The CEO of Philips Electronics North America seems to be having a midlife crisis. Or at least, his company is. Asks Paul Zeven: "Have we gone too far? Are we in step with the needs of today's American consumer?" Philips research suggests that manufacturers have gone astray. "My company has studied the relationship between technology's complexity and consumers' attitudes and found that two out of three Americans have lost interest in a technology product because it seemed too complex to set up or operate. We also found that only 13 percent of Americans believe technology products in general are easy to use. The study concluded that only one in four consumers reports using the full range of features on most new technology products. If these findings aren't enough of a wake-up call, the study also found that more than half of Americans believe manufacturers are trying to satisfy perceived consumer needs that may not be real." It's telling that Zeven looks not to the hardware sector for a new role model, but to the likes of Google and Craigslist. The solution, he says, is "design, manageability and functionality."
Delta Airlines is struggling for survival, negotiating in federal bankruptcy court, and fending off a hostile takeover by US Airways. But whether you go first-class or coach, flying Delta is about to get more entertaining. These bullet points are a verbatim quote from an email Delta frequent flyers received a few weeks ago:
By a 3-2 vote, the Federal Communications Commission's Republican majority voted yesterday to supplant local regulation of television delivery services with their own rules. The move is expected to speed the entry of Verizon, AT&T, and other telcos into the turf of cable and satellite providers. Congress had been about to enact legislation with new video franchising rules until the regime change of the November elections. Now Democrats like Reps. Ed Markey (D-MA, new chair of the House Subcommittee on Telecommunications and the Internet) and John Dingell (D-MI, new chair of the House Energy and Commerce Committee) are pledging to take a close look at the FCC action in 2007. Along with the U.S. Conference of Mayors, other local-government associations, and various media watchdogs, they question whether the FCC had the statutory authority to change the rules. FCC chair Kevin Martin says telco TV will increase competition and lower rates for consumers, pointing to his agency's 2005 study on cable rates, which showed they had increased 93 percent over the previous decade. Not so, says Harold Feld of the Media Access Project: "The other guy just gradually raises his price...rather than having the higher price come down to the competitor's level." Overshadowing the cost issue is the equal-access issue: Can the telcos be counted on to "build out" to every home in a community under the new rules, as the old framework of local franchising and regulation had required them to do? The telcos have their own good cop, bad cop routine going on this subject. There's your hot topic for the New Year.
If you're looking to buy an LCD HDTV for an unprecedently low price, 'tis the season to be ecstatic. The 2006 holiday shopping season is the best in history for TV buyers in general--and, thanks to slipping profit margins, one of the worst for retailers. As I'm writing this, Amazon is selling 32-inch models by major names below the psychologically significant $1000 mark. A Panasonic goes for $979 and a Samsung for $939. I won't link to them because these things change from moment to moment, but you get the idea. So why is the Justice Department--and its brethren in Japan and South Korea--investigating LCD manufacturers for price fixing? The problem is not with TVs or other finished products but rather with LCD components. Their makers are accused of cutting output to keep prices high. And eventually that will affect pricing of TVs, laptops, and other LCD-driven products, even if it doesn't seem to be doing so now. Companies under investigation include Samsung, Sharp, NEC, AU Optronics, LG Phillips, and Chi Mei Optoelectronics; Matsushita and Sony have not gotten the fishy eye.
If you want to predict the future of the music industry, don't just talk like a pirate. Think like a billionaire. According to Mark Cuban, owner of HDNet and the Dallas Mavericks, the music download business may be in for a major consolidation. Forget about iTunes and the Zune Marketplace, he says. Instead look at what Google has just done in the video file sharing realm: Pay $1.65 billion for YouTube and offer the television networks an estimated $100 million for the right to use portions (as opposed to all) of their programming. Cuban likens it to the moment when Microsoft took over the desktop by selling Office as a $99 upgrade back when word processors, spreadsheets, etc. sold for $500 each. Then he crunches the numbers: If Apple sells a billion tracks a year for 99 cents each, and pays 70 cents per song to the music labels, the music industry gets $700 million, and the biggest labels get $575 million of it. But what if deep-pocketed Google offered that same $575 million to the major labels for the right to use just some of their content free--not their whole catalogues, just hot songs and clips? After all, music executives are already openly rebelling against Apple's rigid pricing. Cuban finishes with an intoxicating rush of speculative questions: "Would it be worth it to Google to pay $575 million and up per year to completely turn Apple upside down? To completely pre-empt their ability to sell iPods? To potentially introduce a new hardware device, or partner with someone who has one? To sell advertising around the music rather than the music itself? Is there a traditional Google arb here of 70 cents per song vs. 70 cents of advertising around the song? Could it sell that much advertising online to justify giving the music away?... Could [Microsoft] position the Zune as the de facto winner by spending $575 million per year with the music labels and giving the first billion songs away to Zune owners?"
A music store dating from the age of the wax cylinder is threatened with closure in Cardiff, the capitol of Wales. Spillers was founded in 1894 and has survived the 78, the LP, the 45, and the CD (and still sells all but one of those formats). In fact, even in the new era of downloads, the beloved shop has been holding its own. What's threatening to engulf it is not technological, but economic, change. Efforts to attract investment to the city have succeeded a little too well, with two giant shopping developments opening up near Spillers. If the landlord follows through on his threat to raise the rent, owner Nick Todd--who left his secure bank job 31 years ago for a job at the shop--will have to close. Petitions are flying around. One has attracted signatures from half of the Welsh National Assembly (would that our own Congress were so hip) and another has garnered 2000 other signers. Says Todd: "If it all goes belly-up we've had a great time. I'd still rather own Spillers than Virgin." (Click here and scroll halfway down for Wes Phillips' tribute to Tower Records. I had no idea that the hundreds of $2 classical LPs I'd bought at the Tower Annex were stocked by "Analog George" Stanwick.)
Can mediocre audio gear hinder your relationship with music? The guys in 3 Doors Down say yes. Not that they aren't doing well--their CDs sell in the multi-platinum range. But they agree with the audiophile community that lack of exposure to good audio equipment hurts listeners and musicians alike. Three members of 3 Doors Down were kind enough to take questions from Home Theater, including lead singer Brad Arnold, guitarist Matt Roberts, and guitarist Chris Henderson.
Does your loved one own a Creative Labs Zen music player and look longingly at shop windows full of "Made for iPod" docking systems? Well, just in time for the holiday season, Cambridge SoundWorks comes to the rescue with the PlayDock Zen. It recharges the player and runs on AC or, gulp, eight C batteries (note to CSW: think rechargable next time). It's also got a line-input to accommodate any other kind of music player, 480 by 640 video output, telescoping antenna for radio-equipped players, and--miraculous!--a handle. If you're looking for an alternative, Creative Labs offers its own TravelDock Zen Micro and many other Zen accessories. Think differently! Oh, and the PlayDock will also support iPods starting in January with the PlayDock i. In either case, the price is $199.