Online Video Coming To Your Living Room

Four months ago I commented on the victory of Blue-Ray over HD-DVD, coming to the conclusion the actual winner might be an on-line, on-demand movie delivery system. Last week there were two important events worth mentioning here, both clearly favor the Sony PlayStation 3 as the heart of the next generation living room entertainment center.

The first event was the presentation of Sony strategy by CEO, Howard Stinger, on June 26th, 2008. On slide 22 you can see the Video Service rollout strategy. Video Service will launch this summer and will deliver online premium video content do PS3's. Later on (2010) the service will be extended to cover other Sony products like Vaio laptops, Bravia TV sets and even SonyEricsson mobiles. The choice of PS3 as the delivery platform is very clear and obvious. It has all the attributes needed now. High definition (HDMI) output, WiFi Internet connection and a local hard disk, necessary today, as usually the "broadband" speed is not enough for the video content to be delivered on-line without any significant buffering. PS3 is also a great and safe investment here from the consumer's perspective - it plays games and it plays Blue-Ray discs (and standard DVDs too).

The second event was the introduction of the Google Media Server Gadget. The gadget allows you to play multimedia on your TV (including YouTube videos) by means of a UPnP device (the Sony PS3 is a UPnP device). Google - style, this is only a beta now (so it may or may not survive in this form), but still it clearly shows Google is looking for a permanent place on your TV screen and considers the PS3 as one of the vehicles to get there.

Both developments also demonstrate how a well designed and widespread hardware platform, such as the PS3, can be continuously enhanced by new software releases to deliver more and more functions and services. I have had a PS3 console for over a year now. And it is really hard to find any flaws in its hardware. On the other hand the software has been changing every month or so... It is now much more capable and considering the facts above, it will be even more capable in future. I keep my fingers crossed....

What Is Next After Targeted Ads?

Last week I put some food for thoughts related to discovery services (or to be precise - the actual scarcity of them...). Yes, in the post - Pareto, long - tail world we need a new ways to discover products and services.

I think I need to sidetrack a little bit here and explain a few shortcuts:

• Pareto - or The Pareto Principle - to quote Wikipedia: "The Pareto principle (also known as the 80-20 rule, Haddad's Theorem, the law of the vital few and the principle of factor sparsity) states that, for many events, 80% of the effects come from 20% of the causes. Business management thinker Joseph M. Juran suggested the principle and named it after Italian economist Vilfredo Pareto, who observed that 80% of income in Italy went to 20% of the population. It is a common rule of thumb in business; e.g., "80% of your sales comes from 20% of your clients.""
• The Pareto Economy, as referred here, or the economy of hits, means 20% of all goods available (hits) satisfy 80% of the population.
• The Long Tail Principle, introduced by Chris Anderson, is the opposite of tge Pareto Principle. The Long Tail especially holds true in the Internet - related economy, such as digital content. The cost side of digital goods (such as MP3 music) does not depend on the number of items in the catalog (running the iTunes store costs Apple the same, regardless of the number of tracks they offer, an opposite to "physical" music store, where each CD occupies physical shelf space). At the same time the profit generated hugely depends on the number of items offered, as the digital content has potentially global reach.
• So by saying "Long Tail" I mean a very wide catalog of available items. If the catalog is so big, users need more and better "helper" discovery services to find what they like and what they would be willing to pay for.

So coming back to the main thread... What you are looking for (be it music or service or experience...) probably already exists... but (first) you may not be aware it exists for real and (second) you may even not be aware you like it... So what may help you discover new things you like?

One of the answers here are advertisements. We all know them from radio, TV and newspapers. They used to be Pareto - based too. Advertising the hits in static media reaching the mass market. Then came the Internet. And Google started profiling ads. They assumed, for instance, what you read is of interest to you, so by analyzing the web page you have in front of you they can select products and services relevant to you and display their "sponsored links", likely matching your interests. But still... Even the sponsored links, being the most discrete form of Internet ads, are, well... the sponsored links paid by the manufacturers and suppliers who want to market their products. Do you believe them? Not fully and too often I suppose.

On the Internet, what you say about your products matters less... And less... But what really matters is what the others say about your products and services... So dear suppliers, forget your traditional marketing... you are wasting your budget... forget even the adwords... (you thought you were smart, didn't you?). The business of the 21st century is not about marketing and sales anymore. The business of the 21st century is about empathy. Thinking of new products, you have to think of the end users and their experience. Will they be happy? Are they going to recommend your products to their friends? I know this may be difficult to swallow for many successful business leaders. Your marketing and sales forces won't work anymore. Have a bad product or bad service? Improve it or your business will suffer. Many have learned this the hard way. And don't even think of running fake blogs touting your products and posting fake [good] opinions. More than ever you need a good product, and excellent user experience. And then it will sell itself. How? The word will spread. Fast.

And this is how we arrive at the social networks. The reason they attract so much attention (and valuation) is they are perfect vehicles to carry product marketing and sales. In the era of abundance of products and, at the same time, the era of scarcity of good value and user satisfaction, a recommendation from a good friend of mine matters more than even the best advertisement matching my profile. Thanks to the Facebook, Skyrock, Nasza-Klasa and others, I have a multidimensional network of friends. Gadget lovers. Music lovers. Travelers. Sotck market investors. I value their opinion. Almost whatever I buy these days is checked beforehand on Amazon, reading user opinions. There is tremendous value in the user generated content. And the virtual connections between the consumers. The next company able to exploit and monetize this value may become the next Google. Yes, targetted ads are not the last invention affecting the path from the designers and manufacturers to the consumers.

Discovery Services

All the statistics show we watch less and less television, spending more and more time with various Internet activities instead. The same is true comparing radio stations and MP3 players. That is the trend we cannot argue, more choice, more personalization. But to be honest sometimes I miss the old days when radio and television were stars. Why? Because they have been great discovery services. I used to learn about new music from my favorite radio station (and imagine 20 years ago it was both free and ad-free). Millions of people have learned new things and have shaped their tastes watching TV. Behind the scenes there have been millions of professionals selecting the content for us. Sure it has not been the long tail... the selection has had to be according to the Pareto rule (20% of hits to please the 80% of the audience). And now what? We have the Internet, we have the Long Tail, we have everything personalized... and we are completely on our own to search and discover.

Sure there are services breaking the Google rule. By saying the Google rule, I mean users actively searching for and pulling the content of interest to them, instead of the network pushing the content their way. One crown example of a perfect discovery service is the Pandora radio, I have been touting here for years. Pandora is still the #1 Internet service in my personal ranking (such a pity it cannot be legally used outside the US... just another craziness of the labels who - let us say it loud and clear - have already lost control on the music distribution channels). Interestingly Google itself is doing very little to actively follow the tastes of the users and push content their way (apart from personalized ads of course). But I would love to have a Google Pandora RSS Reader. Walking through the daily portion of posts coming from subscribed RSS feeds, I would love to have an option "thumb up" or "thumb down" each of them. And next morning my morning coffee selection of RSS news should come not strictly from the subscribed feeds, but also taking into account what kind of news I liked yesterday and the day before and what kind I did not like. This way the content would have a chance to be actively pushed to me, leaving me just an option to rate it, instead of myself searching the Net for what I like.

Following this thread I came to some product conclusions related to my business. As some of you know, Wind Mobile, where I work, supplies the leading personalized ringback tones platform to mobile carriers. At the moment ringback tones are quite static, this means most of the subscribers keep a fairly constant set of tunes tied to their profiles. Our vision is to push it forward, to the "Ringback 2.0" level, and to make the ringback content as dynamic as can be. There are two important factors here. First, from the end-user's perspective, selecting a new ringback tune must be as easy and straightforward as possible. Second, there must be a good discovery mechanism.

To answer both issues we have introduced the "I like this song" (or "thumb up" in Pandora terminology) feature. It works like this. I like the new song "I hear" by the Strange People (I bet you have not heard it before, and I bet you will like it a lot!). I set it up as my personalized ringback tone. Now you call my mobile. You hear this tune as my phone rings (this is how ringback tones work). And as you like it, you just press an asterisk [*] while it plays. That is all. It is now copied to your ringback profile. OK, there is one intermediate step in between. You have to actually purchase the tune. So after pressing the [*] button you get a text message asking you to confirm the purchase. After the confirmation your new ringback is automatically provisioned and the purchase appears on your phone bill. Now the next person calls you, the newly purchased tune is played, and likely she does the same. Each time the [*] is pressed, the Strange People get their tune sold. Great, interactive, viral, easy to use service bringing more purchases and more happy users.

And of course there are more features to be derived from that one. The confirmation SMS can bring you an option to buy the whole bundle: the ringback tone, the ringtone and the full track download. Again you are billed by your mobile service provider, but the single tune, multipurpose bundle is inexpensive enough for you not to stop the "I like it, I WANT IT" impulse... Go for it! Music is about emotions... do not let them fade away by complicated setup procedures and multi - step billing. Want it and want it now? Just press the [*] button...

AFTER The Internet

Last two weeks I had a chance to attend two of the best conferences ever. Highly visionary Telecosm 2008 and highly business oriented Intel Capital CEO Summit 2008. Both giving fantastic insight on trends and technologies driving our future. And both concentrated on the Internet. Paul Otellini presented a fantastic keynote, rejecting my “default” view on big companies. Intel is different. The difference comes from the top, from the visionary CEO who certainly is a right – brainer, implementing the six new senses of the Conceptual Era: design, story, symphony, empathy, play and meaning (more on this in the upcoming posts). Intel is also doing a phenomenal job with its VC arm, the Intel Capital. They ferociously dig up for talent and ideas worldwide. And the payback they have is hard to overestimate.

Intel might have been late on some trends (like vector processing mastered by GPU guys or performance per watt mastered by ARM) or even missed some of them (like 3G telephony and probably even 4G in form of LTE that will again crown Qualcomm driving WiMAX to just a few niches). But their leadership and focus aligned with synthetic approach will help them close the gap. Larrabee, the next multi – core chip from Intel will accommodate both standard IA (x86) and vector processing, practically zeroing the advantage the GPU guys enjoy now. Of course the game here will move to software. NVIDIA’s CUDA versus Intel’s Ct (high – performance multithreaded C++ - based language). Again the question is which of the two will be supported by Microsoft and Java vendors (we may expect another approach to vector processing by Sun Microsystems...). Paul even went to the point they (Intel) will be sooner on the market with the hardware, than the software (algorithm parallelization) issue will be solved. Hard to disagree... With multicore / multithreaded designs and vector processing capabilities the new software taking advantage of the new architecture is radically different compared to what we write today. The issue is even more serious when we look at graduate software engineers – many (even most) of them have never written multithreaded code. This is also the reason why companies like Jules Urbach’s will be so valuable in the future, as they are the champions of significantly shifted programming skills...

But as I was lintening to the Paul Otellini's keynote, I realized the vision of the CEO goes as far as the Internet goes... So a question kept on bubbling up to the top of my head... "What is NEXT?... What is the next big thing AFTER the Internet?". When Paul finished and there was silence at the Q&A mikes, encouraged by his comments "the questions may be off limits", I asked...

I was obviously asking myself the same question a week earlier listening to the Telecosm presenters. And it seems there is a small company that may have the answer. Seldon Technologies specializes in nanotechnologies, with focus on millimeter - long ones (that means extremely long ones). What Chris Cooper (one of the Seldon founders) has discovered is the nanotubes are excellent as an extreme - high pressure hydrogen storage tanks, and this can lead to Nano Confinement Fusion. Probably the current holy grail we look for... and a revolution bigger than the Internet coming towards us.

What does it mean in practice? We will be able to store extreme amounts of energy in very small volumes. That means most of the devices you buy will be charged for it's lifetime. A notebook computer charged for 10 years. A light bulb with its internal energy source, enough to keep it lit for 5 years. Or a car fueled to drive 1 million miles without visiting a gas station. What does that mean in practice? No gas stations... no refineries... no power plants... no electric grid... no power transmission lines... We are still far from reaching that point... But we will get there... This way or the other we will find a way to run fully controlled nuclear fusion reaction in a micro (or nano) scale... This is not a fundamental problem... this is just engineering problem... Maybe Intel can bring us faster to the solution? Seldon is looking for an investment round... seems like a good match to the Intel Capital... :)

Graphics Processors (GPUs) Revisited

Another Telecosm brought another great talk by Jules Urbach. Hew as showing some new stuff (I even do not know I I can share it here, as he was requesting the cameraman to stop taping what was on the screens a number of times...). But anyway. You know - they have full ray tracing in the GPU. And he was showing how his models perform on stage. OK, I mean the computerized models of virtual reality. Humans with skin modeled several layers deep... some reflective, some absorbing different parts of light spectrum, with veins and bones below them... Or a model of the SpiderMan, all of them generated in high definition theater - like quality real time. This "real-time" part is the breakthrough. We have seen many computer - generated moves already, but nobody but OTOY can do it in real time. And all it takes is a number of clustered NVIDIA cards. This GPU trend is turning the computing industry upside down. Suddenly we have discovered GPUs are not only for graphics... they are supercomputers themselves.

Researchers at the University of Antwerp in Belgium have created a new supercomputer with just four NVIDIA 9800 GX2 graphics cards, it costs less than 4000EUR to build. They say the eight NVIDIA GPUs deliver the same performance for their work as more than 300 Intel Core 2 Duo 2.4GHz processors. And thanks to the CUDA framework NVIDIA delivers (abstracting heterogenous manycore computing), they can be programmed using standard tools and techniques to unleash the power of those chips.

NVIDIA themselves put a lot of R&D money into software libraries and platforms helping unleash the power of GPU. They recently acquired RayScale, a University of Utah spin-off. It means the in the next generation of graphics cards we may move from simple rasterization and polygon rendering to full ray tracing.

There is an excellent interview with NVIDIA's David Kirk on bit-tech.net, if you want to follow up this subject further. The takeaway is the CPU guys suddenly have a big competitor to worry about. Will the X86 architecture stand up the new challenges or will the new generation of [not only personal] computers be powered by GUPs having CPU offload just a housekeeping tasks?

This [GPU] trend was ignited initially by the Sony PlayStation 3, that is now becoming a common building block for supercomputing centers (see the "PS3's Cell CPU tops high-performance computing benchmark"). We can easily see the computing power is no longer a function of megahertz and gigahertz clock speeds. And it is not even a function of having several standard CPU cores on one chip. It is a matter of architecture and new paradigm of algorithms and code design. Intel seems to be a little bit lost in all those [multiple] threads... but the strange thing is I have not heard much on this subject from Microsoft... well... but what would you expect from a company run by a business - oriented bean - counter? They are too busy chasing Yahoo after all...

And the final loser in this game may be the Hollywood. Movie production will shift up one abstraction layer. With technologies from guys like Jules Urbach, all the artist will be needed for is to design a computer model of a new actor. And than the NVIDIA cluster will work through the screenplay script to output new production. Who needs humans for that job, after all?