Category Archives: Entertainment

SkyCast – the cooler path to in-flight entertainment

Occasionally, you see a deal where you immediately understand both how cool it is and the impact that it will have on an industry. Couple that with one that will also have an impact on you personally and a great team, and you have SkyCast Solutions.

Founded by the inventor of the digEplayer (if you fly Alaska as much as I do, it needs no introduction), Bill Boyer, who is joined by my friend, Peter Parsons, and Greg Latimer (former VP Marketing at Alaska Air), this is a team that understands the industry. It is no secret that airlines have troubles with profitability. As fuel prices soar and the sluggish economy depress business travel, the problem gets worse. Airlines have learned that ancillary sources for revenue (like baggage fees) are an attractive way to make up any gaps. The problem with fees: customers hate paying for something that brings them no enjoyment that they think should be free.

Enter SkyCast Solutions. They make a VERY cool in-flight entertainment solution, called TrayVu™ (http://www.skycastsolutions.com/NEW/products.html). It is an android tablet that goes into the tray table, can be viewed through the table, and automatically flips up when you put the tray down. This offers many advantages, including being light weight (a short IRR for the airlines on fuel savings alone), ability to show ads or other things below 10,000 feet, having use of your tray table with the screen in a perfect viewing position, a credit card reader to buy food or pay per views, and (maybe most importantly to anyone who has had the person behind them play angry birds in a seat back system) when you play a touch game you don’t disturb the person in the seat in front. It is an exceeding economical system for the airlines to install and use, brought to you by an industry veteran who knows how to make these things work.

OK.. in-flight entertainment won’t change the world. But it will make long flights much more fun. This is why I (and other Alliance of Angels members) chose to invest in SkyCast Solutions.

Apple: You’ve Got to be Kidding

I hope that you all have been following the tiff that has developed between Apple and its app vendors and publishers (see e.g. http://www.informationweek.com/news/personal-tech/smart-phones/showArticle.jhtml?articleID=229200215). Nothing like taking wonderful successes like the iPhone and iPad and then let unbridled greed kill an ecosystem. This is exactly the kind of corporate behavior that has killed so many nascent new markets and deserves to be punished.

As those that have read my previous blogs know, I am a big iPad fan. Among my favorite apps on the iPad are Kindle and Netflix. I was proud of Amazon for sticking up to the publishers to try to get better pricing for their customers, even though they ultimately failed. (Can anyone explain to me why a printed book should be cheaper than an eBook?)

The only logic behind Apple’s decision that ALL content offered through their platform should have to pay them 30% of the gross is that they think they can get away with it. The end result will be one of the following:

1) The content providers will have to charge 30% more on Apple platforms; or

2) There will be less content available on those platforms, because all content will only be available on the iTunes store.

Neither of these alternatives is good strategy for Apple. While exceedingly profitable in the short term, ultimately, it will lead to their ecosystem being stifled of innovation and being surpassed by others that are friendlier to partners and user economics.

I believe that Apple is still thinking like the underdog in its markets and not like the market leader it has become.  Being the market leader brings obligations as well as exceptional rewards.  If Microsoft were to decide to charge a 10% charge for all e-commerce done on Windows, the furor would be loud and never end.  But Apple, with its innovative products seems to believe that it is still the underdog and not the market leader with iPad and iPhone.  It is exactly this sort of bad corporate greed that forces governments to become involved in our industry (see http://online.wsj.com/article/SB10001424052748704657704576150350669475800.html?mod=WSJ_Tech_LEADTop). I hope that Apple senior management and their board wake up soon.

I would urge all iTunes customers to immediately find alternative way to buy content. A good example of this is one of my portfolio companies – Single-Click Checkout (http://www.singleclickcheckout.com/) which is available to merchants on most mobile platforms and allows a user a safe and secure way to purchase things directly from the vendor on their mobile devices without using the platform store.

I hope Amazon and other content owners don’t bow to Apple’s mafia-like tactics. Even if Apple doesn’t realize it, forcing their hand on this and getting them to back down is in everyone’s interest.

I had waited to upgrade my iPhone 3G to an iPhone 4 on Verizon, and was just about to do so.  I no longer intend to go to the iPhone 4 with this Apple policy on content.

Film, Angels, and Entrepreneurs

Last week I was invited to speak at an event at Victory Studios in Seattle that was sponsored by the new Seattle chapter of the Institute for International Film Financing (IIFF). I told them I thought they had the wrong person, but they explained that in LA and San Francisco there had been some great interactions between tech angels and the film community – we had a lot to teach each other. I agreed to speak, but was concerned that I really knew nothing about the film business.

I love film (as well as theatre). I’ve loved movies for as long as I can remember and (from my previous posts) you know that I found the new 3D/IMAX experience entertainment-altering. I’ve also blogged about setting up my home theatre to watch movies and loving Netflix on the iPad. I enjoy the output of the film industry, but really have no knowledge about film as a business, nor have I ever given it much thought.

I found myself at a film studio, sitting among a panel of film experts, including experienced producers, speaking to an audience of established and aspiring film makers, producers, and directors. As I listened to them speak, I realized why I was there. There really were a ton of similarities!

Listening to a producer discuss how the director and stars had a strong desire to create the vision exactly the way they wanted it, without regard to the budget, sounded like a conversation I had just had with the CTO/founder of a tech startup who had delayed shipping on schedule to get it exactly right. A discussion about the need to consider marketing budgets in film production sounds so eerily similar to that of a web company that had only budgeted sufficient money to launch their product, but not enough for distribution. And there was a long discussion about using social networks to enhance views that could have been a web startup as well as a movie.

The similarities do abound. Is a short film marketable? (Is a single feature company marketable?) Can a director be a producer as well? (Can a tech founder be a CEO?) Etc.

But for me, the biggest learning experience is how the movie industry has paralleled the tech industry. It used to cost many $M to produce a film, just like it used to cost $20+M to build a software company. You can now produce a film for several $100k’s. The technology has made it easier to do the filming, do the editing, etc. Even distribution is changing markedly. For example, you can distribute a film entirely on line, using services like YouTube and Netflix.

However, I also realize that, while I have some expertise in startup deal structure and terms, this might not apply to film ventures. I haven’t yet taken the time to review the kind of deal structure, partnership arrangements, rights, etc of a film deal. Nor have I looked at the business/revenue models that apply to film. I sense that most film investors do so more on gut, instinct, and passion than the smart tech investor.

The main difference is that most tech (or medical) startups create a product that doesn’t have to be a “hit” to succeed. If you get it wrong, or your timing is wrong, you still have the opportunity to fix the situation. This makes investing in a single film very different than investing in other startups. Most of our tech startups are more like investing in a studio than a film. This might dissuade a tech angel from film.

Comments from experienced film investors very welcome.

Avatar

I had a trip cancelled on Thursday at the last minute. Since my calendar was clear, I did something out of character – I decided to see a matinee movie instead of working. So, I decided to see Avatar in 3D/IMAX. After going to the Pacific Science Center in Seattle and being told it was sold out (for 3 days!), I went to another theater (Lincoln Square in Bellevue) to see the movie.

I was blown away! First of all, I didn’t expect that the 3D would be much more than a gimmick. The previews disabused me of that idea! By the time I watched the preview for “Alice in Wonderland,” I understood that the new 3D (compared to what was done a generation ago, primarily in horror movies with cardboard glasses) was for real. It not only increased the immersive nature of the movie, but was integral to telling the story by the director.

As you know, Avatar, is a sci-fi tale set in a distant world. The story was very typical (but good) for the genre. But the experience was exceptional. The combination of the IMAX, 3D, and sound caused the me to feel like they were there, which caused an emotional connection to characters, the plot, and world Cameron created.

Not only was Avatar a movie worth seeing, but it also shows me part of the future public entertainment. I really didn’t expect to like 3D so much. But in the IMAX format, with exceptional sound, Avatar shows the immersive potential of films in a theatre, taking the suspension of disbelief one step beyond. I’m happy to have been part of this transition. I will certainly see more films in IMAX/3D