May 29, 2017

Archives for September 2008

Will cherry picking undermine the market for ad-supported television?

Want to watch a popular television show without all the ads? Your options are increasing. There’s the iTunes store, moving toward HD video formats, in which a growing range of shows can be bought on a per-episode or per-season basis, to be watched without advertisements on a growing range of devices at a time of your chooing. Or you could buy a Netflix subscription and Roku streaming box on top of your existing media expenditures, and stream many TV episodes directly over the web. Thirdly, there’s the growing market for DVDs or Blu-ray discs themselves, which are higher definition and particularly rewarding for those who are able to shell out for top-end home theater systems that can make the most of the added information in a disc as opposed to a  broadcast. I’m sure there are yet more options for turning a willingness to pay into an ad-free viewing experience — video-on-demand over the pricey but by most accounts great FiOS service, perhaps? Finally, TiVo and other options like it reward those who can afford DVRs, and further reward those savvy enough to bother programming their remotes with the 30-second skip feature.

In any case, the growing popularity of these options and others like them pose a challenge, or at least a subtle shift in pricing incentives, for the makers of television content. Traditionally, content has been monetized by ads, where advertisers could be confident that the whole viewership of a given show would be tuned in for whatever was placed in the midst of an episode. Now, the wealthiest, best educated, most consumer electronics hungry segments of the television audience–among the most valuable viewers to advertisers–is able to absent itself from the ad viewing public.

This problem is worse than just losing some fraction of the audience: it’s about losing a particular fraction of the audience. If x percent of the audience skips the ads for the reasons mentioned in the first paragraph, then the remaining 100-x percent of the audience is the least tech-savvy, least consumer electronics acquistive part of the audience, by and large a much less attractive demographic for advertisers. (A converse version of this effect may be true for the online advertising market, where every viewer is in front of a web browser or relatively fancy phone, but I’m less confident of that because of the active interest in ad-blocking technologies. Maybe online ad viewers will be a middle slice, savvy enough to be online but not to block ads?)

What will this mean for TV? Here’s one scenario: Television bifurcates. Ad-supported TV goes after the audience that still watches ads, those toward the lower part of the socioeconomic spectrum. Ads for Walmart replace those for designer brands. The content of ad-supported TV itself trends toward options that cater to the ad-watching demographic. Meanwhile, high end TV emerges as an always ad-free medium supported by more direct revenue channels, with more and more of it coming along something like the HBO route. These shows are underwritten by, and ultimately directed to, the ad-skipping but high-income crowd. So there won’t be advertisers clamoring to attract the higher income viewers, as such, but those who invest in creating the shows in the first place will learn over time to cater to the interests and viewing habits of the elite.

Another scenario, that could play out in tandem with the first, is that there may be a strong appetite for a truly universal advertising medium, either because of the ease this creates for certain advertisers or because of the increasing revenue premium as such broad audiences become rarer and are bid up in value. In this case, you could imagine a Truman Show-esque effort to integrate advertising with the TV content. The ads would be unskippable because they wouldn’t exist or, put another way, would be the only thing on (some parts of) television.

Hurricane Ike status report: electrical power is cool

Today, we checked out the house, again, and lo and behold, it finally has power again!  Huzzah!

All in all, it hasn’t been that bad for us.  We crashed with friends, ate out all the time, and (thankfully) had daycare for our daughter as of Thursday last week.  Indeed, I’m seeing fewer people’s kids around the office this week and more people seem to be getting back into the groove.

Even though Rice wanted classes to restart on Tuesday of last week, the unstated unofficial everybody-get-back-to-work day was really yesterday, Monday, just over a week after the hurricane.  What’s the status of the city?

Many people are still without power, and the power crews are now dealing with harder cases, individually damaged lines, and so forth.  Getting the rest of the city online may well take a good long time.  Another interesting effect is that the rush-hour traffic is beyond insane.  Luckily, our daily commute is short enough that we’re largely immute to this, but traffic lights which reset to blinking red are slowing down everything, to the point that remote freeway exits are backing up into the freeways due to the malfunctioning traffic lights at the intersections below.  The Chron estimates it could be until November until all the traffic lights are repaired.  Ouch.

Naturally, one of the tempting purchases for us is some kind of natural gas powered, permanently installed generator.  I’m sure if I shop around for one now, I’d pay a mint to get it.  Maybe in the off season… Needless to say, I don’t see the city investing to bury all the power lines that run above ground.  They have legitimately higher priorities.  As to me, I sure would have been happy to have had power all the way through this thing, brought to us by the one utility that never had any downtime: our natural gas line.

[Sidebar: it takes a major power outage for you to really appreciate how people got by in the days before electrical power.  Pickling, preserving, and other techniques suddenly seem awfully clever.  Some candles put out an awful lot more light than others.  You can also see why it was a standard architectural feature of old Southern homes to have big outdoor porches — so you’d have somewhere slightly cooler to sleep than indoors.]

How Yahoo could have protected Palin's email

Last week I criticized Yahoo for their insecure password recovery mechanism that allowed an intruder to take control of Sarah Palin’s email account. Several readers asked me the obvious follow-up question: What should Yahoo have done instead?

Before we discuss alternatives, let’s take a minute to appreciate the delicate balance involved in designing a password recovery mechanism for a free, mass-market web service. On the one hand, users lose their passwords all the time; they generally refuse to take precautions in advance against a lost password; and they won’t accept being locked out of their own accounts because of a lost password. On the other hand, password recovery is an obvious vector for attack — and one exploited at large scale, every day, by spammers and other troublemakers.

Password recovery is especially challenging for email accounts. A common approach to password recovery is to email a new password (or a unique recovery URL) to the user, which works nicely if the user has a stable email address outside the service — but there’s no point in sending email to a user who has lost the password to his only email account.

Still, Yahoo could be doing more to protect their users’ passwords. They could allow users to make up their own security questions, rather than offering only a fixed set of questions. They could warn users that security questions are a security risk and that users with stable external email addresses might be better off disabling the security-question functionality and relying instead on email for password recovery.

Yahoo could also have followed Gmail’s lead, and disabled the security-question mechanism unless no logged-in user had accessed the account for five days. This clever trick prevents password “recovery” when there is evidence that somebody who knows the password is actively using the account. If the legitimate user loses the password and doesn’t have an alternative email account, he has to wait five days before recovering the password, but this seems like a small price to pay for the extra security.

Finally, Yahoo would have been wise, at least from a public-relations standpoint, to give extra protection to high-profile accounts like Palin’s. The existence of these accounts, and even the email addresses, had already been published online. And the account signup at Yahoo asks for a name and postal code so Yahoo could have recognized that this suddenly-important public figure had an account on their system. (It seems unlikely that Palin gave a false name or postal code in signing up for the account.) Given the public allegations that Palin had used her Yahoo email accounts for state business, these accounts would have been obvious targets for freelance “investigators”.

Some commenters on my previous post argued that all of this is Palin’s fault for using a Yahoo mail account for Alaska state business. As I understand it, the breached account included some state business emails along with some private email. I’ll agree that it was unwise for Palin to put official state email into a Yahoo account, for security reasons alone, not to mention the state rules or laws against doing so. But this doesn’t justify the break-in, and I think anyone would agree that it doesn’t justify publishing non-incriminating private emails taken from the account.

Indeed, the feeding frenzy to grab and publish private material from the account, after the intruder had published the password, is perhaps the ugliest aspect of the whole incident. I don’t know how many people participated — and I’m glad that at least one Good Samaritan tried to re-lock the account — but I hope the republishers get at least a scary visit from the FBI. It looks like the FBI is closing in on the initial intruder. I assume he is facing a bigger punishment.