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It's hard to say these days

Oh Netflix, I love ya’ but I’m beginning to think you’re doomed

clock October 24, 2011 22:32 by author Tom

Netflix announced its earnings after the market closed today and the results weren’t good.  Another 800,000 customers fled the service.  As of this writing Netflix is down a whopping 26.86% in after hours trading.  That would mean the stock has fallen 71.5% since its high on July 8th, 2011. 

But Netflix’s CEO claims to have learned a lesson

Q: Why did you try to do Qwikster?

Reed: In hindsight, it is hard to justify. Having separate brands can in theory make sense. However after the price increase, Qwikster became the symbol of Netflix not listening.

That quote makes it seem like he got the message.  But did he?  Take a look at this…

Q: Why not reintroduce a combined streaming-DVD?

Reed: we think future is brightest for streaming. We don’t want to subsidize DVD. We think $7.99 is such a great price that mostly we should focus on filling out content.

The focus for us is in rebuilding our reputation

DVD business will become like AOL dial-up. a slow decline.

The problem here is he admits to not listening but then doubles down on the exact same strategy.  So  you have to wonder what he thinks people were trying to say.  To get that answer look no further than the NY Times Magazine Interview of him

Last month, when announcing Qwikster, you apologized for the way Netflix handled its price hikes, writing, “In hindsight I slid into arrogance based upon past success.” But wasn’t introducing Qwikster the way you did the most arrogant move of all?
No, I think it was just a mistake in underestimating the depth of emotional attachment to Netflix.

I’m curious if you could have done any kind of research — or even a select-market rollout — that could have anticipated this?
I don’t know of any Internet service that opens on a regional basis. Our focus-group work concentrated on trying to understand consumers’ perspectives on names other than Netflix.

Now maybe it’s just me but I don’t think people disliking the name Qwikster is really the problem.   The problem was and still is the company’s attempts to push people into the streaming-only service before it’s ready.  

Note: I’m a streaming only customer. 

But I get away with that because I don’t watch that much media.   I use Netflix for no more than 10 hours a month and I have the financial resources to just buy what I want off iTunes if Netflix doesn’t have it.  But not everyone is that lucky.  So the limited content on Netflix’s streaming service is a significant issue to some people.  Especially when the amount of content they have is shrinking…

When your agreement to stream Starz content ends in March, you’ll lose your ability to show Disney movies like “Toy Story 3.” You’ve played down the effect this will have on the service, but can you name a movie that my kids will enjoy as much?
We can give you hundreds of titles that we’ve been adding over the last couple of months, both animated big movies and Japanese anime and lots of Nickelodeon content as examples. And of course, DreamWorks is coming online in 2013.

But can you name just one that will cushion the blow of losing Buzz Lightyear?
I watch mostly independent films. I’m not in that particular demo. I’ll send you a list.

On top of all this you have the original content issue.  Apparently Netflix doesn’t have the money to keep the Starz contract AND they’re so poor they need to significantly raise the price of their DVD service.  But they can afford to pay for exclusive rights to obscure original content.  

I admit to being on the outside here.  As I said I’m a streaming only customer who doesn’t watch anything that’s part of the Starz contract.  So my costs haven’t gone up and I’m not losing anything.  But I can see how other customers would be fleeing in droves.  To my mind Reed Hastings has built up a lot of good will over the years and I still think people should support him through this obviously tough time.  But with him giving interviews like the ones above and the stock in a freefall he’s making that very hard to do. 



Thoughts on “Steve Jobs”

clock October 24, 2011 06:37 by author Tom

So it’s out.  Walter Isaacson’s biography of Steve Jobs (titled simply “Steve Jobs”) hit my Kindle around 6pm today and I dove right in.  I’ve been kind of shell shocked on a personal level since Steve Jobs died and I hoped this would provide a bookend for the last couple weeks.  A way to honor him (by learning more about his life) while at the same time moving on. 

Having just finished it my opinion basically boils down to this: : It’s a good read but it’s a bad historical account. 

I feel pretentious saying that because obviously I wasn’t there when things unfolded at Apple (in fact I wasn’t alive for the early parts).  But I’ve read many, many accounts of the events detailed in this book.  Those include…

Apple: The inside story of intrigue, egomania, and Business Blunders (My personal favorite)

Infinite Loop: How the world’s most insanely great computer company went insane

Apple Confidential 2.0

Return to the Little Kingdom

The Second Coming of Steve Jobs

iCon: The greatest second act in the history of business

iWoz: Computer Geek to Cult Icon

The Pixar Touch

Odyssey: Pepsi to Apple

On the Firing Line: My 500 Days At Apple

Accidental Empires

Barbarians Led By Bill Gates (the Mac deal from a Microsoft employees perspective)

So I know a little about this.  I mean, everyone spins the story a little differently but when the same facts come from 4 or 5 different sources you start to get an accurate picture. 

In the case of “Steve Jobs” the problems are mostly ones of omission.  For example, it’s easy to portray John Sculley and Gil Amelio as “Bozos” if you omit their earlier successes.  It’s easy to portray Sculley’s tenure as having coasted on Jobs’ laurels and then dropped if you ignore the fact that Sculley actually turned the company around twice (and was ousted before he could try a third time).  It’s easy to accuse Microsoft of copying the Mac if you don’t know the internal story of Microsoft’s development procedures (procedures Apple insisted on and inspected themselves).

There’s also a lot of hero worship that hurts the book.  Clearly these interviews were done at a time when the people being interviewed knew Mr. Jobs could die soon.   So what you find are a lot of employee accounts that contradict what those same employees said at the time these events took place.  This is especially clear in how fast the author glosses over the Mac vs Apple II conflict that eventually led to the lackluster Apple III (produced by a completely demoralized team) and was partially responsible for Woz leaving Apple.  You also don’t get a clear view of just how much the Mac took from Lisa  (remember Jobs was in charge of Lisa before he started on the Mac) or how troubled Jobs’ relationship with Pixar has been over the years. 

Then you have the author’s personal opinion that is sprinkled throughout the book.  Here’s an example (the author’s words are in bold while the rest of the text is a Sculley quote):

At every opportunity Sculley would find similarities with Jobs and point them out:

We could complete each other’s sentences because we were on the same wavelength.  Steve would rouse me from sleep at 2 a.m. with a phone call to chat about an idea that suddenly crossed his mind.  “Hi, it’s me,” he’d harmlessly say to the dazed listener, totally unaware of the time.  I curiously had done the same in my Pepsi days.  Steve would rip apart a presentation he had to give the next morning, throwing out slides and text.  So had I as I struggled to turn public speaking into an important management tool during my early days at Pepsi.  As a  young executive, I was always impatient to get things done and often felt I could do them better myself.  So did Steve.  Sometimes I felt as if I was watching Steve playing me in a movie.  The similarities were uncanny, and they were behind the amazing symbiosis we developed. 

This was self-delusion and it was a recipe for disaster.

John Sculley had his flaws and I can’t imagine anyone arguing he was AS exceptional as Steve Jobs.  But the man was exceptional.  There’s no question of that.  The man was responsible for a business strategy that Pepsi uses TO THIS DAY.  Beyond that Steve Jobs clearly thought highly of him before their falling out.  So it really isn’t fair to bash the man for drawing comparisons.  Negative portrayals such as that take away from the historical value of the piece.  It would be like a book on John Adams downplaying the intelligence of Thomas Jefferson. 

Moving on there are also factual inaccuracies that, because they are presented as Mr. Jobs’ opinion, are put forth unchallenged.  Like…

It had taken Microsoft a few years to replicate Macintosh’s graphical user interface, but by 1990 it had come out with Windows 3.0, which began the company’s march to dominance in the desktop market.  Windows 95, which was released in 1995, became the most successful operating system ever, and Macintosh sales began to collapse.  “Microsoft simply ripped off what other people did,” Jobs later said.  “Apple deserved it. After I left, it didn’t invent anything new.  The Mac hardly improved.”

So Quicktime, the Newton, Claris, Copland, and a host of other innovations were nothing?  The truth is, from every insider account I’ve read the opposite was true.  They created an unprecedented amount of things but the management was so bad they couldn’t capitalize on any of it.  Apple created no less than 3 different operating systems that were more advanced than System 7 but couldn’t get a single one out the door.  Beyond that almost every account I’ve ever read has said Windows 3.0 did not succeed because of its technical superiority.  It succeeded because it was cheap and good enough. 

I know it seems like I’m defending the period between Jobs’ ousting and his return but I’m really not.  That period was just the easiest to find examples from since Mr. Jobs had a clear distain for everything that happened during that period. 

Beyond the above flaws the book is interesting from a “what Steve Jobs believes” perspective.  Plus the account of his childhood is more detailed than anything I’ve ever seen and that alone is worth the price of admission.  Then there are little revelations that make it worthwhile.  The fact that Jobs wanted to make a “Mac in a book” (aka a Tablet) after seeing touchscreen technology in 1985 is a fun fact.  And of course there are post iPod stories, an era that haven’t been written about much  (since most of the insiders from this time are still working for the company making historical accounts hard to research). 

Just to be clear I think Steve Jobs deserves hero worship.  I’m glad he’s getting it.  Because of him a whole generation of technologists have grown up knowing usability is as important as features and that’s put technology on a better path.  But at the same time the whole point of history is to pass on lessons from the past.  If the genesis of those lessons becomes white washed then the lessons themselves get lost. 



The Internet is Breaking

clock October 5, 2011 23:53 by author Tom

As I sit here and refresh Techmeme and Hacker News over and over again looking for more people to commiserate with I’m finding a lot of the links are going dead.  I have to admit it brought a smile to my face. 

Is there anyone who deserves such a send off more than Steve Jobs?



To The Ages…

clock October 5, 2011 23:16 by author Tom

I really hoped this wasn’t true

 

I have two thoughts on this. 

First, You can’t see this as anything but a tragedy and I want to say up front that I wish he’d lived to a ripe old age.

At the same time my first thought when I heard this news was to think of an old quote.  After the doctor declared Abraham Lincoln dead a silence fell over the room.  Then Lincoln’s War Secretary, Edwin Stanton, reportedly said “Now he belongs to the Ages”.  As tragic as the death of Steve Jobs is you have to also see the beauty of him always being remembered as the relatively young man with a twinkle in his eye and a magical device in his hand. 

Now that he’s passed it seems impossible to imagine him as a doddering old 80 year old sitting in retirement.  He truly did belong to the ages. 

The other thing that keeps going through my mind is a story that made the rounds a while back.  After it was clear MobileMe had become a disaster Jobs reportedly took the team aside and berated them.  He’s reported to have yelled “You should hate each other for having let each other down”

To be honest I don’t think you can learn much from Steve Jobs because he had such an extraordinary talent.  His instincts were better than the combined rational thought of an entire industry.  So in most things you can’t hope to emulate Steve Jobs.

But you can live passionately.  You can work so hard at doing something well that you hate yourself for failing.  That’s something we can all do and even if we’re not lucky enough the change the world like Steve Jobs we’ll certainly succeed in making the world a better place. 

That’s my take away tonight.

Addendum: I certainly didn't realize this but for the record Abraham Lincoln died at the very same age, 56.



About Me

Not really relevant right now. This blog is on hiatus. I really haven't decided if it is an indefinite hiatus yet

For the record if you've tried to e-mail me over the last 4 to 6 months I didn't mean to ignore you. The e-mail forwarding isn't working and I didn't realize that until months worth of e-mails had been deleted on forward. The tom@tomstechblog.com address still won't forward to the postmaster account and I don't know why because it's provided by the webhost. But if you're one of my old blog pen pals I would always welcome an e-mail from you at the postmaster@tomstechblog.com address

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