We have plenty of variety for you this week, starting with Glenn Fleishman reporting on Apple COO Tim Cook’s $22 million bonus and Verizon’s sneaky plan to woo Wi-Fi-only iPad buyers with their neat MiFi 3G portable hotspot. Glenn also contributes a look at T-Mobile, including an explanation of why the iPhone and iPad won’t work well on T-Mobile’s network in the United States; Matt Neuburg reviews C-Command’s EagleFiler snippet keeper; and Adam explores how the Internet has changed the playing field for businesses like newspapers and record labels that sell arbitrary bundles of content. Finally, if you run a client-based business, check out our DealBITS drawing this week for ProfitTrain. Notable software releases this week include VMware Fusion 3.1 Beta, Things 1.3, MainStage 2.1.1, LogMeIn Pro2, Safari 4.0.5, and TextExpander 3.0.
Those of us who have had regular jobs know the joy of the bonus, a reward for working hard and producing results. Apple Chief Operating Officer Tim Cook found a little something extra in his pay envelope on 10 March 2010: $5 million plus 75,000 restricted shares of stock worth $17 million at today’s prices.
Cook was rewarded for “outstanding performance in assuming the day-to-day operations of the Company for the period in fiscal 2009 during which Mr. Jobs was on medical leave of absence,” according to an SEC filing by Apple. The stock grants are in two even pieces that can’t be sold for one and two years as long as Cook is still employed on those dates.
Many executives at companies large and small are compensated far beyond the value to investors. I’m a great fan of Nell Minow, who has for the last 11 years documented at Corporate Library excessive and secret corporate payouts to underperforming leaders.
But Cook seems to deserve this one (I’m not a shareholder, and so the disbursement doesn’t affect me directly). Cook was in charge of Apple for the first half of 2009, and the company didn’t appear to suffer at all, despite handwringing by pundits who thought Jobs had the golden product-laying goose in his carry-on luggage.
The stock was around $100 per share near the end of 2008 and into 2009; it closed at $224.84 on the day Cook’s shares were awarded. Company revenue and earnings were remarkable in the fiscal quarter ending in January 2010 (which included the holiday season). Apple increased revenue 32 percent over the year-ago quarter, and profit was up 50 percent. Apple has $40 billion in cash and short-term investments.
The company’s market capitalization – stock price multiplied by shares outstanding – is over $200 billion, which means shareholders’ stake in the firm has grown by about $115 billion in the last 14 months. Cook’s bonus is two-hundredths of one percent of that increase.
The restricted stock is also a tiny set of handcuffs to keep Cook at the company, and could be worth much more than the $17 million the shares would sell for today. Two years ago, Cook exercised 300,000 options and sold them for around $140 per share, reaping about $40 million. Records show he retained just 14,000 shares in the company before this new, restricted grant.
Engadget posted a leaked photo of a Verizon Wireless marketing campaign that’s being prepared to lure early iPad buyers into choosing Verizon over AT&T for 3G service. How so? Verizon offers the MiFi, a wireless router that connects to the Internet over Verizon’s 3G network, and then allows up to five devices to piggyback over Wi-Fi.
The MiFi is a nifty device, fitting in a shirt pocket, working off a fully charged internal battery for four hours or indefinitely via an AC adapter.
The problem is the service plan. Verizon requires a two-year commitment from MiFi buyers for either a $39.99 per month plan for 250 MB of combined upstream and downstream usage (and 10 cents per MB above that), or $59.99 per month for 5 GB of combined usage (and 5 cents per MB for overages).
That’s far more expensive than the 3G-enabled iPad, which requires no contract commitment, and offers two monthly plans: $14.99 for 250 MB usage per month and $29.99 for unlimited usage. There are no overage charges; instead, the iPad pops up alerts when the 250 MB limit is coming up and offers the user the option of upgrading to the unlimited plan for the rest of that month, a thoroughly rational approach.
Still, it’s smart of Verizon to seize the opportunity to show alternatives. I’ve heard great things about the MiFi because of its flexibility and portability, and the way it gives users a single 3G data plan and hardware device that works with all Wi-Fi-capable laptops and handhelds.
Several years ago, we ran a DealBITS drawing for a then-new time-tracking and invoicing program for freelancers and small businesses called Billable from indie software house Clickable Bliss (see “DealBITS Drawing: Billable,” 29 January 2007). Clickable Bliss’s Mike Zornek has been hard at work on the program in the intervening years, and along with adding oodles of features to the 2.0 version, he has renamed the program ProfitTrain. It now supports multiple businesses, lets you create invoices based either on completed tasks or line items that you enter manually, stores recurring services and products to add to invoices, allows bidding
via an “estimate” invoice status, tracks expenses to be included in invoices, provides for full or partial payment, includes built-in reports, and much more. ProfitTrain is definitely worth a look for any Mac user who runs a client-based business.
In nearly two decades of experimenting with ways of storing and retrieving text and other snippets of information, largely documented in the “Conquer Your Text” series of articles, I’ve found that most applications take a fairly heavyweight approach, requiring me to hand my data completely over to their care, keeping it in a specific place or (even more often) in a document and format specific to the application. That’s why I was intrigued by the lighter touch of EagleFiler, from C-Command (the development house of Michael Tsai, who also writes SpamSieve (see “Tools We Use: SpamSieve,” 17
February 2003) and other utilities I wouldn’t want to be without).
EagleFiler’s chief document type is called a “library.” You can have as many libraries as you like, and each library is just an ordinary folder in the Finder, containing files that are your data; each snippet is simply a file in a standard data format. A library also contains some housekeeping files maintained by EagleFiler. So you do have to make a conscious decision to keep particular snippets in a particular folder – the snippets can’t be scattered all over your hard disk – and you do need, in general, to refrain from altering the contents of that folder directly, interacting with them through EagleFiler instead. But all the same, there are your snippets just sitting there, ordinary files in an ordinary folder, completely visible and
accessible in the Finder. You can search your snippets within EagleFiler, but you can also search them with system-level Spotlight. You can open them directly in the Finder. If the world were suddenly struck by mysterious cosmic rays that destroyed EagleFiler, none of your data would be lost, because your data are just normal files in folders.
In the distant past, one might have criticized this scheme for wasting space. Even a tiny text file occupies a minimum logical space on your hard disk – typically 8 KB. So, while 100 snippets of 10 bytes of text data apiece sum to about a kilobyte, 100 files of 10 bytes apiece require nearly a megabyte. However, in the modern scheme of things, where a hard disk will typically have dozens of gigabytes of free space, a few extra megabytes are hardly problematic.
Window on the World — Since EagleFiler’s data are just files in a folder, its chief value lies in its presentation of those files, and how it lets you annotate and search them. I’ll start by describing the library window. The basic layout is reminiscent of Mail’s tripartite window. At the top is a list of files in the library (called “records”). At the bottom are the contents of the record currently selected in that list. And on the left is a sidebar where you can select to specify the subset of records you want listed at the top.
The sidebar has three sections. First comes a hierarchical list of folders. Here you can make new folders, put folders within folders, and organize records into folders; these folders are real, reflecting and controlling the actual folder hierarchy within the library folder in the Finder.
The second sidebar section is smart folders. As in Mail or the Finder, a smart folder is a saved set of search criteria; clicking one performs the search, determining which records are listed at the top. You can construct (through an excellent interface) some powerfully complex search criteria.
The third sidebar section is tags. You can create tags at will, and assign any number of them to a record; and tags can be structured hierarchically.
So, the sidebar is itself a search mechanism, because you can select any combination of folders, smart folders, and tags to determine what’s listed in the top half of the window. In addition, at the very top of the window (in the toolbar) is a search field. EagleFiler’s search really shines; it’s based on Spotlight (so it can index any file that Spotlight knows how to index), but it uses its own index (making it super-fast) and its own straightforward Boolean syntax.
There is also a secondary Info (or Inspect) window. Here, among other things, you can read and edit a record’s “note.” A note is an RTF file, associated with a record, that EagleFiler stores for you in a separate Notes folder within the library folder. Thus, you can attach text to a record in addition to its title and contents. And once again, if EagleFiler weren’t present, you could still read all your notes, as they are normal RTF files openable in TextEdit.
A World of Data — EagleFiler can import any kind of file. Within EagleFiler, you can edit a file’s title (which is displayed in the upper part of the window), and, in the case of RTF and text files, even its contents. You can ask EagleFiler to open any record via the Finder, but this is often unnecessary, since EagleFiler can display the contents of many file types, and some file types receive special treatment of other kinds. Perhaps the best way to give you some idea of this is to describe some of my own various EagleFiler libraries.
- Notes. This is a large miscellaneous library of text and RTF files. They are vaguely categorized using tags (“Ruby”, “Cocoa”) but in no other way; I search on them mostly by title or contents.
- Scans. I got tired of saving all my old paper warranties, instruction booklets, receipts, and so forth, so I scanned them all. These files are just images, so they have no internal data; therefore I’ve given them titles and notes that are descriptive and flexible, for the sake of searchability. The files are JPEGs, and EagleFiler’s display of their contents is usually quite sufficient when I need to examine one.
- Orders. When I buy something over the Web, I save a PDF of the browser’s receipt page in this library. (This save can be performed in a single move, using the Save PDF to EagleFiler command that appears in every application’s Print dialog.) Tags let me specify the stage the order is at (“ordered”, “shipped”, “received”).
- Mail Archive. I use Entourage, which keeps its mail in one gigantic, all too easily corrupted database. So every once in a while I export an Entourage “folder” that’s no longer active to EagleFiler and delete those messages from Entourage. EagleFiler keeps each “folder” as an mbox file, but it displays the messages individually using the subject line as the title, and it knows (and displays) a message’s From, To, and Date information. All embedded attachments are maintained. Naturally, messages are searchable by contents.
- Bookmarks. This is a massive hierarchy of URL files.
These have all proven to be splendid uses of EagleFiler, except for my Bookmarks library (which is not working out, for reasons I’ll discuss in the next section).
Conclusions — EagleFiler combines ease of use with an underlying ingenuity that makes it feel simple, fast, and lightweight. It’s packed with too many clever touches for me to list. The range of things you can import, of ways you can perform an import, and of smart things EagleFiler can do in response, is quite astounding (and you can use AppleScript to extend its powers even further); read the manual online if you want to know more. To give just one example: Suppose EagleFiler isn’t even running; well, every library folder contains a To Import folder, and whatever you place there will be imported into that library automatically the next time EagleFiler
opens that library. Brilliant.
At the same time, I’ve occasionally encountered problems with EagleFiler’s interface. In fact, over several weeks in 2009, when I was first giving EagleFiler a serious try, I reported many interface issues. Most were small and were quickly fixed, such as a text field that refused to accept a space character, windows opening at the wrong time, a window that forgot what text field I was working in when I returned to it, that sort of thing. On the other hand, EagleFiler still starts up unbelievably slowly, and its Help menu is still extremely slow to pop down when you click it, apparently due to EagleFiler’s being written with the PyObjC framework.
And, while EagleFiler is excellent for storage of an occasional URL file, it can’t substitute for a full-fledged bookmark repository. The hierarchical display of folders in the sidebar lacks the organizational power of a true outliner. You can’t edit an imported URL, so if a Web address changes, you can’t change the corresponding listing within EagleFiler – you have to delete and replace the existing URL file. And, while there are various ways to import a Web URL – as a bookmark file, a text file, a PDF, or a Web archive – there’s no interface for picking an option at import time: you have to specify it beforehand in the application’s overall preferences. (However, you can use a cool browser bookmarklet to overcome this limitation.)
But I’ve been very happily using EagleFiler otherwise. I’m probably not using it to its full potential, and yet it has already replaced several other snippet keepers in my arsenal. And it’s a whole lot better than using the Finder alone! If you already have a folder full of related things, and you still can’t readily find the right one, that folder is a candidate for being turned into an EagleFiler library. In fact, that’s how I really think of EagleFiler – it’s a Finder folder on steroids.
EagleFiler requires Mac OS X 10.4 or later, with 10.5 or later recommended. It costs $40, and you can download and try it for 30 days for free.
Do you remember car-rental firm Avis’s ads: “We’re number two; we try harder”? Hertz was the big dog, and Avis used this campaign to explain why its service was better, because it had to be.
T-Mobile is in the same boat, except it’s number four. Verizon Wireless, AT&T, and Sprint Nextel, in that order, are bigger than T-Mobile in terms of subscribers, revenue, and 3G coverage. But the plucky number four is trying to catch up.
I’ve been following T-Mobile closely because the company is trying to build the fastest and most robust 3G network in the United States, all while keeping its pricing structure competitive with and more flexible than the three dominant carriers. It’s in the process of dramatically increasing its already fast network, too, far ahead of its competitors.
T-Mobile may be poised to be an alternative to AT&T, because both firms use the same worldwide GSM standard and the 3G flavors that have emerged from it; Sprint and Verizon chose CDMA, although both are migrating to different technology in future networks.
But T-Mobile has a technical disadvantage that has kept it from being a true alternative from AT&T for the iPhone (jailbroken or unlocked) and that will prevent it from being a choice for the iPad with 3G. (Although it’s technically legal to unlock an iPhone, the Digital Millennium Copyright Act seems to make it impossible in fact to unlock one legally.)
T-Mobile’s 3G Network — T-Mobile acquired the spectrum necessary to build a nationwide 3G network only a few years ago, and launched coverage in its first city in early 2008. The company now claims that over 200 million people spread across nearly 300 cities could use its 3G offering. Its three national competitors claim somewhat greater 3G coverage that’s available to between 233 and 280 million people out of the total 307 million U.S. residents. (Several smaller carriers, such as MetroPCS, U.S. Cellular, and Cricket Wireless have only regional markets covering several million.)
But by starting from scratch so recently with 3G, T-Mobile hopes to have an advantage. Because the demands on 3G networks were already being understood as T-Mobile planned its build out, the company says it has developed more-robust backhaul – the link from cell towers to the rest of the network. Where AT&T has struggled, T-Mobile claims to have the links in most places at the scale needed to serve the fastest 3G that will be out this year.
AT&T and T-Mobile have both deployed HSPA (High Speed Packet Access), and both started with the 3.6 Mbps downstream flavor and have moved to 7.2 Mbps downstream (often called HSPA 7.2). In contrast, Sprint and Verizon’s 3G service uses EVDO Rev. A, which tops out at 3.1 Mbps downstream. (These are the highest possible throughput over the air, and users on average see 20 to 50 percent of that rate with higher bursts.)
But AT&T, despite having put in the software update to make HSPA 7.2 possible, said it’s not yet actually offering the higher speed because of limited backhaul. The company plans to roll HSPA 7.2 out on a city-by-city basis as it upgrades base station sites with additional backhaul capacity. In contrast, T-Mobile says it’s ready now; some reports claim T-Mobile has fiber and wireless links that provide as much as 20 Mbps per site, which is enough to cover multiple separate channels of 3G in the same location.
This backhaul capacity might give T-Mobile bragging rights. Its 7.2 Mbps network was announced only a few weeks ago, and the latest PCWorld tests conducted by Novarum – a firm I rely on for accurate data about wireless rates – were completed in January 2010.
Where T-Mobile suffers is in the frequencies it uses for 3G. Cell phones come with radio chips that enable them to operate over many different frequencies, because different bands (ranges of frequencies at various points in the radio spectrum) are available to different companies and in different countries.
The iPhone 3GS, for instance, supports several bands for worldwide compatibility without Apple having to create different models: 850, 1900, and 2100 MHz are available for 3G, and 850, 900, 1800, and 1900 MHz for 1G (plain GSM) and 2G (EDGE).
Here’s the problem. T-Mobile wasn’t able to acquire any of the 1900 MHz band, and uses the 1700 MHz band instead. Further, phones designed for the T-Mobile 3G network send transmissions using 1700 MHz and receive data from the network using 2100 MHz. T-Mobile is nearly unique worldwide in using the 1700 MHz band at all.
AT&T uses either 850 MHz or 1900 MHz for 3G, and sends and receives in the same band. This means that a GSM 3G phone or data device compatible with any other carrier cannot work on T-Mobile’s network, and devices intended just for T-Mobile’s network won’t work on nearly any other network worldwide.
EDGE frequencies are compatible, however. If you buy a 3G iPad and want to use it on T-Mobile’s network, and T-Mobile starts producing micro-SIM cards, you could use the network at EDGE speeds, which are typically no faster than about 200 Kbps.
That’s a bummer for consumers and T-Mobile, as it means we don’t have the compatibility necessary for true unlocked competition between the two GSM carriers in the United States. In most other countries with multiple 3G carriers, frequencies are harmonized, and this won’t be an issue.
T-Mobile USB Modem — That’s all technical background, but I gave T-Mobile’s USB webConnect modem a workout on a recent trip: my travels to California for the Apple iPad launch. I figured this would be the perfect circumstance, since Verizon, AT&T, and Sprint mobile broadband modems would clog up those networks; T-Mobile was likely to be free and clear.
The modem, made by Huawei, is an attractive stick with support for Mac OS X 10.4 and later, along with several flavors of Windows. It costs $129.99 retail, or $19.99 with a two-year contract. The modem requires a simple software installation of unobtrusive – if not particularly attractive – connection software.
I pre-tested the extent to which it would drain my 2008 MacBook’s battery before the trip to the iPad launch to see whether I could get through a two-hour event on a full charge; it looked like I could just squeak through, which turned out to be the case. (I get about the same battery life with Wi-Fi turned on and active, too.)
The USB stick performed admirably during Steve Jobs’s talk, while I heard grumbles all around me from users of other 3G networks that were failing under the collective load. Score one for diversity. In testing, I didn’t see the faster HSPA 7.2 rates – I tested mostly in January and early February 2010 – but I frequently saw speeds well over 1 Mbps downstream.
T-Mobile’s 3G Data Plans — T-Mobile just put a twist in its service plans on 11 March 2010. It used to charge the same for its highest-level usage plan as its three competitors: $59.99 per month gets you up to 5 GB in combined upload and download usage. Additional megabytes on T-Mobile cost 20 cents each (that works out to $200 per GB), which is substantially higher than competitors.
T-Mobile also offers a lower, lighter-weight usage plan: 200 MB for $29.99 per month, with the same additional per-megabyte fee. Competitors charge $5 or $10 more per month for the same or slightly more data. As I wrote in “Can You Get By with 250 MB of Data Per Month?” (2 February 2010), it’s hard to figure out how much data you wind up using. Laptop usage tends to be far higher than the smartphone usage I was tracking. You can check usage directly from within the connection software.
But T-Mobile now charges those monthly rates only if you accept the company’s subsidized 3G hardware; those plans also require a two-year contract.
If you pay the $129.99 retail price for its USB modem, a $110 difference from the subsidized price, T-Mobile will let you have a month-by-month 5 GB plan for $49.99 each month, and a 200 MB plan for $19.99 each month. Over two years, that’s a $240 price difference on either plan, and you retain the flexibility of not paying for the service when you don’t need it.
Unmetered Wi-Fi usage at all of T-Mobile’s own and roaming partner hotspots is included with all plans.
T-Mobile also recently became the first carrier to offer a lower monthly data price for the Google Nexus One phone when purchased outright; AT&T and others charge you the same monthly rate whether you own the phone or got a subsidy by signing a two-year contract, while T-Mobile drops the price $20 per month. That’s $480 over two years, far more than the difference between the subsidized and unsubsidized rate.
Virgin Mobile Broadband has an interesting alternative to T-Mobile’s month-to-month possibility. Despite being owned by Sprint Nextel, Virgin has a distinctly original broadband approach. Buy its $99.99 USB modem (which requires Mac OS X 10.4 or later), and purchase units of access from its Broadband2Go plan. Rates are $10 for use of up to 100 MB within 10 days, or, with a 30-day expiration, pay $20, $40, or $60, for up to 300 MB, 1 GB, or 5 GB, respectively. There are no overage fees; you just buy more units of service.
T-Mobile now beats Virgin Mobile for an unsubsidized plan at the 5 GB level, but Virgin Mobile (using Sprint’s network) still has more coverage area. However, T-Mobile charges its 20-cents-per-MB overage for extra usage during any billing period: another 5 GB would be $1,000 on T-Mobile but just $60 with Virgin.
Faster Speeds Ahead — T-Mobile says it has just begun in its move towards higher speed. In early February 2010, the company announced the commercial rollout of HSPA+, an update to HSPA 7.2 that will offer raw data rates as fast as 21 Mbps.
The company isn’t promising specific downstream speeds, but it will likely be possible to get the same range as Clearwire’s WiMax service, which, in the limited markets currently served, pumps 3 to 6 Mbps downstream with higher burst rates. Clearwire aims for 120 million people covered by the end of 2010.
For now, T-Mobile’s HSPA+ service is available just in Philadelphia, with the upgrades to both coasts coming as we move into spring and summer, and most of T-Mobile’s national footprint by the end of 2010. A new HSPA+ modem, the Rocket, was released on 14 March 2010 for $99.99 with a two-year contract (or $199.99 without the contract).
HSPA+ puts T-Mobile at the top of the speed heap, and possibly with the best backhaul among 3G operators. Only further testing will tell. Verizon’s next-generation LTE (Long Term Evolution) service – fourth generation or 4G – can deliver 5 to 12 Mbps downstream, but won’t be ready until later in 2010. Initial LTE devices will be limited to data adapters; smartphones may not appear until 2012.
Verizon says it will light up 25 to 30 metro areas with LTE in 2010, covering 100 million users, with the rest of its footprint covered by 2013. AT&T will also deploy LTE, but its timetable extends further into the future, with 2011 seeing its first commercial deployment.
The real question will be whether T-Mobile can deliver a service that’s enough faster, better, and cheaper than its more heavily used competitors. If so, it could rise from its fourth position to challenge the top contenders.
In 2003, when we came up with the idea for the Take Control electronic book series, one guiding principle was that individual books should be relatively short, such that they could function like chapters in an über-book. Our thought was that shorter books would be faster to write (and thus quicker to market), easier to update, and less expensive. They could also be simultaneously more focused and more detailed than traditional books. In aiming to break apart the traditional computer book into its component chapters (albeit with more depth than a book chapter would have space for), we were channeling the bundle-busting trend.
Some years later, we would repeat the process with TidBITS itself, taking our traditional email newsletter with its collection of articles written over the previous week and breaking it apart into its constituent pieces (see “Designing a Modern Web Site for TidBITS,” 10 September 2007). In this new approach, instead of articles appearing fully formed in each email issue, we would write and post each article on our Web site as it was done, collecting them back into the issue each Monday.
We made this change to enable coverage of breaking news, spread out our writing and editing effort throughout the week, bring our publishing approach in line with how readers interacted with our content, and, honestly, to modernize what was seeming like an increasingly quaint publication model. (The irony of ironies is that when we started TidBITS in 1990, our use of Internet distribution meant that we were more timely than the lumbering monthly magazines and even than the edgy weeklies, with their printing and mailing delays.)
Bundling Breaks Down — Outside of our little world, bundle-busting was going full tilt. In 2003, Apple introduced iTunes with the innovation of selling each individual song on an album for $0.99, side-by-side with complete albums for $9.99 (some songs weren’t available individually, and some larger albums had higher prices, even before 2009, when Apple agreed to different pricing levels). Even before iTunes, newspaper and magazine publishers starting moving online in a big way, essentially untethering their articles from the bundled pieces of paper that made up a daily, weekly, or monthly issue.
All this unbundling happened due to customer demand and because new technology, largely the Internet, made it possible. After all, who hasn’t felt slightly cheated after buying an album and discovering that some of its songs are far less appealing than others, or realizing that none of the articles in a magazine were compelling enough to read? This shouldn’t be surprising: enabling each member of a family to order a completely different meal in a restaurant has long been seen as “better” than a home-cooked meal where everyone is forced to share the same dishes, whether or not they are equally well liked. Unbundling promotes choice, and, within reason, people like choice.
To understand why the Internet enabled so much unbundling, it’s worth considering briefly why bundling happened in the first place. It comes down, as so often happens, to the essential awkwardness of atoms. Before the Internet, it was certainly possible to write and publish a single article, or record and distribute an individual song, but it wasn’t significantly more expensive, once the words or notes became instantiated on a physical medium, to publish 100 articles, or to distribute an album containing 12 songs.
In other words, bundling came about because of economies of scale, but the Internet, and perhaps more aptly, the all-you-can-eat pricing schemes that have grown up around the Internet, have radically changed the game. The economic advantage of publishing a bundle – a newspaper or an album – is no longer significant.
Bundle-Based Businesses — All this unbundling sounds like a good idea, but let’s change gears for a moment and consider the benefits of bundling from a business perspective. There are many ways to set prices for a product, but in the end, the economists tell us, Adam Smith’s invisible hand will cause prices to settle at a point where customers are willing to buy and where producers can turn a profit. It’s worth noting that there is always a floor below which prices cannot drop, regardless of other factors, because of the cost of collecting payments. One of the advantages of the digital revolution, and the Internet in particular, was to reduce the cost of collecting payments, which in turn dropped that price
It seems to be a truism that people place relatively little value on content, whether it’s writing, music, or video, perhaps because we intuitively know that the very same content can be sold to many people. Whether you’re reading an article in the New York Times, listening to your favorite artist’s latest hit single, or watching a TV show, you know that hundreds of thousands of people, if not more, are enjoying the exact same content. In other words, content isn’t scarce, and we value scarcity, which is why we’re happier to pay for one-on-one training from a consultant or a live concert.
But we also place value on volume, so while we may not be willing to pay $1.00 for an article in a newspaper, we have much less problem paying $1.00 for the entire newspaper, containing tens or hundreds of articles. And while $10 feels wrong for a single song, it’s not unreasonable for an entire album.
So publishers and record companies figured out that they could take advantage of the economies of scale and bundle multiple articles or songs or whatever into physical products – newspapers, magazines, some books, music albums, VHS and DVD sets of old TV episodes, and so on – that could then be sold for a sufficiently high price to turn a healthy profit while still offering enough value to customers that they didn’t complain too much about prices.
But then came the Internet, and it didn’t take long before people realized that bundling was largely artificial, that there was too often no real relationship between the different articles in a newspaper. And even when the bundle was less arbitrary, as in a themed magazine or a well-conceived album, the irritation of paying for content that you didn’t want to read or listen to contributed to the decline of the bundle.
Babies and Bundle-Based Bathwater? Alas, bundle-busting doesn’t come for free, and bundle-based businesses like newspapers and the recording industry have come upon harder times. (It’s hard to blame all woes purely on the breakdown of the bundle, but at least Anita Elberse’s research into unbundling controls for illegitimate copying in the recording industry still points to unbundling as the cause of the industry’s declining profits.)
Bundles may have boosted profits for those industries beyond what would have been possible without bundling, but those profits made certain things possible. Although we’re proponents of the Internet enabling small publishers and individual writers to publish content that wouldn’t have survived in a large publisher’s newspaper or magazine, it’s absolutely true that some of the serious reporting and journalism we’ve become accustomed to requires the significant investment only a well-heeled company – bolstered by bundle-based profits – can afford.
There’s no question that these bundle-based companies will have to change, but we can hope that the bundle-busting trend doesn’t eliminate content that is socially worthwhile, even if it cannot compete on its own in the marketplace.
Will Bundles Survive? This desire to create socially useful works that cannot earn their keep is one reason the iPad (and to a lesser extent, the Kindle before it) is seen in some circles as the next great hope for bundle-based publishers. It will be devilishly hard to stuff the genie of unbundled (and free) content back into the Internet bottle, but the iPad offers a blank slate on which newspaper and magazine publishers can once again bundle content and charge for a subscription to the entire collection. And if that gives great content a business model on which it can survive, that’s a good thing.
Even as the iPad inches closer to the time when we’ll see if it can fulfill these grandiose rescue fantasies, it seems clear that the bundle, as many businesses are accustomed to it, is on the way out.
That pronouncement should not cause undue distress. Breaking apart bundles can provide all sorts of benefits, not just to customers, but to producers.
Here’s where we come full circle, since the unbundling movements we made when creating the Take Control ebook series were as much about improving the business side of things as they were about meeting customers’ needs for detailed discussions of highly focused topics. Unbundling the book helps us and our readers.
Similarly, changing the unit of publication from a full TidBITS issue to the individual article helped us speed up production, increase Web-based revenues, and attract new readers, but it also gave our readers more timely articles, an article-based forum for discussion, and more accurate articles (as we integrate new information and address reader comments). Again, everyone wins.
At the same time, we’re still bullish on bundles made for the right reasons. One of those is price; if you’re going to sell lots of products that don’t have individual production costs (any sort of digital content), bundling multiple items together at a discount increases overall revenues for the publisher even as it reduces individual unit costs for the purchaser.
Looking forward, even as we think about ways of further unbundling our content (is there that much difference between an article and a book chapter?), we’re simultaneously exploring ways of bundling that content together in ways that at least some customers will appreciate. After all, what’s a subscription but a bundle of somewhat related items sold at a significant discount in exchange for guaranteed revenue flow for the publisher?
So yes, bundles will survive, but those that do will survive for the right reasons, and those reasons have to do with meeting customers’ needs and desires more than facilitating economies of scale and higher price points. That in turns means that companies relying on bundled products need to figure out business models that serve both the bundled and the unbundled product. Otherwise they’ll eventually slide into unbundled oblivion.
VMware Fusion 3.1 Beta — VMware has released a new public beta of the company’s virtualization software for the Mac, VMware Fusion. Version 3.1 Beta significantly improves graphics performance via OpenGL 2.1 support for Windows 7 and Windows Vista, along with performance improvements for both DirectX 9.0 SM3 and Windows Aero. Additionally, it makes it easier to connect USB devices to your virtual machine with the new EasyConnect feature, extends support for virtual hard disks up to 2 TB, resolves an issue that created multiple Boot Camp entries in the library of the virtual machine, and displays your migration status when migrating from a PC.
The update, whose release notes are available from VMware’s Web site, also fixes over 200 bugs.
Keep in mind that this is beta software and is thus prone to buggy behavior; you may want to avoid using it for any essential tasks. Also note that downloading version 3.1 will overwrite your current version; reverting to an earlier version of Fusion will require reinstallation.
Read/post comments about VMware Fusion 3.1 Beta.
Things 1.3 — Busy people take notice: the latest version of Cultured Code’s popular task manager Things is now available and comes with a big functionality boost. Version 1.3 brings a new Mixed Projects feature, enabling users to work with projects that have active, inactive, and scheduled to-dos all at once, something that wasn’t previously possible. In addition to lending the program greater flexibility, the Cultured Code blog notes that Mixed Projects was added with an eye towards cloud-syncing capabilities in the future. The update also addresses an
issue that could cause Things to launch with a blank interface, fixes a bug that prevented Help menus from being displayed, and makes several minor improvements to unspecified localizations. ($49.95, free upgrade, 8.7 MB)
Read/post comments about Things 1.3.
MainStage 2.1.1 — Gigging musicians will be pleased to hear that Apple has updated MainStage, the live performance program that’s part of Logic Studio. Version 2.1.1 provides over 40 minor bug fixes and performance tweaks, including enhanced support for 32-bit Audio Unit Bridge plug-ins, improved stability when changing or removing audio devices, and the resolution of a bug that caused audio output loss when the user enabled “Display audio engine overload” messages. The update also improves screen controls in several areas, increases the reliability of number keys acting as command triggers, and restores proper behavior to several aspects of the
Loopback plug-in. The lengthy release notes are available in a Knowledge Base article on Apple’s Web site. The hefty update is available via Software Update and Apple’s Support Downloads page. (Free, 207 MB)
Read/post comments about MainStage 2.1.1.
LogMeIn Pro2 — It has been several years since LogMeIn first brought its remote control software LogMeIn Free to the Mac (see “LogMeIn for Mac Released,” 4 December 2007). While LogMeIn Free remains available, the company has recently released LogMeIn Pro2 for the Mac with significant additional features. LogMeIn Pro2 adds secure file transfer and sharing capabilities, folder synchronization, desktop sharing on demand, and remote-to-local printing. It also expands browser support to include 64-bit Safari, improves access to remote control
settings, and enhances performance speeds (these secondary features are also now available in the free version). ($69.95 per year, multi-computer discounts available)
Read/post comments about LogMeIn Pro2.
Safari 4.0.5 — Apple has released Safari 4.0.5, an update for Mac OS X and Windows that addresses several items. On the surface, the new version improves performance of the Top Sites feature; improves stability when running third-party plug-ins and Web sites with online forms and SVG (Scalable Vector Graphics) images; and now works to configure settings of some Linksys routers that were problematic. Under the hood, Safari 4.0.5 addresses lots of security issues, mostly adjusting WebKit to deal with malicious Web sites, but also processing images under Windows. The update requires Mac OS X 10.6.1 or later, Mac OS
X 10.5.8, Mac OS X 10.4.11, or Windows 7, Vista, or XP. (Free, 30.52 MB for Snow Leopard, 38.59 MB for Leopard, 26.78 MB for Tiger, 30.18 MB for Windows)
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TextExpander 3.0 — Want to use a text expansion utility to save typing cumbersome phrases but dislike switching programs to create snippets? The new TextExpander 3.0 from SmileOnMyMac adds a hotkey combination that opens a quick entry window for snippet creation, and another hotkey lets you edit the last-expanded snippet, making it easier to update one that’s no longer quite right. Other new features in TextExpander include “fill-in” snippets that can prompt you for additional text to be entered manually, new options for finding snippets in your collection, and snippet syncing via both MobileMe and Dropbox. Minor changes include the capability to
insert Tab and Return characters in snippets, correction of accidental double-capitalizations at the start of sentences, automatic updates via Sparkle, and more. Finally, TextExpander 3 is now a full-fledged application rather than a preference pane. ($34.95 new, $15 upgrade, free for those who purchased after 1 November 2009, 4.5 MB)
Read/post comments about TextExpander 3.0.
Our extracurricular reading this week was all about Apple, with the New York Times examining the Apple/Google rift, the EFF taking a close read on Apple’s iPhone Developer Program License Agreement, and usability guru Jakob Nielsen criticizing how iTunes handles app updates.
New York Times Examines the Apple/Google Rift — The New York Times has a lengthy article laying out the history of the relationship between Apple and Google, which started close but has now developed schisms due to the huge differences in corporate approaches and increasingly competitive products. Apple prefers proprietary systems and tight control over high margin products, whereas Google’s goal is to increase Web usage (and thus ad revenue) via free services and open-source software. It’s the iPhone OS versus Android, Mac OS X versus Chrome OS, Safari versus Chrome, and Apple’s Quattro acquisition versus Google’s AdMob buy. All that,
and the competition between the companies is just starting to heat up.
EFF Examines iPhone Developer License Agreement — Alongside Apple’s undeniable success with the iPhone App Store have been the near-constant stories of app rejections for dubious or entirely bogus reasons (to be fair, most rejections are entirely legitimate). But what gives Apple the right to reject or even remove apps? The iPhone Developer Program License Agreement, to which all iPhone developers must agree, that’s what. The EFF has now acquired copies of the agreement and analyzed some of the more troubling clauses. Would they stand up in court? There’s no way to know until someone sues Apple.
Jakob Nielsen Criticizes iTunes App Update Interface — Usability guru Jakob Nielsen devoted his Alertbox post this week to showing how interfaces can become confusing if elements like buttons and checkboxes are too far away from the objects they act on, using the iPhone app updating interface in iTunes as an example. Our take is that the overall mistake here is that Apple is relying on iTunes for too many unrelated tasks that call out for different interface approaches.