The Golden Age of Netflix

NETFLIX, THE DVD-BY-MAIL RENTAL SERVICE I first told you about in February, 2001, (Mike's List 11) is about to achieve Silicon Valley nirvana. With growing popularity and brand recognition, the startup is now is protected by the warm glow of exclusive patents that create the appearance of invincibility. 

Netflix flacks said Tuesday that the U.S. Patent & Trademark Office issued the company a patent that covers key aspects of web-based subscription DVD rental.

The company's competitors, including Blockbuster and Wal-Mart, may later argue in court that the whole idea of renting DVDs by mail via a web site is an inevitable no-brainer and therefore should not have been patented. But the more likely outcome is that they'll just end up paying Netflix licensing fees. 

It's the best of all possible worlds. Netflix currently has more than a million customers -- a spectacular 95% of the DVD-by-mail market. The patents are a kind of magic pixie dust that create the aura of protection around Netflix, boosting its stock. Savvy users may be more likely to choose Netflix over competitors because of the patents. And the more its competitors succeed, the more licensing revenue the company will rake in.

Netflix would have to screw up pretty badly to fail under these circumstances.

I first discovered Netflix three years ago. My son tried to find a job within walking distance of our house. Netflix's headquarters were just three blocks away. He didn't get a job there, but we did learn about Netflix, and have been customers ever since. 

Netflix is better than Blockbuster because it doesn't annoy customers with all the standard irritants normally found at your local video rental mega store.  

The Blockbuster experience starts when some pimple-faced punk in loud shirt insincerely drones, "Hi, welcome to Blockbuster." You know that wooden greeting is simply the result of a corporate policy to reduce theft (studies show that shoplifting decreases when thieves are greeting by a human). 

OK, so they think I'm a shoplifter. What else? Videos are categorized badly, good movies are often missing, the line to pay is usually extremely long and the cashiers tend to be rude. But wait! There's more! 

You have to drive to Blockbuster to rent the movies, then drive back to return them. If you've missed the return deadline, you get hit with huge late fees. It's really annoying to pay $24 for a movie you didn't like, just because you didn't re-arrange your life to cart movies back to some strip-mall. 

With Netflix, there's never a late fee. You can hang on to a movie for months if you want. No lines. No rude sales people. And finding movies is easy via a web search. Whenever you decide you want to see a movie, just go to the Netflix web site and add it to your "rental queue," which can include hundreds of movies. When you return three movies using supplied self-addressed envelopes, Netflix sends you the top three DVDs on your queue automatically.

All the stars have lined up for Netflix. Unfortunately for the company, it won't last. Within the next three years, some upstart startup will come out with an iTunes style, video-on-demand service that will gradually destroy Netflix's business. It might be Apple. It might be Blockbuster. It might even be Netflix. 

In the meantime, Netflix rules. 

Unanticipated Convergence

Brunel University student Sam James won a contest sponsored by AOL for his invention of swim goggles with a built-in MP3 player. The gadget sends sound waves to your eardrums through bone conduction. James says it sounds better than a conventional stereo. Better yet, it "drowns out" the sound of those annoying lifeguards, who are always shouting something or other about sharks and lightning. Newland Scientific may manufacture and sell the goggles as a product. I'll keep you posted. 

Found Video

Sony Interactive Laboratories in Tokyo has built a prototype bendable PDA. The flexibility is the "input device." By bending the gadget this way or that, the user navigates, launches applications and zooms in or out. Developed by Russian researcher Ivan Poupyre, the gadget, code-named Gummy (also called the Touch Engine), enables more intuitive zooming navigation of videos, maps and other data. Here's the video. 

The Art Gallery

One unique art form that Silicon Valley artisans specialize in is the "We've run out of money and have gone out of business" web page, which typically replaces or is added to the web sites of failed dot-coms. A guy named Stanley Schwarz collects and displays these "farewell" pages in his unique gallery. 

Don't Try This At Home

Imagine the ultimate Microsoft Flight Simulator setup. Would it look something like this? Or this? 

Please! Don't Send Me Flowers or Jewelry!

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Sign of the Times

If you travel on business, you probably have a computer bag to protect your laptop. But if you travel to any of the world's dangerous hotspots, such as Bunia, Baghdad or Los Angeles, how about a computer bag to protect your *ss? A company called Forcefield sells a new bullet-proof laptop bag. The $650 bags have a quick-release mechanism that opens them up into a 14" X 30" shield for you to cower behind when the bullets fly. 

Reader Web Site o' the Week

Karen Kenworthy writes about some of the most useful and unique Windows utilities available anywhere. Karen knows all about these utilities because she's the programmer who created them! Fred Langa hired Karen back in the early 90s to be one of Windows Magazine's star columnists. Karen has a unique gift for discovering what's wrong with Windows, then fixing it with great software. Check out Karen's Power Tools Newsletter web site!

Get YOUR web site on the high-traffic Mike's List Reader Links page. HERE'S HOW! 

Gotta-Get-It Gadgets

Electric bicycles are all the rage in Tokyo, especially among thieves. That's why National Bicycle Industrial, an affiliate of Matsushita, introduced an electric bike this week with a built-in GPS tracking system. An affiliated security service called Secom lets you monitor the movement of your stolen bike on the web -- or by calling a Secon operator. Secom will either call the police or send over one of their rent-a-cops to collar the suspect. The bike costs about $650 and the Secom service runs about $8 per month. 

XENARC plans to ship later this month the XENARC Carputer System 1000, a PC designed to be installed in a car dashboard. The PC itself looks a bit like a car stereo. Plugged into a XENARC dashboard touch screen LCD monitor, the Carputer will transform you into a geeky, distracted safety hazard as you sail down the freeway reading Mike's List. The PC features built-in GPS with navigation software, a DVD player, two PCMCIA slots, a Pentium MMX-266 MHz processor, 128 megabytes of RAM, a 15 gigabyte hard drive, two USB slots and an infrared port. XENARC told me the Carputer will ship in August, but would not give the price. 

Gadget-happy motorists in Seattle, Washington, have a new toy to play with. Called TrafficGauge, the handheld device shows in real-time where the traffic congestion is on 176 miles of Seattle roadways. TrafficGauge is "always on" and fits in a shirt pocket. Color coding indicates light, medium or heavy traffic. Icons show at-a-glance when Mariners, Sonics, Huskies and Seahawks games are letting out and blocking all the roads. The TrafficGauge costs $50, plus $5 per month for the service. They should  come out with a Silicon Valley version, which would be much easier to implement: Simply pre-code them to display all area freeways with "heavy" traffic. No service required. 

Roland Corp will launch July 7 a digital piano that interfaces with a cell phone via infrared. Called the "KR-7iR," the piano can download music data from 504i series, 504iS series, 505i series and FOMA series i-Mode mobile phones. Roland will also launch a music download distribution service with more than 7,000 musical data titles on the web site. Cell phone users can get the data into their handsets, then zap them to the piano at their convenience. Pricing has not been announced. The phone service works only in Japan. 

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Wacky Web Sites

Mark your calendars! It's less than a month until System Administrator Appreciation Day (Friday, July 25th). 

Milo is an ugly dog with a tongue so long it has its own web site. Behold! The Eighth Wonder of the World! Milo's Tongue!

Most political blogs lean to the right, to the left or espouse some unconventional political point of view somewhere in between. WatchBlog does all three at the same time.

How over-the-top crazy can obsessive computer game enthusiasts allow their game rooms to become? Digital Press tries to find out with The Ultimate Game Room web site.

That site should definitely never be confused with another web site, called The Desktop Project, for people who use their PCs primarily for work.

Mike's List on the Radio

Craig Crossman's Computer America features Mike Elgan every Thursday night. The show runs from 7pm to 9pm SVT (Silicon Valley Time). Listen to Computer America on your local Business TalkRadio station or over the Internet every weeknight. Don't miss Computer America!

Big Number o' the Week

5,500,000,000 (The total amount in U.S. dollars of lost revenue by software companies resulting from piracy in Asia.)

Geek Trivia o' the Week

Trivia: IBM stands for "International Business Machines." What does BEA stand for?

Know the answer? Send it to [email protected] (be sure to say where you live). If you're first with the right answer, I'll print your name in the next issue of Mike's List!

LAST WEEK'S GEEK TRIVIA ANSWER: 
Last week I asked: "How many closed-circuit security cameras are there in Britain? (Estimate) Bonus points for how many cameras there are in the London Tube." According to this recent MSNBC article, there are between 1.5 million and 2 million closed-circuit television cameras in Britain. The article points out that with so many cameras watching about 70 million people, the British are the most "surveiled" on earth. Congratulations to Doug Thomas of Santa Barbara, California, for being first with the right answer. Doug also got the bonus points. 

Mystery Pic o' the Week

What is it? Send YOUR guess to [email protected] (be sure to say where you live). If you're first with the right answer, I'll print your name in the next issue of Mike's List!

LAST WEEK'S MYSTERY PIC: No, it's not a "computer barber," a "Space Shuttle laser targeting system," or even a "tiny microwave oven" as suggested by some readers. In fact, it's a picture of National Freight truck driver Mowbrey Jemmott using an IdleAire system. The system provides air conditioning, heat (presumably not at the same time), broadband internet access, TV, movies-on-demand and electrical power to truck drivers. It's designed to cut down on unnecessary air pollution when drivers run their truck's engines to generate electricity while they're stopped. IdleAire units have been installed at truck stops in Atlanta, Knoxville, S. Bronx, Chittenango and DeWitt. Congratulations to John Kruemp of Cupertino, California, (right here in Silicon Valley) for being first with the right answer!

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