As iPhone excitement reaches a fever pitch, let’s take a moment to ponder what Steve Jobs called Apple’s “hobby”, Apple TV (product page). Jobs explained to Walt Mossberg that Apple TV is not another set top box or a set top box replacement, but is “sort of a new DVD player for the Internet age.” Jobs also said Apple TV is a product that will evolve over time.
Many people in the developed world have a DVD player. It’s not as big a market as cell phones, but it is a huge market. It’s historically been a pretty bad business, unless you’re the low cost manufacturer, because the format in which DVD discs are encoded is a standard that any manufacturer can create a device for.
Toshiba and Sony each saw a solution to the commoditization of DVD players: create and control a new standard for a new type of DVD disc that carries a lot more data, enough to carry movies in high definition. Toshiba, with its HD DVD standard, and Sony, with its Blueray standard, are fighting a pitched battle over who gets to control that high definition DVD disc future. A good amount of their fight has been over convincing the movie studios to back their respective standards. Yet the confusion over which type of player to buy has kept many people from buying either type of player. And when hackers cracked the digital rights protection on high definition DVDs, Fox stopped distributing high definition movie discs.
Meanwhile, Apple and startups like Vudu (see my prior post on Vudu) are seeking to use Internet connected boxes that would replace the DVD player entirely. Is an Internet connected box a better approach than a high definition DVD player? For any type of content, to me it seems the Internet is a better medium than a physical disc in 4 ways and a worse environment in 3 ways.
The ways the Internet is superior are:
- Marketing. It’s cheaper to do marketing. You can tease people with parts of content and it’s easier for people to share what they like. With community features like YouTube ratings and the Facebook social graph, you can let people know what content their communities prefer.
- Upload, storage, distribution. It’s easier to allow people to upload. In the physical world, only a select few get DVDs made. In the Internet world, anyone can share their video. The technological costs of storing and distributing that video are rapidly decreasing as the Internet evolves.
- Encryption. It’s technologically easier to create an encrypted environment on the Internet because you control the software on both the server, client, and data packet sides. In the physical world it’s harder to update broken encryption systems once part of the encryption scheme has been shattered.
- Update the interface. The interface for Internet based solutions can be revised and updated, as we see in the rapid changes happening to websites. This advantage of the Internet will spread to Internet connected consumer devices.
The ways the Internet is inferior are:
- Technologically it’s cheaper to move large amount of data by moving discs than by copying bits. High definition video takes up a lot of data space. For a long time it has been cheaper to move that data around by truck than by a network because each physical disc can store tremendous amounts of data. The advantage trucks enjoy is diminishing, however, because the Internet is evolving swiftly and peer to peer file sharing systems dramatically lower the technological costs of distribution.
- Legally it’s cheaper to move discs then to copy bits. For professionally produced content it’s a bit more expensive to buy or rent movies than it is to share physical discs (thus the current disc through the mail business models of Netflix, Blockbuster, Gamestop, LaLa). This is because although technology makes it cheaper to copy bits electronically then to move them physically, the law of copyright requires you to obtain rights to copy bits electronically but often lets you move them around physically without seeking permission. Therefore, despite the greater technological costs of moving discs, they have less legal costs, and therefore potentially less total cost.
- Painful to hook up. It’s a bit difficult to connect the Internet to your high definition television type displays. The interfaces on the devices currently used to make this hookup are generally pretty poor and keeping the Internet connection live adds a potential point of failure.
Yet that’s just where things are currently. In the spirit of Wayne Gretzky, let’s ask where the puck is going.
Are physical discs going to become better at marketing, upload (openness), storage, encryption, or changing their interface, than the Internet? It seems to me self evident that the answer is a resounding no.
Is it going to get technologically and legally cheaper to move discs onto the Internet relative to the legal cost of moving physical discs? The discrepancy in technological and legal cost will likely diminish, but it’s unlikely for the legal cost advantage of physical distribution to disappear unless more and more content is unencrypted.
There are multiple approaches to dealing with the legal cost of moving content around. Apple is trying its best to get around this disadvantage by creating one environment (iTunes) to serve content (music, video, games, software) to a multitude of devices (the desktop, laptop, ipod, iphone, Apple TV). Internet stores selling professional content in a digital form may be able to leverage their growing market share (see story) to diminish their legal cost disadvantage. Like Apple, Joost has created an encrypted hard to upload environment, but there are also unencrypted easy to upload environment (think YouTube), or encrypted easy to upload environments (think Brightcove), which all circumvent some of the legal cost disadvantages that the Internet has over physical distribution. The growing size of the Internet advertising market also potentially will draw more professional content onto Internet based distribution systems.
Is it going to get less painful to hookup the Internet to your high definition television type display? Undoubtedly. User interface design in consumer devices is something that Apple is very good at, but it’s not beyond the capabilities of a TiVo, Microsoft, Google, or other party to innovate in such a space. And one significant advantage of building consumer electronics devices with a built in Internet service to distribute media is that you can continuously upgrade the interface of that device. We’ve seen this in the desktop, the laptop, and hints of this with Apple TV and the iPhone. Device development goes from a relatively slow iteration hardware model to a super fast iteration web site like model.
Although leadership in the Internet age can change rapidly (see my post on Murdoch’s statement “They’re all moving to Facebook now”), it is possible to create competitive advantage in the Internet. Apple has shown they can do it by coupling beautiful hardware, elegant software interfaces, a minimalist aesthetic approach to what a customer actually finds most useful, and a growing library of professional content that it has the rights to distribute (iTunes) and amateur content (YouTube through Apple). Internet connected consumer electronics devices is certainly a better business than being a commodity DVD player manufacturer, if you can get traction with the consumer, and can maintain a proper pace of innovation. This is a point that Toshiba and Sony, with their massive initiatives on a waning medium, would do well to heed.
Update, 1-9-08: An alternative to Apple TV or the various Windows extender devices is to attach a full computer to the television. See http://scobleizer.com/2007/12/27/the-macmini-hdtv-revolution/
Update, 3-14-08: An even better alternative may be to get Netflix’s streaming movie service ($13.99 a month for 2 DVDs in the mail AND unlimited streaming of about a third of Netflix’s movies) onto your television. Currently this requires a Windows PC (thanks to Apple’s refusal to license digital rights management to Netflix), but in the near future this Netflix service is expected to appear on other consumer products devices.
When I first saw multi-touch screens being developed in universities, I knew it would be pretty revolutionary. They later showed up in movies like Minority Report, devices like the Apple iPhone, and presentations such as the one shown here: http://www.mathoda.com/archives/112.
Microsoft has now thrown it’s hat into the ring with Surface, a multi-touch table computer:
Pretty neat, although they are targeting high end resorts and other such places as the first customers for their $10,000 computer.
I suggested desktop multi-touch would happen in an earlier post, stating:
Despite this recent history, I believe software that runs on your local computer without needing an internet connection is going to make a come back. Two things will cause this change.
The first is that multi-touch interfaces will come to desktop machines, allowing for new types of desktop applications. You only have to look at the Nintendo Wii to see that when the human interface to a machine changes, new forms of software can meet previously unmet or unknown desires.
As cool as multi-touch desktop computers are, I’m waiting for the first laptop/tablet computer with multi-touch capabilities.
Steve Jobs of Apple indicated that their multi-touch efforts were first directed to such a device, but they decided to redirect towards the phone market due to its size and the obvious integration advantages with the iPod.
I’m sure Apple and Microsoft and a few dozen startups are hard at work developing a multi-touch laptop… who will get the prize?
Update July 20, 2007: Microsoft research demo’ed a rudimentary multi-touch laptop.
Update July 2010: Clearly the iPad gets the prize.
A study by federal scientists has concluded that meat and milk from cloned animals and their offspring is safe to eat and should be allowed to enter the food supply without any special labeling. It is likely based on the study made by federal scientists that the Food and Drug Administration will approve such meat and milk for human consumption. The study has attracted considerable media attention (see http://news.google.com/news?ie=UTF-8&oe=UTF-8&client=firefox-a&rls=org.mozilla%3Aen-US%3Aofficial&tab=wn&q=clone+fda&btnG=Search+News), and has given rise to shock and concern.
Why would scientists conclude there is a lack of risk? After all, if you clone a creature, isn’t there something unnatural about it?
To my mind, part of the problem is that cloning is a terrible term. The actual technology should be called twinning. The technology made famous by the sheep Dolly doesn’t xerox a creature. It instead is an expensive process that often fails, but creates a slim chance that identical twins will be born. Because this technology is so expensive and so prone to failure, its unlikely that anyone will eat meat from a cloned animal anytime soon. Simply put, once you’ve gone through the process of creating a cloned animal, it’s too valuable to kill. It’s much more likely that people will eat the offsprings or milk of the identical twins created by the process.
Currently, we don’t worry about whether the steak we are eating or the milk we are drinking was from a cow that was an identical twin or not. Some people say that would change if the identical twin was forced into being by a process like cloning. Yet it doesn’t make difference to the molecular makeup of the animal whether it is an identical twin that arose due to complex processes in a womb, or complex processes in a petri dish, just as it doesn’t make a difference whether a human child arose due to conception in a womb, or conception in a test tube. When artificial insemnination first arose, people thought the human child conceived in a test tube would be somehow different. Time has put that fear to rest.
Interesting things are likely to result from twinning technology. For example, a lot of drugs must now be created by synthetic processes that are expensive and difficult to distribute. You could potentially gene splice a drug into a cow that allowed it to by organic processes produce an anti-malarial drug. With twinning technology you could then create identical twins of that cow and then breed mutliple offspring from such cows. The offspring that carried the spliced gene could be used to create very inexpensive therapies.
Alternatively, you could breed different cows together, and then when the cows have an offspring that produces a particularly high quality milk, you could twin the offspring so that you can create more robust milk producing breeds. Therefore twinning technology could be used in conjunction with the much older technology of breeding.
Regardless of the factual evidence, not everyone would trust such a process. Should such people be kept purposely dark of the source of their food by government mandate? I don’t think so.
Although I don’t think it is proper for the government to ban people from making the decision that such food sources are fine with them, I do think it is proper for the government to require better information be provided to consumers.
Therefore, although I agree with the conclusions of the federal scientists that the meat and milk of cloned animals is safe for human consumption, I would prefer that the source of such food be clearly disclosed. We should be able to know what we ingest, and choose whether or not to ingest it, whether or not we will be rational in making that choice.
Therefore I support the conclusion of federal scientists that meat and milk from cloned animals and their offspring is safe to eat, but I do not conclude that it should therefore be allowed to enter the food supply without any special labeling. In fact, I would support that all food in the food supply be labeled as to its origins (farm, factory, etc) and the processes used upon it.
