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  • Newsletter Issue #548

    May 30th, 2010

    THIS WEEK'S TECH NIGHT OWL RADIO UPDATE

    I first returned to radio in 2003, with an online show that I co-hosted with my son, Grayson. Once he left home to seek his fortune, I continued to expand the effort, adding a second weekly broadcast.

    While online radio has become increasingly popular, there is something magical about traditional brick and mortar stations. That's where I first learned the craft, as it were, and I've often wondered if I'd ever return to that profession before I started the online venture.

    Well, things are starting to jell. I recently signed a deal to syndicate both radio shows with a U.S.-based network. This means that we'll be coming to a local radio station near you in the next few weeks, though I'll need your help to encourage stations in your city to carry the show.

    At the same time, you'll still be able to hear The Tech Night Owl LIVE and The Paracast online, and download via iTunes or another podcast repository. There will also be a special iPhone app from the network, so you can hear the live and on-demand feeds on your favorite smartphone or tablet computer.

    Meantime, on last week's episode of The Tech Night Owl LIVE, "Angry Mac Bastard" Peter Cohen joined us to give you his unvarnished views on the DOJ investigation into Apple's iTunes business practices, the strange case of that notorious "lost" iPhone prototype and Mac gaming updates.

    Steve "Mr. Gadget"Kruschen delivered "dads and grads" gear, with the emphasis on Internet phone service, a new TiVo DVR and other cool stuff.

    Cutting-edge commentator Daniel Eran Dilger, of Roughly Drafted Magazine, spoke out about the potential announcements at Apple's WWDC, the problems with Google, Flash and lots more.

    This week on our other show, The Paracast, newly-minted co-host Greg Bishop presents paranormal researcher Walter Bosley, co-author of "Latitude 33: Key to the Kingdom," who once worked as a U.S. counterintelligence specialist, and has loads of fascinating insights to offer about UFOs and other strange and unknown phenomena.

    Coming June 6: Co-hosts Paul Kimball and Christopher O'Brien present veteran UFO researcher Kevin D. Randle, author of "Crash: When UFOs Fall From the Sky: A History of Famous Incidents, Conspiracies, and Cover-Ups."

    Now Shipping! The Official Paracast T-Shirt. We're taking orders direct from our new Official Paracast Store, where you can place your order and pay with a major credit card or PayPal. The shirts come in white, 100% cotton, and feature The Paracast logo on the front. The rear emblem states: "Separating Signal From Noise." We've also added a selection of additional special custom-imprinted merchandise for fans of our show.

    SO IS APPLE REALLY IN LEGAL TROUBLE?

    Just days before Apple became the largest tech company on the planet, at least based on stock valuation, it was widely reported that the U.S. Department of Justice was looking into possible antitrust violations. The main focus of the investigation appears to center on iTunes, and the way Apple handles its contracts with the entertainment industry.

    The probe was reportedly triggered by Apple's response to Amazon's efforts to gain a one-day exclusive on new music. Apple allegedly threatened to withhold promotion for a participating label's product.

    Such behavior wouldn't make much of a difference, except that Apple controls roughly 70% of the online music marketplace in the U.S. Even when you factor physical stores into the mix, Apple remains well ahead of the pack, which also includes Walmart. So you can see why the authorities are looking into the situation.

    At the same time, Apple's decision to block Flash from their mobile platform and alter the iPhone SDK to prevent you from using third-party tools to create software has also drawn attention. But I expect it's iTunes that's getting the lion's share of attention.

    Now in the scheme of things, Apple has been very good for the music business. The industry was caught flat-footed without a workable strategy when Napster came to be and it was easy to download songs. It's not that Napster actually made deals with the industry in those days. They just made it possible for people who ripped the tracks from CDs to post them and to have millions of others download their favorite tunes, while the industry and the artists lost billions of dollars.

    With iTunes, Apple may have actually saved the industry. They crafted deals that allowed you to download individual tracks or complete albums with only modest restrictions on your ability to listen to that content on multiple devices. After Steve Jobs made a public plea to ditch DRM, nowadays you can buy an even higher-quality track from iTunes and transfer it anywhere you want. Despite what one ill-informed online commentator said the other day, you can even play those songs on rival music players, so long as they support AAC encoding.

    And, no, AAC is not an Apple format. It's an industry standard that happens to be better than MP3, although not all rival players support the technology, to their detriment.

    As much as the music industry benefits from iTunes, they still hold the cards. They aren't forced to sign new contracts and, in fact, the selection of movies and TV shows isn't near as comprehensive as music, where the most significant holdout remains The Beatles, unfortunately.

    Yes, it's true that Apple's market dominance allows them to make demands of their industry partners and perhaps get their way more often than not. The entertainment industry cannot easily tell Apple where to go and how to get there, because they need iTunes for maximum distribution and sales.

    Being dominant, however, has its price. The things Apple would do in order to carve out a place for the company in a highly competitive environment can seem abusive when they reach the pinnacle of success. That's where government regulators enter the picture and demand some measure of equality.

    In the end, if Apple overstepped the boundaries of good business practices, they might be required to sign a consent decree agreeing to halt such practices and perhaps pay a fine to cover the costs of the investigation and to suffer appropriately. But I don't see their behavior being near as restrictive as the requirements Microsoft forced onto its PC partners back in the 1990s.

    After all, you are not dealing with an environment where there's no competition. You can buy your music, via download or physical media, from Amazon and other companies. You are free to visit a Walmart or Target store and buy your favorite DVDs and CDs, although I grant the selection is nowhere as extensive as the online alternatives.

    What's more, those DVDs — except for Blu-ray unless you get a third-party player — and CDs work just great on any Mac. You can even import the contents of your CDs into iTunes and download it to your iPhone, iPod or iPad. Nobody forces you to buy your music from Apple, now or ever. It just doesn't work that way, although that impression is also being spread by some media pundits who should know better.

    As far as I'm concerned, I still prefer physical media for movies and music, both of which provide superior quality on a decent home entertainment system. I have purchased very few albums from iTunes, and, in fact, I gather the same is true for most iPhone and iPod users.

    I do not feel that Apple has in any way constrained my ability to listen to music or watch movies. What's more, I do see Apple reaching out to allow you to access competitive services on their mobile platform. So, for example, you'll be able to hear custom music mixes without interruption (even if you switch apps) from Pandora when iPhone 4.0 appears with its enhanced multitasking. Such music subscription services as Rhapsody also provide iPhone apps in case you want to rent rather than purchase. While I don't expect you'll be able to download tracks from the Zune Marketplace direct to your iPhone or iPod, it's not as if Apple has left you without choices and at least some access to the competition.

    In any case, the DOJ probe will continue to remain front and center unless or until Apple does something else that upsets someone, somewhere. Or maybe the expected announcements at the forthcoming WWDC will focus the coverage on something perhaps a bit more positive.

    USING SURVEYS FOR REVIEWS

    I have been mighty critical of the review policies at Consumer Reports, particularly when it comes to personal computers and security issues. The magazine's tech staff continually fails to understand the Mac OS or Apple's hardware, treating them as just a bunch of fancy, perhaps overpriced, PCs. You rarely even see much content explaining that Macs use a totally different operating system than Windows, nor is there ever a comparison as to which is actually better when it comes to usability and reliability.

    Well, at least CR admits that security issues are largely Windows based, although that information is not always directly presented. It just happens that all or most of the security products they cover are strictly for Windows users, leaving the implication obvious if you want to read between the lines.

    Forgetting CR's curious agenda when it comes to giving Macs a fair shake, one area where they really fall down is the way they conduct reader surveys and use that information in their feature stories. Most or all subscribers to the magazine receive annual surveys covering a host of products ranging from laundry detergents to motor vehicles. Since CR isn't picking recipients based on a scientific sampling, and they don't control the number and demographics of those who choose to participate, the results are hardly worth more than the random polls you see online.

    Unfortunately, CR is using that data to decide not just whether a car has a history of decent reliability, but where you should shop to get the best prices and service. Now I realize there may be some level of accuracy in auto quality ratings, where, if a certain percentage of owners of a specific make and model routinely experience serious breakdowns, that is apt to indicate a product-wide problem. But there's a danger of making too much out of too little.

    So in an article entitled "America's top stores," CR is relying on the responses of 30,000 unscientifically selected readers to provide the actual ratings. Now if CR's own editors visited the stores randomly and made efforts to confirm those value judgements, that would surely help enhance the feature's relative accuracy. But it appears that the survey is the beginning and end of the evidence used to calculate those rankings, and that's unfortunate, since different merchants are apt to cater to customers that may or may not be properly represented in that survey.

    This isn't to say that CR's various rankings should be discounted completely. When they tell you, for example, that a certain Lexus SUV has unsavory handling characteristics that might cause the vehicle to overturn during an emergency maneuver, you have to pay attention. Certainly, Toyota did, when it changed the software of that luxury vehicle to provide a safer response. Well, at least car makers can do that nowadays, since they rely so heavily on electronics for better or worse.

    Part of the problem with CR, however, may be that it's too full of itself, presenting itself as the most important arbiter of the quality of consumer products. Certainly the fact that the magazine is published by a non-profit corporation, that they do not take advertising and do not allow companies to use their ratings for promotional purposes, does seem to deliver at least the veneer of reliability and respectability. But when testing methods and results fall short, the ones who suffer most are the consumers who take them seriously.

    THE FINAL WORD

    The Tech Night Owl Newsletter is a weekly information service of Making The Impossible, Inc.

    Publisher/Editor: Gene Steinberg
    Managing Editor: Grayson Steinberg
    Marketing and Public Relations: Barbara Kaplan
    Worldwide Licensing and Marketing: Sharon Jarvis



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    4 Responses to “Newsletter Issue #548”

    1. Gadget Newz says:

      [...] Newsletter Issue #548 [...]

    2. Louis Wheeler says:

      Consumer Reports has always seemed rather odd. Their attitudes are vaguely anti-business; they take an adversarial stance. They proclaim their purity by not accepting free products, as though they are not biased in other ways. Their assumption is that companies are out to cheat people. CR tends to view products in commodity terms, so that they are essentially interchangeable. I suspect it is their politics which blinds them.

      Franklin Delano Roosevelt cartelized American businesses under the National Recovery Administration. Even though this law was declared unconstitutional, many American businesses remained covertly anti-competitive into the 1980s. What FDR imposed was Corporate Statism or state capitalism which was then regulated by federal agencies. Some people on the Left saw this combination of Big Business and Government as unholy and set out to thwart it through "Consumerism." These people are the ones in control of CR.

      Apple has never been part of Big Business; it has always been antiestablishment. The Mac seems intentionally individualistic to me; it is greater than the sum of its parts. Apple has always been about the dream of excellence, even when they fall short.

      Consumer Reports seems to have difficulty believing that such companies exist. Apple is imperfect, as is every human enterprise, but it is not falling short by much, now. If CR cannot perceive that, then it is their world view which is interfering. Hence, I suspect that Apple is better off without CR's support.

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    3. Dave Barnes says:

      @Louis
      Wow! Now that is the big picture. FDR and Apple in the same paragraph.

      @Gene
      CR is great for washing machines and laundry detergent as they actually test the products and the products' [desired] functions are well understood.
      CR sucks at all things electronic. They take too long to test and report. They don't keep up with technology.
      I subscribe to CR and use them for what they are good at.

      Reply To This Comment

    4. Louis Wheeler says:

      One of the great difficulties in life is knowing where you and other people stand. This is compounded by businesses and organizations utilizing propaganda or public relations to mislead people. Sometimes, you must read through the lines to get at what a business or organization really means.

      It helps to know the history of the Consumers Union, who owns Consumers Reports, and what political positions they have taken in the past. The Consumers Union tends to take anti-corporate and anti-consumerist stances. I find their attitude to be arrogant and presumptuous.

      The CU is opposed to mass marketing. They assume that people are too stupid to know what they want and are led around by their noses through advertising. This position seems rather naive and backwards.

      When businesses guess wrong in marketing, they lose big bucks. I suggest you look up the Ford Edsel. Ford spent 200 million dollars in advertising and the Edsel failed. It didn't help that this full sized car had an odd name and funny looking grill which became the butt of jokes. The real problem was that it was an expensive car, which Ford was trying to introduce during a recession.

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