
• Asrock ION 330 – another dual core Atom 330 processor, 2GB of RAM, a 160GB drive, Ion, but no OS (you have to buy your own)
• Zotac MAG – similar specs to the Revo sans the OS – but much cheaper than the Asrock.

One potential issue with these units is that they use 2.5″ hard drives that spin at 5400RPM so that tends to slow them down, but indications are that these machines are fast enough to record and play HD Video from a TV tuner. Additionally the ION processor with Adobe Flash 10.1+ beta is supposed to have super smooth playback of 1080P video from Hulu, Youtube, and the like.

Taking the Plunge

Computing has come a long way with respect to video and I’m amazed that these sub-$400 computers can become my DVR, stream online video, and enable me to get rid of Comcast. I’m seriously considering taking the plunge.

Note: I wrote this on my old blog in August 2009 so I’m moving it over – obviously a lot has changed since then in the mobile space

With the Palm Pre‘s launch last June it finally looked like there would be finally be a worthy competitor to the Phone’s dominance in the smartphone field, at least from the technology journalism field. It seems to me that the tech press, with Techcrunch as lead, have branded the iPhone the winner of the SmartPhone, largely on the success of Apple’s remarkably successful App Store.

I have an iPod touch, the phone-less counterpart to the iPhone, which I’ve refused to buy because AT&T’s service is really horrendous in my home area. To me, at least at this point, there is not much point into having a phone you can’t talk on. Thus I remain hopelessly stuck on my Verizon dumbsmartphone, the LG Dare. My problems with the LG come down to some pretty basic ones:

• The touch-screen keyboard sucks. I can’t type very fast on it because when I do I mistype often. I’ve found, despite the fact the phone supports a landscape touch-screen keyboard I usually use the T9 version – as if I didn’t have a smartphone at all!

• The email application was really really bad. First off Verizon charges you $5 a month to use the application, which was horrendous. It takes an eternity to load, and the interface was clunky at best.

• Finding names in the contact list is challenging at best. LG helpfully puts an alphabet selector at the top (Select F to find users with the first name F…), but the problem is the area to tap is so tiny that it becomes very difficult to hit the right key and you end up scrolling helplessly trying to find the right name.

My contact is up in August, so I’m contemplating a new phone – specifically a Palm Pre, because I’ve heard Sprint’s service may actually work in my home. It seems to me a key criticism that their store is devoid of apps, at least when compared to Apple’s, and that Apple has an insurmountable lead. I find this ironic because I see the phone OS war as quite analogous to the battle that played out between Windows and the Mac 20 years ago.

At that point Windows was by far the market leader in terms of PC installation, and generally you bought a Mac because it was “easy to use” or you liked the design. However, the big knock was that “it doesn’t have the applications” that Windows did. You wanted a Spreadsheet? Wait till next year for Lotus 123 in Mac. You want an office suite – no Office for you, as it doesn’t exist on the Mac. I think open source killed that problem – open source apps provided tons of code that people built on to build high quality apps for the Mac, and even now there are strong competitors even on linux for almost any productivity software you need. Games remain the one category that the Mac (and linux) remain far behind on.

I find this fascinating because people now make a similar argument about the iPhone and the app store – how can anyone possibly catch up? My answer: give it a bit of time. If the phone (or more precisely, the OS) sell, people will develop for the phone.  And as more open source apps find their way out developers will be able to create more applications with lower effort, and soon there will be a substantial catalog of Palm WebOS apps. Will there be the 50,000 apps? Perhaps not, but I suspect you’ll be able to find everything you want on the Palm App store soon.