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Netflix Strategy: Revenue and Content

9/30/2011

 
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Netflix's change is all about content and revenue.
This has been the strategy of Netflix for the past 14 years:
One fee. Unlimited Content. 

Going forward this is what we can expect:
Qwikster: One Fee. Unlimited Content. (Same as original business model)
New Netflix: One Fee for unlimited basic content. Pay per view for premium content.

Movie Studios can and do demand a high premium for New Releases and other premium content. It is about customer demand. Customer demand is so high in the first weeks following a new release that studios can demand very high fees from distributors like Netflix. But Netflix's business model has been about unlimited content for a fixed fee. This model can destroy BlockBuster and make Netflix a fast growing company, but the economics will never work out for New Releases.

Now that Netflix has pushed BlockBuster into bankruptcy there are emerging threats online for pay-per-view premium content, like Hulu and Zune. Netflix needs to make a move and it can do so by delivering premium content. It will give them access to great new content as well as another revenue source. Online is the future of content and Netflix is growing up and will start closing and announcing new deals for premium content. They have the distribution, the name, subscribers, and access on a lot of devices. 


If you want to go long on a stock, buy Netflix.

It Is A Bright Future If You Are An Algorithm

9/22/2011

 
Great TED talk on Algorithms:Kevin Slavin argues that we're living in a world designed for -- and increasingly controlled by -- algorithms. In this riveting talk from TEDGlobal, he shows how these complex computer programs determine: espionage tactics, stock prices, movie scripts, and architecture. And he warns that we are writing code we can't understand, with implications we can't control.

Why the Angries Makes You Happy

9/20/2011

 
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 When Angry Birds was starting to become really popular, I was surprised that anyone who played the game enjoyed it and would get almost obsessed with the game. I was a Blackberry user for several years, so I was behind the curve a little when it came to mobile apps and games. Since I never had played the game, I didn't understand the appeal. Friends would tell me how sometimes they would stay up until late at night trying to beat the next. This was very surprising, especially considering how wide the appeal was. Is this just a social phenomena? Or was there something about the game that made it appealing?

So when I bought the new Evo 4, Angry Birds was one of the first apps I downloaded. It instantly became popular in my house. In fact I found myself being more and more drawn to finish the game. I wanted to finish each level. I was finding myself spending a lot of time on the game. I couldn't understand why. I enjoyed playing the game, but I didn't understand why I felt addicted to the game. I would promise myself just one more level, which would always turn in to one more. I kept telling myself that I could stop whenever I wanted, but I found myself unable to do so. 

I discovered in the book "Flow: The Psychology of Optimal Experience" why this is the case. The author lists 7 attributes that makes us enjoy an experience. Each of these attributes is present in the Angry Birds game. We play the game because it makes us happy.
  1. Challenging Activity that Requires Skill- Each level on Angry Birds, is a confronting task. We need to knock down all of the Pigs. These require some level of skill and calculation. As well as strategy. But for each level, we believe that eventually we will find the right combination and that there is a chance of completing.
  2. Concentrate on What We Are Doing. We can concentrate in Angry Birds. We are flicking our fingers and watching the birds fly through the air. We are captivated by the the challenge, goals and feedback.
  3. Clear Goals- Knock down the pigs and complete the level, with only the limited number of birds. Very clear.
  4. Clear Feedback-  Immediately we see if the flick worked. We understand if we have to make adjustments. 
  5. Removes from awareness the worries and frustrations of everyday life- Playing Angry Birds allows us to slip into a trance. I see it whenever my 5 year old starts to play. He can't hear me. He forgets he has to go to the bathroom. He forgets he is tired. He forgets that he is hungry.
  6. The Paradox of Control- This means that it allows us a sense of control over our actions. We feel in control of how long we want to play, when we want to play. It is available on a phone or ipod so we can choose. We feel like we are in control of improving our skill too. We each develop a strategy and we improve on that strategy. (Always go for the most difficult bird first)
  7. Transformation of Time- Duration of time is altered, time passes quickly, hours appear as minutes. Next thing we realize is that it is midnight, we didn't eat dinner and the wife went to bed hours ago. (Was she mad? Not sure.)

These principles can apply to many other situations in our life. When we have all of these moments at once, we can realize that we are happy. While Angry Birds did a lot of things right, like design, this is the most crucial. It makes us happy.

Big Data in Healthcare

9/20/2011

 
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A visualization of thousands of Wikipedia edits that were made by a single software bot. Each color corresponds to a different page. Image: Fernanda B. Viégas, Martin Wattenberg, and Kate Hollenbach
What is Big Data? Big data are datasets that grow so large that they become awkward to work with using on-hand database management tools. Difficulties include capture, storage, search, sharing, analytics, and visualizing. This trend continues because of the benefits of working with larger and larger datasets allowing analysts to "spot business trends, prevent diseases, combat crime.
 McKinsey addresses the benefits and risks of using big data. 
"If US health care were to use big data creatively and effectively to drive efficiency and quality, the sector could create more than $300 billion in value every year. Two-thirds of that would be in the form of reducing US health care expenditure by about 8 percent."

I think the interesting thing here is that it enables the long tail to start to have an impact. Or, I should say a larger impact. You can sample from a large data set and understand what is going on, generally. But outliers and long tails can get ignored. This is a great place to focus when you think about the concepts of Quality Improvement, Six Sigma, and other improvement movements. 

Being able to impact what is occurring on the fringe can have a great impact. Look at Itunes and Amazon for commercial examples of being able to deliver the Long Tail. Chris Anderson wrote a book a few years ago about the Long Tail. With Bern we operate in the Long Tail. When we analyze a radiology group to discover under-billings we are looking for exceptions. Most groups and I think healthcare providers are good with billing. We are looking for 98% accuracy. But, this still leaves an average of 2% error rate for us to discover. Since these are the long tail types of errors, it is a little more difficult to completely eliminate from happening. Not impossible, but a little more difficult.

So we search for trends in the data, to help explain and understand some of the causes. Perhaps there is a trend in the facility, modality, or scheduler. It may not be cost effective to eliminate some of the errors, provide a daily reconciliation of small dollar items. Some times we get close enough and that is good enough. And maybe that is ok. Because Bern could come in and provide a reconciliation (audit) of a batch of data (quarterly or annually) and be able to recover some of the money and do so in a much cost effective manner.

Share the Air- VC Presentation

9/15/2011

 
This presentation is from earlier this year. A great presentation. I will let you decide if the VCFC conference and company presentation are real.

HealthBox Accelerator

9/15/2011

 
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I attended the San Diego presentation from HealthBox tonight at Qualcomm. I for one really appreciate what they are doing. I am sure that the first round will be a little learning opportunity for them to figure out the right model. It seems that they are doubting making companies move to Chicago for 3 months. I think it would be a mistake to give that requirement up. This is from a San Diego based company that would have to go to HealthBox at Chicago in January.... But there is something to living in the area and in being there with the contacts etc... that will be missed if they drop the requirement.

See, part of the accelerator is about the connections that you would make as part of being in the program. The other thing is the network effect of having 10 startups working together and brainstorming on solutions. That will be interesting and while it might not have immediate effects, for sure the collaboration will occur because the companies work closely. 

I am not as familiar with Sandbox so if anyone has more info on them, please shoot me an email.

Right. This is why I don\'t accept Linkedin requests from people I don\'t know.

9/14/2011

 
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This will totally screw up my SEO I am sure. But as a general rule I don't accept linkedin requests from people I don't know (especially Facebook friends, too) But I do make exceptions sometimes and I do invite people that I would like to be connected to as well. This is a good reason not to accept requests from random people. Got this message today. Maybe this isn't too weird and I am just ignorant when it comes to the astrology as a profession. 

Astrology as a profession in and from India (doemstic and global market)
Hi David - My wife "Susie" wants to start up Astrology professionally. We are based out of India (Calcutta) and I am an executive with IBM with global clientele. That gives us the advantage of being in contact with educated, modern and globally-aware crowd in India. 
My wife can spend at least 8 hours day, spread between day-time India time and in the evening when the western world is active. And over the last few months she has picked significant knowledge to do consulting in astrology. 

That was a brief background and can speak more if you wish to. 
Wished to ask you - if you can give some leads/tips on how to start up/succeed on Astrology as a profession -with a combination of face to face consulting domestic in India and online for a global clientele. 

Thanks and will look to your response. Have a good day. 
"Jim"

7 Elements of Enjoyment

9/14/2011

 

I will post a couple of additional thoughts on these 7 elements in how we can create a great culture and how we can use these elements in products and services. These are concepts that lead us to have real enjoyment in an experience.

 These thoughts are presented in "Flow The Psychology of Optimal Experience" byMihaly Csikszentmihalyi. 
  1. Challenging Activity that Requires Skill- Confronting tasks that we have a chance of completing
  2. Merging of Actions and Awareness- Must be able to concentrate on what we are doing
  3. Clear Goals and Feedback- Undertaken because the task has clear goals and immediate feedback
  4. Clear Feedback-  Undertaken because the task has clear goals and immediate feedback
  5. Concentration on the Task at Hand- Removes from awareness the worries and frustrations of everyday life.
  6. The Paradox of Control- Allow people to control a sense of control over their actions.
  7. Transformation of Time- Duration of time is altered, time passes quickly, hours appear as minutes.

You Get What You Measure

9/13/2011

 
Dustin Moskovitz co-founder of Facebook stated in his interview at Disrupt San Francisco, "You get what you measure". I think this is important, because what you decide to measure is what as a result you will continue to modify and change- in order to impact the measurements. So whatever metrics you focus on will be the result of what you are desiring. 

It reminds me of another similar quote, "When performance is measured, performance improves. When performance is measured and reported back, the rate of improvement accelerates".


So choose important metrics. Identify what you want and begin to measure them.

Data is the New Soil

9/12/2011

 
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Every two days now we create as much information as we did from the dawn of civilization up until  2003, according to Schmidt. That’s something like five exabytes of data.

Let me repeat that: we create as much information in two days now as we did from the dawn of man through 2003.

“I spend most of my time assuming the world is not ready for the technology revolution that will be happening to them soon,” Schmidt said.

How are we to understand so much information? How can we understand how the data changes over time? Data visualization helps release the complexities of the data ad the relationships inside the data. Especially when they are complex.

Below is a video from a presentation at TED from David McCandless. It is a great reminder on the beauty and the increased understanding that can come from data visualization. 
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