The Leap Motion

In 2002's movie Minority Report,  Tom Cruise played the part of Tom Cruise acting as a police officer. The movie was really quite good and worth getting on Netflix.  In the movie, we see Tom looking for evidence on some holographic computer screens, and all he used was his hands to move all that information around.

Cool huh?

Wouldn't it be great to be able to do that...move and control images in thin air?

That's what the Leap does.  It's a tiny little box that plugs into your USB and allows you to control the computer and special "Leap" activated files.

I received mine a couple of days ago and have been playing with it...so what does it do?

Firstly the little box creates a field around it that picks up your finger and hand movements within it.  This is what the Leap sees when you use it...

And here's the "field"...

It's really quite cool...so what does it do...

Firstly there's a very cool instructional video introducing you to the movements and utilizing space as a mouse.  There are games like Cut The Rope, The New York times has a very impressive app, and an amazing interactive DNA app that allows you to move the DNA strand as if you were holding it.

The New York Times is interesting. It takes but seconds to learn how to use the app, and then you are pulling stories up, scrolling down the story by just circling your finger, and closing stories by waving over the Leap.  Some of the games are a bit clunky and frustrating if our hand leaves the field and the games stops or in my case with "Fish Run" my fish dies.  But all in all, it's a lot of fun.

There is an app store and it's got quite a lot of stuff in it.  I counted 58 apps for the MAC, including a very cool frog dissection.

So why is this good and is it practical?  At the moment it's a novelty, it's fun and not really practical, it would take less time to access the NY Times from a browser...BUT, this sort of technology is important.  Game play will change because of it.  I think it has immense opportunities for educational content.  The Leap cost $65, shouldn't every school have something like this, it would revolutionize biology, physics, chemistry...and kids would love to learn using it.

Try and get a hold of a Leap, play with it, it's cool, it's very interesting and it makes you look like tom Cruise when you use it, (OK that last part was a lie).

The Pebble

Many years ago, when dinosaurs roamed the earth, television was in black and white, and politicians didn't Tweet nude photos of themselves I backed a Kickstarter campaign called Pebble. The Pebble is a watch that synchs with you smart phone's Bluetooth, and delivers emails, phone call ID, and text messages.  As we all know by now the campaign became Kickstarters most successful campaign to date.

I love Kickstarter.  I have invested and continue to do so in many of the enterprises posted there.  Not only is Kickstarter a superb platform for young companies to get their idea off the ground, but it encourages creative thinking and problem solving. Someone who might have sat on an idea, now has a launch pad to not only try and raise money on an idea, but see the public's appetite for that idea.

Pebble was the ultimate success story.  To date they have shipped over 93,000 Pebbles to 150 countries.  Understandably the scale of their success took the young company by surprise.  They instantly had production problems and logistic problems.  It took a year for my Pebble to ship to me, and after giving that first one to my nephew, I ordered a "pre-order" Pebble for me.  That still hasn't arrived.  What did happen though is that Pebble did a deal with Best Buy to distribute Pebbles.  This has pissed a lot of people on the waiting list off that they would release inventory to the public before fulfilling the remaining 182,000 units, me being one of them.  It clear to say that Eric Migocovsky
and his young management team are trying to keep their heads above water and are not necessarily making the smartest decisions. 

On a whim I ventured into Best Buy yesterday in Manhattan.  They had one Pebble left. It was the last one from  a shipment of 30 watches they had received the previous afternoon.  This is quite impressive, think about it.  a product launched exclusively online with no marketing what so ever sold out their inventory of 30 units within a day in one store, and apparently has been doing so in all stores ever since they started receiving units on July 8th.  The Pebble costs $150, so did Best Buy sell 30 pairs of $150 headphones within a day, or UP bands from Jawbone...I doubt it.  There is definitely an interest in wearable technology, it can't all be early adopter geeks like me.

So what's it like.  I'll break it down into different categories.

Construction:  It feels cheap.  It is plastic, lightweight and feels cheaper than a Swatch.  It is water resistant but not recommended to be worn in hot water, so don't take a bath or shower. It is rated for freshwater and saltwater so you can swim but don't dive with it.  The case is shiny plastic so waiting for the first scratches. The strap a cheap matt rubber.  The buttons on the side feel particularly cheap to the touch.  If Apple has designed this it would feel substantive and of high quality, you notice things like this when you wear it.

Design:  It's not a small watch, (it has to house a lot of stuff), so on my wrist...it looks OK, but if my wife were to wear one it would look like a Gigantor had lent her his watch.

It has a smart clean look, but again not s sophisticated as one if Apple or samsung had designed it.

Setting up:  The online instructions were complicated and clunky.  It IS easy to setup, but at the same time you find yourself jumping from screen to screen in their app trying to source information on why certain things didn't happen the way they ere meant to.

Synching with an iPhone:  I was able to synch texts immediately, caller ID doesn't work properly, the phone number comes up but no name, which is the main function. It took me into the night to have email synching and to be honest it just started working which makes no sense, but now it does synch with all my accounts and I must say this is the best part of the watch. The watch immediately synched with my iPod/Music on my iPhone and that's a cool feature.  Some of the third party apps do not work as advertised, but as they're freeware, nothing to shout about.

Watch faces: There are a great and ever increasing selection of cool watch faces that you can easily down load.  I have already downloaded seven.

Alerts: The watch alerts you to an incoming message or email by vibrating.  this is really useful as it makes no noise and I can now turn the ringer off on my phone, which pleases my wife immensely.  The alarm also works on vibration and it does wake you up.

Overall this is an exciting product development.  I liken it to when streaming video hit the internet.  Most people had a dial up connection or if they were posh a DSL, and streaming video was in a tiny little player at 4 frames a second.  It was exciting, didn't quite work as advertised, but the potential was huge.  People are going to want to wear and use wearable technology.  This is the tiny rough end of a huge iceberg, it is cool, but what's to come is larger and a lot cooler. One thing I have noticed since synching is an increase in battery drain and my iPhone is a lot hotter than it was, if it explodes I'll let you know.  The Pebble is cool, it will get better.  I predict by the end of the year Apple will at least announce their wearable iWatch, and Samsung also. They will look and feel better than the Pebble and that unfortunately will kill the Pebble business. But for the moment, they own this space, and I think what they have produced is a market changer.

Royal baby

Yes I am English...no I don't give a crap about the Royal baby. I hope the baby is healthy, ( as I would any baby), but when CNN, Fox and it seems every news outlet is turning into Royal Baby central...that's just sad.

At the moment in this world of ours, there's a suspected serial killer in Cleveland, a massive earthquake in China, Egypt is still in complete turmoil, the UK is banning online porn, our economic growth is stalled, millions of encrypted radios for the Marshals service have been stolen allowing terrorists to listen to confidential VIP movements, Detroit is bankrupt, children have been poisoned in India, China has detained an English background investigator, there is a need to stabilize the Chinese currency and their economy... but turn the TV on and what you will see is the Royal baby!

This story should be relegated to a funny spot on the boring shows...and that's it.

More important things happening in life.

End of rant.

Snowden traitor or hero?

We all know the story, Edward Snowden, leaked information he thought was in the best interest of the US public about the US's monitoring of information...is he a hero or a traitor.

Let's look at this another way....

You join a company that is developing a top secret software.  On joining the company you sign NDA's and a binding contract that you will not reveal any secret and sensitive material.  After a couple of months you discover that the software the company is developing is morally at odds with you.  If you reveal this publicly, you would be sued, have restraining orders placed against you and probably end up in court for a long time.  That isn't the material of a hero.

So why is Snowden considered by some a hero?

Is there a difference between the NDA's he signed and contract with the NSA he entered into?

Firstly, unless you believe that you're living in a real life Pleasantville, is it ANY surprise to you that your government is monitoring cell phones, emails or any mass electronic communication?  We're certainly not living in Russia, (and neither is Snowden by the looks of it), but it should be pretty obvious that your emails are being scanned/skimmed for telltale words and word chains that might be an indication of terrorism.  It doesn't mean that some poor government idiot is sitting there reading my emails or listening to my calls.  If I could prevent one incident of terrorism, I say go at it, read away, (you'll be bored to death, but read away).

Snowden betrayed the trust placed in him by the NSA, and therefore the American people.  He is now threatening to release more informations, "that could bring down the government".  Firstly, I doubt he had that level of clearance, but even if he did, to threaten this is purely treason. Every government in the world is doing things that we wouldn't be proud to be a part of, be aware of, or probably condone, but it doesn't mean it's not happening.

People were up in arms about water boarding terrorist suspects, it's inhuman and against human rights...well so is flying a plane into a building and killing 3,000 innocent people. If your son or daughter was killed in 9/11 I would imagine you would be lining up to water board anyone to find Osama Bin Laden or anyone to blame.  My point is, things like this happen, and 99% of these things we know nothing about, nor should we.  If you join a government security organization and agree to be bound by their secrecy rules, that's what you're signing up for.  Making public sensitive information and breaking your confidentiality agreement is not whistle blowing, it's treason.

Again, if this were a private company Snowden would be in court now looking a life changing damages.

So Snowden...hero whistleblower or traitor? I say traitor.

Netflix...again

UPDATE: So, I just bought an Apple TV to watch Netflix at home. I just paid $99 to enhance our viewing experience. I already had an old Apple TV with iTunes, but it didn't have the OTT Netflix option.  The world...my world is changing.


So how was your Fourth of July weekend?

My wife and I spent six hours watching House of Cards on Netflix.  Now, I know everyone known to the media god has expressed their opinions on how good House of Cards is, and for $3mm an episode it should be, but I have a different perspective.

Over a 48 hour period we watched six hours of one program.  If you deduct eight hours a night for sleep, (we like to get our full eight hours in), that means we dedicated 19% of our time to watching Netflix!!

As reported in an earlier blog, The Business of The Kids Business a new report from cable channel Pivot claims that 13% of "Millenials", (who are now in their mid 20's), have cut the cord from traditional program suppliers and gone web only. Now admittedly, my ancient 45 year old self doesn't fit into this demo, but look what this 45 year old did this weekend, we watched Netflix, not cable.

Why did this happen? Well, House of Cards really is THAT good!  Both my wife and I are completely hooked.  We used the OTT capabilities of Apple TV in the country and the experience was great, and when we got back to the city on Sunday night, our old Apple TV didn't have OTT capabilities, (I must get a new one), so we turned the TV off and watched on a laptop.  As much as I look like a bronzed young 25 year old, I'm actually  as stated before a crotchety 45 year old, what the hell am I doing watching high quality drama on a laptop???  It's really that good of a show!

I pay $8.00 a month for Netflix. In the two months since I signed up I have watched the new series of Arrested Development, (I don't care what the critics say I loved it), and now I am spending hours watching House of Cards. All of these shows are original Netflix productions, and the more I love them the more I a) spend time on Netflix and b) love Netflix as a brand.

If I didn't watch anything else this month on Netflix each episode cost me $1.33 which I don't think is all that bad, (my wife really screws me on the price of the popcorn and concessions but hey), but you know we're going to finish the series so, that's 13 hours at 61 cents an hour.  Throw in a couple of movies a month and we're down to 50 cents an hour. So, I suppose the question is, what would you pay for advertising free high quality entertainment?  So far I am more than happy to pay 50 cents an hour.

If you haven't seen House of Cards it really is a superbly written and acted political drama. Kevin Spacey is amazing, (as he usually is), and the supporting cast are truly great.  If you have ever lived in Washington DC, (I lived there for five years), you will know how realistic the cynical, corrupt, money exploiting plot lines and characters are. This drama is better than ANYTHING I am watching on TV at the moment.  Let's just think about that for a second...better than any other drama on TV.  As we know network TV is in a dire situation. the networks don't know whether to go gameshow, reality of drama. Ratings are down, and cable is starting to fracture in certain demos.  The only stupid thing is I don't own Netflix stock...yet.

One too many Cook's in the Kitchen (OK best I could do)

So Apples stock is tanking. My personal stock needs an aqualung. It seems that the WOW factor is leaving Apple, iPhones are no longer the saving grace, is Tim Cook going to be able to hang in?

It's clear that Tim Cook was Steve Job's personal recommendation for CEO, and there's no doubting Cooks ability to manage incredibly complicated supply chains and manufacturing, but is he the visionary CEO, pushing the company to the limit to innovate and provide products that we "might" need but "must" have?

Apple laptops are still far superior than anything else on the market. The OS system on Macs leave MIcrosoft faltering and trying to emulate, the design of the powerbooks and Mac Air is still breathtaking, the speed of the solid state laptops addictive. Apple always had the reputation for building amazing laptops and really accessible cool looking good desktops.  I think the new iMac is a beautiful thing, so is an iMac from ten years ago.  The company is faltering on it's iPhone.

Imagine being the company that completely changed the way we look at and use a telephone.  A sleek touch screen, that allowed you to keep your calendar, contacts, photos, music, weather, texts in one place, oh and you can make calls! It was revolutionary and everyone followed behind.  But now the edge has gone, the iPhone 5 a disappointment, and rumors are that iPhone 5S (please can we kill the stupid "S" thing), the same make up as the iPhone 5. Samsung have come out with a phone that is equal if not better than the iPhone 5, the Galaxy 4.  Friends of mine who have the Galaxy 4 love it and do not miss the iPhone 5.

Today Oppenheimer analyst Ittai Kidron downgraded Apple. The downgrade comes directly from falling iPhone sales. Apple has to do something and do it quickly to start building shareholder confidence. Growth of sales is bound to happen when everyone has a smart phone, it's being a victim of their own success, but now that HTC, Nokia, Samsung and Apple are all fighting it out, what will Apple do to squash the competition and WOW us all?

Getting back to Tim Cook.  Is he really the right guy to be steering the ship?  If not him then who?  Apple likes to promote from within, and apart from Jonny Ive, who certainly is mega talented but not CEO material, who else?  At the developer conference a couple of weeks ago, Craig Federighi certainly turned out to be the star on stage, but who knows what leadership chops he would have in the top position?  For now I think Tim Cook is safe simply because who else would you put in?  But people and the board might start looking soon at alternatives if nothing happens soon.

The business of the kids business...

A new report just came out from new cable channel Pivot, saying that 13% of 18-34 year olds who have broadband have cut the cord to pay TV providers, and rely on broadband content only.  The new “Millenial” generation is cutting the cord, PAY TV and cable as a whole is in trouble, and the area to really watch to see the future of this is kids.  If your kids are spending more time online than watching TV, then guess what they’re NOT going to do when they grow up and decide on the family entertainment budget…pay for cable.

There was a time many years ago when a producer could make millions of dollars producing kids programming. The kids networks were king, and even broadcast networks retained major Saturday morning audiences. The times though are a changing.

The formula used to be easy…produce a cartoon, sell it to a network, retain licensing rights, sell the IP rights to every licensing category known to god, repeat in as many countries as possible, and everyone gets rich. Just ask the master of this Hiam Saban, exactly how much money you can make off one IP.

Let’s look at the kids business today:

Kids TV Networks

Networks are losing audience to online, a recent 2013 Mintel report on Tweens and Teens shows Tweens aged 8-13 are spending more time online than watching TV, 53% say spending time on the computer is their favorite way of spending spare time.  The kids business is going the way the of the record industry, and needs to understand and adapt.  The networks seem to be completely adverse to the second screen mentality, and even less adept to make money this way. 

Nick

Yes Nickelodeon FINALLY has brought out an app, and if you can navigate though that app, has some content on it.  What it isn’t though, is Nickelodeon in a true streaming 2^nd screen format.   I am very close to Nick, having been part of the launch team for it’s first international channel in 1993, Nick UK, and have witnessed a steady decline in the ratings over a number of years. The most important sales demo in my opinion in the kids business is kids 6-11, and I have tracked this rating for Nick over the past five years and seen a steady year on year drop in ratings.  What has led to this?  There used to be a time when a Nick program was identifiable. There was only one network that would do Ren & Stimpy, there’s only one home for Spongebob Squarepants. Now it seems that Nick is playing catch up to Disney Channel and trying to emulate their success and programming.  It’s interesting to note that they haven’t had a Spongebob sized hit since Herb Scannel left the network six years ago. In my opinion Nick has lost it’s identity with its audience. 

Cartoon Network

Again, I am close to this brand having worked for Tuner setting up international Cartoon Network shows around the world many years ago.  Online, Cartoon Network has a strong offering, mainly thanks to Paul Condoloroa who is an excellent executive. I suspect given more of a runway Cartoon could really forge ahead in this area.  Out of all the networks Cartoon Network has been a more proactive online player.  Programming wise on the network though I just don’t know what Cartoon is anymore, and what its audience is?  It used to be young boys, and they ruled this demo, but now, I give up. Is their programming animated or live action, and how can Cartoon be a live action offering? 

Disney

The amazing machine that is the Disney machine. Disney Channel used to be the “baby” channel, no Tween with any self respect would go near them, and then through executives like Adam Bonnett, they developed amazing Tween sit-coms, and now they own that market.  Disney is now cool, and their shows create stars.  The “machine” integrates an amazing cross platform promotion, from Radio Disney, to retail, you don’t launch a show on Disney, you launch a property.  That being said, for the independent producer it’s very still very hard to get a show on Disney.  They tend to develop their own within a community of approved producers, it’s hard to break in.  Digitally, the “Mouse House”, has had trouble getting traction.  From the failed Go.com to various online kids platforms, they seem to miss the mark.  Recently though there have been some light at the end of this tunnel, but I do not feel Disney are doing half of what they could online.

Network programming

By law, free to air networks have to provide three hours of educational and informative information a week.  This used to be served through their own Saturday morning blocks, and also used to be a cash cow.  As long as a show contained a supportive educational element, (Zack has a moral dilemma in Saved By the Bell, how will he deal with it?), it was counted as E/I content.  Now the ratings have fallen off, and networks farm out their three hour blocks to producers who try to sell advertising and licensing against the pitiful dwindling ratings. This just isn’t a business anymore.

Money

The economics of making content suck.  To be a producer involves an enormous amount of masochism.  If you make a show for say $300,000 an episode, and if an average large network pays you $60,000 an episode, you have to sell five major territories to break even on your budget.  But reality is, most networks will not pay you $60,000, it’s more like $20-30,000, so you could be looking at ten major broadcasters.  That’s a hard sell.  If you do manage to sell to your broadcasters and break even against your budget, you have probably had to give up licensing rights, have no control over how many times they play the show, where they play the show, IF they play the show.  Home entertainment dollars are in the toilet, (still a market in pre-school but thanks to the iPad that’s declining).  Licensing if you have been able to retain it, have killed advances, (OK if you’re Spiderman that’s a different deal), and will not guarantee the levels of advertising against their product that they used to.  Shelf space at big box retailers like Walmart have declined whilst their expectation per foot of shelving has increased. 

Network economics.  If you’re audience is in decline, the advertiser will do two things.  First they will drop the effective CPM base against your inventory, second they will start to move advertising dollars over to where the audience is going; in the kids case, online.  Networks like Nickelodeon have desperately tried to maintain their bottom line by doing major licensing deals to online services like Netflix and Amazon.  Recently Netflix dropped their Viacom deal, showing the strength of their platform and the lack of strength they place against the Viacom programming.  Viacom has immediately shopped their deal to Amazon.  So let’s think about the logic, or as I ascertain, lack of logic for doing this. You network is in major rating decline and has been for a couple of years, you know the audience is going online, but instead of building your own online presence and capturing the audience under your own flag, you sell out to get dollars in quickly and help build someone else’s platform. They then turn around and leave you standing as a wallflower at the dance,  and move on, “thank you but I don’t need you anymore”, and in order to not show a huge hole in your bottom line you HAVE to do another deal.  What happens when Viacom programming has built up Amazon’s audience?  Do they drop Viacom as a dance partner and move on?

Online Economics

First of all, if you own a library of shows, is it worth doing a network deal hoping it will get a platform? A network deal would pay a small licensing fee for library content and tie your shows up for three years.  So let’s for example say you get $10,000 per episode, over three years that’s  $3,340 dollars a year.  Online, against a $20 pre roll CPM, that equates to 170,000 views.  On  a dedicated online platform with millions of Tweens and the right promotion, could you get say, 300,000 streams per month per episode?  If so you are looking at generating $6,000 in revenues per episode per month, or $72,000 a year, or $216,000 over the three year license period a network would take.  A 30% revenue share against that would be $64,800 per episode.  That is $54,800 better than the network deal, and you keep your rights.  Now of course this all depends on how many streams you get against your show, BUT, it seems like a better deal to me!  This is why I am going online for my next business.

If you make content for the web, you approach the production from a completely different perspective.  Long gone are the $300,000 per episode budgets.  Imagine your starting place being $30,000 per episode.  Return against that would be 1.5mm streams and then you’re in profit.  You own the content to license against in other territories and platforms, all of which is profit.  I successfully did this at KOL.  We made a number of cartoons, Princess Natasha being the most successful. We cleared a profit online, we sold the show to Cartoon Network, did a home DVD deal, and then licensed the IP to 22 separate licensees.  Profit, profit, profit.  This is why I am going online for my next business.

So where does this leave us?

The business is changing.  The dominance of networks has gone, kids cable channels are losing audience share year on year, kids spend more time on iPads and computers than they do sitting in front of TV’s and this will only increase.  Advertisers are growing their online commitment, according to Adweek, last year the Tween space accounted for $17 billion in US ad spend, a greater percentage of that money is going online every month, forget every year!

Networks are never going to get back into the kids world.  Cable channels have to adapt and rebuild their own programming brand, and totally re-think their online offering, or they will loose. But if you were me, and you were starting up a new business, aimed at Tweens, what platform would you go to?