Nick Carr recently posted an article entitled Google, Apple and the future of personal computing in which he speculates about what possible offspring might be produced by Apple and Google’s partnership.

I have no doubts that Apple is working very closely with Google, but their partnership will never produce the product that Nick is describing… Ad-supported applications are not something Apple does. And everything else Nick described sounds awfully like an Apple TV.

Speaking of which, I’m expecting Apple to announce some significant updates to their Apple TV (in the form of downloadable/streamable video content, directly from the unit).

Now that Apple’s released their iTunes Wifi Music Store for the iPhone/Touch, it’s only a matter of time before they reveal a similar store interface for the AppleTV (we’ll call it the iTunes WiFi Video Store). There is also evidence of movie rentals in the works as well.

This is going to require a great deal of bandwidth, and I’m pretty sure Google will be providing the backbone for all of this. My guess is that Google will take a cut of the video purchases, all while continuing to absorb to the consumption data as well. It also wouldn’t surprise me if Google began inserting commercials into the YouTube feeds for a little extra gravy.

Food for thought – Google hasn’t been porting YouTube videos over to the h.264 codec simply to help Apple show off the iPhone.

In my opinion, Apple is looking to disrupt the existing cable television market with an internet-based video distribution system, and the Apple TV will be the primary consumer interface. TV and movie content will be purchasable on the Apple TV directly from the iTunes store, and YouTube will replace the mindless “channel surfing” that is lost when you’re faced with an on-demand viewing experience.

Even the name Apple gave the device is very telling when you think about it. Eventually, it won’t be referred to as AN Apple TV – it’ll simply become “Apple TV”.

“All of your favorite TV shows, movies, YouTube clips and music videos – all available on Apple TV.”

(Article via Mark Ury via Facebook)

Rick Rubin, founder of Def Jam records and “career-transforming, chart-topping, Grammy Award-winning producer” was profiled in the latest issue of the New York Times Magazine. Rubin, much respect for everything you’ve done over the years, but dude, you’re way off with this one.

“You would subscribe to music,” Rubin explained, as he settled on the velvet couch in his library. “You’d pay, say, $19.95 a month, and the music will come anywhere you’d like. In this new world, there will be a virtual library that will be accessible from your car, from your cellphone, from your computer, from your television. Anywhere. The iPod will be obsolete, but there would be a Walkman-like device you could plug into speakers at home. You’ll say, ‘Today I want to listen to … Simon and Garfunkel,’ and there they are. The service can have demos, bootlegs, concerts, whatever context the artist wants to put out. And once that model is put into place, the industry will grow 10 times the size it is now.”

No, seriously. A subscription model? Again? Haven’t we covered this ground already? You have to be kidding me.

As Gruber points out, that technology ship has sailed and no one was on board. No one wants DRM, which means no one wants to subscribe to a service for their music. You can’t have one without the other.

Too all the record executives out there, listen up. Music subscriptions (and the DRM that comes with it) are not the magic bullet that will solve your piracy problem. It won’t work. Give it up. Move on already.

Rubin goes on to say,

Until a new model is agreed upon and rolling, we can be the best at the existing paradigm, but until the paradigm shifts, it’s going to be a declining business.

The new model is already here. It’s called iTunes. Stop fighting the inevitable and just accept it. Take a deep breath. Take it all in.

Of course Universal isn’t going down without a fight. And NBC is doing the same with their video content, but seriously guys, you’re not going to do any better. And Microsoft isn’t going to help. Neither is MTV. Or Real (opps, same as MTV, right?). Or Sony.

Apple is the only player in town that got it right and as FSJ pointed out, the record labels just woke up and realized “all the power in the value chain resides in one player.” Oops.

Here’s the thing. These guys could have done what we did. In the early days of the Internet, everyone figured the majors would build digital distribution arms. But they didn’t do it, because they didn’t understand technology, and they didn’t want to invest in building this expertise, and they were freaked out about piracy and paralyzed with fear. So we stepped in. We made the big investment. We hired programmers. We developed software that’s easy to use and works flawlessly. (If you think that’s trivial, think again. It’s huge.) We ran the system. We promoted it, we marketed it, we haggled with all the majors and struck deals. We took all the risk, which was considerable. Now we’re reaping the reward. And the majors want a bigger slice. Um, for what? We did all the work. Ain’t gonna happen, slick.

Tower Records has been replaced by iTunes. MTV has been replaced by YouTube. MySpace has been replaced by Facebook (until something replaces it of course). I had hoped Pandora would replace radio, but, of course, the RIAA went and sued them. Bravo guys. Bravo.

Ladies and gentlemen of the record industry, may I have your attention please. This is the new playing field people. Kicking the corpse isn’t going to bring it back to life. Stop denying it. Stop fighting it. Just embrace it.

When The Fake Steve Jobs was recently outed, I wasn’t quite sure if I’d enjoy the blog as much as I did previously. Well, it appears as if the answer has been delivered in what can only be described as the best entry thus far.

My Lunch With Fester

Beastmaster, Monkey Boy, and all the rest of you in Redmond, listen close and hear what I’m about to say: We will fight you on the desktop. We will fight you on the Internet. We will fight you in the browser space, and in desktop productivity apps. We will fight you in music players and smart phones. We will never surrender. We will never make peace. We will never stop fighting. Never, ever, ever. Siooma, motherfuckers.

Amen FSJ

Read On

For quite some time, Netflix has been the undisputed king of online DVD rentals. They were the first company to take advantage of the internet to help people find and watch the movies they wanted. They proved that there was a valid online business model in movies-as-a-service and not just movies-as-a-product. They pioneered the concept of the “rental queue”. They’ve been praised endlessly for their operational efficiencies. But that was the past, and it would appear that Netflix is facing the greatest threat they’ve ever seen. And no, it’s not Blockbuster or iTunes or Amazon.

It’s an 8 person shop in San Francisco.

Flixster is a mere one year old, and already they are one of the largest movie sites online right now. They have fully embraced the new platform and continue to refine their ever-changing application within Facebook. Every time I log in, there appears to be a change made or a feature added. It’s clear that they are comfortable evolving inside their new medium, and judging by the slowdowns and suspension of QuickRate, I’m guessing their also struggling to adapt to the influx of additional traffic. Now that they’ve firmly planted themselves as one of the top Facebook applications, one has to wonder if Netflix is starting to sweat.

Not too long ago, Netflix announced a contest to help them find a better way to “connect people to the movies they love”. I wonder what the winning solution will be? (Hint: Build an app for Facebook before it’s too late)

At the moment Flixster has the lead, but they lack the ability to fulfill my desire to actually watch movies (and not just rate them). This is Netflix’s one and only advantage, and they should act quickly to integrate themselves into the Facebook platform to take advantage of it. Users should be able to quickly rate, review and add movies to their rental queue within the Facebook world. People should be able to proudly display their queue so their friends can see what they’re watching now and what they’ll be watching next.

Quite frankly, if Netflix is going to survive, they need to displace Flixster and become the dominate movie application on Facebook. I just wonder if it’s already too late?

As I wait for something to download over our slow (but thankfully available) satellite internet connection here at the cottage (inside working and not outside enjoying this beautiful Saturday!) I decided to take a few minutes to reflect on the virtues of Facebook. But before I get too far, let me say this. If you’ve heard of Facebook but currently aren’t using it, odds are you have a misconception of what it actually is and why it’s so important.

When I first heard about Facebook, I was reluctant to create an account simply because I didn’t see the value in doing so. My original perception was that of another MySpace, aimed primarily at students to communicate and share photos with each other. And while that may very well have been the case when Facebook was originally concived, things have changed considerably since then.

Facebook looks to be one the most important—and possibly valuable—technologies to emerge online in quite a number of years. Quite frankly, it will not surprise me to see Facebook become an online giant on the scale of Google.

As with every other social-networking site, Facebook’s primary value comes from the network of “friends” you build. However, I believe Facebook is the first of the sites to truly understand the full potential of this network, and with the release of their Apps they’ve set out to fully tap into it.

For example, the News Feed feature which has been around for a while now (and apparently caused quite a stir when it was first launched). It’s a straightforward concept, but was quite unique when it was originally conceived. Put simply, the News Feed is an “activity aggregator” which takes all of the various activities of your friends, and presents the information in one convenient list.

The best analogy I can think of is that of being in a room with all your friends, and there are a number of conversations going on around you. You can hear what’s going on and can choose to participate if you like. So, if someone posts a video, you’ll see it. If someone comments on a photo, you’ll see it. If someone rates a movie, you’ll see it.

I think you get the idea.

(This obviously raises a number of privacy concerns, but Facebook has seen fit to provided a number of flexible options to ensure everyone has a comfortable level of privacy.)

Along the same lines, I’ve noticed a common trend for users of social-networking sites to build out the biggest network possible. Size always seems to be an issue for some. In the case of Facebook, I actually think a larger network dilutes its value to you simply because you’re faced with increased noise from the network. That said, I have to give Facebook credit as they’re utilizing some interesting algorithms to filter out the unwanted clutter to only present you with relevant info (in the case of the News Feed at least).

And just a few weeks ago, Facebook has taken the next step as they further transform themselves into a full fledged platform. With the release of Applications, third-party developers can now write apps that can run inside of Facebook and tap into your network of friends (or social graph as Facebook calls it). It may not be apparent at first, but this is hugely important because it provides contextual relevance to many aspects of the internet. David Sacks (of PayPal fame) had some interesting things to say about this topic a few weeks back, and I have to agree with him (except for the peanut butter & bread analogy… it didn’t feel quite right).

We’re just starting to see the first generations of applications created by developers, and the results look very promising. And to everyone who hasn’t checked Facebook out yet, I suggest you give it a try. Myself however, I welcome our new social-network overlords.

So I had the pleasure of giving a lecture at OCAD last night, which admittedly was a first for me.

I chatted about what we do here at Blast Radius, walked through some examples of our work, and gave some insight into the process of pitching new business. It looks like I may be back to chat again next semester, which I’m definitely looking forward to. What I found quite interesting was how attentive the students were – clearly, they were there to actually listen. Hopefully they found some value in what I had to say.

Being that I didn’t attend post-secondary school, I’d never actually been in a lecture let alone given one. Regardless, I think it went pretty well… hopefully the students felt the same.

With Apple’s recent iTV pre-announcement it’s clear that they’re looking to reproduce the success they’ve had with the iPod, and do for video what they did for music. However, what I had hoped would usher in true on-demand television is starting to look like nothing more than a jukebox for movies.

Ok, first things first. Clearly there is a market for movie downloads, and I’m sure Apple will make a profit doing so. However, what originally got me excited about iTV was the idea of ditching my cable company entirely and replacing it a vast library of television and movie content, available on-demand, over the internet. And while that idea still excites me, I don’t think Apple will be delivering on it. At least not out of the gate.

One Plus One Still Equals Two.

In theory the economics could work, but in reality they don’t. With the average monthly cost of cable at $41.17, and the average monthly consumption at 82.6 hours, it becomes clear that the numbers won’t add up. Assuming each show is 45 minutes long (1 hour minus the commercials), the average person would watch 110 downloaded episodes a month (82.6 hours * 60 minutes / 45 minutes = 110 downloads). At $1.99 a pop (and if my math is correct), that’s just shy of $220 a month. And when you bake 30 minute shows into the equation, the monthly costs will skew even higher.

Now, I suppose you can argue that without commercials, you’re actually watching more TV in that 82.6 hours a month, but not $180 more. Additionally, options like Multi-Pass do make the monthly expenditure a bit more palatable, but I’m not sure it’s enough.

If you’re a casual television viewer (such as myself), the number may add up… but unless you acquire content through illicit sources (aka BitTorrent), I can’t see Joe Average moving over anytime soon. I honestly hope more shows adopt the Multi-Pass model and offer multiple downloads for a discount. Because with the current pricing model, I don’t see how iTV will be a viable alternative for your current cable offerings.

You’ll be able to skip the trip to Wal-Mart for your next Pixar movie, but don’t expect to ditch the dish any time soon.

For those who weren’t following along, Apple had another one of their special events yesterday. And as expected, this Apple love-in brought us another string of new product and service announcements.

iPods got a little love, Nano’s are officially 2nd generation (and look a lot like the old iPod Mini), and the Shuffle is now “impossibly small” (am I the only one who thinks it’s the Shuffle that should be called the Nano?). Curiously, we didn’t see the “real” iPod video that’s been tearing up the rumor sites for months now, but I expect it’ll make an appearance at some point… it’s just a matter of time. And what about the iPhone?

iTunes got a lotta’ love with the release of version 7. I’m still on the fence regarding the UI – Apple loves to change shit for the change sake. Why did they change the scrollbars and buttons? Is this what get to expect in OSX 10.5? Anyway, there’s some fluff and some substance, but it’s looking good nonetheless. Of particular interest however, were the changes made to the iTunes Music Store. Officially re-branded, the iTunes Store is now selling the full spectrum of media. Music, TV shows, games (iPod only) and now movies. And with a move completely out of character, they “pre-announced” a new piece of hardware that will tie the whole package together (as an aside, how does someone actually go about pre-announcing something… aren’t you making an announcement when you pre-announce something?).

iTV (tentative codename at this point) is a small device that plugs into your TV and wireless connects it with your computer. It looks like a flattened Mac Mini, and it’s UI looks a lot like Front Row.

Finally, the remaining pieces of Apple’s digital hub strategy are falling into place.

Now, I want to take a moment and really put this into perspective. In the not-too-distant future, you’ll be able to all but abandon your cable services entirely. Imagine the ability to have a central library of television and movie content, accessible from all TVs in your house. DVDs all ripped and stored in a central location. TV shows automatically downloaded off the internet, and stored in the same place. And instead of a piece-of-shit cable box, you’ll have a slick little device that serves it all up for your big-screen TV.

Now, this technology already exists. If you were so inclined, you could string together a similar system and have it working quite well. However, that’s not Apple’s goal here. When you connect the dots (iTunes Store + iPod + Mac + iTV), it becomes quite clear that Apple’s looking to completely displace the traditional cable companies with an entirely new content distribution system. They’ll sell you the hardware/software to take advantage of this system, but their endgame is the delivery method.

As Apple announced, their Music Store has a 74%+ market share in the US, and they are officially in the top 5 of legal music retailers. That’s actually a very import note – for the first time, a store that sells nothing but digital content is now in the top 5. And with the TV+Movie content, Apple’s looking to repeat that success. They want to own the content delivery system to your living room, with your computer as the central hub.

However, there are still a few outstanding questions I have:

1. Can I browse and download content directly from iTV?
2. Can I rip my DVDs and have them accessible from iTV?
3. What if I want/need to have local TV? Is there anyway to interface with traditional cable?
4. Will iTV play video content acquired from other sources?
5. How much bandwidth is eaten up with the wireless streaming? Will there be enough to still surf wirelessly?

1. Can iTV replace my existing cable service?

   The last question is a big one. One has to stop and wonder how the cable and satellite companies are reacting to this. Because if it wasn’t clear when Apple started selling TV shows via the ITMS, this is clearly a shot across the bow. These companies are spending millions attempting to deploy HD services, and it looks as if these investments could quickly become antiquated.

   Whatever the case I’m definitely looking forward to it’s release in Q1 2007. And for the record, I welcome our Apple overlords with open arms, and will be disposing of my Rogers HDTV PVR piece-of-shit set-top box the second iTV becomes available.