DVR'S & COMMERCIAL SKIPPING

When Tivo first launched in 2000, the TV business panicked. Tivo was heralded as the next step in the evolution of the VCR, the DVR - the Digital Video Recorder. DVR's required no tapes to either save or watch, but allowed you the same functionality as a VCR - saving your programs, rewinding and re-wathcing, and of course, fast forwarding. (Remember setting the time on your VCR to record shows? Worrying about how much space you had left on a tape? Setting the tape for 2, 4 or 6 hours of recording? Using magic markers to label your tapes with the contents? Ah the 80's & 90's - good times).

And the real problem was with the fast forwarding. If you can fast forward, of course what you are fast forwarding past is the very unpinning of the entire business model of the television industry - the commercials. You're not fast forwarding past the show, but you do fast forward past the commercial. The studios couldn't stop the technology from being released, and consumers liked DVR's better than VCRs. So if consumers aren't watching the advertising, this undercuts the entire television industry. And with Tivo gaining in popularity, both the cable and satellite industries jumped into the mix so their revenues didn't get eroded by consumers switching to Tivo altogether for the DVR technology. If you spoke to anyone in the TV industry at the time, the sky was falling.

Flash forward to 10 years later and we now know considerably more about DVR (or PVR's - Personal Video Recorders, as they're called internationally). First of all, the sky didn't fall. The TV industry is still funded largely by advertisers. What is happening in the TV industry now is that broadcast networks are now adopting the cable business model where a network is funded by both advertiser revenue and with carriage subscriber revenue. Certainly a dual revenue stream is better than a single revenue stream. But it wasn't the DVR that blew up the broadcast industry, it was the decline in advertising revenue from the recession that did it.

And now we know considerably more about DVRs that we did 10 years ago. So let's look at some of the myths:

1. Viewers skip all the commercials. Not really. Sure, most people skip past most of the commercials, but really, viewers always skipped commercials. Viewers used commercials to go to the bathroom, return a phone call, make dinner, check their email, and a million other things. Turns out that people use their DVRs in the same way. They skip commercials that they don't care about, but people will watch commercials that appeal to them. Personally, I watch movie trailers and network promos and skip everything else. Women I know watch commercials that appeal to them, fashion, music, movies. Men watch sports promos for upcoming games, beer ads with pretty girls in them. Kids watch ads for toys, games, and Disney World/Land. My point is that consumers will and do watch commercials that appeal to them and consumers have always had the option of "skipping" commercials, even before the DVR.

2. Everyone viewer will have a DVR. We're doomed. Well, it's been a decade and only 35% of U.S. homes have a DVR. (it's about 25% in the UK and most other advanced television countries). I know alot about consumer adoption of new technology. Whereas VCRs had 80-85% penetration, DVR's only have 35% after 10 years and availability on every platform (satellite, cable, telcos)? That's not mass consumer adoption, that's a transitional technology. In fact, if cable companies technology wasn't so poor, VOD would have (and will have) mass consumer adoption. DVR's will be a thing of the past in about 5 years.

Also, the latest consumer research shows that consumers are using the DVR the exact same way they did before DVRs. Now most consumers pause on a commercial while they go to the rest room, cook dinner or return a call (so they see the ad). Also, people leave their TV's on, go to the rest room, likely hear the commercial, return to the rest room to find their TV is on and then rewind to where they left off - at the commercial (largely seeing the ad multiple times). Viewers are seeing more commercials than they used to, and the DVR has added to that, not subtracted from it.

3. We can't stop consumers from skipping the ads. You're right, you can't, but you don't have to. My #1 example here is the Super Bowl. Consumers watch every commercial during the Super Bowl. Which leads me to my point Madison Avenue, if it's a good commercials viewers will watch it. Whether it's a movie trailer, a soft drink ad, a beer commercial, or an internet company, if it's a good ad, people will watch it. Also, broadcast networks have figured out how to combat skipping with an old internet advertising standard, the banner ad. If you watch promotions for movies and TV shows now, you'll notice a black box above and below the screen that says either the name of the movie and when it opens or for TV the name of the show and day and time it airs. The banner ad stays on throughout the entire commercial. So even if you fast forward past the ad, you see the name, day, and date whether you like it or not. Smart.

The #1 way the DVR has changed my TV habits is "video snacking." Video snacking is only watching the parts of a TV show that you want to see. For example, I almost never watch live TV. Even for an awards show (the Academy Awards, Golden Globes), I skip right past the nominees and fast forward right to the winner's speech. It takes me about 1 hour to get through a 3 hour awards show. And for me, that's the best thing about my DVR, skipping boring programming, not the commercials.

ART VS. COMMERCE

After the gigantic success of Avatar and then the massive success of Alice In Wonderland, audiences and movie studios are in love with 3D. Studios love it because they can charge higher ticket prices (price elasticity is about to be tested beginning this weekend with Dreamworks' How To Train Your Dragon) as the cost of a 3D movie ticket gets over $15 and close to $20 depending on your city. (Now movies join concerts in charging higher prices - see my blog below). Higher ticket prices boost revenue and studios love anything generates large amounts of quarterly revenue. Audiences love it because they can only see it in cinemas, making it a unique experience. And unique experiences have been missing in cinema since everyone bought a large screen TV and home theater sound system. It's a different visual experience, and frankly after seeing Avatar, I totally agree with the audiences' perspective. 3D is just a brilliant way to see a film.

With 3D revenue filling in for blood in the proverbial cinema waters, every studio is looking at every theatrical film they have to see if they can 3D it. And my studio, Warner Bros. is jumping into 3D with both feet. We have at least 5 films this year that are in 3D. And WB isn't the only studio. Sony announced that the new Spider Man (technically Spider Man 4, but there will be no numbers in the title since it's a relaunching of the franchise). And right there is the problem. Film is a directors medium, and now Sony is telling whomever they hire to make the new Spider Man film that it HAS to be in 3D. 3D requires the right 3D camera equipment, a different shooting style, different editing, sounds, etc. It's a different way of shooting a film, visualizing it in 3D.

No less than 2 titans of directing, James Cameron and Michael Bay, want to put the brakes on every film being released in 3D. Right now there are 2 ways to shoot a 3D film. 1. Are films that are already completed and can be retrofitted with 3D for a price and 2. The rarer (and less rarer as we go along) is the film CONCEIVED in 3D. And therein lies the rub.

The age old battle between art and commerce is being waged even to this day. Studios want more money, and more money means more 3D. Directors are more savvy, with their films and therefore their reputations on the line, they don't want to be forced to make a 3D film and risk it bombing. If audiences are being charged a premium and they don't feel like they are getting their money's worth, they will not go to a 3D film.

And that point was driven home for me this week. I saw Avatar twice and each time I totally felt like it was worth paying almost $20 for my ticket. And then this week I saw Alice In Wonderland in 3D and it was terrible. Other than tea cups getting thrown at my head, there was no reason for that film to be in 3D. I felt robbed and I wanted my $3 3D "premium" money back and I'll be perfectly happy seeing it at the regular "bargain" ticket price of $12 in 2D. And I won't be alone.

If studios like mine are not careful, we'll overdo it and kill the golden goose before we've even gotten a chance to mine that revenue stream of golden eggs. And directors, while I applaud your astounding creativity, Mr. Cameron set the bar pretty high for all of you. I remember thinking while watching Avatar that Steven Spielberg and Peter Jackson must be watching Avatar and thinking to themselves, "Uh Oh.....how do we top this?" Mr. Cameron has thrown down the gauntlet and directors are too egomanical to not try to out do each other. See the battle unfold this year at your local cinema....who will win - art or commerce?

CONCERT TICKET PRICES ARE OUT OF CONTROL

I love going to concerts. In my heyday in LA (because every single musical act in the world comes through LA), I would attend at least 1 concert a month, and sometimes several in concerts in a week. I love a live concert experience. The Lady Gaga concert on New Year's Eve was my last concert of 2009 and I remember thinking that I wasn't seeing another concert again until the end of March (actually later tonight) when I'm seeing the John Mayer concert at the Staples Center in downtown LA.

3 months and only 1 concert? And then Paul McCartney, Sting, the cast of Glee, and Lady Gaga all announced upcoming concerts. Excellent! Paul McCartney & Sting are living musical legends and Gaga & Glee are the gayest concerts I could ever go to - I was SO EXCITED!!! And then I looked at the ticket prices....WTF?!?!?

It's as if we weren't still living through a recession. For Paul McCartney, the good seats start at $750!!! Are you f-ing kidding me?! I know Sir Paul is a legend, but for close to a $1000 I would expect a personal concert in my home at that price. The $250 seats are the NOSEBLEED seats. Really for $250 all I get is the nosebleed seats?! That's a lot of money to watch a spotlight follow a dot around a stage while singing famous 60's tunes. Sting's prices are a bit more reasonable, but he's doing an orchestral tour. Lady Gaga's tickets are $250 and those are just the decent seats. The good seats are $400 and Gaga just became famous and started touring last year. Glee was no better. If you wanted good seats, you would have to pay $200? Really? $200 for a glorified celebrity high school glee club concert?! Hell, even Conan O'Brien, who isn't a stand up comedian, and just made $32 million for NOT doing The Tonight Show is charging his fans $695 to meet him $500 for the close seats and $250 for the nosebleed. And yes, most of these artists (except Sir Paul) have seats for under $100, but they're super nosebleed from a very high altitude seats and there aren't that many of those seats available at all. And you know who started all this overpriced concert tickets (and got it) was U2 with their environmentally unfriendly, but amazing concert (see my previous blog - I watched it for free on You Tube).

Listen, I'm all for musical artists making as much money as they can. Lord knows their radio play and digital track sales aren't exactly paying for the private jet, but I'm out as those prices. And it's not just the ticket price, it's the facility fee, and the "convenience" fee and the taxes and the parking fee (at least $20) and the nightmare getting in and out of the concert and the $12 beers and $15 dollar drink - each.

I tell ya, when I can just sit in the privacy and comfort in my own home and watch a digital concert with digital sound on my TV watching either HD Net's Sunday Concert series or Palladia (MTV's HD concert channel - notice how tarnished the MTV brand is that even MTV isn't branding their own channel MTV any more?) why the hell would I want to pay outrageous prices for an inconvenient experience to witness 2 hours of music when all I see are little glowing specs saying, "Thank you" after finishing a song and asking, "Are you all right ________ (insert you city name here)"? And after complaining about this recently one of the comments I heard back was, "Well, just watch the concert on the monitors." What? I didn't pay $500+ to be a live concert and basically watch it on someone else's massive TV. I can watch a concert on my big screen TV at home for free where my cable company is already ripping me off for $150 plus a month.

First I was too old to stand in the General Admission pit with the kids, but now I'm too rich to overpay for a minimally satisfying music experience. I don't mind spending a lot of money for a great musical experience if I feel I'm getting my monies worth, but a lot of money for nosebleed seats sound like a bad deal to me. Rather than enjoy the music, I would spend the whole time at the concert angry because I overpaid and I'm having a bad time for a lot of money.

As for John Mayer, I got great seats for under $100. Thank you John!

(Full Disclosure - I did overpay for the Gaga tickets, but they were for a great cause - my boyfriend's birthday, and we did get nosebleed seats for Glee, and I MIGHT, MIGHT be spontaneous and see Paul McCartney and Sting - but if the prices are out of control for bad seats, I definitely won't).

UPDATE: http://www.nytimes.com/2010/07/31/arts/music/31concerts.html?_r=1

THE PASSPORT I'VE ALWAYS WANTED

I remember when I was a teenager being fascinated by passports. I didn't have one, and no one in my immediate family had one. But I knew early on that I wanted one. My family and I did a lot of vacationing around the United States from a very young age. We traveled to Washington D.C., Orlando Florida, Lake Placid New York (after the 1980 Winter Olympics), Mount Washington and Lake Winnisesaukee in New Hampshire, and every Christmas we would all fly down to Florida to spend the holidays on the beach together as a family.

Almost every weekend we drove from our home in Everett Massachusetts to our cottage in Amesbury Massachusetts. I remember it being a long 2 hour drive where my parents hoped both my brother and I would sleep on the drive up.

We traveled a lot as a family, but never overseas. I remember when I was 21 and had just moved to Los Angeles. One of my first priorities was to get my very first passport. I went to a photo mart to get my passport photo taken and then I sent in all my paperwork to the State Department. My first passport sat on the shelf for years until my first business trip overseas to London, Paris, and Amsterdam. The very first time I used my passport, I remember loving the stamps from each country inside. It was like my very own travelogue. Whenever I would see someone's passport at a party or on a plane I would always ask to see the stamps and ask people where they had been and what their favorite places in the world are. I dreamed that one day I would have a passport full of stamps from all over the world.

After travelling all over the world for more than 15 years now, I now have passport stamps from England, Italy, Switzerland, the United Arab Emirates, France, Canada, the Netherlands, Spain, and the Czech Republic. Every stamp has a date and every city in every country has a fond memory attached to it.

Although it seemed like very far away at the time, my passport is up for renewal in 2012. I'm curious to see where my travels will take me with my new passport. One thing is for sure though, I have to passport I've always wanted since I was a little kid. But its not the passport that's important to me, or even the vacations. What stands out most in my mind is the friend's I have been lucky enough to make all over the world. I would go to these countries and know no one and make good friends in foreign lands. Those friendships have meant the most to me. My passport is just colored paper and ink, but the memories and friendships it holds has more value to me than anything else. I treasure it.

CREDIT CARDS COMPANIES ARE THE NEW EVIL EMPIRE!

Just having returned from Canada, and after all the new legislation I had read about with credit card companies looking for new ways to generate revenue, I was shocked to experience higher credit card fees firsthand.

The exchange rate between the U.S. and Canada used to be very appealing. Only 3 years ago, it was 75 U.S. cents for every Canadian dollar. The exchange rate made traveling to Canada almost as inexpensive as Mexico. Flash forward 3 years and 1 massive recession later and the U.S. dollar is doing poorly up against the Loonie (We call a U.S. dollar a "buck" the Canadians call the Canadian dollar the "loonie" - I'm not making this up). Right now it's 95 U.S. cents for every Canadian dollar or nearly a 1:1 valuation.

So off to Canada I go happily charging hotel rooms, transportation, lift tickets, ski rentals, and dinners on my Chase Visa card. Now I understand that transactions done between banks between foreign countries comes with a cost. And I do think that given a 5% differential between the U.S. and Canadian exchange rates that the bank is entitled to take a modest 2% in fees and leave me the minor illusion of "saving money" with a 3% gain on the dollar versus the loonie. But imagine my surprise when I came home and added up all my "foreign transaction fees" (a nebulous enough line item) to find out that even with a favorable exchange rate between the U.S. and Canada, it cost me more money to vacation in Canada than it did in the U.S.! My $989.03 Canadian dollar vacation cost me $960.27 in U.S. dollars, but with the foreign transaction fees, my real expenditure was $965.22 USD. Granted that's only a $5 dollar difference, but with a 5% exchange rate, shouldn't those numbers be reversed?

I love travelling overseas, but when it costs more to go to Canada than the U.S., what is my credit card bill going to look like travelling to Germany with the Euro? Or the worse, England where the pound/dollar exchange rate is definitely not in my favor? It will be hugely expensive, which leads me to my next point about future overseas travelling, I will have to try to pay for as much up front as possible. The days of just charging everything overseas is over.

FOR AMERICA, BROADBAND IS THE FUTURE

Last week, the United States made a major announcement about the future of telecommunications for the country. On March 16th, the Federal Communications Commission released the National Broadband Plan. For the country that created and nurtured the development and deployment of the internet worldwide, the United States is wisely making a big bet on broadband as the future of this country's communications. Just like the telephone before it, the United States is mandating universal access to broadband for its citizens. To the U.S., the internet is more important than a landline, a cell phone, a television, or a radio. And I couldn't agree more.

I have blogged before about how important it is for faster broadband speeds, but no less then the future economy of the world will depend on which country most effectively utilizes broadband internet speeds and access for its citizens. Since the United States nurtures small businesses more than any other country, it is U.S. small businesses that have the most to gain from this.

Where goes the government, goes private investment in infrastructure. And where there's broadband, there's entertainment content. I said it over 10 years ago, but its worth saying again, with all of its hopes and promises and dreams, it turns out the internet is just a massive delivery system.

Read the National Broadband Plan here: http://www.broadband.gov/

THE ACADEMY AWARDS WERE AWFUL THIS YEAR!

Just awful. The show directing was all over the map. There were no stars there (M.I.A. were Brad Pitt, Tom Cruise, Angelina Jolie, Megan Fox, Will Smith, Leonardo DiCaprio, Shia LeBeouf....). I love Neil Patrick Harris, and I hope he continues to have a marvelous career, but his opening number was painful to watch. No one in the audience looked like they were having any fun. The younger Hollywood stars (Zac Efron, Taylor Lautner, Amanda Seyfried, Kirsten Stewart) all looked very uncomfortable and underutilized. A tribute to Horror? I don't understand why Farrah Fawcett was left out of the "In Memoriam" while Michael Jackson was included. The Best Songs being performed by an interpretive dance company? One of the highlights of the show has always been the Best Song performers singing the nominated songs. It always made for such a nice break to see a huge musical talent perform at the Oscars. Ben Stiller's Avatar joke was horrible. The actresses all looked like they were going to a formal ball rather than dressing up super sexy for the Academy Awards. I was disappointed on every level with the show. Thank God for my Uverse DVR so I could skip right through 85% of the show.

The Oscars need to be entirely re-conceived. The entire show should be no longer than 2 hours. All of the technical awards should be moved off air and the death montage and special awards have to go. That just leaves the 2 Best Screenplays, 2 Best Supporting Actors, 2 Best Actors, 1 Best Director and 1 Best Picture categories and that's your show. It can be over in 2 hours and those awards are the only ones anyone really cares about anyway.

Steve Martin and Alec Baldwin were funny. Sandra Bullock's acceptance speech was the best of them all. There were 2 or 3 good jokes, but honestly, I laughed the hardest at the Modern Family Oscar charades promo than anything I saw during the 3 1/2 hour long Oscars: http://www.youtube.com/watch?v=diU5bm9wvjI

Of the 10 films that were nominated, I personally thought Up In The Air was the best film of 2009.The real Best Picture Winner should have been Avatar for literally forever changing the way films can be made. I am looking forward to seeing Hurt Locker, but I'm fairly certain I'm not going to think that it was the BEST film of 2009. One of the best? Yes. THE Best. No.

And it was fairly sexiest of Hollywood to engage in gender politicking. And really, in the second decade of the 21st century the press is making a big deal about a woman advancing? Women have had power in Hollywood for a very long time now. By making this a David and Goliath story of a former husband and wife and the triumph of the good little indie over the huge Hollywood blockbuster is just silly.

Bring back the gay Oscars from last year. At least they much better and Hugh Jackman sang!

5 COUNTRIES, 2 CONTINENTS

This past weekend I went skiing for the very first time up at Whistler and Blackcomb Mountains 2 hours north of Vancouver Canada. It was a special trip for a number of reasons: 1. This would be my first time in both Vancouver and at Whistler. 2. Canada would be the 5th country I have gone downhill skiing in. The other 4 countries are the U.S. (both East Coast, West Coast and the Rockies), Spain, Switzerland, and Austria. 3. I was going the week after the Winter Olympics.

Whistler & Blackcomb are world class mountains and definitely deserving of the Olympics. Of the 2 peaks, Blackcomb is a better mountain than Whistler. Whistler is cut into the side of the mountain, so you're skiing downhill and over and then you drop 100 yards and then you're skiing downhill and to the side. Blackcomb (the most recently developed of the 2) was actually cut with the fall line down the mountain, which makes for much better skiing. Blackcomb is also the least busy, or at least it was when I was there.

In a twist that could only happen to me, I was at Whistler for both Gay Ski Week (which was terrible, don't even get me started on how poorly run it was) and a heterosexual bachelor party for my boy Jon. My friend Tom and I skiing hard all day Friday for 9AM-3PM. Then on Saturday, the bachelor party arrived and I skied with 2 of the 5 guys all day Saturday. I'm an advanced intermediate skier (not an expert, but damn close). The 2 guys who were snowboarding while I was skiing were intermidate skiers. After the Winter Olympics always follows the Paralympics. So the 2 snowboarders and I ascend to Blackcomb Glacier and we're sitting up the top looking down into the bowl and they both start to hedge, "Wow, this looks pretty steep. Should we go over here or should we cut down there?" And I said, "Guys, it's not that bad, just stay over to the right and cut over." I no sooner get done saying that and WOOSH! From behind us come 2 paralympics skiers with only 1 leg each come skiing by us and go right down the glacier. I just threw up my hands and said, "Guys, come on, you've got 2 legs. What's your excuse?" And then I took off down the glacier myself. The timing couldn't have been any better if I had tried to plan it.

Next is either skiing in New Zealand or skiing in Argentina or Chile. If I manage to do either continent that will be fine with me. And remember, you ski in both New Zealand and Argentina in July, since that's winter in the southern hemisphere.

Sadly the website doesn't do any justice to just how beautiful the mountains are: http://www.whistlerblackcomb.com/index.htm