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Archive for the ‘prognostication’ Category

By now you’ve read about Warner Bros. Entertainment announcement to drop HD DVD and focus on Blu-ray, a Sony Corp. backed technology vs. rival Toshiba.  Warner was the last major studio to put out movies in both formats and after May they will exclusively release on Blu-ray. 

The announcement by Warner rattled the industry nerves to the point that the N.A. HD DVD Promotional Group (which included Intel and Microsoft) canceled a major media event.  Who would blame them?   It’s not the kind of exciting news for what’s to come in 2008! 

I predicted Sony would not allow the “Betamax” struggle to repeat and that Blu-ray would prevail (HERE).  No need to bore you with the technology advantages of each format.  Ironically HD DVD has better interactivity today than Blu-ray, but that will evolve with BD Live.  I also observed evidence of a move of desperation during the holiday season when Toshiba HD DVD players flooded the market at $179.99.  Then Sony countered and jumped on the price discounting wagon with their BDP-S300 (entry level player) at Costco for $278.99 after a $100 rebate.  A $100 premium and never mind it didn’t support 7.1 audio. 

So what will Microsoft do now?  Speaking to Reuters, Albert Penello, group marketing manager for Xbox hardware, said in response to a question about Microsoft possibly supporting a Blu-ray accessory if HD DVD failed that they would consider it.  According to Engadget during holiday ’07 consumers purchased 92K HD DVD players for the xBox 360.   I believe Microsoft really wants the market to shift to digital download (aligns with xBox 360 content download service and their xBox 360 IPTV directions) and the format war was likely viewed as a gift which stalled adoption, create consumer confusion while digital download services improve. 

What is really important to most consumers is that the Warner announcement translates to the release of more movies which we want to watch (rent/buy) in stunning hi-def.  Now that the format battle is over I can plan on the Blu-ray release of Lord of the Rings (LOTR).  New Line (parent Time-Warner) will make this happen in ’08. 

And if all this wasn’t enough good news for the week, Sony demoed at CES the “next generation” of portable cinema viewing.  Samples of Blu-ray movies were successfully copied from a PlayStation 3 Blu-ray drive to a PlayStation Portable’s memory stick, as part of Sony’s new web-oriented service/approach to interactivity and play anywhere portability known as BD Live.  Other abilities include ring tone downloading and other media content to a BD Live media player.  One issue is that current Blu-ray players in the market (including the PS3) do not support BD-Live, but Sony confirmed the PS3 firmware update will be rolling out as early as this month to incorporate BD-Live playback into the system.

Now if Universal and Paramount can see that it makes sense (or is that $cents) to move to Blu-ray we’d be all set for a great hi-def year!

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Legend Homes LogoI’ve avoided the entire “Chicken Little” the sky is falling on the housing market to pump up my blog stats. But, I’m sooooo tired of the constant whining about the mortgage crisis and especially annoyed at a naive article from Matrix Development (Legend Homes) CEO, David Oringdulph on Sunday, October 21st that Ryan Frank wrote in The Oregonian. They ran a “5 Questions” snippet interview where Mr. Oringdulph RANTS about the media as the main culprit behind the housing recession.

He states:

“There’s really nothing wrong with the housing market from the standpoint of economics. The loan rate is low. The income level is doing about 11/2 percent this year as far as income increase. We also got a population growth of close to 2 percent a year. If you look at all the numbers and you look at how everything else is doing, why isn’t housing doing well?” He goes on to say: “Why? The media. We blame it a lot on the media. Where else would someone get the idea that there’s something wrong with our housing market when it’s not?”

So, if we are to believe Mr. Oringdulph the housing recession doesn’t exist and is only a perception of the media making a big deal out of nothing. Well sir, not to be disrespectful, but you are full of hot air!

Mortgage companies were greedy and made loans to people who shouldn’t have qualified. It’s commonly known that in Portland, any real estate broker you chat with had a saying — if you could “fog a mirror” then you could get a loan. No money down, 110% financing, low-single digit ARM’s, — no problem — and any other “creative” financing method you want — now it’s no shirt, no shoes. This flies in the face of common sense sir and if something is too good to be true then it likely is.

Mr. Oringdulph/Legend Homes wants us to feel sorry for their reduced revenue while they whine about how the market recession isn’t REAL? It’s a fabrication of our over active imagination which the media created and continues to foster. If only the evening news would stop talking about all those foreclosures the market would magically be robust again. What planet did he just beam down from? Good grief! Just today BofA quits wholesale mortgage business laying off 700 jobs and shares of Countrywide plunge to $13.07 which is the lowest in more than 4 years. Oh yeah, it’s just our imagination Mr. Oringdulph!!

Many of us have gone without the double whip carmel machiotta so we can make mortgage payments and have made hard financial decisions to purchase a home with out being enabled by “no money down” predatory promotions from the “mega” builders and/or their cooperative lending divisions.

Mr. Oringdulph needs to step down off his Lake “O” perch and talk to the people in foreclosure about how this is the media’s fault and is only imagination.

I’m annoyed at his attempt to dismiss the whole crisis as psychological trickle-down economics. He obfuscated facts after trends were well established. And, I for one don’t want to subsidize financial mistakes of others or the lending institutions that recklessly loaned money to people who clearly were at risk. Hey David, here’s an idea…lets have the mortgage company or builder reward the home owners that have purchased homes responsibly and continue to make their payments. Now there’s an idea!

Mr. Oringdulph statements were offensive to those of us who work hard to be responsible and his PR team was very foolish to allow a public peek into his philosophical views and executive prowness! The Oregonian (that’s you Mr. Ryan Frank) should have been more assertive in challenging his thinking vs. providing him a soap box to evangelize his incorrect perspective. No, I don’t work for or in the media, but I know “spin” when I see it.

The housing market will run its due course with out any artificial stimulus that he or others may want to wish up on it!

If you feel the same as I do then email Ryan at: ryanfrank@news.oregonian.com and tell him what you think. Maybe the power of the blog-O-sphere will force a follow up article with some balance.

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I recently sat in on panel discussions and audience interactions at ETECH. At each session we were met by enthusiastic people/companies that have a genuine concern about understanding what customers want.

In a world where the noise of the social crowd is amped up exponentially with endless streams of chatter…what I took away was confirming some of the reading I have been doing lately (Check out Scott McKain’s “What Customers Really Want”):

We need to focus on creating customer experience, not customer service; personal focus, not product focus; reciprocal loyalty, not endless prospecting; and innovation rather than status quo.

Then I came across this new start-up website Oddpodz. It’s basically a website where creative, independent thinkers unite and share information.

I’m not sure how these type start-ups are changing the way we communicate or manage intellectual property?

Let me know what you think.

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Looking in the mirror at just what objects did appear closer as the year comes to a close, I suspect a key question on your mind is: What is Mac’s prognostication of digital home and general usage trends next year…?

1. Music is THE Application for Mobile Phones

CD-quality music is going to be on more than half the entry-level cell phones used around the world by year-end. Music will be THE application on cell phones measured by consumer use and revenue-generated by handset makers and wireless service providers. Apple proved people will pay for good-sounding music, including hundreds of their favorite songs, easily accessed by simply pressing a button. And these music cell phones will store hundreds and late in the year thousands of songs, which is plenty for the average music fan.

But what about video or Mobile TV adoption? Mobile TV will continue to develop, but will be challenged to win market acceptance because of the small size of cell phone screens. Battery limitations and the small screens make long-term, non-stop viewing unappealing, not a good user experience. The most likely mobile TV applications will be people checking sports scores and updates; cartoons, videos, standup comedy etc., and/or general news. All these will need to fit in about a 3-to-15 minute time frame, according to most industry experts. Many people won’t watch TV on a cell phone for much longer than that, except for some special, out-of-the-mainstream reasons. Mobile TV’s early adopters are expected to be mass transit commuters, primarily Asian and European adults. Look for those countries to be early adopters.

2. Apple iTunes Remains Dominate

Apple will see their iPod market share erode in ’07 from increased competition thanks to Microsoft (Zune), the increased availability of independent video subscriptions (studio’s, broadcasters, news organizations etc.,), and the MTV URGE marketing juggernaut of VH1, MTV and CMT.

The “Leopard” version of the OS will extend Apple MSS to 8% and the FrontRow: media access embedded in the OS along with iTV is what the digital home needs in an interface device. The OS and device will be hugely successful with Apple retail stores able to promoting a compelling value proposition for consuming video content on your schedule…on any device… any time and keep those “buying eye-balls” on iTunes.

The increase in content sources and video quality of the iPod will drive demand for portable video players and subsequently on demand video content. The standard drive size for an iPod will be 100GB by year end. Flash models will ship with 8GB standard and upper end units with 15GB.

The Apple iPhone (Cell phone) will have few new features, but will become big sellers. It won’t be introduced at MacWorld rather it will be mid-year.

3. IPTV Over-Hyped and HDTV Prices Drop as Demand Increases.

The first sub-$500 27-inch LCD HDTV will hit the market. The dramatic price drops are causing consumers to not only upgrade living room sets, but buy additional units for different rooms in the house.

IPTV adoption and speculation will continue to be rampant and over-hyped. Industry pundits will continue to state that it’s right around the corner and that the deals are ramping the industry. New mega-revenue streams don’t exist. There are opportunities for the industry, including programming for non-traditional platforms, but 2007 will not be the year for broad adoption.

4. Blu-Ray and HD-DVD Sales Stall

With no HD-DVD standard concluded, format wars will continue to confuse the consumer and retail is unable to position the differences. Touted as the second coming of the DVD, it’s starting to look a lot like the second coming of the Laserdisc. The inclusion of 1080p support in Playstation 3 (PS3) won’t matter to consumers because there is very little content available and it’s at a premium price.

Speaking of Sony — they will stumble over backwards compatibility with PS2 games and lack of an interactive strategy. Gamers will become further addicted to Xbox 360 combined with Xbox Live, where points and ratings offer a direct comparison of skills against other Xbox Live members, which leaves PlayStation 3 out in the cold. For the console market, 2006 will be game over at Sony.

5. Generation C (Content) Mind Share

In three years, people born between 1980 and 2000, will outnumber Baby Boomers and Gen-Xers. They will be a consumer sector of tremendous importance to the media & entertainment industry. Not only are they big, but they will be fragmented and difficult to reach. The increasing number of media channels – instant messaging, email, social networks, iPods, mobile phones, Tivo, P2P networks, handhelds, video games, etc., – through which this group communicates and consumes media & entertainment, makes them a very elusive target for us to market to them. The characteristics of this generation – one embracing a pervasively digital world – and the implications for media, entertainment, and advertising is going to drive everyone nutty.

Social networking services will morph into something even less useful, like social shopper with coupons and we’ll see sites provide buying recommendations triggered by your profile data.

6. Microsoft Success

Late-February they issue a Press Release proclaiming that “Windows Vista is the best selling operating system ever.” Consumers will love the Vista Media Center Edition with Xbox 360 connectivity in large scale. Adoption rates of Vista with XP customers will be very slow due to computational and memory requirements.

Frustrated with Apple’s market power, the music industry will move aggressively closer to Microsoft. It won’t matter, as the Zune will be deemed the most underwhelming product Microsoft has ever made. And afraid of Microsoft’s market power, the movie industry will try to cozy up to Washington.

Groove collaboration software will ship in the Office suite for the first time. It won’t matter as more significant desktop apps will move to an Ajax/server-based design like Zoho.

7. MPAA Supports Consumer Content Value Chain (When Pigs Fly!)

We buy a title, not a particular file for a title (so, we buy video once, for all devices)

“Stop, pause, resume, buy, rent, etc.” all work across platforms, devices, and service providers/retailers

Content transcoding is a job for the professionals and the serious hobbyists and the MPEG, H.264, video compression codec’s…whatever, is banned from everyday consumer vernacular

We need to know as much about DRM as we need to know about locks in our bank safety deposit vault

Content (purchased and our own creations) are as safe as credit cards (Meaning we should be angry when someone rips the content that we had to pay for)

I left off the ever important legal prediction…there will be a felony conviction in the U.S. for a crime committed entirely in a virtual world and for the Wiki people, the word “mashup” will be the most overused word in 2007!

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