May « 2008 « ChrisCarterConsulting Blog

27May/080

Another Box Bites the Dust

Posted by Chris

Did anyone else see this coming?

I just read that Akimbo, the manufacturer of the Akimbo set top box, and video service provider to said box, has laid off all but a handfull of staff in the hopes of selling their platform and/or technology to recoup a portion of the estimated $47M (I've also read the total is $56M) investors have given to this enterprise. Has an independent service that requires a consumer to purchase a box to download and view videos been successful? Does anyone remember Moviebeam, another venture that closed $50M+ in money only for the assets to be sold for approximately $10M and the service shuttered, and now those same assets are back on the block for less than $5M? I offer the following for the next entrepreneur who thinks they can build a new box that consumers will purchase to dowload and view video content:

1. Consumers do not want another box to connect to the myriad of boxes they already have in their entertainment centers;

2. Consumers will not be interested in a service that has limited offerings and no recent titles. Ask Apple about their foray into this space with a limited suite of content;

3. If you think you need a set top box to demonstrate a slick new User Inteface that will transform how consumers interact with cable content and other digital media, think again. Your solution is a software platform that will end up in a Cable STB, if you can convince the cable operators to use your platform, and that will take several years of discussion and testing. Longer with CE companies. I offer Moxi's Digeo platform, Ucentric (now owned by Motorola) and even Hillcrest Lab's "Loop" as evidence.

I am still waiting for the day when the HDTV has the components inside that permit navigation of web sites to view, select, download and play any video content from any web site. If Apple can condense the components to operate an iMac into the back of a monitor, surely the CE companies can do the same with an HDTV set. I understand some models were displayed at the CE Show in January. On the content side, all of the broadcast networks offer their programming for FREE on several web sites, so the content is available. Just waiting for the CE companies to catch up, as usual. It still astounds me that it took Sony so long to link video content to its Playstation device.

Filed under: Consumer Devices, Digital Media No Comments

23May/080

Clearwire – is it really that Clear?

Posted by Chris

I have enjoyed reading the articles and comments by pundits about the recent Clearwire:Sprint, et.al. hook-up to create a national WiMax network. Other participants in this love fest include Google, Comcast, Time Warner and Intel. Hope I haven't forgotten anyone. The pundits, news media and bloggers talk about data speeds, 3G Vs 4G, LTE Vs WiMax and a variety of other factors one can analyze. While this is all well and good let's put out there the obvious - how will these prima donna's of their respective industries ever agree on a strategy and business plan that meets everyone's objectives?

The cable companies are investing $1.0B each, Google about a half billion and Intel somewhere in the same range. On paper the combination makes sense. In reality the self-interests of the participants will overshadow the execution of the business strategy. I harken back to my days working for the Tele-TV JV between 3 RBOCS and Creative Artisits Agency. The JV was formed to develop a service for one platform and to take advantage of economies of scale in developing and rolling out the service. Almost immediately issues arose with the ability to execute the business plan on that platform. Within one year tests were being performed to evaluate wireless MMDS and advanced fiber technologies while the partners battled other issues in the respective markets and with each other, creating diverging objectives and eliminating the economies of scale the venture was formed to achieve.

As in the TTV JV, this WiMax venture includes participants who are monopolists in their markets, and market leaders in other industries, who are used to getting their way. Stories about the venture never getting off the ground because competing interests could not be resolved have appeared in several industry blogs. Not to mention that by the time this JV rolls out its service (2010 nationwide?) technology will have advanced, that Moore's Law thing, that will undoubtedly force the partners to revisit the business model and their positions/objectives in the JV. Case in point, ask Earthlink about the muni-wifi services they rolled out in several cities, like Philadelphia (look out Anaheim!), that they are now exiting. Maybe it was foolish to think an advertising based model would fund the capital requirements and operating costs of the muni-wifi network. As I always say, financial modeling is an art, not a science. Tell me what picture you want to paint and I can create a model to support it!

I don't mean to be douse the fire with water. I wish the partners the best of luck, especially if they create a viable service that creates competition in the marketplace. I'd just love to be a fly on the wall at the Board meetings of the venture as the partners work to protect their interest and insure they maximize their ROI in this JV.