Dana Blankenhorn

Why Clouds Will Win the Streaming Wars

Since long before the streaming crash began, I predicted its Big Three would end up being Apple, Google, and Amazon.Com.

Not Netflix. Not Disney. Not Comcast or Paramount or Warner Brothers.

The Cloud Czars.

As usual, I was early to the story. But it has long been clear that, when push comes to shove in streaming, money talks. The coming result was easy for me to see and the story was easy to do.

Of the three Cloud Czars, Amazon is the best-positioned. They have the front-end technology with the Fire Stick, which has one-third of the U.S. market. They have Prime Video, which becomes a huge value if you use the Amazon store. They can re-sell every other streamer’s stuff and make money. They’re also global, something only Netflix and Disney among their competitors can lay claim to.

The Streaming Winners (And Losers)

This is something I saw coming years ago at Investorplace.

Streaming will be owned by the Cloud Czars.

All the entertainment companies with their lawyers, producers, and lobbyists are going to fade away. Together, they’re worth a fraction of what Amazon or Alphabet are. Amazon and Alphabet are, in turn, worth barely half what Apple is.

It’s game over.

The reason is simple. Think of the cloud as the operating system of our time. Control what’s beneath and you control what’s above. IBM understood this in the 1960s. Microsoft understood it better in the 1980s.

The TV Content Crash

Ever since the Web was spun, over a quarter century ago, TV content providers have been getting squeezed out of the advertising market.

That’s not how it’s reported. But fewer people have cable than can watch a broadcast. Fewer still have access to streaming. What’s left of broadcasting now are mostly one-set news shows, cheap reality and game shows, endless re-runs of movies and old TV, people sitting around tables talking, or sitting in chairs yelling. Cable is evolving into the same wasteland.

Streaming is where it’s at because of ARPU. That’s Average Revenue Per User. Broadcasting is free, cable brings in very little to most channels, but a streaming subscription costs $10-15/month and the programmer only shares that with the producer.

Instant Family

Last year a real Hollywood movie was made on our street. 

It came out early this year, and Wikipedia says it grossed $120 million. It found life on Amazon Prime and, when I saw it was available, I gave it a look.

The film stars Mark Wahlberg and Rose Byrne as childless adults who spent a month being driven up and down the street in black cars on their way to filming. Primary filming was done at 262 Winter. We’re at 215. Our house was never shown.

I remember 262 from back in the day, in the early 1990s, before the neighborhood became gentrified. It was barely a shell when a man named Michael bought it and renovated.

Some history. These houses all look like Craftsman barns, a central beam and a roof that slopes to the sides. My son John calls them “double-barreled shotgun shacks.” The homes on the east side were built around 1908, in the City of Oakhurst. Oakhurst folded in 1915, and the homes were joined to Decatur. Those homes on the west side were built in the early 1920s, when the City of Kirkwood folded and became part of Atlanta. Our house dates from 1923. The developer of the Oakhurst homes was a woman in Kirkwood named Lavinia Winter. Hence the name Winter Avenue.

The Death of Cable (and what comes after)

On March 25 Apple announced the death of the cable television model.

What replaces it is, in a word, the Internet. Streaming services, yes, but with far more interactivity than cable or broadcasting ever offered. True integration between audiences and programming, whether you need news, sports, or entertainment. Available wherever you happen to be. All you need is a mobile phone.

This is the entertainment model of the future.

Sounds great. People are now paying $200-250 per month for bundled Internet and TV service, with the TV taking up two-thirds of that bill. They’re paying another $60 or so for mobile Internet service, with calling bundled in.

There’s a lot of money at stake.

I covered the birth of the present world. I covered it twice.

Consolation Prize

Think of this as Volume 17, Number 27 of the newsletter I have written weekly since March, 1997. Enjoy.

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Let's see what's at the cinema:

• After Earth  – A father-and-son find they can only rely on one another after everyone else has been forced to abandon it.
• Man of Steel – Superman turns out to be a farm boy who must choose to fight for Europe against his own people.
• This Is The End – Rich Hollywood stars, and Hollywood, get the apocalypse they deserve. (right)
• World War Z – Only one man can save us from the zombie apocalypse.
• White House Down – A black President and his White House must be saved by a white tourist.
• The Lone Ranger – This time, Tonto tells the tale. And the white guy is still the good guy.
• Red2  – The CIA saves the world from nuclear disaster. 

 

Notice what all these films have in common? They're generally about rugged individuals saving a complex civilization through the use of their rude simplicity. When liberals appear, they're the butt of the joke.

They are all, fundamentally, conservative.

Last Word on Jobs

I've been wracking my brain trying to think of another executive who passed at the absolute peak of his wealth and fame, as Steve Jobs did. This is the best I could come up with -- Irving Thalberg.

Of course even in that case Thalberg had been aced-out of his role as sole head of production five years before his death. (He had suffered a heart attack at age 33 and died of pneumonia in 1937.)  So maybe even that's not a true analog.

But it's true that the studio closed the day of his funeral, just as Apple stores did yesterday in celebration of Jobs. Both Thalberg and Jobs were cultural icons, people who transformed the consumer world (as opposed to the Watsons of IBM, who worked with businesses).

If y'all can come up with a better analog, let me know. Elvis was fading when he passed at ae 42, and Lennon's star was 10 years dimmed when he died at age 40. John F. Kennedy comes to mind, but he was shot -- he didn't die of cancer, age 44.

It's a puzzlement.

The Market is Bigger than the Law

To hear Florian Mueller tell it  Google is doomed.

In addition to its other legal troubles involving Android, it may have grossly violated the General Public License (GPL), taking copyrighted work willy-nilly from open source and turning it into the semi-proprietary Dalvik.

Well, since it's St. Patrick's Day, we'll quote a little Finian's Rainbow.  Things are desperate, but not serious.

After Dinner

While all the news shows were covering the Inaugural Balls this evening, Turner Movie Classics (known at my home as the Dead Movie Channel) re-ran a classic from 1967, Guess Who's Coming to Dinner.

It's a movie that has lived many lives. It won Spencer Tracy his 9th (and last) Oscar nomination -- he died shortly after filming ended. It then killed Sidney Poitier's career as a Big Star, as black folks who had moved from King to Malcolm X decided he was just an "Uncle Tom."

Nothing could have been further from the truth, but the character he played, a brilliant black doctor with honors as long as your arm, was very much in keeping with what critics call the Magic Negro, an incredibly gifted, infinitely patient, almost godlike black figure who is nevertheless not the center of the story, but a means by which some white character finds their own soul.

There are many examples in contemporary cinema. The caddy in "Bagger Vance." Morgan Freeman in "Driving Miss Daisy," or as God himself in "Bruce Almighty." Queen Latifah in Steve Martin's "Bringing Down the House." (In fact Poitier's characterization is more nuanced. He is, in fact, conflicted about his own choice, and how others will react. It's Katharine Ross' Joanna who is truly unruffled.)

The problem, in other words, was that Sidney Poitier's character was not at the center of the story, but that Spencer Tracy's was. Of course that's the way with drama -- it's the one who changes whom we focus on.

Leadership

The difference between the ordinary and the extraordinary is calm in the center of the storm.

• We see it in athletics, where the pitcher or the quarterback or the point guard is able to somehow control their emotions, stay in the moment, slow down the game and deliver the victory.
• We see it in business, where a trader or CEO keeps his head while markets are falling and scoops up assets at a fraction of their "real" price.
• We love to see it in Las Vegas. It's what the great gamblers have. It allows them to bluff and take pots when they have nothing, because they separate themselves from the emotions of the moment and take advantage of others' normal weakness.
• We see it on the stage, in the movies. We see it in religion. The greats all have it. That ability to be still, to hold a mirror to the audience and let themselves be the hero the viewer wants them to be.

We're seeing it in politics this week, in the person of Barack Obama.

It is an extraordinary talent.