Friday, June 14, 2013

Why Netflix is producing original content

Why Netflix is producing original content


By Felix Salmon
June 13, 2013


Matthew Ball has a long examination of the economics of Netflix’s original content, looking at it on a show-by-show level. He starts with the cost of producing something like Arrested Development, and then works out how many extra subscribers Netflix would need to attract in order to justify that cost. (Or, how many extra months existing subscribers would have to keep their subscriptions for, compared to when they would unsubscribe otherwise.) He writes:
I’d argue that it is unlikely that Arrested Development will convince millions of users to stay an extra month in 2014 and 2015. If this is the case, the show would need to achieve its return in the immediate future. Therefore, if we don’t see Netflix adding four to five million new subscribers during the quarter, one of two things are true. One, the show was a poor investment whose draw was a fraction of those anticipated, or two, the show is instead intended to convince many of the million subscribers currently churning away each month to defer their cancellation. This would be telling.
While Wall Street analysts are assessing the success of original content in terms of new customers, I believe Netflix’s primary goal is on imminent service cancellations.
Ball lists three reasons why Netflix is making original content. There’s the way in which that content keeps people subscribing for longer; the way in which original content will allow Netflix to raise its prices in the future; and then there’s this:
Hedging against rising content licensing costs, which are up 700% over the past two years. While per-show licenses will never surpass the cost of original producing a series, their increases will make ongoing investments in House of Cards less expensive on a differential basis.
The ever-increasing cost of licensing is a huge issue for Netflix, and it’s the reason why its business model is a very tough one: any time that Netflix builds up a profit margin, the studios will simply raise their prices until that margin disappears. Netflix had to pay a whopping $1.355 billion in licensing costs just in the first quarter of this year; that number is only going to increase, unless Netflix can find some other way of finding content. Like producing it in-house. At the margin, the more material that Netflix produces on its own, the less it needs from third parties, and the easier that Netflix finds it to say no to ridiculous demands.

But what Ball misses, I think, is that Netflix is playing a very, very long game here — not one measured in months or quarters, and certainly not one where original content pays for itself within a year. Netflix doesn’t particularly want or need the content it produces in-house to make a profit on a short-term basis. Instead, it wants “to become HBO faster than HBO can become Netflix,” in the words of its chief content officer Ted Sarandos.

Most importantly, the thing that Netflix aspires to, and which HBO already has, is an exclusive library of shows. If everything goes according to plan, then the Netflix of the future will be something people feel that they have to subscribe to, on the grounds that it’s the only place where they can find shows A, B, C, and D. That’s what it means to become HBO — and Netflix is fully cognizant that this is a process which takes many years and billions of dollars.

If Netflix gets there, then it becomes a license to print money, just as HBO is today. Shows like Arrested Development and House of Cards may or may not pay for themselves over the short term — in fact, they almost certainly won’t. But that doesn’t matter. In the long term, they will become part of a library which has massive value on two fronts: the shows can be licensed out in jurisdictions where Netflix doesn’t want to compete, and they will also help make Netflix a service that can guarantee you a great show that you want to watch, whenever you want to watch it.
Ball says that “Arrested Development is an established brand that’s intended to be a one-off event to convince its fanatical (and tech-savvy) followers to give Netflix’s broader streaming service a try.” That’s true — narrowly. But the series is much more than that: it’s also a way for Netflix to signal to all its current and potential subscribers that it is home to high-quality exclusive content, if and when they ever feel like giving it a try. In a weird way, Arrested Development is worth more as the number of people who haven’t seen it goes up.

No one today is likely to subscribe to Netflix just on the grounds that they think they might like to watch Arrested Development at some point. But when there are dozens such shows — none of which are available anywhere else — that begins to add up. At that point, not only does Netflix provide something for everybody; it also becomes the only place to watch certain shows with cultural-touchstone status. And presto, the decision is no longer whether Netflix is worth the subscription price; rather, the question is whether you can afford not to have it.

There’s no guarantee that Netflix is going to succeed at this strategy: many have sailed into the treacherous waters of Hollywood video production, and few have thrived there. And in the first instance the strategy just means that it’s no longer just the content companies managing to extract enormous rents from Netflix; it’s the production industry and the talent as well. The old argument still applies, mutatis mutandis, to the new strategy: as high-quality original content becomes increasingly important to Netflix, Hollywood will find ever more ingenious ways of forcing Netflix to pay through the nose for it.

Still, for viewers, this can only be good. The viewing audience doesn’t care whether Netflix makes money: they just want great shows to be produced. If they like House of Cards and Arrested Development, they should be very heartened: there’s going to be a lot more new shows where those ones came from.

Tuesday, June 11, 2013

God, Revised

[ What fun to share a religious article that is interestingly close to my feelings on the matter, but shouldn't this be entitled "God Revisited" because do you revise God or your opinion of God? So, keep in mind this guy may be only, say,  35% right. :) -mike ]

God, Revised: The Atheists Are Half Right

Rev. Galen Guengerich - Huffington Post

Religion in America is in trouble, and science can help save it. Conventional wisdom suggests otherwise, saying that science is more likely to kill religion than rescue it. I'm convinced that science is the last best hope for religion in the modern world.

The God Wars pit those who believe in a supernatural God that commands and controls from outside the natural order against those who accept rational thought and scientific research as the final word. For centuries, people have tried to arbitrage the difference between these competing worldviews. Today, more and more people are concluding that we ultimately have to choose. In this ongoing battle of Faith v. Reason, reason now appears to be winning: The majority of Americans either have no religious affiliation or, even if affiliated, see a conflict between being a devout religious person and living in the modern world.
This conflict is real, but unnecessary.
Until about 500 years ago, people thought the Earth was at the center of the solar system. But Copernicus looked into the night sky and discovered otherwise. In more recent centuries, scientists have come to another conclusion of similar magnitude: In our universe, the fundamental laws of nature have existed from the very beginning, they apply everywhere, and they do not change.
As humans, we continually revise our answers to cosmic questions, and I believe now is the time to revise the answer to the question of God. This is where science can show the way forward. Rather than ignore it, we need to take everything we know into account in order to discover the God we believe in and decide how we need to live. But like the view of the universe as Earth-centered, I believe the view of God that requires us to suspend disbelief needs left behind.
It won't be easy. The belief in a supernatural God is longstanding and has broad appeal, not to mention evolutionary origins. Our ancient ancestors survived because they understood the world in terms of cause and effect; they understood themselves as agents who could cause things to happen. If they followed cause and agency far enough upstream, they would reach a first cause that stood outside the universe, which they dubbed God.
But people didn't respond to Copernicus by saying that if the earth isn't the center of the solar system, then the solar system doesn't exist. When people ask me whether I believe in God, my answer is yes. But I'm convinced that today's atheists are 100 percent half right. I, too, don't believe in the supernatural God they don't believe in. Traditional religionists are also 100 percent half right. Just because God isn't supernatural doesn't mean that God is a fantasy and religion is a farce.
I did not come to this answer quickly or easily, however. As a former Conservative Mennonite from a long line of Mennonite preachers, I've struggled since my youth with this question, which I work to untangle in my writings, sermons and book "God Revised: How Religion Must Evolve in a Scientific Age."
Seeking God, finding faith and participating in a religious community is more than a personal exercise. If we fail to adapt, our increasingly empty houses of worship will become a sad symbol of a deeper vacancy in our lives and our culture. We'll each be left increasingly alone with our spiritual hunger and our longing for a place to belong. Self-centered entertainment will increasingly substitute for moral education. Political expediency and religious zealotry will increasingly triumph over a commitment to common good.
In our modern world, we need to understand where we belong -- that deep connection to everything that is present in our world, as well as all that is past and all that is possible. For this reason, a revised understanding of God isn't an optional aspect of life today. I believe it's necessary -- not to explain everything we don't know, but to make meaningful sense of everything we do know.

Sunday, June 9, 2013

NSA Bombshell Story Falling Apart Under Scrutiny; Key Facts Turning Out to Be Inaccurate

"Has our collective attention span become so ridiculously short that we’re suddenly shocked by news of the NSA attaining data about Americans as a means of fighting evildoers? Has everyone been asleep for the last 12 years?"

NSA Bombshell Story Falling Apart Under Scrutiny; Key Facts Turning Out to Be Inaccurate

By  · June 08,2013 http://thedailybanter.com



greenwald_nsaIt turns out, the NSA data-mining story isn’t quite the bombshell that everyone said it was. Yes, there continues to be a serious cause for concern when it comes to government spying and overreach with its counter-terrorism efforts. But the reporting fromGlenn Greenwald and theWashington Post has been shoddy and misleading.
We shouldn’t shrug off our weakened privacy as a merely a side effect of the digital age, either. We ought to fight to preserve as much of our personal information as possible. So if there’s any benefit to the NSA news, it’s to serve as a reminder that, yes, the government is serious about attaining information in its war on terrorism and that we should be aware of what’s going on — checking it when it gets out of control.
But with new contravening information emerging since the original stories were posted by Greenwald and the Washington Post, it’s clear that the reporting by each news outlet was filled with possibly agenda-driven speculation and key inaccuracies.
Greenwald told CNN, “It’s well past time that we have a debate about whether that’s the kind of country and world in which we want to live.”
Canonizing bad reporting as a means of inciting a debate is as bad as no debate at all. Attachment to empirical reality must remain a central trait of the left, otherwise the progressive movement is no better than the non-reality based propagandists on the right who will say and do anything to further the conservative agenda. So perhaps some positive changes on domestic spying are eventually achieved, but at what cost? Greenwald, who doesn’t really care about “left and right,” isn’t concerned with anything other than his personal agenda and clearly he’s willing to do whatever it takes in pursuit of those goals. Specifics presently.
It’s a shame because there’s a way to have this debate without selling out to misinformation. Instead, we appear to be careening way off the empirical rails into hysterical, kneejerk acceptance of half-assed information.
Here’s how this story has played out since late Thursday.
1. Both Glenn Greenwald and the Washington Post reported that the NSA had attained “direct access” to servers owned by Facebook, Google, Yahoo, Apple and other big tech companies in order to attain private user information via a top secret government operation called PRISM. Initially, this appeared to be a major violation of privacy. The implication is that the government enjoyed unchecked, unrestricted access to metadata about users any time it wanted.
2. Then, naturally, heads exploded throughout the blogs and social media. Left and right alike.
3. While everyone was busily losing their shpadoinkle on Twitter and the blogs, Google, Facebook, Dropbox, Yahoo, Microsoft, Paltalk, AOL and Apple all announced in separate statements that not only were they unaware of any PRISM program, but they also confirmed that there’s no way the government had infiltrated the privately-owned servers maintained by these companies. Furthermore, Google wrote, “Indeed, the U.S. government does not have direct access or a “back door” to the information stored in our data centers. We had not heard of a program called PRISM until yesterday.” Google also described how it will occasionally and voluntarily hand over user data to the government, but only after it’s been vetted and scrutinized by Google’s legal team.
4. The freakout continued.
5. Furthermore, Glenn Greenwald used the phrase “direct access,” as in unobstructed direct server access, four times in his article, most prominently in his lede, “The National Security Agency has obtained direct access to the systems of Google, Facebook, Apple and other US internet giants, according to a top secret document obtained by the Guardian.” Unless the tech companies were collectively lying, Greenwald’s use of “direct access” is inaccurate. And if it’s inaccurate, the most alarming aspect of this NSA story is untrue.
On Twitter, Greenwald defended his reporting by reiterating that the NSA said within the PRISM document that there has been “collection directly from the servers of these US service providers: Microsoft, Yahoo, Google, Facebook…” But this could mean that the data was drawn from the servers, vetted and handed over to the NSA per Google’s stated process of legal vetting. And if the data was made available, it’s possible that the tech companies posted it on a server for the NSA analysts to download, just as you might download a file from work or a friend via Dropbox or an FTP server. Regardless, it seems as if Greenwald’s entire story hinges on a semantic interpretation of the PRISM language. And his mistake was to leap from “collection directly from servers” to “direct access.”
6. More exploded heads anyway. Anyone relaying the new information is accused of being an Obamabot.
7. Additionally, the NSA whistleblower who provided the information to the Washington Postwas quoted as saying, “They quite literally can watch your ideas form as you type.” Without direct access to the servers this would be impossible — that is, unless the NSA was intercepting user data in transit. But that’s not what Greenwald and the Washington Postreported: direct server access. This was the bombshell — that the NSA could grab information at will — and, as of this writing, it’s inaccurate.
8. In spite of these new revelations, epidemic-level outrage continued to spread all around. Michael Moore and others applauded the anonymous whistleblower(s) who provided information to Greenwald.
9. By the end of the day Friday, Business Insider reported that the Washington Post hadrevised its article. The article no longer reported that the tech companies “knowingly” cooperated with PRISM. But, more importantly, the phrase “track a person’s movements and contacts over time” in the article’s lede was revised to “track foreign targets.” There’s a huge difference between the two phrases. Public outrage was almost entirely based on the idea that the NSA was spying on everyone who uses those services — broad, unrestricted access to private information (as private as social media and email is). But the revision limits the scope of the operation to international communications.
As of Saturday, Greenwald, unlike the Washington Post, hadn’t corrected or revised his reporting to reflect the new information, and, in fact, Greenwald continued to defend his reporting on Twitter. (It’s worth noting how speculative Greenwald’s article was. The following line was particularly leading: “It also opens the possibility of communications made entirely within the US being collected without warrants.” There’s no indication whatsoever that the government was gathering information without warrants.)
10. Heads, sadly, continued to explode all over the place in spite of the total de-fanging of both stories.
11. Meanwhile, TechCrunch‘s Josh Constine reported on Saturday, “[T]he NSA did not have direct access or any special instant access to data or servers at the PRISM targets, but instead had to send requests to the companies for the data.”
This is vastly different from what Greenwald reported.
12. Rampant outrage all day Saturday.
13. And ultimately, other than the PRISM Power Point, the NSA’s surveillance story isn’t anything new. Some headline history via ProPublica:
Bush Lets U.S. Spy on Callers Without Courts, New York Times, December 2005
U.S. Terrorism Agency to Tap a Vast Database of Citizens, The Wall Street Journal, December 2012
But the Greenwald and Washington Post stories are somehow bombshells, taken at face value. Has our collective attention span become so ridiculously short that we’re suddenly shocked by news of the NSA attaining data about Americans as a means of fighting evildoers? Has everyone been asleep for the last 12 years?
To summarize, yes, the NSA routinely requests information from the tech giants. But the NSA doesn’t have “direct access” to servers nor is it randomly collecting information about you personally. Yet rending of garments and general apoplexy has ruled the day, complete with predictable invective about the president being “worse than Bush” and that anyone who reported on the new information debunking the initial report was and is an Obamabot apologist.
Speaking for myself on that front, I’m not apologizing for anyone. I’m merely noting that Greenwald and the Washington Post reported inaccurate information. I’ve spent a considerable chunk of my writing career eviscerating the post-9/11 surveillance state and its accompanying trespasses against privacy and civil liberties. While I’m encouraged by the president’s vow to begin rolling back the 2001 Authorization for Use of Military force, winding down the endless war and its accompanying endless war powers, I’m also concerned about the continued bartering of privacy for the sake of a little more security — a through-line that began under George W. Bush and continues today.
But this prioritization of security over liberty wasn’t invented by this president. It began as the unforgivable exploitation of fear in the days after 9/11 and became entwined in the American worldview. We’ve sadly become just as accustomed to unnecessary searches and privacy intrusions as the federal government has grown accustomed to going beyond its mandate to smoke out the evildoers.
(Special thanks to both JM Ashby and Charles Johnson from Little Green Footballs, whose coverage on this topic has been tenacious.)

Sunday, June 2, 2013

Income inequality is now as high as it's been since the Great Depression

American dream deferred indefinitely

Income inequality is now as high as it's been since the Great Depression, and the middle class is nearly extinct


     
American dream deferred indefinitely(Credit: Shutterstock)
This article originally appeared on the L.A. Review of Books.
Los
Angeles Review of BooksINEQUALITY IS NOW ONE of the biggest political and economic challenges facing the United States. Not that long ago, the gap between rich and poor barely registered on the political Richter scale. Now the growing income divide, an issue that dominated the presidential election debate, has turned into one of the hottest topics of the age.
Postwar American history divides into two halves. For the first three decades, those on middle and low incomes did well out of rising prosperity and inequality fell. In the second half, roughly from the mid–1970s, this process went into reverse. Set on apparent autopilot, the gains from growth were heavily colonized by the superrich, leaving the bulk of the workforce with little better than stagnant incomes.
The return of inequality to levels last seen in the 1920s has had a profound effect on American society, its values, and its economy. The United States led the world in the building of a majority middle class. As early as 1956, the celebrated sociologist, C. Wright Mills, wrote that American society had become “less a pyramid with a flat base than a fat diamond with a bulging middle.”
That bulge has been on a diet. The chairman of President Obama’s Council of Economic Advisers — Professor Alan Krueger — has shown how the size of the American middle class (households with annual incomes within 50 percent of the midpoint of the income distribution) has been heading backwards from a peak of more than a half in the late 1970s to 40 percent now. The “diamond” has gone. The social shape of America now looks more like a contorted “hourglass” with a pronounced bulge at the top, a long thin stem in the middle, and a fat bulge at the bottom.
One of the most significant effects of America’s hourglass society has been the capping of opportunities and the emergence of downward mobility amongst the middle classes, a process that began well before the recession. Around 100 million Americans — a third of the population — live below or fractionally above the poverty level. A quarter of the American workforce end up in low-paid jobs, the highest rate across rich nations, while the wealthiest 400 Americans have the same combined wealth as the poorest half — over 150 million people.
With a growing percentage of the current generation facing a lower living standard than their parents, more and more US citizens express a “fear of falling,” worried about a further loss of livelihood and their relative income status. The nation is at last waking up to what has been reality for years — the vaunted American Dream (the ability of citizens to go from rags to riches, and one of the country’s most enduring values) is increasingly a myth.
In a poll conducted for The Washington Post before the 2012 presidential election, respondents were asked which was the bigger worry: “unfairness in the economic system that favors the wealthy” or “over-regulation of the free market that interferes with growth and prosperity.” They chose unfairness by a margin of 52–37 percent. The mostly pro-self-reliant American public are perhaps coming to recognize that their much-heralded virtues of hard work and self-help are no longer an effective means to economic advancement.
The most damaging impact of growing inequality has been on the American — and global — economy. It has been one of the central rules of market economics that inequality is good for growth and stability. The idea was enshrined in the postwar writings of the New Right critics of the model of managed capitalism that emerged after the war. “Inequality of wealth and incomes is the cause of the masses’ well being, not the cause of anybody’s distress” wrote the Austrian-American economist Ludwig von Mises, one of the leading prophets of the superiority of markets, in 1955.
It was a theory that gained traction during the global economic crisis of the 1970s and with the publication in 1975 of a highly influential book, Equality and Efficiency: The Big Tradeoff, by the late American mainstream economist Arthur Okun. This theory — that you can have either more equal societies or more economically successful ones, but not both — has been used to justify the growth of inequality in the United States, a trend that has since spread to a majority of the rich world. One of the telling by-products of the current economic crisis is that this theory is now being challenged. It is now being increasingly argued that the levels of income concentration in recent times have had a significant negative effect on the economy, bringing slower growth and greater turbulence and contributing to both the 2008 crash and the lack of a sustained recovery.
Perhaps the most significant convert to these ideas is President Obama. A year ago, he remarked, “When middle-class families can no longer afford to buy the goods and services that businesses are selling, it drags down the entire economy from top to bottom.” Addressing delegates at the annual meeting of the World Economic Forum at Davos in January 2013, Christine Lagarde, head of the International Monetary Fund, endorsed this view, “I believe that the economics profession and the policy community have downplayed inequality for too long […] [A] more equal distribution of income allows for more economic stability, more sustained economic growth.”
This view goes against the grain of the economic orthodoxy of the last 30 years. As the Chicago economist Robert E. Lucas, Nobel prizewinner and one of the principal architects of the pro-market, self-regulating school that has dominated economic strategy in the Anglo-Saxon world, declared in 2003, “Of the tendencies that are harmful to sound economics, the most poisonous is to focus on questions of distribution.”
A growing body of evidence and opinion now holds that this idea is wrong. In fact, the “distribution question” — how the cake is divided, between wages and profits on the one hand, and between the top and bottom on the other — is critical to economic health. Over the last 30 years, the rich world, led by the United States, has steered a growing share of national output first to profits and ultimately to the top one percent. Across the 34 richest nations in the world, the share going to wages has fallen from over 66 percent in 1990 to less than 62 percent today. The result is a growing detachment of living standards from output. The stagnating incomes of the bulk of Americans, along with the shrinking of the middle, are the mirror image of the rise of the plutocracy and the return of the gilded age.
This decoupling of wages from output creates a critical structural fault that ultimately brings self-destruction. First, a growing pay-output gap sucks consumer lifeblood out of economies. To fill this growing demand gap, levels of personal debt were allowed to explode. In the US, the level of outstanding personal debt rose almost threefold in the decade from 1997 to $14.4 trillion. This helped to fuel a domestic boom from the mid-1990s, but one that was never going to be sustainable.
Secondly, the long wage squeeze and the growing concentration of income at the top led to record corporate surpluses and an explosion of personal fortunes. Instead of being used to create new wealth via an investment and entrepreneurial boom (as predicted by market theorists), these massive cash surpluses were used to finance a wave of speculative financial activity and asset restructuring. The effect was the upward redistribution of existing wealth and the fueling of the bubbles — in property and business — that eventually brought the global economy to its knees. That inequality is also acting as a profound drag on the prospects of recovery.
A central feature of the President’s annual State of the Union address on February 11 was its call to “grow the economy from the middle out,” to “reignite the true engine of America’s economic growth — a rising, thriving middle class.” In his call for more active government to reduce inequality — from a 25 percent hike in the minimum wage to higher taxes on the rich — Obama was adding some meat to his earlier call “to restore an economy where everyone gets a fair shot, and everyone does their fair share.” Yet, despite a succession of lofty speeches, the best evidence is that since 2008, growth has continued to be very unevenly shared. The economists Emmanuel Saez and Thomas Piketty have shown that over nine tenths of growth in 2010 was captured by the top one percent. This is in stark contrast to the 1930s, when the big gainers from recovery were most ordinary Americans and the big losers were the superrich.
Obama’s program for change fails to match the radicalism of Franklin D. Roosevelt in the 1930s or that of Lyndon Johnson’s War on Poverty three decades later. Of course, creating a more equal America is hardly a cakewalk. The United States has rarely been more divided on the politics of change. Before Congressman Paul Ryan became Mitt Romney’s controversial running mate, he had blasted Obama’s proposed (and modest) tax measures on the rich as “class warfare.” Other global leaders seem equally disempowered in the face of the might of a global billionaire class determined to preserve its privileges, muscle, and wealth.
But unless Obama can find a way of breaking the firewalls created by the new plutocrats to protect their wealth from economic collapse and political interference, the likelihood is that the American middle class will go on shrinking, the American dream will further erode, and the nation’s economy will continue to stumble from crisis to crisis.

Friday, May 31, 2013

Another Samsung Chromebook review

[ If there is one thing I have learned through my life in computers it is that I cannot recommend any product at all. This can only come back to haunt you as inevitably something goes wrong that they do not like. And... of course, it is my fault. The same holds true for fixing computers. JUST SAY NO. :) Inevitably some computer genius nephew has had a hand in it and guess what, HE couldn't fix. And he works in some computer defense project in Kentucky. And often I suspect that nephew of breaking the computer in the first place because all of the spyware toolbars indicate that while he may work on Drones he doesn't have a clue about  Internet capitalism or his uncle's laptop. :) A scenario like this is inevitable. So, if you will keep my feelings about this in mind, here is another review of the Samsung Chromebook, my favorite computing device ever, a great value for money product that fits my particular needs exactly. Oh, but you have been warned. While I think this review is spot on perfect, I do not recommend  the device. It wasn't me. But you know...sometimes I wonder if I am ever mentioned as that computer genius librarian who couldn't fix it. :) ]

Samsung Chromebook: Best $249 you can spend (review)

Summary: I tested one months ago and just bought my own Samsung Chromebook. This cheap laptop is a great value for such a low cost.
Frontal open
Image credit: James Kendrick/ZDNet
The recent article explaining why I ordered a Samsung Chromebook resulted in a flooded inbox with a lot of readers wanting to know more about the inexpensive laptop. I've been using it heavily for all of my work since it arrived, and it works just as well as I remembered from the test unit I tried months ago.
I purchased the model with wi-fi, choosing to pass on the 3G-enabled Chromebook with its slightly higher price. I have become spoiled by LTE and have no desire to drop back to 3G speeds.
Hardware specs
  • Model Number: XE303C12
  • Display Size: 11.6-inches
  • Display: 1366x768 resolution; 200nit brightness
  • Weight: 2.43 lbs (1.1.kg)
  • Less than 0.8 inches thick (17.5 mm)
  • Battery Life: over 6.5 hours
  • Processor: Samsung Exynos 5250
  • Memory: 2GB
  • Storage: 16GB SSD (Google is including 100GB free online storage)
  • Webcam
  • Ports: 1 USB 3.0, 1 USB 2.0, combo headphone/mic jack, secure digital memory slot
  • HDMI Port
  • Bluetooth 3.0™ Compatible
  • Speaker: 1.5W speaker X 2
  • Keyboard: Full-size Chrome keyboard
  • Wireless: 802.11 abg/n 2x2
Side open
This hardware seems typical for a laptop with the exception of the ARM processor. The Samsung Exynos is used in high-end powerful Android tablets, and it powers the Samsung Chromebook with ease. Performance is on par with other Intel-based Chromebooks, although the Chromebook Pixel blows them all away. Of course, the Pixel costs a thousand dollars more than the Samsung Chromebook, so that's a reasonable trade-off.
The performance of the Samsung Chromebook is so good I forget it's not an Intel processor inside, which says a lot. Playing 1080p video shows lags at times, but all other video plays just fine. I have no complaints about the user experience offered by the ARM processor.
Keyboard
The keyboard on this Chromebook is really good, an important attribute for this writer. Key travel is great and the chiclet keys are comfortable for fast typing.
The buttonless trackpad is also good and complements the keyboard nicely. Operating the Chromebook by trackpad is smooth and I find it almost as good as the standard, the Apple MacBook.
SD slot side
What sets this Chromebook apart from the others on the market is the highly portable form. The weight of 2.4 pounds is great for lugging around all day and the ultra-thin form feels as good as the MacBook Air it resembles. It's all plastic but feels solid and handles the bumps of the road as proven by my earlier evaluation.
The display is not the brightest out there (200 nits); I admit I am totally spoiled by Retina Displays and the Chromebook Pixel screen. This one is just fine, however, and I can use it all day with no issues.
Battery life is a decent 7+ hours due to the ARM processor. That's impressive for the thin, light casing which limits how big the sealed battery can be. The Samsung Chromebook can easily handle a full day of work for me.

Conclusion

Closed
The Samsung Chromebook is a nice laptop for such a low price. It runs Chrome OS nicely on the ARM processor which yields a decent battery life of over 7 hours. The Chromebook runs silently as the ARM processor requires no fans for cooling.
This is one of the most portable laptops with an 11.6-inch display, weighing only 2.4lbs and as thin as the MacBook Air. Samsung has created a very nice Chromebook for just $249. This could easily be the best $249 you spend this year.

Wednesday, May 29, 2013

Excerpt from "An Atheist in the FOXhole: A Liberal's Eight-Year Odyssey Inside the Heart of the Right-Wing Media"

Excerpt from "An Atheist in the FOXhole: A Liberal's Eight-Year Odyssey Inside the Heart of the Right-Wing Media"
 
                                       
People would often ask me about how Fox pushes a message.

And I would always tell them the message isn’t so much pushed as it is pulled, gravitationally, with Roger Ailes as the sun at the center of the solar system; his vice presidents were the forces of gravity that kept the planet-size anchors and executive producers in a tight orbit; then all the lesser producers and PAs were moons and satellites and debris of varying sizes.

An organizational flow chart at Fox would be tough to draw up, as title alone was not the ultimate signifier of status. Sometimes the anchors outranked their executive producers, as was the case with “The O’Reilly Factor.” (In fact, Bill had procured an EP title for himself, but he outranked the two other EPs on the show, both Stan, who oversaw TV, radio, and the website, and Gayle, who focused on television and also served as a fact-checker.) Sometimes the anchors were relatively weak — as was the case with a lot of weekend shows, and maybe some of the newswheel hours — and a strong senior producer or producer outranked, or at least pretended to outrank, the host. (For example, Lizzie from “The Lineup,” who was only a producer but was tough enough that she probably could have bossed around Ailes himself had she been left alone in a room with him for more than five minutes.)
The bottom line is that each show had one person — be they anchor or producer or whoever — who was directly accountable to the Second Floor. That was the brilliance of the company’s power structure. One misconception that outsiders always had about the channel is that we’d sit around all morning planning how to distort the news that day. But there was never any centralized control like that. No “marching orders,” as it were. Instead, it was more a decentralized, entrepreneurial approach. Each show was an autonomous unit. Each showrunner — who had not risen to their position by being stupid — knew exactly what was expected of them, knew what topics and guests would be acceptable.

Theoretically, each show could talk about whatever they wanted to talk about, and take any angle they wanted to take, and book any guest they wanted to have on. Realistically, there was tremendous pressure to hew closely to the company line. The Second Floor monitored the content of every show very closely. Each show was required to submit a list of all the guests and all the topics well before the fact; the list would be reviewed by one of the relevant vice presidents. Most of the time, this was just a formality — as I said, the showrunners knew their boundaries — but every once in a while, a certain guest or topic would set off alarm bells on the second floor, leading to a series of increasingly urgent and unpleasant e-mails and phone calls for the showrunner.

Even if a segment passed initial muster, the Second Floor reserved the right to pull the plug if it took a turn they didn’t like. They were always watching, and never hesitant to exercise their authority. Roger himself had a phone in his office, a hotline he could pick up and immediately be connected to the control room. Every producer knew that, and dreaded seeing his name on the caller ID. If Roger took the time to personally call the control room, in my experience it was almost never complimentary.

It was a unique, bottom-up management structure that had built-in checks and balances coming from the top down. This approach had its advantages and disadvantages. On the upside, it often led to innovative programming, with adventurous hosts and producers coming up with story ideas and segments that a more buttoned-down, dictatorial management structure might otherwise never have approved. (O’Reilly was one of the beneficiaries of this, successfully experimenting with some of his more outlandish, barely news-related segments like Body Language and the Quiz.)
One of the disadvantages was that the Second Floor often put insane, arbitrary restrictions into place, with networkwide implications.

For example, some unlucky guests were banned for life from every show on the network, a result of a diktat from the Second Floor. Comedian Bill Maher, once a semi-regular guest on “The Factor” and some other Fox shows, made too many cracks about Sarah Palin over the years, raising the ire of a powerful female VP who banned him from our air and demanded that all Fox-affiliated websites refer to him only as “Pig Maher.”

Sometimes entire organizations were given lifetime bans. The website Politico wrote something a few years back that rubbed Roger the wrong way (we were never told what exactly the transgression was) and word went out to all the shows: No more Politico reporters as guests. Also, any anchors who mentioned the site on air had to use the phrase “left-wing Politico” — an absurd designation for a publication that usually played it down the middle.

Some anchors and producers had enough juice — proportional to the size of their audience, generally — to push back against the Second Floor’s mandates, with varying levels of success, though even O’Reilly, who had more juice than anyone, could only do so much. When one of his favorite guests, a fiery, young, liberal African American college professor, was banned, agreement with the Second Floor allowing him to continue to use the guy as long as his appearances were limited to once a month. O’Reilly wasn’t happy with it, but it was better than walking away empty-handed.

There was nothing Bill hated more than management impositions on his show. These impositions almost always followed the same pattern — Stan would get a phone call in his office from one of Roger’s underlings, usually a vice president named Bill Shine. I’d hear Manskoff’s end of the conversation. “You’re killing me here, you know that, don’t you,” Stan would say. “You know he’s going to hate this.” Manskoff would hang up, shaking his head in disbelief, and make the fifteen-foot trek to Bill’s office, closing the door behind him. Through the door, we’d hear muffled talking from Stan, then muffled shouting from Bill, followed shortly by the door popping open and Stan bolting from the office like a pinball from a launcher.

“I’ll do it this time, Manskoff,” Bill would call after him, “just this once. But I’m tired of this bullshit!” He’d always slow down for the next part, hammering each phrase so there would be no mistake in the future: “I want the interference! With my show! To stop! Now!”
Relations were rocky enough between O’Reilly and the Second Floor that VP Shine was dispatched on a regular basis to smooth things over, meeting in O’Reilly’s office every Tuesday at four p.m. These meetings would sometimes last upward of forty-five minutes. Though I was never privy to what was said in the meetings, neither man ever looked particularly pleased upon completion.
It was Stan’s job to run interference between O’Reilly and management, keeping the bosses out of Bill’s hair but also insulating the suits from Bill’s fits of rage. Ninety-nine percent of all issues could be solved with Manskoff and Shine collaborating, not having to involve Ailes or O’Reilly. But every once in a while, O’Reilly would refuse to back down, and Ailes would be forced to intervene.
The most memorable instance of this was in late 2008, when Lehman Brothers went tits-up and the whole economy was teetering on the brink. President Bush prepared a massive bailout package for the banks, and conservative talk radio exploded with outrage and opposition. One prominent conservative voice in favor of the bailout? Bill O’Reilly, who believed that the entire financial system would collapse without it. He took to his radio show that day and excoriated the radio hosts who opposed the bailout:
“Let’s get back to this talk radio stuff. These idiots. I mean, they’re misleading you. They’re lying to you. They’re rich, these guys. Big cigars. All of that. ‘Yeah, oh yeah, my private jet!’ And they’re saying, ‘Oh, no! No bailout!’ Walk away from these liars, these right-wing liars. Walk away from them! They’re not looking out for you.”
The cigar and private jet stuff was a thinly veiled swipe at Rush Limbaugh, someone O’Reilly has never liked, but also a figure who had a lot of fans at 1211 Sixth Avenue, including Roger Ailes and Sean Hannity.

When word filtered to the Second Floor that O’Reilly planned on repeating some of his radio rant on the TV show that night, the order came back quickly: Absolutely not. But O’Reilly put his foot down. Neither Stan Manskoff nor Bill Shine could dissuade him, and it took a phone call from Roger himself to put the matter to rest.

Bill took the call in his office, politely but insistently pleading his case to Ailes, but Roger held firm. Bill reluctantly agreed to toe the party line, excused himself from the call, gently hung up the receiver, then loudly yelled a string of expletives that could be heard all over the seventeenth floor. But after he got it out of his system, he spiked the Limbaugh reference from the TV show.
I said earlier that O’Reilly had more juice than anyone. That wasn’t entirely true. He had higher ratings than anyone, to be sure, but it could be argued that Hannity actually had more juice, owing to his closer affiliation and friendship with Ailes. The two of them are fellow travelers, both devoted to Republican causes. Bill is not on that train with them — he’s truly devoted only to O’Reilly-related causes. (Which just so happen to dovetail with Republican causes most of the time, but still …)

This has led to no small amount of tension between the parties. O’Reilly and Hannity, the two biggest stars at Fox News Channel, have basically no working relationship. Their shows are back-to-back, yet they’re barely on speaking terms. O’Reilly is convinced that Hannity is trying to sabatoge his show, and vice versa. The two of them fight constantly, almost entirely through intermediaries and over the pettiest of issues — mostly over guests. Both shows like to use Fox News analysts — specifically Karl Rove, Dick Morris, and Bernie Goldberg — and 90 percent of the squabbling is over which show gets which guest on which night. Roger did the situation no favors in 2011, when he spoke to Howard Kurtz of The Daily Beast and engaged in a bit of provocative muckraking:

“O’Reilly hates Sean [Hannity] and he hates Rush [Limbaugh] because they did better in radio than he did,” Ailes said. Bill was furious for weeks. Because it turns out there is one thing he hated even more than management meddling: someone insulting his ratings.
* * *
Bill was, if nothing else, a man of habit — to the point where he got incredibly angry if anything went awry with his schedule. For someone as pugilistic as he, he’s shockingly unable to roll with the punches. He’s like a taller, Irish version of Dustin Hoffman in “Rain Man.” Even a slight delay or deviation from the plan could set off a lecture or, on occasion, a screaming match. As a result, he was tightly scheduled down to the minute.

Bill’s daily routine was really a marvel of efficiency. It wasn’t quite “The 4-Hour Workweek,” but it came pretty damn close to being the four-hour workday. Now, he would tell you he’s up early, reading the paper, communicating with his staff, etc. And this is all true. He’s a hardworking guy. I don’t want to give the impression that he isn’t. But as far as actual time spent in the building? We’re talking four and a half hours a day, tops.

Here’s how it went:

9:30 a.m.
We’d compile and send to Bill the “Newsfax,” a ten-page document with excerpts from what we thought were the day’s most important stories, op-eds, sound bites, and so on. We called it the Newsfax because it was easier to tell Bill we were faxing it to him than it was to explain that we were remotely printing it to his home printer.
This is actually a familiar pattern with Bill. It’s often simpler to let him believe something erroneously than it is to correct him.
Case in point: In summer 2011, a story surfaced on the right-wing blogs that an auditor for the Justice Department had found out some DOJ employees attending a meeting at the Capital Hilton in Washington, DC, had been served refreshments, including muffins for which the hotel charged sixteen dollars apiece.
It’s no surprise that the story spread like wildfire on the blogs and was soon picked up by cable news. It was a great story for the right, reinforcing preexisting notions of government excess and willingness to waste taxpayer money, the incompetence of the Obama Justice Department, etc.
One problem: It wasn’t true.
A few days after the story broke, a representative from Hilton Hotels came out and said that the auditor had misread the bill, that the sixteen dollars referred to a full breakfast—coffee, tea, fruit, muffins, plus tax and gratuity. Not a bargain by any means, but also not too bad for a hotel continental breakfast.
A producer named Steiner Rudolf was line producing — assembling the stories in the rundown and making sure they all timed out correctly — on the day that Bill wanted to include the muffin anecdote in a Talking Points Memo. “Actually, Bill, the muffin thing got debunked,” Steiner started to tell him. “A guy from the hotel came out and said —”
“I don’t give a shit what the guy said,” Bill interrupted, suddenly angry. “It’s the same old thing. They come out and deny it, but the story is there. We know it’s true. We have the proof.”
Steiner tried gamely one more time to convince Bill to drop the story, explaining that he didn’t have the proof, but O’Reilly was adamant. He’d latched on to the story, and pesky things like “facts” weren’t going to convince him otherwise. The muffins went into the Talking Points. Over the next few weeks, he repeated the story several times on his own show, on Jon Stewart’s show, on David Letterman’s show, and on Good Morning America.
Unfortunately for the embarrassed Hilton Hotels and some nameless DOJ bureaucrats, the muffin story, false though it may be, perfectly coincided with Bill’s book tour.

10:00 a.m.
The morning conference was when the real work of building the day’s show began. The senior staff connected on a four-way call. From my vantage point outside Stan’s office, I could hear them on speakerphone gearing up for it like troops going into battle. “Are you ready for this?” “Yeah, are you?” “Here goes nothing.”
One of them would dial Bill’s house. He’s all business when he picks up the phone. A curt “good morning,” then Gayle begins reciting what she calls the “comp report.” Right off the bat she tells him how many e-mails came in after the previous night’s show, and what topic elicited the most messages. (“We had thirty-five hundred e-mails last night, most of them in reaction to the immigration segment …”)
Bill took the e-mails — sent by our audience to OReilly@foxnews.com — pretty seriously, regarding them (not inaccurately, I’d say) as a direct gauge of viewer interest. Each morning, two unlucky women on the staff had the unenviable job of sorting through the e-mails and printing out a representative sample of fifty to sixty. Bill, to his credit, reads these personally. He selects a handful to be read on the air. If he likes some others but doesn’t consider them airworthy, he’ll instruct our lucky mail combers to send a signed book or some “kind words” — a response e-mail reading, Thanks for the kind words. Signed, Bill O’Reilly. I’d glanced at the show’s in-box from time to time and had been blown away by the sheer incoherence and illiteracy of some of the respondents. This would sometimes present a problem, for Bill liked his e-mails to be short, pithy, and not written by a complete moron.
This was a surprisingly tall order on certain days.
On one occasion, there was an e-mail that Bill really wanted to read on the air. One of the producers noticed that the e-mail was signed with an obvious gag name: Jack MeHoff. Clearly, that’s unreadable on television. But Bill liked the text of the e-mail so much that he couldn’t bear to cut it from the mail segment. After pondering for a bit, he decided on a course of action: “Let’s just change the last name to Mehoffer.” Despite producers pleading with him that the slight name change was not much, if at all, better than the original, Bill stuck to his guns, reading the letter with the modified name on air. The rest is YouTube history.
Back to the conference call. After the e-mail tally, Gayle would read off the list of guests on the competing shows — whatever guests CNN and MSNBC had the night before, and whatever guests Hannity and Greta were scheduled to have that night.
Next, the call got to the real nitty-gritty: Bill started talking about what he wanted on the show that night. “The Factor” was one hour long, divided by commercial breaks into seven “blocks,” identified by letters A through G. The first six blocks all needed a topic and a guest, while the last block — the shortest one — usually contained the viewer e-mail segment, plugs for merchandise, and other “Factor” business.
“The Factor” differed from a straight news program in that all of the segments are, with a few exceptions, interview segments. The advantage of this is that interview segments are incredibly easy to produce. A single associate producer can put together an entire segment by his- or herself in about an hour, without even getting up from a desk. The associate producer (also sometimes called a segment producer, for obvious reasons) would call the guest on the phone and get them to agree to come on; conduct a pre-interview; book a car to bring the guest either to the New York studio to sit with Bill or to a remote studio with a satellite connection; do some research on the topic; cut some B-roll; plug in some graphics; and call it a day.
Contrast that with something like the nightly network news, which uses an anchor who tosses to reporters who introduce highly produced taped pieces known in the industry — somewhat suggestively — as “packages.” (As in, “Hey, did you see Jake Tapper’s package last night?” or “The local affiliate has a great package on that.”) A good package will combine B-roll, graphics, interviews, and narration from the reporter.
The advantages of the network news model is that the reporter packages are a lot more slick and tell a better story in a much more concise and visually appealing manner. The downside to the network model is that it’s very time- and labor- intensive, with each package requiring painstaking work from a reporter, producers, a cameraman, a sound technician, an editor, and so on.
Also, a pretaped package lacks some of the urgency, some of the energy and excitement that a spontaneous interview segment contains. The interview format is one of the reasons for Fox’s financial success. They churn out our product faster, for less money and with fewer staffers. It’s simple economics.
When O’Reilly picked the topics for the show, he’d usually have a specific guest in mind. Sometimes he’d give it to one of our “regulars,” guests who appear every week. (These include, in addition to the aforementioned Messrs. Rove, Morris, and Goldberg, figures like comedian Dennis Miller and Fox daytime anchor Megyn Kelly.) But sometimes he’d want a guest who was not one of the regulars but, rather, someone who would take a certain side on an issue, or an expert with certain biographical details.
Often these requests got hilariously specific: “We’re doing a gay marriage segment — get me a black lesbian civil rights attorney!” or “I want to do a segment on the Super Bowl next week — find me a funny white sports expert under forty! But he can’t be bald.”
One of the most important things the segment producer did was the pre-interview, which was exactly what it sounds like— we’d interview the guest a few hours before Bill interviewed them. We tried to think of the same questions Bill would ask, and would take notes, condensing and bullet-pointing whatever the guest said. Eventually, we’d give this “POV” to Bill, along with research on the topic.
The end result was that, barring the occasional surprise, Bill knew exactly what his guest was going to say in the interview, sometimes down to the last word. In this way, cable news somewhat resembled professional wrestling: The outcomes were predetermined, with the host not only choosing his guests based specifically on the stance he knew they were going to take, but actually getting a preview of their arguments several hours in advance so he could formulate his counterarguments.

Noon
Bill would get into his chauffered town car for the drive from his Long Island home to Fox headquarters in Manhattan. During this drive, he’d call the line producer and dictate the script for that night’s show.
Cursed with speedy typing skills, I would occasionally get roped into taking dictation on these calls. Listening to him write the entire show in his head on the fly, I realized that Bill O’Reilly is much smarter than any of his critics give him credit for. There’s not a ton of writing in a typical episode of “The O’Reilly Factor” — once you get past the Talking Points Memo, it’s only relatively short introductions (“Our next guest is a Fox News analyst coming to us from Washington, D.C. …”) and teases before the commercial break (“Coming up, Karl Rove will weigh in on the GOP primary race …”) — but the mere fact that Bill writes the whole thing himself, every word, separates him from almost every anchor in the building. And the fact that he does it all in his head, dictating it on the fly, is nothing short of astounding.
One funny point about this, though — Bill is, unsurprisingly, the ultimate back seat driver, so the dictation calls are constantly punctuated with his yelling at Carl, his poor beleaguered driver. Bill would dictate a couple of lines, then scream a bit at Carl, berating him for getting caught in traffic. Then he’d tick off a few more lines, then bark at Carl again, telling him that if he didn’t find a different route, Bill would be forced to take over driving duties.

1:30 p.m.
Bill would usually arrive about this time, traffic permitting, then head into his office and have lunch, which his long-suffering, saintly assistant, Margaret, would bring to him. He wasn’t into fancy lunches — strictly a soup-and-sandwich-at-his-desk kind of guy. But he was still as demanding with his orders as he was with everything else in his life.
A sandwich shop got his order wrong one time, and Bill called Margaret into his office.
“Look,” he said. “I’m not mad at you, Margaret. But they put the wrong cheese on this thing.”
“Do you want me to get you a new one?” Margaret asked, sounding relieved that she wasn’t going to catch the blame for once.
“No,” Bill said. “I want you to take it back to them, tell them they screwed it up, and get the money back.”
“Okay,” she said.
“Are you actually going to say that? Because I definitely want you to say that to them. ‘You screwed it up. Bill O’Reilly wants his money back.’ Are you going to say that to them?”
“Yes, yes, I’ll say that,” Margaret insisted.
I don’t know if she did end up doing it or not. She’s one of the nicest, most soft-spoken people in the world, so it’s hard for me to picture her throwing a sandwich back in the Quiznos guy’s face. But on the other hand, she’s worked for O’Reilly for more than two decades, so who the hell knows what she’s capable of?

2:00 p.m.–4:00 p.m.
On Mondays and Thursdays, we had pitch meetings during this block of time. On Tuesdays, O’Reilly had his weekly powwow with the company VP, Bill Shine. And it seemed as if the other two days of the week there were always other things clawing for his attention. But every once in a while, he got this time to himself, and we’d find him lounging on the couch in his office, shoes off, his six-foot-four frame spilling over both sides, just reading the paper. It was kind of endearing, actually.

4:30 p.m.
Bill would get anxious around this time every day, like a kid on Christmas Eve — because it was ratings time! The number crunchers e-mailed out spreadsheets at the same time every afternoon, with data about the previous day’s shows. We’d get ratings for not only all the Fox News shows but also all the shows on CNN, MSNBC, and Headline News, broken down into fifteen-minute increments and separated into total viewers as well as the coveted age twenty-five to fifty-four demographic.
As much as I’d thought my colleagues on “The Lineup” were obsessed with the ratings data, O’Reilly made them look like absolute amateurs. First, if the number crunchers were even one minute late with the data, Bill would get agitated, calling Manskoff every few minutes to impatiently ask him if the e-mail with the spreadsheets had come in yet.
When he finally did get the sheets, about fifteen pages in all, with tiny print and column after column of numbers, he’d pore over the digits as if they held the secret to finding the Holy Grail. If the number for “The Factor” was good, he’d crow about it for the rest of the day. If the number was bad, he’d panic, making phone calls until he determined what had gone wrong: “Eugene, we dropped thirty-three thousand in the demo last night in the final quarter. Remind me what we had in the back of the show last night?”
Eugene would tell him the name of the guest, or the topic, and Bill would decide that the show would no longer be covering that topic, or would cease inviting that guest.
Most of my fellow producers took the boss’s cue and obsessed over the numbers as much as he did, but it always felt like chicanery to me. To make changes in programming, important decisions about what stories to cover and which guests to use, based on minute changes in a system as imprecise and imperfect as the Nielsen ratings seemed irresponsible, barely better than reading chicken entrails. But Bill had lived and died by those ratings for so long that he didn’t know another way. (And to be fair, his method seemed to be working, because he’s enjoyed more than a decade at number one. So maybe I’m the one who doesn’t know what he’s talking about.)

4:45 p.m.
Bill heads down to a private room in the basement to get his hair and makeup done. A device that Ailes had installed in every green room in the building methodically sucks the life force out of five adorable baby puppies and deposits it into Bill’s face, keeping him fresh and youthful-looking for one more day.

5:00 p.m.
Showtime!

6:00 p.m.
Show’s over. A quick wipedown with a hot towel in the green room to get rid of the makeup and puppy tears.

6:05 p.m.
Back to the O’Reilly pod for the show’s postmortem meeting, where we’d discuss what went right and wrong that night. These were short and uneventful normally, consisting of nothing more than Bill looking at the big bulletin board, sighing, and saying, “That was okay tonight. I think we might get away with that.”

6:10 p.m.
O’Reilly gets into the town car to head home, warming up his vocal cords in case Carl the driver takes yet another wrong turn.

from “An Atheist in the FOXhole” by Joe Muto. Copyright © 2013 by Joseph Muto.

Friday, May 17, 2013

Good news for Google Fiber: Broadcast TV audiences are cratering faster than ever.

[Lesson today: Netflix is the correct business model. And broacast networks? Broadcast networks with commercials, and competitive ratings based on time slots against other shows or lead ins or whatever, and crap flying all over the screen advertising stuff during the show.... well, broadcasting is not going to be the correct business model in time. This would mean, the quality of the show might just take precedence over idiotic competitive factors in the broadcast world. Let us hope.  - mike]

The early reviews of Google Fiber are in from Kansas City and one of the most attractive features of the service seems to be how it makes Netflix irresistible. The buffering annoyances that consumers take for granted vanish as Google Fiber feeds movies and shows instantly to eager Silicon Prairie dwellers. What’s more, the recently launched Google Fiber TV app offers video on demand for iPad. This direction is fascinating because of the hottest trend in US consumer behavior: broadcast television audience collapse.
TV show audiences have been falling for a long time, but recently the decline has turned into a plunge. According to Goldman Sachs, ratings in the 18-49 year demo dropped by a hideous 17% last winter, the steepest drop ever. “American Idol” is losing nearly 25% of its audience in a year. Most of the big new shows have been disasters and old staples like “Survivor” and “Dancing with Stars” are in free fall.
Everyone has long known that the broadcast dinosaurs are in trouble but it is only now becoming clear just how rapidly they are losing their grip on consumers in the United States. This coincides with rapid growth of time spent on mobile apps: American iPhone owners now waste two hours per day on apps and annualized growth of daily engagement still tops 30%. But it also opens up completely new vistas for Netflix, Amazon, Google and Apple when it comes to video distribution.
It now looks like American demand for video on demand is far bigger than was estimated just a year ago. The accelerating erosion of broadcast television frees up consumer time and hits ad revenue of CBS, Fox and their peers. This in turn will limit their ability to create big-budget shows that has been their last line of defense. That cycle is starting to turn just as challengers with serious money to burn are pushing into content creation.
Netflix had a hit with its $100 million “House of Cards” series that debuted during the quarter when Netflix beat Wall Street consensus handily. The buzz around “Arrested Development” is deafening and will likely raise the profile of Netflix original programming considerably. It is only a matter of time before deep-pocketed Google and/or Amazon take the plunge and start shoveling big bucks into television production. Amazon is already previewing a dozen pilots it has produced, trying to gauge which ones to take into full production.
Google Fiber and its ilk may be the final straw that will break the back of broadcast television. Once high-speed video downloading becomes widely available, instant access to VOD services will make them even more appealing. What Netflix showed with “House of Cards” is that it’s possible to take a B-list star, create a high concept show around him and reap tons of media coverage. Soon enough we will see Alicia Silverstone and Jeff Goldblum starring in an Amazon show discovering the rebirth of a Bal-Ammon cult in SARS-ravaged Fargo.
What makes this possible is the complete paralysis of the broadcast dinos. All the majors are frozen in terror, repeating old behavioral patterns that turned self-destructive years ago. NBC spent the annual defense budget of Mauritius to promote “Ready for Love,” a tired Bachelor clone. ABC is going to build its autumn slate on “Scandal”, “Revenge” and “Betrayal,” as well as a hasty spin-off of its fading “Once Upon a Time” franchise. ABC also handed Robin Williams a comeback vehicle. Sensing desperation, audiences are tuning out in disgust.
Google is well-positioned to turn Google Fiber into the core technology enabling instant VOD access; Netflix is pioneering the new production/distribution logic; Amazon is sneakily exploiting its Prime service to slip video consumption to its customer base. The big question mark here is Apple. Why isn’t Apple being more aggressive in attacking the dying broadcasting giants? Is it so wrapped up with its smartphone and tablet challenges that it does not have the time? Or is there some grand design being developed in secret that will stun the world in few months?