Is Quality Losing Again?

Monday August 27, 2012 – Stewart Wolpin

It's happening again.

A superior qualitative technology is failing and will perhaps disappear while a competing inferior technology thrives and becomes dominant.

There's been a long, if dishonorable, tradition of consumers and the market making the wrong qualitative format choice. AM dominating FM. Audio cassette usurping vinyl. VHS vaulting over Beta. Windows whipping Mac. MP3 trumping CD.

Sure, there are solid functional, convenience, marketing and pricing reasons why an inferior quality technology beat out a higher-quality competitor. But the historical fact remains – too often, a lower-quality product wins out.

In this case, the qualitative loser is poor plasma HDTV. Even though plasmas were the first and, for a long time, the dominant flat screen HDTV technology, LCD is prevailing in the market place. Always inferior to plasma (even today, the best LCD models are always noted as being "as good as plasma"), LCD models were not available in large sizes, and when they were, they were vastly more expensive than plasma.

Not anymore.

Plasma HDTV sales have been slowing for some years and make up a small percentage of the overall flat-panel TV market, despite the fact that plasma HD prices are moving down.

A lot of plasma’s misfortunes began when certain LCD manufacturer started to spread misinformation about plasma burn-in rates, lifetime brightness limitations and other now non-existent plasma problems that I still hear from civilians ("Oh, I heard plasma has problems with…") and have to constantly refute.

And, so, plasma HDTV may be on its way to the dustbin of TV history.

Perhaps the one consolation for folks who want an alternative to LCD is the hopeful emergence of OLED sets, unveiled at CES by both Samsung and LG and promised for sale this fall. Sure, initial OLED sets will run around $10k, but this is less than what original plasma HTDVs cost 15 years ago.

For quality survival sake, I hope plasma lasts long enough for OLED to become affordable.

An Olympic Debacle?

Tuesday August 21, 2012 – Greg Scoblete

Shortly after NASA's Curiosity Rover landed on Mars and began beaming back its initial images, a graphic popped up on social networks lampooning NBC's Olympic coverage. It showed the Earth and Mars with two captions: "NBC: six hour delay for an event 3,500 miles away. NASA: 14 minute delay for an event 155,000,000 miles away."

If nothing else, it was a pithy reminder of how business models artificially constrain what our technology is capable of. It was also a reminder of the flack NBC caught for how it handled the broadcasting of the games.

The company was mercilessly lampooned for its decision to replay live events long after the outcomes had been widely broadcast online. It also sought - unsuccessfully - to button up all online viewing in the U.S. to its own stream, offering a "free" stream to anyone who authenticated their subscription to a pay TV service. Commentators pointed out that as a broadcast channel that is obligated by law to offer free broadcasts, this policy was an affront. It didn't help matters that the stream itself faltered at several key events - something that will no doubt give over-the-top providers heartburn.

The streaming wasn't the only debacle.

Twitter, too, suffered its share of black eyes. The London Olympics were to serve as a kind of coming out party for "social TV" - where users could tweet out their reactions to events as they watched them. Yet one day before the opening ceremony, Twitter crashed. Then after the first day of the Olympics, the organizers sheepishly asked attendees to only Tweet "in an emergency" because broadcasters were complaining that all the Tweets were clogging network bandwidth.

Finally, Twitter caught huge flack for (temporarily) banning a journalist from London's Independent newspaper, who had been using his Twitter account to savage NBC for its Olympic coverage (if nothing else, Twitter served as a useful aggregator for the groundswell of vitriol generated toward NBC).

The London Olympics were to be a proving ground for two of the TV industry's big hopes - social and streaming TV. It's clear that neither were as well executed as they could have been -  certainly not gold medal worthy. But like any good competitor, NBC (and Twitter) will undoubtedly dust themselves off and give it another go in Sochi.

Lights, Camera, Action Camcorders

Monday August 13, 2012 – Stewart Wolpin

While watching TV the other night, I saw something shocking: a commercial for a camcorder.

Why shocking? The camcorder business is going into the…uh, commode, especially the so-called "pocketcam" camcorder, the sub-$200 models popularized by Flip.

For around five years, Flip-style camcorders were the hoola-hoop of the imaging business. Nearly every mainstream and not-so-mainstream camcorder company suddenly wanted into the hoola-hoop…er, pocketcam business.

But around 18 months ago, Cisco decided that profit margins on Flip camcorders didn't exactly produce…uh, profit. So Cisco the non-consumer electronics company shut down the consumer electronics camcorder business it had bought just two years before.

Flip's death coincided with the rise of 1080p video recording capability being included in nearly every new smartphone and nearly every new digital camera over $150. These mediocre cellcams and mediocre digicam cams obviated the consumer need to carry around a separate – and larger – mediocre pocketcam.

And then Kodak, the second-biggest seller of pocketcams, went into the…uh, commode earlier this year. In the wake of these pocketcam disasters, nearly all the camcorder makers who had entered the pocketcam business quickly reversed course and exited the pocketcam business.

Thus, the aforementioned camcorder commode condition. DTC projects camcorder unit sales will plummet 15 percent in 2012 and another 13 percent 2013. Camcorders are likely to never see sales growth again. In fact, camcorders could become a specialty category ala D-SLRs or audiophile speakers in less than five years.

Wear your camcorder

It is because of this deteriorating camcorder environment that I found the camcorder commercial shocking. But the commercial didn't come from one of the usual camcorder suspects.

The ad was for GoPro, a maker of wearable, waterproof and shockproof so-called "action" camcorders.

In the last two years, GoPro has gone from a niche camcorder maker to one of the top 10 camcorder suppliers. Three of the top five best-selling camcorders on Amazon are GoPro models. Best-selling models numbers 6, 8 and 9 are waterproof models from Kodak – which, as noted, is out of the camcorder business. Best-seller number 12 is a wearable model from another relatively new action camcorder maker, Contour.

This GoPro sales trend is not an American aberration.

The best-selling digitale camcorder on German Amazon: GoPro.

The best-selling camcorder on Great British Amazon: GoPro.

The top two best-selling cámerscopes on French Amazon: GoPro.

The top two best-selling camcorders on Canada Amazon: GoPro.

The top two best-selling videocamere on Italian Amazon: GoPro.

The top two best-selling videocámaras on Spanish Amazon: GoPro.

You get the idea.

Jumping the action bandwagon

As a result of GoPro's sudden sales success, action camcorders have suddenly become the new hoola-hoop…er, I mean pocketcam.

Sony, Panasonic, Samsung and Toshiba all have added sub-$200 waterproof SKUs to their lineups in the last year. In late June, JVC unveiled its Adixxion wearable camcorder. Others are likely to jump on the waterproof camcorder bandwagon.

One supplier told me waterproof/wearable is the only way to differentiate their other unnecessary product from smartphone and digital camera camcorders.

As with all fad product trends, the action cam rush is unsustainable.

Most obvious, as with all bandwagon products, the waterproof camcorder will soon be flooded (pun intended), and will naturally collapse the market pool leaving only the heartiest action cam swimmers.

But more important is the limited addressable market. How many outdoor types are there who will buy all these action camcorders? Are action camcorder makers hoping their action camcorders aren't as shock or waterproof as claimed requiring new action cam replacement purchases?

And what happens to the action cam market when more and more smartphones become waterproof?

No, the judgment here is that action cam sales action itself is the aberration and is likely to fade far faster than the pocketcam business.

Can Google Fiber Change the TV Game?

Monday August 6, 2012 – Greg Scoblete

Google has a reputation for being somewhat flighty with its technological forays (you would be too if you were sitting atop a mountain of cash). Apps and services come and go. There's a self-driving car, a pair of futuristic glasses, a mobile operating system, tablets, a social network - all circling tenuously around the company's core mission of internet search.

Now there's another item on the list: Google Fiber. Announced 2011, Google Fiber went live in Kansas City, Missouri last week. The high-speed service offers users Internet access of 1,000 Mbps - both download and upload. That's roughly 100 times faster than most broadband connections available to consumers in the U.S.

Google is offering the service in several flavors. The most expensive is a $120 package, which includes the gigabit connection in addition to a pay TV package (and a Nexus 7 tablet). The TV package is itself underwhelming - there's no ESPN, Disney, HBO, TNT or TBS - but that doesn't mean that Google Fiber can't shake up the TV industry.

There are two reasons to watch this space. First, due to Google Fiber's enormous bandwidth, high definition movies are no longer the over-sized load trying to barge down a crowded highway. Streaming quality - and linear broadcasts - could improve considerably over a gigabit fiber network as they'd require less compression.

Second, Google isn't wed to the old business model that has delivered cable TV and internet access to consumers’ homes. Whereas those services are threatening their users with caps and tiered pricing if they stream too much Netflix, Google could take a more relaxed attitude about over the top TV competition - especially since Google-owned YouTube constitutes one of the emerging threats to traditional TV over managed networks.

The market for broadband - and pay TV services in general - is very limited in the U.S., when not downright monopolistic. Google introduces something critical: more competition. Google Fiber not only embarrasses the pokey speeds of any incumbent internet service provider, it erases the threat that bandwidth caps and tiered pricing regimes could strangle a consumer's appetite for "over the top video."

The big caveat, of course, is that Google Fiber can only be competitive in the places that have it and to date that is exactly one. Google will announce in September a rollout schedule for additional Google Fiber build outs but it's likely to be a slow process. The company's history of flirting with one business area only to dump it doesn't exactly inspire a ton of confidence that Google Fiber can scale to a national offering to challenge DirecTV or Comcast, either. The revolution, if it is to come, will be slow. But if Google does make a go of it, the Hulus and the Netflixes of the world will rejoice.