My Fantasy League Pick for Yahoo's Board: Steve Jobs

Over 11 years ago, after seeing one of the release candidates for Windows 98, I wrote “The browser wars are over, Microsoft won.” I took a lot of heat from the Netscape and Mac faithful, but at the time it was obvious that whatever the default was in the late 90s was going to win.

That was one prediction that I got right. But saying “the search wars are over, Google won” isn’t a prediction, but rather a statement of what already happened. Here’s a screen shot from a recent day’s worth of search traffic for TVbytheNumbers:

If search is the focus, combining Yahoo and Microsoft doesn’t really make up much ground. I’m mostly for Yahoo staying a separate entity because it has such massive scale overall. It’s lagging in search, but its other properties ranging from mail, to MyYahoo, to Yahoo sports perform very well. My theory, boneheaded as it may be, is with that much scale you ought to be able to figure out how to make more money. The one problem I have with the combination isn’t really Microsoft, it’s that combining the companies doesn’t seem like it will wind up increasing the scale that much.

Today Fred Wilson posted a list of board members he’d like to see in light of Carl Ichan’s recommendations. To be honest, I’d rather see Mark Cuban than a lot of Fred’s recommendations. Though I loved Fred’s pick of Bill Gross, overall there are too many deep-thinking smart people on his list. I’m not sure anything ever gets accomplished when you throw that many deep thinkers in a room. And with the mix of people Fred recommends I’d worry about the testosterone warrior mentality of making Google the target of all strategy. I think that would be a bad strategy. I’ve seen what happens when companies make their major competitor the sole focus, and it doesn’t usually work out well.

The one guy I’d really like to see on Yahoo’s board if we’re doing fantasy league is Apple’s Steve Jobs. Think about it. Apple stopped making Microsoft its direct focus, all doing so got it was the need to ask for Microsoft’s help to bail it out! Which Microsoft did.

It took a while, but then came the iPod and now Mac and its OS are very steadily gaining share too. The Apple Store? A retail hit! The Microsoft Store? Not so much. Jobs seemingly knows how to ride these things out better than anyone. Marc Andreesen may be a great product guy and Tim O’Reilly may be a genius at seeing the future. But Jobs has the practical experience of actually surviving something similar.

Seidman vs. Gorman TVbytheNumbers-style

TVbytheNumbers.com is still in shambles, but you can give it a look at www.tvbythenumbers.com/wp .But man cannot live by charts and numbers alone, so we're toying around with a couple of ideas to be more entertaining. Here's one...

OVER/UNDER

First question. Over or under ONE YEAR before NBCU shows are back on Apple's iTunes?

Robert: UNDER! NBC Universal has a problem. The way the it is set up I believe they will ONLY be able to sell well digitally if someone actually wants to watch it on the iPod. Otherwise, they'll go to NBC's site looking to see where they can buy Heroes and one of two things will happen:

1. $4.99? WTF!?

2. Even if it's $1.99 - HEY! they archive all the shows here during the season! I'll just watch it FOR FREE (there are ads, but only a few with what any of them are currently doing. It adds about 2 minutes instead of 20 you'd see on TV). Under, definitely under.

Bill: OVER! You're insane to think that the executives making these decisions at NBCU are sane, rational people trying to figure out how to make the most money and act in their own self-interests.. It's all about ego, and they can't handle that Steve Jobs is so, so fabulous and they're so, so not. Unless GE & Vivendi fire the dopes at NBCU who made this choice, I'm sticking with OVER.

Next question: Over/Under ONE HUNDRED TIMES that Les Moonves says "Only 45% of DVR users zap through the commercials" during the 2007-2008 season?

Robert: This is a ridiculous question. And a ridiculous statistic that's only true if you squint and ignore the actual data. I'd be prone to go over, even at ONE THOUSAND TIMES. More and more people will be moving to DVR usage and more and more advertisers will be upset about it. Moonves will constantly and consistently try to soothe them while still getting their greenbacks. OVER

Bill: Ahh, the pain and agony of having to agree with you. OVER. I have nothing else to add.

Next Question: Over/Under TEN: Number of this season's new shows that make it to next year's lineup?

Robert: If you include the CW in this mix, which we must because we here at TVbytheNumbers are a very inclusive bunch there are FORTY SIX new shows. I don't want to go over though because I think the number is exactly 10. So I'm going to push and say 10

Bill: The game is OVER/UNDER! We'll have to start changing these questions (e.g. 10.5) to force you into being a man and growing some stones. It's UNDER, it will be around 8 or 9 shows. But this is a dumb question to be asking now because Fox is holding back all their good stuff until January. I can't WAIT for The Sarah Connor Chronicles! Not to mention my favorites 24 and American Idol. No wait, I don't actually like either of those shows, I might give the Return of Jezebel James a try though. UNDER!

Robert: You know you can't wait for ABC's Cavemen! But when it comes to ABC I'm all about seeing my boy Mark Cuban winning Dancing with the Stars and watching Denny Crane (Boston Legal).

I don't know that I'll watch ANY new show. I may even bail on 24, it sucked last year. They say it will be better this year, with a female president. Fortunately I don't have to worry about that until next year. I'm pretty set in my ways.

Bill: You will watch the Sarah Connor Chronicles and you know you're going to watch the Bionic Woman AT LEAST once.

Robert: I'm as likely to watch the Bionic Woman as I am to watch 20/20, which is never. I didn't like it in the ‘70's, I won't like it in '07.

Bill: Admit it, it's already on your Tivo...

Next Question..(p.s. Zap2it has good full coverage of all the lineups).

Over/Under: Seven Weeks that Mark Cuban Lasts on "Dancing with the Stars"?

Robert: OVER, people are crazy if they don't think Cubes is advancing to the finals. I'd say he's going to win at all except for two words: Jane Seymour. C'mon, how am I going to bet against Jayne Seymour? But Mark will crush Marie Osmond and Scary Spice. You just wait!

Bill: Why do you make me suffer through your man-love for Cuban? Are you going to send him "good luck" flowers too? Cuban won't fare any better here than he did with the Benefactor (6 weeks!) UNDER, under, under, definitely under.

Robert: You're insane, but that's a great idea about the flowers! That's it for this week boys and girls...

(this is a complete mockup and may not accuately reflect the opinions of either of us, though that will always be true! The idea is also completely a ripoff of Tony Kornheiser's and Michael Wilbon's fine work on ESPN's Pardon the Interruption).

Lies, Damn Lies and Les Moonves: More Fun with Numbers

With apologies to Mr. Moonves, CBS crushed the competition last week, but I love a catchy headline.

One thing that’s always bothered me and always will because it’s not like it’s ever going to change is the way numbers get used. Misleading statistics make it out into the media stream and then there is this tendency to just start parroting the statistics because they’re out there. Recently I saw this Moonves quote:

"But DVRs are getting counted, and you're seeing that they are not as disastrous to commercials as everybody thought. Nobody would have thought that only [about] 45 percent of people zap commercials. Not only that, but commercials you zap through are still effective to a certain extent. When you see that Crest toothpaste logo, that goes into your brain. More and more people are going to be viewing [commercials] with the logo throughout,” said Moonves in a story on Jack Myers’ mediaVillage.

Wow, 55% of DVR owners don’t zap through commercials! At the risk of some perilous branding here: you have to be kidding me! Maybe it’s true. What I suspect is really the case is that only 45% always zap through commercials. I’m pretty sure the way the data actually works out is that most DVR users zap commercials most of the time when they are watching something time shifted.

That is not the song Moonves was singing here. I do believe that only a small % of DVR users always zap through commercials. I often find myself not zapping through them. Usually it’s when I wasn’t actually paying attention to what I was watching! I watch ESPN’s PTI religiously on the DVR, but I often watch it on my computer and am just listening while I surf the web or try to get the tvbythenumbers.com web site looking much better than what you see here before we launch next month.

I could be wrong in my assumptions and it could be Les Moonves is right. But I’ll tell you what, I’d bet $1000 that the data doesn’t show that 55% of DVR users never zap through commercials. I contacted Nielsen for clarity on the data, but so far my request has fallen on deaf ears (it’s been over a week and I asked more than once). I think the clarity is very, very important, but admittedly it’s far more important if you’re buying advertising based on the numbers that include DVR viewership than it is if you’re selling the advertising.

It’s not just the networks. When it comes to TV data, it’s just plain hard to get. I wanted to provide Bill Gorman with some numbers so he could make a chart on the growth of homes in the US with HDTVs. I tried to compile some data from the internet and it looks like this: (again, I am only talking homes in the United States, not worldwide):

March 2004 1.6 million homes (source = In-Stat)
March 2005 4.0 million homes (In-Stat)
Dec 31, 2006 27.7 million (source Global Analysis)
Dec 31, 2007 52 Million Homes (source CEA)

In the most recent data point provided by the Consumer Electronics Association is projecting end of year stats based on the sales of HDTVs during the first six months of 2007 that a total of 16 million additional homes will be added to the number of homes with at least one HDTV. I have 2, three if you count the plasma screen hanging on Michael Raneri’s basement wall – hey, I have a 61” DLP set, and bigger is better. Hanging the plasma screen on my office wall and using it as a computer monitor seemed excessive, besides it is five years old now and can only do 1024x768 resolution. If it could do 1920x1280, I’d have already ripped it off Mike’s wall.

Enough about me. I don’t take issue with the 16 million additional homes with an HDTV in 2007. But, they say that 16 million additional homes in ’07 brings the US Total to 52 million. I couldn’t find any data showing 36 million homes at the end of 2006 which is more than 8 million more homes than with the data I could find.

It doesn’t mean the data doesn’t exist, only that if it does I couldn’t find it or it’s a stat that is not freely available anywhere. We’ll still probably make the chart anyway and whether it’s 52 million homes or 44 million, it’s getting to be a lot of homes.

But here’s another statistic from the CEA from the same press release predicting the 52 Million homes, 44% of the homes with at least one HDTV receive no HD programming at all.

It’s bad enough that I don’t get Mark Cuban’s HDNet or HDNet Movies channels via my Comcast HDTV package, but at least I’ll be able to watch him dance in HD if the sources for this story are correct.

Who spends all the money for an HDTV and then doesn’t get any content? Apparently a whole lot of people.

Ted Leonsis vs. SportsTalk 980

I haven’t lived in Washington, D.C. since early 1995, but I follow my old friend Ted Leonsis’ musings on a regular basis. Ted was put off by when hosts of a talk show on SportsTalk 980 as he was headed, along with about 50,000 other people to see the David Beckham vs. DC United soccer match.

Beckham is a star in the international sense, had a movie named after him and married one of the spice girls and that’s the kind of star power we (the aggregate USA star-effer mentality) love.

The hosts on the talk show mocked the people who were going to the game. I understand the mentality: the jacked up attendance for that specific game (probably including Ted) is all because it was an “event” and had nothing to do with a love of soccer. We like the big events. It’s how the system works.

Unless the league can find 3-4 more players of Beckham’s star quality, and they won’t be able to without actually somehow creating the stars, it won’t matter. More to Ted’s real concern is hockey: he owns the NHL Washington Capitals, and has a loyal, but not huge fan base (especially compared to the NFL franchise, the Washington Redskins, but even the MLB and NBA franchises, and even some of the college teams have more of a following locally than the Capitals).

The problem for the NHL, in terms of sheer #’s is its lack of stars. Period. The end. Ted suggests that 980 was foolish for not embracing diversity of all sports leagues, and that it will perish into irrelevancy if it does not.

BIG DISCLAIMER: I love Ted. I’m serious. I have some genuine affection for the guy. He’s smart, charming, and funny and most definitely a “man of the people”, which I think is really cool. He says what he thinks and he’s authentic. I trust him. Plus, he’s been very helpful to me personally. He’s a great guy. But all that doesn’t add up to “he’s always right” and he’s wrong here.

First of all, 980 did cover the event, which I referred to as David Beckham vs. DC United because I can’t name a single other person on the LA Galaxy. I can’t name a single person on DC United either, unless Freddy Adu is still there and I believe the last I heard he was fleeing to play in a country that actually cares about soccer.

I think 980 covered this the way a Sports Talk station should've. They mocked the event nature of it. Sometimes, a part of human nature is that you get a lot more attention by insulting people than you otherwise would. This is a case in point. If they had simply celebrated the event as if it were the second coming of the Beatles, Ted would not have written about it for over the last week. The suggestion that sports talk needs to be diverse, especially in DC is likely folly. I believe 980 would have MORE listeners than it currently has if it said, “From now on, we talk about NOTHING but the Redskins! 365 days a year! All Redskins all the time!” The NFL is a big, big deal. Period. How big of a deal? The NFL DRAFT (yes, the boring ass draft!) was the second highest rated program on non-broadcast television the week it aired in April – edged out by the Sopranos. The NFL draft had MORE THAN THREE TIMES as many television viewers -- just over 5 million as the NHL Finals which had 1.4 million viewers.

The NHL has the same problem as soccer has. Not enough stars. Not nearly enough. Soccer has one. None of the NHL stars have the Q-Rating that Beckham has and only Alex Ovechken and Sidney “Sid the kid” Crosby have any Q-rating with the American public at all and again, not nearly as many people know who those guys are as Beckham and neither of them are in the public’s mind as much as Wayne Gretzky, Bobby Orr or Bobby Hull. The NHL is lacking good “Bobbys” these days! If the Capitals field a good team and are winning games, making the playoffs, etc., 980 will certainly cover the team locally. But the NHL has the bigger problem of lack of star quality. Even the most casual of sports fans can rattle off five NFL, NBA or MLB stars fairly easily. NHL? Soccer? NO FREAKING WAY.

Mark Cuban suggested to me via e-mail a couple of months back, and I believe not jokingly (though he might have been, I don’t think so) that the NHL needed to get Alex O. and Sid the Kid together with Paris Hilton and Lindsay Lohan. I think Cubes is correct. In the life imitates art department, fictional Entourage meets real life Entourage this week with Entourage star Adrian Grenier who plays Vinny Chase hooking his real-life star to the Paris Hilton gravy train. Paris is looking good by the way, perhaps incarceration is good for the skin.

I believe Ted would be better served by leading the NHL’s charge to somehow market its players to the broader public than solving the problems of a small sports talk radio station in DC. If successful, he will have killed two birds with one stone.

Broad(band) Disappointment is on the Rise

just a recent sampling of the disappointment in broadband (at least here in the US) from Mark Cuban, Om Malik and Robert Cringley:

IntraNets vs InterNets

Broadband ISP’s Fear of the Web Video

The $200 Billion Rip-Off

Marc Cuban vs. Steve Jobs: Who ya Got?

The problem with my love of sports and shows like ESPN’s Pardon the Interruption and Around the Horn is love of creating “the contest”. Your team vs. my team, with the ensuing smack talk (your team sucks, my team rules!). I’m 45, and it never gets old for me. And I’m OK with this because sports is one of the few places this should happen. I don’t think it’s good that this same emotional nature, including all the smack-talk seems to drive the political arena as well.

When it comes to Mark Cuban and Steve Jobs, my answer is: BOTH. I pick both. If I could only pick one, sorry Cubes, I gotta go with Jobs but, dude, he invented the iPhone, maybe you’ve heard of it!? (indeed, I am lamenting the outing of Fake Steve Jobs!) I use my iPod/iPhone much more than I watch any HDTV, HDNet or otherwise. But I don’t have to pick just one here, so I pick both. They both announced some new products this week.

Apple announced its new line of computers including a sweet 24” iMac. I am not historically a user of Apple computers, but I have been leaning towards buying one when the new Apple Store opens up on Chestnut Street about 5 blocks from where I live in San Francisco. It’s just an elegant machine and all the issues I had with the Mac vs. PC debate years ago are no longer issues for me.

The only ding against the iMac I have at all is that there aren’t more options and it’s not very customizable. It apparently doesn’t come with a high end video card and that’s disappointing. If you want an iMac with a high end video card, too freaking bad: you can’t have one. You have to buy a Mac Pro, and that’s way more computer (for way more money) than I need (or need to spend). I like the elegance of the all-in-one iMac, but I am big into video applications on my computer and am disappointed there aren’t more options.

Mark Cuban recently announced Ultra HD Video on Demand, which, according to a write-up in Variety:

Cuban is offering it to DirecTV, Time Warner Cable, Charter, Verizon and other cable-network distributors as a snob-appeal add-on to Cuban-financed and -distributed films that show up, for free, on his 24/7 HDNet Movies on the same day the pics open in theaters.

A shout out to Variety write John Dempsey because the phrase “a snob appeal add-on” will forever be etched in my vernacular! I have not been in love with the movie theaters and their $10 ticket prices for some time. Ultra HD aims to bring you theatrical releases sometimes even weeks before their theatrical releases at a retail price of $12.95-$19.95 depending on the movie.

I find this pricing extremely reasonable and I wonder years from now if these types of services won’t pummel the movie houses. Sure, for one person it’s more expensive, but add a second person in your living room and it’s either cheaper or competitive. If there are four people in your living room, it’s a fantastic deal, especially when you factor in the “you got to see it first!” aspect. There’s definitely something to be said for snob appeal add-ons. I hope the studios like this model and that it takes off rapidly.

Cuban is ahead of Jobs on this front, but those of you who have read any of my screeds on Apple’s Four Steps to Total World Domination know that I believe getting stuff from iTunes on to your big screen is a part of that plan. If that’s true, ultimately Steve Jobs and Apple will be offering the same type of thing as Ultra HD.

Over the long haul, unless Cuban somehow beats Jobs to the punch with some easy way of getting that UltraHD movie onto my iPhone/iPod, I think Jobs will win this contest. But it’s not clear to me yet whether several years from now when Apple TV is no longer a “hobby” whether Apple will do deals directly with the studios or just cut a deals with offerings like Cubans. If I have to guess, I am guessing Apple will cut the deals directly with the studios itself, but my guessing is often wrong.

Update 10:26 PDT: I just saw this poll on the Motley Fool and was a little sad because I don't need to buy any of them, but things are looking good for Cuban if this sentiment can be extrapolated to the rest of the world:

Which item do you need to buy right now?
Plasma screen, high definition TV
(6296 votes - 40%)
Computer
(3569 votes - 23%)
Washing machine
(1875 votes - 12%)
iPhone
(1875 votes - 12%)
Air conditioning
(1992 votes - 13%)

Eight Years Later and I Can’t Buy Entourage over the Internet

On the 8th anniversary of the broadcast.com IPO, I can’t help but wondering, what is HBO thinking about? You can’t even buy a four pack of Entourage episodes on iTunes for $8.00. I believe the $1.99 pricing would work out for HBO, it just needs to price stuff where if you subscribe to more than 2 things, it’d be a better deal just subscribing to HBO. I know, HBO like all the Time Warner schmoes on the music business side that came before it are worried about cannibalization. But there are a few ways around worrying about cannibalizing the HBO subscription service and the DVDs. Update: 7:35am, according to Cuban, it's the 9th anniversary of the IPO and the 8th anniversary of closing the broadcast.com deal, a special day for Mr. Cuban no matter how you look at it!

Does HBO think in 10 years the fate of the DVD is going to be any better than the CD? The DVDs purpose in life at that point will be very cheap media you can cram a lot of stuff on. Otherwise most people will be buying their content digitally already. And since that’s the way content will be sold anyway, why not get in ahead of the curve for a change? Otherwise you just encourage the countless sites up and available on the Internet aimed at providing immediate (and free) access to Entourage, the Sopranos, John in Cincinnati. I can understand not wanting to deal with Apple and although I think it’s dumb to fight that trend, I think Time Warner has a chance to sell its HBO content via its AOL arm. None of that synergy stuff seems to be playing out and it rankles me.

You don’t even have to do this in a way that cannibalizes the mothership or the DVDs. First, make it something that would be high quality on the iPod or iPhone but not so great on the TV. Or make the video high quality anyway – it’s not like iTunes includes any of the director’s or actor’s commentary tracks. There will still be a reason to buy the DVDs until all the content providers have thrown in the towel and realize digital distribution is going to win and they have to even include the good stuff digitally. For now though, that is a ways off.

I don’t know if there’s a penalty for HBO and others not being first movers here. It seems like the penalty is that people who might otherwise buy it wind up stealing it because it’s the fastest way to go. I have to be honest, I pay for HBO and various DVRs and record Entourage. I still find downloading the free torrent is faster than converting the huge file on my DVR into a format for my iPhone (mp4 or m4v) So, I’d already be willing to pay HBO or Comcast a small extra fee for access to “optimized for iPhone/iPod” files of shows I have already paid for in high definition.

The question for me is does HBO think about this at all and decide it’s not right for them or are they just not even thinking about it? A real decision not to do it I couldn’t find fault with, but if HBO isn’t even thinking about it, that’s another story.

I understand as well that the various producers of content may have different deals in terms of digital distribution and I think HBO not necessarily owning those rights right now isn’t a big deal if that’s the case. But I think such things will be a fairly huge deal in the 5-10 year time range.

Some have suggested via the comments under Cuban’s blog entry that perhaps Cubes has broadcast.com II up his sleeves. I hope so, but I think his focus is on owning sports franchises now and judging from the content I can download via hd.net, Cuban has become a content owner now and doesn’t want to cannibalize his content either. The only thing available for streaming/download from hd.net is 2 hours of Dan Rather content that is decidedly NOT in high definition. It’s good enough to look at and watch, but if my whole brand was based on high definition, I don’t know if I’d release much lower than HD quality content to the internet, even in consideration of bandwidth constraints. The file wasn’t so big that even doubling the file size and breaking it up into 2 pieces would’ve curtailed my desire to download it. My only point with this is that unless Cuban is deliberately trying to look “backwards compatible” with what’s available on HD.Net, he’s not looking to do “Broadcast II, and this time we mean it!”

The latest Dan Rather episode (from July 10th) is available for streaming via the Google Video player, and the production value isn’t nearly as good as some shorter stuff, like “Will it Blend: iPhone" via YouTube.

Another Update: 7:40a: In the credit where credit is due, much as this pains me, credit goes to Major League Baseball (MLB!). For $4.99 via iTunes I was able to buy all the coverage of the All Star Week festivities here in San Francisco (the rookie game, celebrity softball game, the Home Run Derby and the All Star Game itself). I thought it was a good value so I downloaded it. I was disappointed (come on, you knew I would be disappointed with something!)it was in 4:3 format instead of 16:9 widescreen, but it's optimized for the iPod, not my big screen. Still a good value for $4.99

iPhone in the IHOP

I pulled a semi all nighter last night and after a few hours of trying to learn how to do tables efficiently in CSS and writing a blog entry on Nielsen//Netratings new measurements (that will hopefully be published somewhere else) I wound up starving at 3am and needing food. I didn't think I'd be able to sleep so I headed to IHOP with my iPhone.

I'm sitting there eating my eggs and watching 24 on the iPhone when at about 3:30 I get a beep in my ears that I have an e-mail. It was from Mark Cuban -- who I believe was probably on the east coast and up early. He was responding to an e-mail I'd sent him based on his blog entry about HDNet & HDNet Movies leading in the High Definition ratings according to TNS Media Research.

There wasn't actually any numeric data in the release and the way I read it was unclear to me what it really meant. It indicated the combined HDNets were the ratings leader both in HD-Exclusive networks and broadcast/cable HD simulcasts. So I wrote to Cuban and asked if when Fox ran it's MLB game on Saturday if the combined HDNet/HDNet Movies had more eyeballs than were on the HD version of FOX's MLB broadcast.

This is a case where I believe even when I'm a "focus group of 1", I'm representative. Sports is something that really is enhanced by HD, and so if HDNet beat out the MLB Game of the week in HD, I would have found it astonishing.

Cuban e-mailed to say, no, HDNets didn't have more eyeballs than the MLB game in HD on Fox, but that on average for the day, HDNets averaged more viewers than Fox HD (and all other HD).

I'm happy for HDNet, and I think it is a nice achievement that I would likewise trumpet if I were running an HD tv network. But I'm not and am more into head-to-head comparisons with real numbers. I think eventually there will be some publicly available data that's sliced like that, but we're not there yet.

In the meanwhile, being in IHOP (or maybe they will change it to iHOP) at 3:30 a.m. watching TV on my iPhone and getting e-mail from Mark Cuban -- it made me smile.

What's the Value of Concentrated Viewership?

Mark Cuban hypothesizes on the value of concentrated eyeballs on a video stream. He doesn’t remember why he was reminded of Metcalf’s Law, but I do, he brought it up in an exchange we had a few weeks ago regarding the perception that the more people watching at the same time, the more valuable the content is. Cuban hoped to generate thinking and discussion with his blog entry, so here is my “thinking out loud” on the subject.

I agree with Cuban’s hypotheses in his blog entry for the most part, but I am in “simple man asking simple questions” mode when it comes to my examination of the TV space, and so far my thinking boils down to:

The value is to both the producers of the content stream and the broadcasters of the stream(s). How is this value determined?

1. How much people are willing to pay for the content
2. How much companies are willing to spend on advertising
3. a combination of both

One assumption I have not validated is that for the most part in cases like ESPN, people don’t realize they are paying for it specifically. Oh sure, they know they pay for cable, but they don’t associate the fees with “buying the content” until you hit the realm of HBO, PPV, MLB Extra Innings, etc.

For purposes of forward looking thinking, at some point in the future I don’t think the opportunity will exist in the scale it currently does to monetize content via physical media (DVD, etc) distribution. I don’t see the revenue from that drying up completely, but I think for the most part how people will buy content in the future will change and I’m guessing how content is purchased/received/accessed will change dramatically. I believe every single one of those changes (some which are already in progress) will come at the expense of the # of people with eyes on the stream at the same time.

As Cuban himself pointed out to me, the number one show in 2007, American Idol wouldn’t have cracked the top 20 in 1987. More people watched Monday Night Football , the #20 show in 1987, then watched American Idol, the #1 show in 2007. I don’t have the data available, but I’d bet $1000 without the data that the cost for a 30 second spot on American Idol in 2007 was higher (adjusted for inflation, etc) than 30 seconds on 60 Minutes in 1987. If this is correct, 1/3rd of the audience 20 years later has more “value” than three times as many eyeballs in 1987.

This my friends seems to be the new math. Why?

My working theory is : advertisers have no real idea how to value their advertising, but they believe what Cuban is preaching. American Idol may have 1/3rd the eyeballs of 1987’s top show, but it’s the biggest “all eyes on at once” show, and the advertisers do value the concentrated viewership regardless of any real ability to quantify (or even qualify) what the value of this actually is in pure dollars and cents. The thinking seems to be more is better, and “fear” comes into play. Fear of looking stupid, fear of missing opportunity, fear that NOT paying to have more eyeballs at once will impact sales (even though I can find no actual data that would seem to justify such a fear).

What results is the buyers of television advertising and the sellers of the space seem to form one of the most inefficient markets ever, with no real basis for determining “valuations”.

Can it continue? If the top show in 2027 has 1/3rd the eyeballs of American Idol – will the price (relative to inflation) go up, stay the same or go down?
What happens when even 50% of the people are watching 50% of their content via time shifted DVR viewing?

And in the future, won’t I actually be able to get more for less? Is it possible I’ll be able to subscribe to the major broadcast networks, HBO, TNT, all of ESPN’s channels, USA, SciFi, whatever the local cable sports channels are, all in HD and with some kind of “virtual” DVR/On Demand (anything on the channels I’ve subscribed to me is available for X time after it initially airs) and pay significantly less than the channels I have today?

Is there anything prohibiting someone from trying to cut these deals now? In the case of the subscription the individual channels (ESPN, TNT, the local sports channel) would likely get a bigger cut than in the current arrangement with the Cable & Satellite distributors, and honestly, I don’t care about almost ALL of the channels on my package. I’d be better off paying for specific content on a pay per view basis than subsidizing a whole boatload of content I almost never watch on a monthly basis.

I believe these services will certainly come and fragment the concentration of “people viewing the same content at the same time” even further. But it’s a fairer market for the buyers of content.

The Trend is not Les Moonves' Friend

Per Bill Gorman:

But neither is it his competitor's friend either.


Lot's of hub bub about the Katie Couric move, but the reality is that the long term trend in broadcast nightly news viewing is down and nothing is going to change that.

Amen.

But will Mark Cuban be able to capitalize on this?

Bud Selig is a Liar: Why I love Ted Leonsis and Mark Cuban

A little background for those of you who don't know me is in order. I am definitely in the statistically small group of people who knew who Mark Cuban was before he was a billionaire or knew who Ted Leonsis was before he was en route to becoming a billionaire (he's not there yet, but it's on his list of things to do) and owned all or parts of the Washington Capitals (NHL), Washington Wizards (NBA) and Washington Mystics (WNBA). Both Mark and Ted were very good to me going back some 10+ years now. One thing I love in my recent contact with these guys is that fame and success did not seem to change the overall makeup and drive of these two men.

I am grateful to both of them because at a time when I had a little bit of fire in my belly they took the spark and poured some gasoline on it and for me personally that's an extraordinary lovely thing.

Lying goes on all around us. We're lied to constantly. Interestingly as Ted and Mark both own sports franchises… Well think about this, as of a year ago, Mark had been fined $1.6 million dollars (that's probably more money than I have ever had at once)by the NBA. Why? He was fined for what he said, which was, an honest portrayal of how he felt. He was fined $1.6 million dollars for being honest. The league seems to believe that honesty is NOT the best policy for the NBA. I actually don't have strong feelings on David Stern or the NBA, certainly not in the way Cuban or Leonsis probably would.

I don't really know the inner workings of the NBA enough to comment on the inner workings of it or well enough to comment on whether David Stern is a person who acts with both the best interests of the NBA and integrity. It seems to me like he does, but I don't know well enough.

But I know enough about baseball, it's inner workings, psychology, values, etc., to know the following: Bud Selig is a liar. The owners and the management of the San Francisco Giants are…liars. Bud Selig is lying about Steroids. Yes, I said lying about it. And if he wishes to take me to court for slander, fine. All Selig can hope for is that by the time all of the "what did he know and when did he know it" comes out, that he'll be gone. He's playing the game of "musical chairs" and basically what Bud is probably hoping for is that by the time the music stops he's not around even LOOKING for a chair anymore.

This game works this way. The American public is in denial about how much we really like the results of steroids (I am not in denial about this at all, but sometimes I wish I still was!). The truth is, especially given the costs of attending this stuff, we want our professional athletes to be SUPER human. Mark McGwire, Sammy Sosa AND Barry Bonds delivered. We the fans like the results, the owners liked the results, and Bud Selig liked the results. You could say that there was so much covering of eyes, ears and mouths by Selig and ownership (see no evil, hear no evil, speak no evil), BUT there was also so much steroid usage that there's no way they got through this period without seeing or at least hearing about someone getting a needle jabbed in their butt. I'm not talking about last year or the year before either. I'm talking 1998-2002 when it was going on, everyone more or less knew it and then looked the other way.

Human nature is that when the stakes are high, people will cheat. This is why Jason Giambi cheated. And why, not only after he got caught (via leaked testimony – and the guy who leaked it is going to JAIL – I'm thrilled about that, probably the biggest smile of the week for me!!!) for steroids, he got caught for amphetamines (greenies) just last year. But Giambi came out with the truth:

I was wrong for doing that stuff. What we should have done a long time ago was stand up -- players, ownership, everybody -- and said: `We made a mistake.' We should have apologized back then and made sure we had a rule in place and gone forward. ... Steroids and all of that was a part of history. But it was a topic that everybody wanted to avoid. Nobody wanted to talk about it."

Although Giambi is a confirmed cheater, he is, in my opinion, absolutely correct about this. Here's how Selig is handling this: he's pressuring Giambi to cooperate with the steroids investigation: name some names or I will suspend you (more or less).

If Hank Aaron wants to be upset with Barry Bonds, I don't have any issue with that at all. But Bud Selig? Please. You knew Bud, and you looked the other way and did nothing. But then you're the kind of guy who would say, "Yeah, I'm an owner, but just go ahead and make me the commissioner!" We already knew right there this is a man lacking in integrity. But it made a lot of people a lot of money and produced a product people wanted to pay for. Everyone was really happy about this: the owners (they made tons of money on this), the players (they made tons of money – and much more with performance enhancements) and the fans, who couldn't eat it up fast enough.

But Bud is a lying hypocrite, so are the owners, and really so are most of the fans. Giambi did tell the truth in that quote above, that's exactly how it is. But once again, your kids are subtley getting the message: honesty isn't the best policy and cheating works – whether you're a player, the owner or the commissioner. It's a bad message to send. Giambi told the truth and the negative reinforcing feedback is, "Whoever told you honesty was the best policy, was lying!"

I love that there are guys like Cuban and Leonsis out there: again, they aren't perfect, but they aren't motivated to cheat and lie due to the stakes being high. They aren't perfect, but in a world massively lacking it at times, these two gentleman have some integrity, and that's something I value very much.

As for steroids, I think this ultimately will hit the NFL hardest of all. We haven't anywhere near begun to hear the last of it. Sorry Mr. Goodell.

Les Moonves vs. Mark Cuban: Who ya Got?

Thinking can sometimes be a very synergistic process for me. There are a multitude of subjects I am interested in thinking about and sometimes in the process of thinking about one thing, I wind up understanding another. It turns out in some weird way almost everything is at least tangentially related in my mind. I understand that often the output of all that is probably some “crazy thinking”.

Things are not always what they seem. I saw record low Nielsen Ratings for the (Stanley Cup) and wondered why my pal Ted Leonsis wasn’t selling the Washington Capitals as fast as he possibly could. On the surface, my approach made a lot of sense. But TV is a place where things aren’t always exactly what they seem, and indeed in the case of Ted Leonsis and the Washington Capitals and the NHL, I was very wrong.

Thankfully I had that all sorted out and didn’t wind up needing to binge on any kind of e-mail exchange with Mark Cuban where I was freaked out looking at the Nielsen Ratings for the NBA Finals and saying, “Oh my God, you’re as crazy as Leonsis!” It’s a good thing too, because I don’t think Mark would have gone nearly as easy on me as Ted did!

Fortunately I do have a gift for self-correction. I can learn.

One thing I am trying to learn is what’s really going on in the television business. I mean what’s really going on. The television industry itself faces the exact same challenges as the major sports franchises. Television bumps up against the same real limits. And there is definitely one real limit: that’s the amount of available free time. You can check out some of this data by the Bureau of Labor Statistics. The bad news is, there’s definitely not unlimited free time. The good news is, as of last summer, TV still won the highest concentration of free time (about 2.6 hours per day). And as you know, on any given night there is way more than 2.6 hours of programming available. All of the programming is fighting for the same free time.

I watched the Dan vs. Katie/Cuban vs. Moonves frenzy the other day and it definitely got me thinking that I was missing something. Something was not right about the whole thing in my mind, but I couldn’t figure out why.

Then, in a somewhat unrelated bit of curiosity, I was looking at the Brand Keys “Sports Loyalty Engagement” (more or less a measure of which sports franchises have the highest loyalty from their fans) and saw all the other “brand loyalty engagement” studies Brand Keys does, including this (rank of evening news by loyalty in 2007):

Evening News Shows
ABC
NBC
FOX
CNN
CBS
MSNBC

Then I understood the something I had missed in this whole thing. The short version of that thinking is, “Ouch, Moonves is dope!” The truth of it is, here he was a complete and total dope. He’ll never admit it. You won’t likely hear the Les Moonves, “Mistakes were made…” speech. But one very, very, very big mistake was made.

First, it is true that the program “brands” do have some loyalty and you can measure it. That’s true for both the Today Show and the CBS Evening News. There is data that I am missing and this data would be helpful. But there is data that I am not missing, and that’s the actual results (which are not good). I like to focus on results. Also, I wanted to start thinking about this in these terms: “What would I do if I ran a television network?”

There’s a secondary truth as well: the stars themselves have some “loyalty engagement index”. Which shows have the most loyalty and which stars have the most loyalty very often crossover. The data I am missing is the crossover between people who are loyal to both Katie Couric and Dan Rather, and people who are loyal to both morning AND evening news programming. Based on the actual results, and admittedly this is still pretty speculative there wasn’t all that much crossover.

Moonves made a key mistake, I believe. The evening news market was already in a free fall (and that trend will NOT change), the mistake Moonves probably made was that he thought he could change this trend. Given that mistake, I do understand how he made the second and big mistake. Let me be clear: when you have a brand, and the sky is kind of falling (ratings across all evening news viewers combined are down more than 50% over the last 25 years) but there is still value in the brand to be milked out of it – you milk it as long as you can. Creating a “new brand” in the environment of Network evening news is as complicated as launching a new beer brand. Beverage companies spend years with rollouts of new brands and the main reason (in my opinion) the rollouts of “new beer” are handled as slowly as they are is because they don’t want the success of the new brand to come at the expense of any existing brand.

There was an existing brand at CBS News. The brand to be exact, was “The CBS News with DAN RATHER”. Dan Rather actually was the brand and I think in a shrinking market where you have a fairly good brand – killing that brand off and trying to launch a new one is just…absolutely insane. This has nothing to do with Katie Couric. I do not believe there was anyone CBS could have put on aside from perhaps bringing Walter Cronkite back that would draw MORE viewers than Dan Rather. Because Dan Rather was the brand and getting rid of him pushed out the millions of people who were loyal Dan Rather evening news fans.

Katie Couric had loyal fans too – but that was for something else. So one lesson here is that brand loyalty does not (certainly in Network television) cross over from morning shows on one network, to evening news shows on the other.

As a result of the way Moonves went about this – again probably a result of thinking he could change the overall trend, one very, very critical mistake was made. Moonves thought about CBS News as the brand. It wasn’t. Dan Rather was the brand and in this case Moonves completely underestimated the value of the Rather brand.

I really don’t find it surprising that without ever thinking about any of this I hadn’t figured it out. What’s vastly more surprising to me is Mooves didn’t figure it out either. There are studies on brand loyalty by the stars themselves. I would not be shocked at all to find out that programming decisions for smaller networks, whether it be USA or Mark Cuban’s own HDNet are being made by trying to create programming around stars with high brand loyalty that happen to be out of work.

I also won’t be surprised that when it comes to network television, that no matter how steep the trend line down is, that the egos like Moonves will think they can reverse the trend, fire more stars with high brand value and…how long can it really be before Dan Rather and Katie Couric are hosting together a nightly news show on Cuban’s own HDNet?

I’ve got Mark Cuban.

Advantage: HDNet?

Mark Cuban knows how to leverage the pop culture better than the geniuses at Time Warner. I didn’t even know Dan Rather was doing some investigative journalism for HDNet until Mark’s blog post this morning.

I am not a huge fan of “The News” on television. In fact, I try to avoid it whenever possible (which believe me, is every time) taking my news in from the New York Times, Google, Yahoo, etc, and a large, large dose of ESPN.

Anyway, Mark capitalized on all the press about Dan Rather saying Moonves at CBS was “tarting it up” in an attempt to attract younger audiences. Moonves has apparently said if they don’t attract a younger audience, the nightly news will die. Moonves shot back that Rather was being sexist in his “tart-ing it up” comment and Rather responded that he wasn’t calling Katie a tart. Just commenting on CBS’ approach.

I look at this chart at and see that the nightly news (in the aggregate, this chart represents total viewers across all 3 major broadcast networks) has been in a steady free fall for over 25 years. It’s not turning around. The overall audience for nightly network news shrunk in half during a 25 year period where there was definitely a bit of population growth. The good ship “Nightly News” has sailed and isn’t going to turn around and come back.

We know for sure, advertisers are willing to pay more for the coveted 18-49 demographic. I only have about 5 years left to be coveted and I want to know WHATS IN IT FOR ME? (I mean besised ads trying to whip me into a frenzy that I need this or that product or I’m a total loser). But beyond that, all that’s clear to me is that that chart is going to continue to trend down. CBS will ultimately have less viewers than they do now. So will ABC. So will NBC.
This speaks to some of the same fragmentation issues I wrote about yesterday, and is every bit as inevitable.

The interesting thing to me is that it does seem that the advantage has shifted to the smaller guys like HDNet. If HDNet could attract even a million viewers to one of its broadcasts I believe that will be a profitable piece of content for HDNet. I do not believe there is any chance in it current set-up that CBS can produce a nightly news show and make money on it for one million viewers, for an audience of one million.

The HDNets do seem to have an advantage with the "smaller" market fragments.

The Brave New World Where Everything is Fragmented

Of course complicating things even further, not all the players involved are all that brave. I’ve seen this happen before (think about a newspaper industry that was once booming that can now often not give away free newspapers). We were all talking about that stuff in the mid ‘90s and it has certainly come to pass.

Think about this: the Sopranos, the most influential drama (especially considering it wasn’t on a broadcast network) probably of the last 20 years. It drew about 11.9 million viewers on Sunday, making it only the 4th most watched episode ever. Number one was the 2002 season premier (13.4 million).

I’m still not quite sure that the NHL is really in better shape just because franchise values are up. It’s true that the multiple is the multiple (and right now that multiple seems to be 3.5x revenue). But it’s also true that: the multiple is the multiple, until it isn’t.

But what’s going on with the NHL, the NBA and the Sopranos is the EXACT same problem: limited free time in a world of burgeoning choice. It wasn’t that the Sopranos got significantly worse since 2002 (it was already starting to wane by then in my estimation), it’s that momentum for the fragmented world is accelerating and getting more and more fragmented all the time.

So let me be the first person I know to say this: (I’m not sure anyone else hasn’t, and I ‘fess up, I didn’t google it, because I didn’t want to know):

Former NFL commissioner Paul Tagliabue is a GENIUS. Like Mark Cuban genius in terms of timing. He got out when the going was good. This poor sap Roger Goodell is about to not know what hit him. He’s worried about the Cincinnati Bengals % arrested – and while I don’t blame him, that’s going to be the least of his worries. The one thing that’s held on pretty steady is the NFL’s ratings clout. But their ratings too are eroding and it’s going to get worse, not better. And this is regardless of anything the NFL and the networks are doing in terms of packaging the product itself. It’s just math. It’s inevitable because of that math (limited free time, more choices, with choice escalating constantly).

I think of at least three things the NFL could or should be doing to stave this off (they can’t stop it, but they can optimize for the fact it is occurring), but don’t appear to be doing at all yet. This doesn’t mean they’re not thinking about it, but I believe they probably are not thinking about it enough. Mr. Goodell, I may be reached at robert dot seidman @ gmail dot com. I’ll give you the three ideas for um… $3.8 million.

Bill Gates vs. Paris Hilton? I'll take the iPod!

at least if it's a popularity contest. Paris Hilton, 8 updates in 0 (zero!) minutes. Bill Gates, 8 updates in 5 hours.

I like looking at the data, but I have no idea what it means. Apple TV returned 46 hits in the last 5 hours.

In fact, Apple is the Paris killer with it's iPod receiving 21 updates in the last ZERO minutes.

George Bush? 2 hits in the last 0 minutes, 7 updates in the last 5 hours.

Let's do Mark Cuban vs. Donald Trump.

Cubes, 4 in the last 24 hours, the Donald? 5 in the last 24 hours.

But Paris and the iPod are way more popular than Harry Potter from the bloglines search view of the world. I'm not sure if any of these comparisons are fair because I can't get a good read on how Bloglines (or Google for its blogsearch) indexes.

Is It Better to Act Like a Dope?

I am fascinated by the way things actually work, mostly because it's frequent that I suppose they "ought" to work some other way. If you do blog or Google searches on "Paris Hilton" you get much more up to the minute coverage (probably by at least one order of magnitude) than you do if you do the same search for "Bill Gates". It boggles my mind.

While I certainly understand that many more men would buy a Playboy magazine because it had naked pictures of Paris Hilton than because it has an interview with Bill Gates (and personally I'd be thrilled with that particular issue for both reasons) the pop culture seems to "value" Paris more.

Some people would say that's because Paris is way more like the average person than Bill Gates. Oh yeah? Really? Is the average joe an heiress who could live off the interest income of her inheritance 25x better than the average person who goes to work, and that assumes she actually ever had to pay for anything? I doubt that.

I think it's more that Don Henley was right: "People love it when you lose, give 'em Dirty Laundry". If Bill Gates got caught up in some juicy sex scandal, he'd probably trump Paris and Lindsay going to jail, but Mr. Gates has the good sense not to act like a dope. At least not in public.

Paris, Lindsay, Britney, Donald, Rosie – they all have one thing in common. They're skilled at acting like dopes in public and still being able to capitalize on it.

I actually kind of like Trump, and I confess, I enjoy it when he talks smack to Rosie. But he seems kind of decadent. I mean I can imagine the Donald having a 2400 square foot shower, with fifteen 50" waterproof plasma screens installed and solid gold knobs and whatnot. The stench of excess (at least in his public persona) is all over him. I don't view Mark Cuban that way. I don't see him being excessive in that fashion. I mean invest in a new sports league? Sure, but TVs and solid gold in the shower, nah.

Why? Well I'm sure from Cuban's perspective and certainly my own, that kind of excess would just be dopey. Exactly the kind of dopey stuff we Americans seem to love, love, love in the popular culture.

I think the reason that The Apprentice did so much better than Cuban's own reality series is pretty simple: Cuban's not a dope. Trump may not be a dope either, but he seemingly has absolutely no problem playing the fool in public either. More often than not, we seem more interested in that kind of behavior than about people who actually know how to behave.

Bad behavior is more entertaining. I think I am coming to the conclusion that if your goal is to run a software company, or run a TV Network and an NBA franchise, acting like a dope is NOT better. But, if you want to be an entertainer, it seems like it's better to be a dope.

Seidman’s Law: You Should’ve Never Trusted Hollywood

Actually that isn't "Seidman's Law".

Seidman's Law is simply this: if the truth hurts, it's because you're doing something that you know (consciously or subconsciously) that you shouldn't be doing, but you're doing it anyway.

I bring it up here only because Mark Cuban's solution to "save the National Hockey League" which pretty much jibed with my own solution does wind up hurting me on some level. The beauty of this law, if you care in the littlest bit about improving your own self awareness is that if the truth hurts you, but you don't know why, that correlates 100% with you (or in this case, me) being in denial about it. So the truth hurts me because I'm in denial in some way about being such a hypocrite. And knowing the truth hurts, but not why means: denial and that is an awareness opportunity for me.

For those who care, Cubes solution to save the NHL was for the stars of the NHL to basically get involved with the likes of Paris Hilton and Lindsay Lohan and wind up showing up in People magazine (or at least the National Enquirer).

I agree it would probably work, but something about this truth – hurt me, so I listened to System of Down's "Lost in Hollywood" about 30 times and it came to me.

Lindsay and Paris are pretty foul people. I mean they are famous and attractive, but really, they are pretty vile. They have the whole world by the balls and yet, they still need to be showing up skanky and drunk all the time. To the tune of they are both going to jail for being the skanky, out-of-control drunks that they are.

You wouldn't want your kids going out with girls (or their male equivalents) like this, but even though Lindsay and Paris both act horribly vile, regularly, and in public to the point of J-A-I-L they still have enough value that they could save the NHL.

Where's my hypocrisy? Well…

Writing about Cuban, Paris and Lindsay is the only thing that wound up automatically feeding my blog postings into the "world". In this case the small world of people who care about the NHL, but I'm not against capitalizing on the value of Lindsay and Paris' skankyness, or cashing in on Cuban's cred either.

The hypocrisy on my part? I'm SO over it.

I'm totally down, just like the NHL should be, to use Paris and Lindsay to get attention. Damn if it doesn't seem to work.

-
Update, I'm not alone: Media in frenzy over jail-bound Paris Hilton