Content Isn’t King When It’s Stuck on Your Hard Drive

My Verizon iPhone 4 is a dream. Transferring my old content to it, however, is a nightmare.

The phone won’t synch with an old Intel-based Mac that has a bunch of my music. My old PC doesn’t even know the iPhone is attached and its Internet connection is shot, so I’m laboriously transferring my MP3s with a thumb drive to my new laptop. Let’s not even talk about transferring the AAC tracks (Apple’s preferred codec); every time I try, iTunes threatens to wipe away everything I’ve transferred so far.

When I considered using an illegal file sharing program to download songs I had already bought, I had a moment of insight. No wonder people rip this stuff off.

Remember CDs? Their biggest selling point is how easy they are: stick them in a CD player — any CD player — and press a button. That’s about how easy it is when you illegally download something. Until we get to that point with music, films and other content,  people won’t change their ways.

What’s annoying is that we already have a solution. It’s called the Cloud. I read the same books on my computer, my Kindle and my phone because Amazon synchs it all for me — and if my Kindle goes dead, I still own the content. Netflix lets me pause a show on TV,, pick it up on my computer and finish it on my iPhone. Last I checked, Amazon and Netflix were doing a hell of a lot better than the labels. And the studios, which are already watching their DVD sales plummet, are about to relive the music industry’s pain.

The best solution, it seems to me, is to allow users to pay a single price to synch their music and movies across multiple devices. Some consumers will want to own the content; others will be content to subscribe. But as long as people hold on to the tired idea that you protect content by restricting it to a piece of hardware or media, only a minority of people are going to use legal outlets.

Apple has long tried to get that idea through Hollywood’s collective head, and perhaps it’s finally making headway. Bloomberg reported last week that Apple is negotiating with music giants like Universal, Sony and  Warner Music to provide a permanent backup of their music in case the original is lost or damaged, and the ability to download music across multiple devices.

Here’s hoping Hollywood finally gets the message.

(For Apple’s possible plans to move to Cloud iTunes, see iPhone 5 Speculation Hints at Mobile’s Future or All Hail iPhone 5, my blog on TheWrap.com

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Nintendo 3DS, Even If It Flops, is a Game Changer

Whether or not the Nintendo 3DS takes off, it represents a seminal moment for 3D. The game player — rolled out for the U.S. market at the Game Developer’s Conference in San Francisco today — is the first mass market hand-held device that shows 3D images without glasses. A swarm of other 3D devices, mostly phones, is expected to hit the market over the next few years.

Besides 3D games, the device will also be able to play 3D trailers, starting with The Green Lantern. This summer, you’ll be able to stream Netflix movies and TV shows — although whether in 3D or not wasn’t immediately clear. The 3DS goes on sale in the U.S. on March 27.

Curiously, 3D without glasses — still considered years away for movies and television — is much easier to achieve with mobile devices. Traditionally, the lenses and mirrors required to create the illusion of 3D have only worked on large screens if the user stays at a fixed point from the image; move a bit in either direction, or add additional viewers, and the effect is lost.  It’s much easier to stay in a fixed position for a tiny mobile screen, making 3D without glasses much more practical.

Although it’s revolutionary, it’s not clear that the 3DS will dominate the market. For one thing, it’s expensive: at $250, it’s as much as 60% more expensive than Nintendo’s last portable release. And a new breed of smartphones capable of 3D is also in the works, making the value proposition for parents — who are shelling out hundreds for kids’ phones that already play games — much less clear.

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Why Obama Likes Silicon Valley More Than Tinseltown

President Obama had plenty of praise for Silicon Valley leaders last week during his visit, and none

Obama and Two SV Powerhouses: Atty. Gen. Kamala Masters and Lt. Gov. Gavin Newsom

for Hollywood. Why? Because they’re actually creating new businesses and jobs up there, not just shoring up oligopolies. That would be the six studios, whose major goal is to ensure that they control product pipeline and distribution, and muscle out competitors.

At his Woodside dinner, Obama dined with relative newcomers like Facebook CEO Mark Zuckerberg and Netflix CEO Reed Hastings. Even Google CEO Eric Schmidt is a new face, by Hollywood standards: the company didn’t exist two decades ago. What studio can you point to that has revolutionized Hollywood during that time? DreamWorks?

Why should we care? Because these Silicon Valley newcomers are creating the rules for Hollywood. Netflix is dominating digital movie distribution because it grabbed a new business model — and a contract with Starz — that the studios ignored. Steve Jobs and Apple are dictating the terms  for music distribution because the labels were too concerned with protecting their revenue streams to see the writing on the wall. Jobs’ Pixar, not eventual buyer Disney, revolutionized digital animation.

Hollywood has a culture of exclusivity: if you make it, you make it on our terms. Silicon Valley has a culture of inclusivity: venture capitalists are always looking for the next big thing that will upend the system.

I don’t see  that changing. Unless, of course, some of these studios get taken over by Silicon Valley CEOs.

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iPhone 5 Speculation Hints at Mobile’s Future

Since Apple tends to be the smartphone trend-setter, here’s some of the more interesting speculation (most gleaned from Engadget and ReadWriteWeb) about what next summer’s roll-out of iPhone 5 will feature — and competitors will rush to duplicate.

  • iTunes Moves to the Cloud. With last April’s acquisition of now-defunct streaming music service Lala.com, Apple showed that it thinks subscription or ad-supported music services have a future. Given that most people still steal, rather than buy, the music they play on their iPhones and iPods, a cloud-based iTunes service  would be a logical way to rope in many of those people. Rhapsody, Napster and Spotify have proven there’s a market for such services; but they don’t have Apple’s ability to create mass appeal.

    iPhone5 Spoof from BizarroComic.Blogspot.com

  • Facial Recognition. I have facial recognition software on my Toshiba laptop, and it sucks. Apple’s acquisition in September of facial recognition software concern Polar Rose suggests that it’s thinking about adding that capability to computers and devices, ReadWriteWeb speculates. If such software actually worked, you’d have something potentially a lot more effective than lock codes.
  • Mobile Payments. Apple has  filed patents for a mobile payments service as well as terms like iPay, iBuy and iCoupons, leading RWW to speculate that the iPhone 5 will ship with a chip enabling users to use their cell phones as digital cash. The idea is hardly new — Google and other mobile players have their own mobile wallet initiatives — but, as always, Apple’s moves carry particular clout.
  • Digital Butler? Apple has envisioned a future of people speaking directly to machines for decades; it once released a video simulating a user doing just that. Its purchase of an SRI offshoot called Siri last April suggests to RWW that it’s planning to roll out a service allowing consumers to use use their voices or type to get answers to simple questions like: Where’s the closest Chinese restaurant? Or how do I get to the corner of La Cienega and Olympic? Google, of course, is well on its way with voice-based mobile Google services, but it’s clunky and inaccurate.

If nothing else, all this hopefully is a comforting reminder that innovation isn’t dead in Steve Jobs’ absence.

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Having, Eating Your Mobile Cake

Sprint’s new Kyocera Echo Dual-Screen smartphone is designed to solve a fundamental problem that’s been around as long as cell phones: How do you fit something in your pants pocket that truly has all the capabilities of your computer?  The iPad doesn’t fill the bill: even if you add talk functions, it won’t fit in your pocket; and you feel like an idiot if you held it up to your ear (the main criticism of Dell’s Streak tablet/phone). On the other hand, the iPhone doesn’t cut it either. No one would mistake that small screen and cramped real estate for their computer.

Enter the Echo, the first phone that truly takes on the computer-in-your-pocket dream. Rolled out with great fanfare yesterday in New York, the Echo has dual 3.5″ touch screens, separated by a patent-pending pivot. Users can either use the two screens together as a 7 inch tablet, or separately, to run two applications similtaneously.

Plenty of immediate problems suggest themselves: will users put up with  a tablet  that has a big crack in the middle? Will shorter battery life (the Echo is shipped with an extra) make the phone impractical? Does the thing actually work? (Reviewers had the Echo only long enough for a few minutes apiece.)

But as a groundbreaking effort, the Echo is a winner. It points to yet another new category of devices that fit in your pocket, with screens or other features that effectively make them much bigger. You can imagine phones with screens that slide out or fold out in pieces; projectors that enable users to view (and type) on table tops; or wirelessly handshake with any available screen. In fact, you don’t have to imagine it. All of it will be here soon enough.

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Why 100 Mil. Super Bowl Viewers Really Matters

I may be one of the few Americans not watching the Super Bowl right now, but that doesn’t mean I’m not interested in it. Last year’s Super Bowl garnered  106.5  million U.S. viewers, making it the most-watched TV program in U.S. history. This year’s game — shown on all four broadcast networks — will undoubtedly get similar numbers when Nielsen announces results tomorrow. And that doesn’t count a few million more people watching around the world.

To reach that audience, companies paid as much as $3 million for a 30 sec. spot. They are spending millions to produce each of those spots, betting (correctly) that few people are going to fast-forward through a live events featuring the best ads of the year.

The takeaways:

1) Live events, particularly sports, are going to continue to command huge ad premiums because they are the one relatively sure way to neutralize DVRs.
2) If you create an ad people actually enjoy watching, they’ll actually watch it. Who knew?

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Nasdaq Hacking Could Portend Far Worse

Another sign the age of electronic warfare has arrived: hackers breaking into Nasdaq. The stock exchange acknowledged to the Wall Street Journal that hackers had repeatedly breached its network over the last year — inserting malware into  a part of its network called Directors Desk, a service designed to allow company boards to communicate by securely storing and sharing documents.

The scary thing is no one knows yet who these alleged hackers are. They could be kids, criminals or a government. WikiLeaks is just the tip of the iceberg. What about the “flash trading” crash of last May that caused the Dow Jones Industrial Average  to drop 400 points in a matter of minutes? Can you imagine what a hostile government or even a company sacked by analysts — might do?

WSJ: http://on.wsj.com/gFJ555

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