If you are thinking about starting a new company, read this story in our September issue. (Or, for a quick preview, watch this slick Web-only video segment that CNN produced about it). B2.0's Michael Copeland and Susanna Hammer went out an dasked investors like Howard Schultz, Vinod Khosla, Steve Case, Tim Draper, Elon Musk, and Danny Rimer what startups they would like to invest in next and how much they would pony up for the right busines splan and the right team.
Here is a pop-up app that will take you through the whole list. But the ones I found most intriguing were:
An implantable patient-monitoring device (VC Corey Mulloy of Highland Capital Partners would invest $10 million if you can show him a functioning prototype).
Search rebuilt from the ground up for mobile phones (Index's Danny Rimer; $2 million)
GPS-Guided Coupons for mobile devices (Norwest's Jeff Crowe; $3 million)
A Social Marketplace where P2P production and trade can bloom (Accel's Jim Breyer; $10 million)
Affordable homes with luxury perks like yoga classes, spas,and room service aimed at aging boomers (Steve Case; $5 million).
Trip Planning 2.0—the ultimate, automated online concierge (Azure's Mike Kwatinetz; $5 million).
A video mashup site that lets you insert yourself into Hollywood movies and TV shows (Spark's Todd Dagres, $4 million).
I especially like this last one because it is similar to one of my ideas for fixing Time Warner (owner of Business 2.0):
Time Warner could allow consumers to search its nearly 7,000-title video library on the Web. It could help them find any scenes with, say, Christopher Walken and allow them to splice those scenes into their home movies.
Which reminds me. I've already gotten one call from a company who says it is already doing one of these ideas (and I didn't even write the story!). Ideas are a dime a dozen (that's actually my going rate). It's what you do with them that counts. And just because someone is already onto one of these opportunities does not mean that you cannot do it better. So go ahead and run with these. All we ask is that you let us know if you actually turn any of these into real businesses.
Forget about Apple buying YouTube. (Too expensive), Sony just snagged Grouper for $65 million. (Press release here). Sure, Grouper never really busted through to become a top-ten video site, but it offers Sony decent, ready-built technology to go after the online video space right out of the gate. Given that Viacom just paid $200 million for Atom Entertainment, the price Sony paid for Grouper seems reasonable. It's definitely a lot cheaper than going after YouTube.
One of Grouper's hidden gems is its video-editing software, and I could easily see Sony marrying its digital camcorders with the service a la the iPod and iTunes. That of course would require the cooperation of Sony Electronics, whereas it is Sony Pictures who is buying the startup. Given the sorry state Sony is in these days, I'll be surprised if they don't destroy value in this case instead of give Grouper the leg up that it needs.
And as for Sony Pictures using Grouper to distribute its own video content online—any service that appears to be captive to a given studio or media company will not keep its Web cred for long.
Update: One of the motivations for the deal seems to be Sony's desire to tap into the culture of participation, and encourage video-camera-wielding fans to create communities (and video clips) around its "real" movies and TV shows. Again, unless Sony is willing to use Grouper as a promotional vehicle for any movie, no matter what studio produced it, the strategy is flawed.
ThisNext, a startup which I wrote about here, is now out of beta. You can reate your own product playlists and "shopcast" them on your blog. Check out my shopcast below and at the bottom of the sidebar at right.
There's been some debate in the past few days about what counts as a blog and what does not (sparked by Robert Scoble), as well as the budding interest of venture capitalists in some sites (such as HuffingtonPost.com and GigaOm) that started out as blogs but now are looking more and more like full-bore (new) media sites. But one thing is for sure: a select (dare I say "elite") group of top bloggers are gaining more and more attention, and in the process are beginning to pull in some serious cash for their blogging operations.
B2.0's Paul Sloan and Paul Kaihla dig deep into the business of blogging in our September cover story, "Blogging for Dollars." What they found was early evidence that blogging is turning into a real media business—not for the vast majority of millions of casual bloggers out there, but for the top few like Michael Arrington of TechCrunch, the Boing Boing gang, Fark's Drew Curtis, Rafat Ali of Paidcontent.org, Brian and Lisa Sugar of PopSugar, Heather Armstrong of Dooce, our own former Om Malik of GigaOm, and, of course, Nick Denton with his Gawker Media empire and AOL's Weblogs. These are the mainstream bloggers (MSB), and in their own way are becoming just as influential as the mainstream media (MSM). And on a per-employee basis, they are beginning to rival the MSM business model. So how much are these guys making from ads and sponsorships? Here is a sampling of estimates from the story:
Nick Denton (Gawker Media)—$3 million
Boing Boing—$1 million/year
Rafat Ali (Paidcontent.org—more than $1 million/year
Michael Arrington (TechCrunch)—$60,000/month ($720K/year)
Drew Curtis (Fark)—potentially $600K/month ($7 million/year)
Brian and Lisa Sugar (Sugar Publishing)—projected $15 million by 2008
Now, this is all very nascent—Organic estimates total ad spending on blogs this year will amount to only a piddling $40 million—and the whole ad-driven model of these blog businesses could blow up tomorrow. But it won't take much to grow the ranks of mainstream bloggers from the dozen or so that we have today to hundreds of properties, each tilling their own niche and making a tidy business out of it. Just since January, for instance, the average CPM that (B2.0 contributor) John Battelle's Federated Media is getting for the 75 blogs in his ad network has grown from about $4 to $8, and he wants to get it above $20.
Most people will never make a dime from their blogs (and that's not why most people do it anyway). But for the few who make it to mainstream blogger status, who can attract a large or influential audience while keeping their overhead costs low, a new kind of media moguldom awaits them.
Steve Lohr raised a good question in Sunday's New York Times: Will the spread of electronic medical records actually save us money? He quotes David M. Cutler, a health economist at Harvard, who notes:
"If better information really helps us understand what is happening in health care, it could well lead to more care for more people and higher costs for the system as a whole."
Lohr goes on to suggest that once electronic medical records are in place, and personalized medicine becomes more feasible, doctors will be more likely to prescribe more niche drugs to patients. They will also be able to identify patients who are more at risk for certain diseases, and prescribe yet more drugs to treat those patients—drugs which they might not prescribe today.
He may be right that the widespread adoption of electronic medical records probably will lead to the U.S. spending more on drugs. But that's because the promise of electronic medical records, and personalized medicine in general, is focused on prevention rather than responding to health crises as they arise (which is the norm in today's healthcare system).
Prevention might be expensive, but it still is usually less expensive than the alternative, which often is surgery. I'd rather pay $100 a month for Lipitor than pay $100,000 for a triple bypass in ten years.
The second issue that needs to be addressed is how would improving the flow of health data affect the quality of care. Even if electronic medical records do end up costing us more overall (which I doubt), if we are healthier for it, wouldn't it be worth that price?
That's the debate we should be having: Can digitizing healthcare help to save lives and give people healthier, longer days on this planet? Can it give us better healthcare? If it can, then we should be doing everything we can to hasten its arrrival.
Amazon's Unbox Video Service is not even out of the gate yet (see the previous scoop, which got picked up by CNNMoney.com), and neither is Apple's expected iTunes movie service, yet signs of a price war over video downloads are already emerging. Om reports that Guba is about to reduce prices on catalog movies to $4.99 and TV shows to $0.49. Now, that's the kind of pricing that would make me want to cut up all of my video cards.
But the larger question here is this: Does the Internet reduce everything that runs over it to a commodity? Forget illegal P2P file-sharing for a moment. Even with these emerging legal services, there may be parallels here between the telco world and what will happen to media.
The price of a phone call in many instances is already zero for anyone who uses pure VoIP telephony like Skype. The same inexorable march to zero that we've seen in the telecom world over the past decade could be a prelude of things to come in the entertainment industry. After all, a phone call sent over an IP network is just bits of data. So is a movie, a TV show, or a song.
We have some more details about Amazon's expected upcoming video service, dubbed Unbox. Kevin Kelleher, a frequent contributor to Business 2.0 was able to actually download the Unbox software when it was up briefly on the Web. Although he wasn't able to try it out because Amazon's server was not responding, he was able to copy the software's terms of service, which he e-mailed to me. I've posted the terms in full after the break. But here are the key takeaways:
—The Unbox Video Service will allow consumers to both rent or buy digital videos (movies, TV shows, sports events, etc.), which will be transferred to their computers. In the case of buying, they will be able to keep the videos. In the case of renting, the videos will expire.
—You must download the videos within 24 hours of purchasing them.
—It appears that the Unbox Video Service will be based on Microsoft's Windows Media Player, along with monitoring and DRM software. Specifically:
*The Software may automatically delete Rental Digital Content that have expired* (i.e., Rental Digital Content that are either beyond the specified access or viewing period) from your Authorized Device, and you consent to such automatic deletion.
However, on the DRM front Kelleher's reading is slightly different. He wrotes in his e-mail to me:
What i thought was especially interesting was the amount of control unbox gives amazon over everyone's pc. deleting files whenever they think it's a good idea. pumping ads and movie promos whether wanted or not. my guess it's all intended as an alternative to drm and all its problems.
(Perhaps Amazon's implementation gets around some of the technical issues presented by DRM, but to me it amounts to the same thing—the ability to delete fiels on your computer or limit how many devices teh videos can be copied to. Anyone who knows more about DRM is free to weigh in on comments below)
—Rented videos can only be viewed on one device (like an authorized laptop). From the terms of service:
You may not copy or move Rental Digital Content from their originally stored location(s) on your Authorized Device. There can only be 1 (one) account for the Service on an Authorized Device. *
— Purchased videos have more leeway. They can be watched on up to four devices (two computers, and two portable devices):
You may exercise these rights on up to 2 (two) non-portable Authorized Devices (e.g. laptop or desktop computers) and two (2) portable Authorized Devices as specifically designated by Amazon from time to time.
—Conusmers will also be able to burn purchased videos onto a DVD, but it looks like it will only play on newer DRM-compliant DVD players:
iii. You may make a back-up copy of the Purchased Digital Content on removable media (e.g. recordable DVD) in the same format as the original downloaded file to play on your permitted Authorized Devices. Any back-up copy of the Purchased Digital Content on a DVD will not be playable on a traditional DVD player.
—The service will only be available in the U.S at launch.
It is important to note that these terms do not appear to be a final version. For instance, one clause about Amazon's right to send promotional content to your computer or other "authorized device" whether you ask for it or not is followed by an asterisked question in brackets:
5. PROMOTIONAL CONTENT.
*From time to time, Amazon will automatically deliver promotional video content (e.g., movie trailers, celebrity interviews, reviews, etc.) to your Authorized Device. Amazon may automatically delete such promotional video content from your Authorized Device without notice to you. [Are we going to provide an opt-out from promotional content?] *
IMHO, the opt-out sounds like the most consumer-friendly way to go. Read the full terms of service after the break.
(Also, Yahoo is graciously hosting a cached version of Amazon's video download installation page here which clearly shows a "dvbeta.amazon.com" url as the original source lending credence that this is legit, and Cnet has more speculative coverage here).
The covers on Amazon's worst kept secret, its upcoming digital download service, may have just been lifted even further. An enterprising blogger, Alan Taylor, claims to have stumbled upon some Amazon Webpages (now since taken down) that look like a test version of the upcoming service, dubbed Amazon Unbox. If this is the real deal, it appears that Amazon will have its own browser-based media player that initially will work only with Windows computers. TV shows will cost $1.99 and movies will range from $10 and up. The service will support some non-PC devices such as Creative's Zen Vision but I'd be surprised if it supports a video iPod (Apple's iTunes, after all, will be Amazon's main competitor here).
Whether or not the Unbox name stays after launch, it is whimsically appropriate. Digital distribution, rather than physical distribution, is Amazon's future. The margins are better, there are no inventory costs, and bandwidth is cheaper than UPS. All they need to do is sell a cheap device that lets people stream their downloaded movies from their PCs to their TVs wirelessly, and both Netflix and Apple could be in trouble.
(Although, not supporting Macs at launch could be a mistake. Sure, it's still a relatively small market, but it is made up of a disproportionate amount of those key early adopters that a service like this needs to get kickstarted).