When doing interviews or chatting at conferences, I can always tell who was paying attention during the “last” boom-bust cycle here in the Valley. Sadly, most weren’t. They’re the ones telling me my company is on the brink of death because we’re not free and, thus, going to lose the land-grab that’s sure to ensue. According to them, some free site is always about to steamroll over us. 🙂
Imagine my surprise to find an article today on GigaOM entitled Free: a Tactic, Not a Business Model. Is this a sign of the Apocalypse? Is the latest bubble about to burst?
Probably not, but it’s surprising none-the-less. At nearly every tech conference, the vast majority of the business models seem to be either “Grow fast, sell to Google” or “Grow fast, slap AdWords on it”. While these may actually work from time-to-time, I find it strange that no-one seems to think these are risky approaches.
The article is right on the money: free is a tactic. For some, it’s an incredibly good one. For others, it’s not. At SmugMug, we dabbled with free and found to our great amazement that it damaged our product, our brand, and pissed off our customers. I really need to blog about what we learned one of these days….
The article also references another fascinating blog post entitled The Penny Gap. It’s definitely worth a read, too.
Our mantra? You get what you pay for.
There are three major players about to vie for a spot in your living room to download videos: Xbox 360, AppleTV, and Amazon Unbox on your TiVo. I have an Xbox 360, a TiVo Series 3, and my AppleTV should be here “any day now” (right Apple?). Saying that I’m thrilled at the ability to order movies from my recliner is an understatement. 🙂
Some of you will howl that Netflix and BitTorrent and other things should fall into this category too. I say “Nay!”. I’ve built and re-built so-called Media Center PCs before and I’m sick of it. I don’t want a PC in my gear stack, I just want a device that does one thing well: A giant video store in the sky.
So, how does Amazon Unbox stack up? Let me break it down:
- Amazon lets you rent OR buy your movies. This is super important, and something Apple is blowing, big time. How many movies that you see do you really want to own? If they’re not Disney (if you have kids), or Indiana Jones or something, you probably want to watch it once. So you want to rent. But there are still those few movies you want to watch over and over and over.. so you want to buy. Give consumers the choice! We’re smart – we’ll figure it out! This is a big win for Amazon.
- Amazon keeps your purchases “in the sky.” This is huge! If I run out of room on my TiVo and delete something that I later want to watch, I’m not out of luck. Amazon will happily re-download it to my TiVo and I’m all set. Apple loses out on this one too – I’ve lost songs I’ve bought from iTunes and had to re-buy. That sucks… they have my purchase history, why can’t they give me another copy?
- 1-Click rocks. Ok, the patent thing was stupid and silly, but nonetheless, being able to click “Buy Now” and have the video almost instantly appear on my TiVo really really rocks. It downloads, for me, 2X realtime (1 hour TV = 30 min download), and I can watch it before it’s finished. Xbox 360 sucks here – you have to wait for it to finish a big chunk first, and it’s terribly slow.
- The selection isn’t that great, yet. I’ve bought a bunch of TV shows, but some of them I really wanted, like The Sopranos or Lost, just aren’t there.
- Browsing for stuff is confusing. I browsed through the TiVo listings and found movies that I couldn’t actually get for my TiVo. Want to watch Sum of All Fears, for example? Tough, it’s listed in the TiVo section but only available on Windows PCs. Ugh.
- They have rentals only for movies. Um, hello? How many times do I really want to watch an episode of 24? Let me rent those, as well. I’ll happily buy every episode of the Simpsons, but I want to rent 24. Gimme the option.
- No HD. Xbox 360 already offers 720p downloads. I’d gladly pay more for HD versions of my favorite movies and TV episodes. I already do with HD-DVDs, afterall.
- Wish I could browse Amazon Unbox from my TiVo. I’m not smart enough to know how this could be done well, but maybe using Amazon recommendations + TiVo thumbs up/down, it could get smart about what to offer me? My wife doesn’t want to open a web browser to buy her movies, she wants to use her remote.
- There’s something terribly wrong with the video encoding. Anytime there’s a lot of horizontal movement (especially camera pans), the video gets all jittery and ghosty. Plus the interlaced picture structure is super-visible. I’ve done enough video editing and encoding that I’m gonna make a guess here: they inverted the interlaced frames and have encoded it wrong. For most scenes it’s tolerable (but not good!), but for some, it’s downright awful. I’m hoping this is a simple oversight and will get fixed, but of the 6 or so shows I’ve watched so far, they all had this problem.
All-in-all, I think it’s off to a good start. Certainly competitive, and I’m certainly going to use it more than the Xbox 360’s download stuff, which was very disappointing. I’m glad there are big competitors duking it out – that means you and I win. 🙂
I’m happy to pay the content holders a reasonable price to download this stuff in a convenient way. It’s no secret that every TV show and DVD is available for free via bittorrent, but the same can be said about music, and I love shopping at iTunes. The people who make this stuff do deserve to get paid, and I’m happy to help. I wish they wouldn’t muck it up with DRM so that I could use it more easily, but hey, that’s life.
Word to the wise: I’d buy *MORE* of this stuff if it were DRM free.
I was interviewed yesterday by Beth Pariseau for an article about Amazon’s S3 at SearchStorage.com. All-in-all I think it’s a good article that covers some of Amazon’s strengths and weaknesses, but would like to clarify some of my quotes in the article.
I’m quoted as having no read speed issues, but having write speed problems. As is common in articles like this, that’s boiling down a long conversation and much is lost in the translation. 🙂 In reality, Amazon has been blazingly fast for us (both reads and writes), relatively speaking, except for the few times they’ve had problems, which I’ve blogged about before. That particular quote, especially about it being less than a 10th of a second, was my attempt to explain the “speed of light” problem, which applies to both read and writes. Even mighty Amazon hasn’t yet figured out how to transfer data at faster-than-light speeds. 🙂
Basically, we’re in California and Amazon isn’t. This means that when we initiate a read or a write to S3, we’re sending bytes to them and they have to cover, at minimum, the physical distance to Amazon’s datacenters (wherever they are) before anything can be done. Assuming that one of their datacenters in on the East Coast, and assuming we have to read or write from that one occasionally, we’re talking 60-80ms of time just to get bits there and back. No-one on Planet Earth can get around this problem, so it bears consideration when you’re planning for S3 usage.
Obviously, our data in our own datacenters suffers from this problem too – only it’s inches, instead of thousands of miles, to our servers, so it’s almost negligible. But we do have clients all over the world, so the problem is still very real. Our friends Down Under, for example, have to wait much longer for their photos to start drawing than our friends at the Googleplex down the street. If we really wanted to solve that problem, we’d have to build or use a CDN (Content Distribution Network). So far, we haven’t wanted to.
Beth mentions how Bob Ippolito at Mochi Media got better performance in Taipei with CacheFly than with Amazon S3. To me, this seems sorta obvious. To my knowledge, S3 doesn’t have a datacenter in Asia at all, and secondly, they’re not a CDN. Let me say that again – they’re not a CDN. Amazon has their issues they need to overcome with S3, but dinging them for lower performance than a CDN is sorta silly. S3 doesn’t provide web search faster than Google either. See my point?
I’m sure Amazon has thought (or is thinking?) about extending S3 to offer CDN services, but I believe the way Amazon builds these things, it’d probably be a separate service that could be layered on top of S3. They’re into offering building blocks which you can mix & match, not complicated services that do too much. (To any would-be Amazon Web Services competitors reading this, the building block approach is the Right Way to do this.)
Beth’s article is right on the money with regards to data transfer costs, though. S3 currently has two sweet spots: small companies who can’t buy large bandwidth, and companies who need a lot of storage but not a lot of transfers. There are, of course, companies which need a lot of transfers but not much storage (CDNs are probably appropriate here), and companies which need a lot of transfers AND a lot of storage. SmugMug potentially falls into this latter category, but you can imagine someone like YouTube falling into it even more than we do. How they solve the different requirements of different companies will be interesting to watch.
Let me reiterate in case it’s not abundantly clear: I love S3. It’s saved us tons of money. I’m a normal, paying customer – not an Amazon shill. It has problems and growing pains, just like every single other online site or service you can name. It may not be right for you – but it’s certainly right for a ton of us.
I address the “speed of light” issue (and some ways of minimizing it) and the whole “sweet spot” pricing issue on my ETech talk (which I’m still working on). If there’s anything specific you’d like to see, be sure to let me know – I’ll be posting the slides here.
I’m still trying to wrap my head around Twitter and why I find it so fascinating, but I definitely have a new term for it: microblogging.
If you put SMS, IM, and blogs into a “Will it Blend” commercial, I think Twitter is the result.
I believe you’ll see me post less “small” things on this blog and more “articles” while I move the other stuff to Twitter. It’s so fun to just whip off a one-liner about something I’m reading, or learned, or thinking about… Very addicting.
Oh, and Twitterific rocks.
I think this brings the “large” (I define large as >100,000 users) OpenID supporters to 4:
- SixApart (LiveJournal, Vox, etc)
- AOL (AIM, specifically, so far)
- SmugMug (only providing, consuming soon)
Microsoft, digg, and 37signals have all announced support, so there are certainly some other heavyweights on the horizon. It’s going to be fascinating to see what happens once critical mass is reached.
OpenID is going to cause some problems, I think, but hopefully it’ll solve more than it creates. The important thing, though, is that there’s momentum in the right direction, the right players are getting involved, and smarter people than I are thinking about the problem.
I met Evan Williams a few months ago at Web 2.0 Expo and told him I thought he’d done a brave and awesome thing by buying back his company, Obvious, and taking control of the direction it was heading.
Today, I finally bit the bullet and tried out his latest product, Twitter, and I’m afraid to say that I may be hooked. So if a SmugMug feature is delayed, you can blame Evan.
The crazy thing is that Twitter seems sorta useless and meaningless when you first glance at it. I know I did, since I checked it out on the day it was announced. I didn’t even bother signing up, I’m afraid.
But Scoble’s been preaching the Twitter gospel a lot lately, so I took the plunge today. It’s a blast. It’s sorta like IRC-to-the-world or something, and it’s clearly going to waste a lot of my time. But oh well – it’s fun. 🙂
Oh, and you’ll likely get sneak peaks of what I’m working on there, too. So if you wanna peek, better stop in.
Cya there – here’s my profile.
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