Dana Blankenhorn

Sell ESPN

For all you read about how great Walt Disney CEO Bob Iger may be, the stock has gone nowhere in 5 years. It was at $101/share at the start of May 1998. It’s $102 now.

Iger got thrown into the culture wars by Florida Republicans, and while many are applauding his strategy, he wants to get out soon and needs a big win.

Selling ESPN will be a big win.

What stock analysts will tell you is that cable is dying, and ESPN is more dependent on it than anyone. It now collects $9/month from everyone’s basic cable bill whether they watch its channels or not. That’s a big reason many are canceling cable.

But there are two bigger problems looming over the company.

The first is the cost of broadcasting rights. That’s rising fast, and ESPN is losing rights auctions. It now dominates only hockey and college football. It has one-fourth of the NFL, one-half of the NBA, one-third of baseball. It has lost cricket and soccer, two huge global games. Its ESPN+ streaming service is now the home of leftovers and depends on (often crappy) local broadcasters for its feeds.

This is going to get worse because of the second problem.

Beyond Even the Cloudless Cloud

The impending failure of the “Cloud Gaming” movement points toward the end of the cloud decade.

Google’s “Stadia” cloud gaming service is proving a technical failure. The company claimed it would reach hundreds of countries. It reached fewer than two dozen. The company claimed it would solve the game latency problem. It didn’t.

It turns out that for a low latency application like gaming to work, content must be cached close to every player. If it’s centralized, then some players have advantages that render the game worthless. Or you can create a delay, making the whole game worthless.

Forced delays happened over a decade ago, in stock trading. A trading platform found that, by putting their data center close to the Hudson River, it could act on orders from Wall Street before centers further away, based on the speed of light.

The Metaverse Problem

Back in 2009, I covered Taiwan’s CompuText show, alongside my son, then 18.

We spent four days wandering the halls, on the hunt for “desktop Linux.” We eventually found Linux Foundation head Jim Zemlin addressing a small group in a corner of Taiwan 101, the city’s tallest building, miles from the show’s main hall. It’s become something of a joke between us since then.

The point is there was no desktop Linux. You can argue that Google Android is Linux, or that the Mac OS is based on a Linux, but these aren’t truly open systems. Linux is, and was, primarily a server technology.

This is important to note when thinking about Web 3.0, or the Metaverse, as the buzzword advocates call it. They say it’s the biggest thing since the Web was spun, nearly 3 decades ago. It’s certainly the biggest thing since the Cloud, which Amazon began selling 15 years ago.

The Metaverse Party

I once spent a half-year working on a manual for an online shopping service.

Unfortunately, the year was 1984.

The point is that while it’s easy to ridicule the metaverse, the enabling technology already exists. The vision is easy to express.

When Mark Zuckerberg thinks of the metaverse, he first sees the oculus headset and haptic gloves he’s been developing for nearly a decade. The former can deliver an artificial, or partly artificial, set of visual and auditory inputs. The latter can deliver other senses, like touch, taste, and smell, simply by assigning values to them and transmitting the values, while having the necessary client equipment on-hand to translate the values back into experience.

Xi is in Trouble

Here’s something no one will tell you today.

Xi Jinping is in trouble.

There is an assumption in the West that, because China is run as an authoritarian state, and Xi Jinping is the President of that state, that he can do anything he wants.

I don’t buy it. The country is too big and too complicated for that to be the case.

Xi has been messing with China’s economy for a year now. Everything he does seems to make things worse. Going after the country’s Cloud Emperors – Alibaba, TenCent, and Baidu – made political sense. Most actions are in line with what western trustbusters would like to do with our Cloud Czars – Amazon, Apple, Facebook, Google, and Microsoft. But investors have been losing money.

Westerners don’t understand how much power the Cloud Emperors have. They dominate the entire economy, not just the cloud. Young Chinese are, if anything, more addicted to their phones than we are. They’re overworked, their homes are tiny, many are still living with their parents. The consumerism pushed by the economy, through the Cloud Emperors, has gotten pushback from millions who resent the “996” lifestyle pushed by Alibaba co-founder Jack Ma. The 996 lifestyle means working from 9 to 9, 6 days a week. This is a 72 hour workweek, not counting the time spent commuting or preparing for work. And for what, they ask?

Xi has reacted to this by attacking the phone-based playstyle that makes all this tolerable. Telling China’s kids that they can only be on their phones for an hour each day is what American parents were doing in the 1960s, attacking rock and roll. It’s out of touch.

The Decade of Immersive Technology

Back in 2019, while at the Heidelberg Laureate Forum in Germany, I wrote about three key trends that would define the 2020s.

They were the end of oil, the Machine Internet, and DNA as a programming language .

Since then, there has been progress in all three areas. The pandemic, and resulting parts shortages, have delayed but won’t prevent the end of oil. You can see the Machine Internet in all the hype over 5G. The Moderna vaccine is indeed using DNA as a programming language.

Turns out there’s a 4^th trend, and there may be more.

Virtual Staging

Right now, production for films, TV, video games, and Web sales are all done differently.

Five years from now, they will all be done in the same way, using “virtual stages” and virtual reality software.

As with everything else in tech, it’s starting at the top of the cost curve but will head down rapidly. Tools like the Unreal Engine cover the software side. Virtual stages represent the hardware side.

The cost of this gear is very high. But the gear is just the tip of the cost iceberg. You need people who can run it, you need people who can write code around it. You need people to integrate it, people who can tell stories using it, and you need big bandwidth to distribute it.

The Overnight Game

Redditors who started by fighting short sellers over Gamestop have a new game to play.

The overnight game.

I got to see it for myself yesterday. I was tasked to write about Sundial Growers. They’re on the NASDAQ, ticker symbol SNDL. They’re a pot company, a small one.

At the start of January this was a penny stock, worth just 60 cents. Then the games started. Management took advantage, watering down the stock repeatedly to get rid of debt and raise cash. This only made the punters more desperate to get a piece. As of this week there are 1.5 billion shares outstanding.

But with a market cap of $2 billion, it’s not hard to move. If you play the overnight game.

After markets close, they’re still open. After-hours trading continues for hours and officially resumes in the morning. Even during those 10 hours, you can still place an order. So, orders got placed. When I was writing at around 7 AM yesterday, shares that had risen to $3 during the day were trading at $4.50.

I told readers to sell, but the game was already over by the time my article came out. By lunch the stock was trading below $2.50.

Dave Portnoy, founder of Barstool Sports, was in on it. He bragged about his $50,000 profit online, buying, then selling in the overnight hours.

Assholes like Portnoy are going to run this game on their followers again-and-again until the suckers get wise. Those who get in with them will win, the ones who follow will be fleeced.

Reform is needed.

The New Virtual Worlds Opened by eSports

The latest technology trend is right up my son’s alley.

It’s eSports, people playing high-end video games for serious money.

I was somewhat shocked when my son insisted on buying a powerful desktop PC before heading to graduate school. I had failed to understand, from my couch in front of the TV, that gaming is now the tip of the PC spear. (No wonder I got to choose what shows to watch.)

Only video games press the power of the latest chips and systems. Every other application set, especially my own work in writing about technology, or my son’s academic work, learning about how to create new molecules, can be done with relatively low-end gear and a cloud connection.

Morality Is Not An Absolute

Think of this as Volume 17, Number 35 of the newsletter I have written weekly since March, 1997. Enjoy.

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This Clue is a bit late getting posted because I was having my first long vacation in three years.

I traveled with my daughter, who writes for us on Urban Wildlife Policy. We did a 10-day cruise of Norway, then spent a week in northern England, mainly based in Sheffield. (Go Wednesday.)

I learned a whole lot. And the most important lesson is this.

Morality is totally objective.

The best way to illustrate this is with our visit to England. We're supposed to be a lot like England. They're our best friends. We can understand them when they speak, sometimes.

But on questions of morality, it turns out we're not like them at all.