Mike, you used to be so insightful. You talked about economics and strategy, and marginal costs and the implications of non-scarce goods.
Now, it's all anti-this and anti-that, and tinfoil-hat-this and conspiracy-that.
And now, you've got Apple buying a locker/streaming service, spending billions to build out data centers, and shutting down the retail operations of the streaming service... and the best you can come up with is that a multi-billion dollar company bought an unprofitable startup solely to shut them down?
Ouch. Apple might have bought Lala for talent, and perhaps for technology or patents, and *maybe* as a precursor to a streaming version of iTunes. This "bought them to shut them down" is about as intelligent and insightful as the old "GM has secret engines that get 1000mpg, but they don't release them so they can profit from the oil cartels!" crap.
Maybe Techdirt's heyday was a fluke, or maybe I was too busy and tired to notice this level of nonsensical thinking. Dunno. I'll miss the increasingly-rare economic analysis, but the world really only needs one Consumerist.com. Best of luck to you.
Well, I was enumerating his *arguments* defending that policy.
You'll note that I did say:
He wants to maintain product differentiation for the iPhone by taking the "we'll ship a less perfect iPhone experience using Flash cross-compiling to we can ship the same thing on other platforms" option off the table for developers.
I am kind of anti-Flash, because it is buggy, crashes my browsers, and causes my browsers to sit at 100% CPU utilization all the time. But, you can throw my experience out, because I'm anti-Flash, eh?
I guess, if you only count results from people who have not had problems with Flash, it is true that they are not seeing those issues.
Actually, the Flash cross-compilation issue is more akin to Microsoft saying that you can't use the Unreal engine to develop for Xbox 360 because it can also be used for PS3, and doesn't produce "native enough" code.
Apple is saying that they will reject native, Objective-C applications which were generated by Adobe's cross-compiler (and presumably GarageGames' and Unity3D's as well).
Anti-trust law changes the rules when you are arguably a monopoly. As a four person software shop, I can lock my customers into buying only my add-on software. That would be flagrantly illegal for Microsoft.
For instance, the issue with bundling explorer was that governments (correctly) worried that Microsoft would embrace/extend/control HTML and the internet by leveraging their desktop market share.
We may well see similar efforts start to focus on Apple as they leverage their dominant smartphone position to lock out competition. Ironically, Android's increasing success is Apple's best defense, just like Apple's acquisition of Quattro and upcoming iAds platform is Google's best defense against accusations of anticompetitive behavior in the ad market. Funny, eh?
I mostly agree, but it's a shame that Jobs didn't do a better job of highlighting the distinction between native apps and web sites, or that Techdirt wasn't smarter about seeing the distinction.
Jobs' actual points:
1) Adobe wants people to build [b]web sites[/b] using their proprietary tools. Apple supports open standards for [b]web sites[/b]
2) Apple wants native applications to be tightly integrated with the OS/device, and abstraction layers like flash reduce customer value
3) Adobe has a long history of overpromising and underdelivering, and of serious quality/performance issues
All of the points are accurate, technically speaking. However, Jobs' real point, of course, is that he wants to maintain product differentiation for the iPhone by taking the "we'll ship a less perfect iPhone experience using Flash cross-compiling to we can ship the same thing on other platforms" option off the table for developers.
So, yeah, his motives aren't at all about openness or anything like that. But he didn't say they were, when it comes to applications. It's a little unfair to accuse him of hypocrisy, but totally fair to accuse him of wandering into anti-competitive practices.
As we predicted, it sure looks like the DVD release while the movie was still in the theaters actually may have driven more people to the theater, rather than taken them away from the theater.
Maybe I'm misreading it, but that sure sounds like a suggestion that the DVD release and theater sales are somehow linked.
Like I said, this neither supports nor refutes theaters' claims. The DVD release could, in fact, have hurt sales. Without a control, there's no telling. There are too many variables to use past performance as a proxy for a control.
Also, it was sunnier here in Seattle two weeks ago, and cloudier this past week. Hey, it looks like the weather in Seattle may have driven people to theaters all over the country!
I support the point that the DVD release does not appear to have had a catastrophic result on ticket sales. But there are so many variables here it's impossible to say much more than that. Maybe sales were up for totally different reasons -- strength of competition, promotions, weather, tax day, whatever -- and the DVD release depressed sales (some) from where they would have been.
Or maybe sales would have collapsed and only the DVD release propped them up. There is no telling.
For a site that constantly attacks poor reasoning, over-simplification, and idealogically-driven conclusions from the entertainment industry... this sure smacks of poor reasoning, over-simplification, and idealogically-driven conclusions.
If you're not going to let other people posit that correlation = causation, you should really stop doing it yourselves.
Ok, so I'm not wild about the idea. The value-add of watching someone get their makeup fixed seems very low, and like more of a novelty that might get people to watch an ad or two, not change behavior.
But this post veers dangerously close to the negative stereotypes of Techdirt and associated sites: that there's a deep seated hatred for traditional media companies that goes beyond business.
Shouldn't we be lauding CNN for experimentation, even if we also say that this particular idea seems unlikely to succeed? There's way too much "oh, those idiots are at it again, look at the incredibly stupid thing they did this time" tone around here. Which is often fair, as many companies act against their self interest. But it doesn't need to be applied in every single case, does it?
Kudos to CNN for trying something different. Maybe there are other interesting experiments to be done.
Can you point me to some of these questionable stats from "pro-piracy" people? If they are as egregiously false, and from places you will argue have as much clout as the MPAA, I will wholeheartedly agree with you.
Have you *used* Android? The only parts of it that make any sense at all are the parts lifted directly from iPhone. Almost without exception, the things it does differently are terrible.
I'm working on an Android version of an iPhone app, and the Android version requires 12x as many graphic assets as iPhone because of the permutations of ldpi, mdpi, hdpi, and screen sizes. And still, there are devices it won't look quite right on. It is a nightmare.
I'm with you, but until someone comes up with a decent competitor to Apple's products (and by decent I mean easy to use, aesthetically pleasing, and appropriate for non-geeks), Apple has all the leverage.
It's pretty ridiculous that a company as small as IBM sometimes comes off as uncoordinated, and like the left hand doesn't know what the right's doing.
You'd think every one of their employees -- there're only four hundred thousand or so of 'em, after all -- would know the company's stance on patents and open source. It's not like tiny companies like that have trouble disseminating organizational knowledge.
I agree, the iPad is just like CD-ROMS. Given the failure of the central CD-ROM store, where users could instantly download now CD-ROM's that they knew were designed for their particular hardware, and without re-entering credit card data... how can the iPad store expect to succeed?
Oh, wait. Hang on. It's almost like Apple's business model is a *marketplace*, while CD-ROM's were plastic discs. Damn, if only Techdirt had posted articles about the business problems one gets into when one thinks one's business is about phyiscal media rather than the actual content.
Oh, wait. Techdirt *did* post that kind of content. Hey, Mike, you should read this cool site, Techdirt. They talk about this reason-to-buy concept that's really pretty cool.
Like, if you have hardware of known specs and a central store that vets content (more or less) for quality, and which handles payments so you don't have to re-enter payment data or trust the app provider with your credit card.
This same site, "Techdirt," I think, talks about providing value to customers. Stuff like pleasing aesthetic design, simple operation, and it-just-works integration of hardware and software. As opposed to old CD-ROM's, which were a physical media and not a software/hardware ecosystem.
Hey, wait, it's almost like iPad apps have nothing to do with CD-ROM's. Huh.
(I personally don't like Apple's walled-garden model... but comparing it to CD-ROM's is pretty disingenuous)
1) Agreed, and that's why I called it out. However, on my iphone, a tab switch is a click to get the list of tabs, a drag to find my tab, and a tap to get that tab loaded. Switching to a native app is a click to get to the homescreen, a drag to find the page the app is on, and a tap of the icon. Not *that* different.
2) The point about standardization is that the open system encourages publishers to target lowest-common-denominator requirements because they don't know what device people will use. Yes, an iPad-specific website that simply refused to work (or worked poorly) on netbooks, phones, etc, would have similar advantages as an iPad app. But significantly stronger downsides (harder to monetize, customer service issues)
3) Um, Apple sells apps. I have an app in the App Store, in fact. I would never have built it as an ad supported website or a website that required external payments. Living in the app store means exposure to users, sales are easier because users trust Apple with their CC info more than they would trust me, and it's a two-click purchase. It's true that $1M is on the high end for apps or websites. Same argument holds for smaller companies just spending $50k.
4) So why would they bother at all, then? You're saying that publishers are just going to put stuff online for free because there's no point in charging for an app that attempts to add value because people will just get the content online for free? Or am I missing something?
I love discussions like this because the outcomes are easily measurable. I'm still not convinced on iPad, by the way, but I think odds are it will be successful, in the sense that it will be moderately to highly profitable for both Apple and app developers.
There are both examples and counter-examples for your point. Sure, HTML beat Prodigy and Blackbird. But TiVo did pretty well with a closed system. XML killed EDI, but no open challenger to eBay has had any luck.
Apple's the 3rd or 4th largest company in the U.S. It's not a foregone conclusion, but it's not impossible that they could affect what everyone agrees on.
And remember, they resisted native apps pretty strongly. Native iPhone apps only appeared because everyone agreed it should work that way.
A digital-only company that did away with much of the business overhead -- offices, full time readers, etc -- would definitely have a different cost profile. But that's really a different question.
Key points: for hardcover, actual publishing cost is $2.83, or about 10%. Doing away with the wholesaler gets you another 10%. Retailer costs go down, but probably don't go away. We're talking about a $28 hardcover that is *maybe* a $15 digital book. Probably more.
I think we may be in for a surprise, and I think native, per-publication apps may very well see substantial success. Here's why:
- Users don't care about the difference between a native app and a browser. If switching between apps gets better, it's just not going to matter.
- Native apps are designed with very well known device parameters. A web app has to scale between different devices, expect different input devices, different CPU and GPU capabilities, and so on. Native apps allow for standardization and higher (perceived) quality.
- Publishers are more likely to invest in easily monetizable products. Spending $1M on a native app can be justified by looking at price points, expected retention, and so on. They might be *wrong* but at least "how are we going to make money from this" is easily understood, at least compared to trying to justify spending $1M on a new web site.
- iPhone/iPad/iPod offer a very low transaction cost to the user. Your credit card is already on file; it's two clicks to pay and you get immediate gratification. Publishers don't have that option on the web
I think some of the arguments against iPad's success are based on wishful thinking -- content *should* be open, users *should* reject vendor lock-in, open standards *should* produce just as robust an experience, etc. But I'm increasingly convinced that actual reality may make iPad an attractive solution for consumers.
Sure, if by "honest" you mean assigning all of the fixed costs -- offices, staff, marketing, legal, etc -- to the physical good, and only look at the variable costs of the digital good. You will definitely get the result you're looking for that way.
I would be very surprised if the variable costs for a moderately selling paperback exceed $1. The digital equivalent, of course, is close to $0. But a fair assignment of overhead to each almost certainly brings their total net cost into a very similar range.
What's even more interesting is the reason for looking -- if there's more than one yellow rain hat available, the defendant is less likely to be guilty?
That seems the exact opposite of common sense. If there were, in fact, only one type of yellow rain hat, isn't it *more* likely to be a case of mistaken identity? The more unique the hats are, the more a similarity is damning. I would think.
Just wow.
Mike, you used to be so insightful. You talked about economics and strategy, and marginal costs and the implications of non-scarce goods.
Now, it's all anti-this and anti-that, and tinfoil-hat-this and conspiracy-that.
And now, you've got Apple buying a locker/streaming service, spending billions to build out data centers, and shutting down the retail operations of the streaming service... and the best you can come up with is that a multi-billion dollar company bought an unprofitable startup solely to shut them down?
Ouch. Apple might have bought Lala for talent, and perhaps for technology or patents, and *maybe* as a precursor to a streaming version of iTunes. This "bought them to shut them down" is about as intelligent and insightful as the old "GM has secret engines that get 1000mpg, but they don't release them so they can profit from the oil cartels!" crap.
Maybe Techdirt's heyday was a fluke, or maybe I was too busy and tired to notice this level of nonsensical thinking. Dunno. I'll miss the increasingly-rare economic analysis, but the world really only needs one Consumerist.com. Best of luck to you.
Re: Re: Partly
Re: Re: Partly
I am kind of anti-Flash, because it is buggy, crashes my browsers, and causes my browsers to sit at 100% CPU utilization all the time. But, you can throw my experience out, because I'm anti-Flash, eh?
I guess, if you only count results from people who have not had problems with Flash, it is true that they are not seeing those issues.
Re: No different than other "platforms"
Apple is saying that they will reject native, Objective-C applications which were generated by Adobe's cross-compiler (and presumably GarageGames' and Unity3D's as well).
Re:
For instance, the issue with bundling explorer was that governments (correctly) worried that Microsoft would embrace/extend/control HTML and the internet by leveraging their desktop market share.
We may well see similar efforts start to focus on Apple as they leverage their dominant smartphone position to lock out competition. Ironically, Android's increasing success is Apple's best defense, just like Apple's acquisition of Quattro and upcoming iAds platform is Google's best defense against accusations of anticompetitive behavior in the ad market. Funny, eh?
Re: Partly
Partly
Jobs' actual points:
1) Adobe wants people to build [b]web sites[/b] using their proprietary tools. Apple supports open standards for [b]web sites[/b]
2) Apple wants native applications to be tightly integrated with the OS/device, and abstraction layers like flash reduce customer value
3) Adobe has a long history of overpromising and underdelivering, and of serious quality/performance issues
All of the points are accurate, technically speaking. However, Jobs' real point, of course, is that he wants to maintain product differentiation for the iPhone by taking the "we'll ship a less perfect iPhone experience using Flash cross-compiling to we can ship the same thing on other platforms" option off the table for developers.
So, yeah, his motives aren't at all about openness or anything like that. But he didn't say they were, when it comes to applications. It's a little unfair to accuse him of hypocrisy, but totally fair to accuse him of wandering into anti-competitive practices.
Re: Re: Oh, Techdirt. Correlation / causation, really?
Maybe I'm misreading it, but that sure sounds like a suggestion that the DVD release and theater sales are somehow linked.
Like I said, this neither supports nor refutes theaters' claims. The DVD release could, in fact, have hurt sales. Without a control, there's no telling. There are too many variables to use past performance as a proxy for a control.
Oh, Techdirt. Correlation / causation, really?
I support the point that the DVD release does not appear to have had a catastrophic result on ticket sales. But there are so many variables here it's impossible to say much more than that. Maybe sales were up for totally different reasons -- strength of competition, promotions, weather, tax day, whatever -- and the DVD release depressed sales (some) from where they would have been.
Or maybe sales would have collapsed and only the DVD release propped them up. There is no telling.
For a site that constantly attacks poor reasoning, over-simplification, and idealogically-driven conclusions from the entertainment industry... this sure smacks of poor reasoning, over-simplification, and idealogically-driven conclusions.
If you're not going to let other people posit that correlation = causation, you should really stop doing it yourselves.
Ugh.
But this post veers dangerously close to the negative stereotypes of Techdirt and associated sites: that there's a deep seated hatred for traditional media companies that goes beyond business.
Shouldn't we be lauding CNN for experimentation, even if we also say that this particular idea seems unlikely to succeed? There's way too much "oh, those idiots are at it again, look at the incredibly stupid thing they did this time" tone around here. Which is often fair, as many companies act against their self interest. But it doesn't need to be applied in every single case, does it?
Kudos to CNN for trying something different. Maybe there are other interesting experiments to be done.
Re:
Re: Apple's Sucker Punch
I'm working on an Android version of an iPhone app, and the Android version requires 12x as many graphic assets as iPhone because of the permutations of ldpi, mdpi, hdpi, and screen sizes. And still, there are devices it won't look quite right on. It is a nightmare.
I'm with you, but until someone comes up with a decent competitor to Apple's products (and by decent I mean easy to use, aesthetically pleasing, and appropriate for non-geeks), Apple has all the leverage.
I tell ya
You'd think every one of their employees -- there're only four hundred thousand or so of 'em, after all -- would know the company's stance on patents and open source. It's not like tiny companies like that have trouble disseminating organizational knowledge.
Shame on them!
Indeed
Oh, wait. Hang on. It's almost like Apple's business model is a *marketplace*, while CD-ROM's were plastic discs. Damn, if only Techdirt had posted articles about the business problems one gets into when one thinks one's business is about phyiscal media rather than the actual content.
Oh, wait. Techdirt *did* post that kind of content. Hey, Mike, you should read this cool site, Techdirt. They talk about this reason-to-buy concept that's really pretty cool.
Like, if you have hardware of known specs and a central store that vets content (more or less) for quality, and which handles payments so you don't have to re-enter payment data or trust the app provider with your credit card.
This same site, "Techdirt," I think, talks about providing value to customers. Stuff like pleasing aesthetic design, simple operation, and it-just-works integration of hardware and software. As opposed to old CD-ROM's, which were a physical media and not a software/hardware ecosystem.
Hey, wait, it's almost like iPad apps have nothing to do with CD-ROM's. Huh.
(I personally don't like Apple's walled-garden model... but comparing it to CD-ROM's is pretty disingenuous)
Re: Re: I'm going to disagree
2) The point about standardization is that the open system encourages publishers to target lowest-common-denominator requirements because they don't know what device people will use. Yes, an iPad-specific website that simply refused to work (or worked poorly) on netbooks, phones, etc, would have similar advantages as an iPad app. But significantly stronger downsides (harder to monetize, customer service issues)
3) Um, Apple sells apps. I have an app in the App Store, in fact. I would never have built it as an ad supported website or a website that required external payments. Living in the app store means exposure to users, sales are easier because users trust Apple with their CC info more than they would trust me, and it's a two-click purchase. It's true that $1M is on the high end for apps or websites. Same argument holds for smaller companies just spending $50k.
4) So why would they bother at all, then? You're saying that publishers are just going to put stuff online for free because there's no point in charging for an app that attempts to add value because people will just get the content online for free? Or am I missing something?
I love discussions like this because the outcomes are easily measurable. I'm still not convinced on iPad, by the way, but I think odds are it will be successful, in the sense that it will be moderately to highly profitable for both Apple and app developers.
Re: Re: I'm going to disagree
Apple's the 3rd or 4th largest company in the U.S. It's not a foregone conclusion, but it's not impossible that they could affect what everyone agrees on.
And remember, they resisted native apps pretty strongly. Native iPhone apps only appeared because everyone agreed it should work that way.
Re: Re: Re: Re: Re:
Here's a pretty good discussion, with links to even more discussion: http://ireaderreview.com/2009/05/03/book-cost-analysis-cost-of-physical-book-publishing/
Key points: for hardcover, actual publishing cost is $2.83, or about 10%. Doing away with the wholesaler gets you another 10%. Retailer costs go down, but probably don't go away. We're talking about a $28 hardcover that is *maybe* a $15 digital book. Probably more.
I'm going to disagree
- Users don't care about the difference between a native app and a browser. If switching between apps gets better, it's just not going to matter.
- Native apps are designed with very well known device parameters. A web app has to scale between different devices, expect different input devices, different CPU and GPU capabilities, and so on. Native apps allow for standardization and higher (perceived) quality.
- Publishers are more likely to invest in easily monetizable products. Spending $1M on a native app can be justified by looking at price points, expected retention, and so on. They might be *wrong* but at least "how are we going to make money from this" is easily understood, at least compared to trying to justify spending $1M on a new web site.
- iPhone/iPad/iPod offer a very low transaction cost to the user. Your credit card is already on file; it's two clicks to pay and you get immediate gratification. Publishers don't have that option on the web
I think some of the arguments against iPad's success are based on wishful thinking -- content *should* be open, users *should* reject vendor lock-in, open standards *should* produce just as robust an experience, etc. But I'm increasingly convinced that actual reality may make iPad an attractive solution for consumers.
Re: Re: Re:
I would be very surprised if the variable costs for a moderately selling paperback exceed $1. The digital equivalent, of course, is close to $0. But a fair assignment of overhead to each almost certainly brings their total net cost into a very similar range.
Re: He had to look?
That seems the exact opposite of common sense. If there were, in fact, only one type of yellow rain hat, isn't it *more* likely to be a case of mistaken identity? The more unique the hats are, the more a similarity is damning. I would think.
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