Apple’s Television Vision

Apple has been sizing up the world of television for a long time now with very hungry eyes. The company almost never reveals its plans out loud, of course, but if you test the PH level of the rumor pool, it’s starting to look a lot like it did about six years ago, just before the first iPhone came along.

At that time, it was widely believed that something called an “iPhone” was on its way, but what that would shape up to be was anyone’s guess. And it wasn’t just about the design and capabilities of the device, either. To get a product like that going would be a lot more complicated than just building a gadget and putting it on shelves.

Apple had to make deals with the entrenched companies that controlled the networks on which those devices relied — wireless carriers. Either that or enact some kind of grand strategy to go it alone and make its own network, which would be an especially risky undertaking.

As it turned out, Apple dealt with the carriers. It drove a hard bargain, but it played the game, and now the iPhone is kind of a big deal.

Now it seems Apple may be looking toward that same strategy for what’s presumed to be its next industry shakeup: television.

For the moment, Apple TV is a simple little set-top box that does iTunes, some streaming sports channels, Netflix, YouTube, so forth. A lean-living cord-cutter can survive nicely on it, but Apple’s said to have bigger dreams. It wants to come out with a full-sized Apple television — not just a box, but a 40-something inch screen. And it wants full-sized content. It wants more shows, immediate availability, everything on-demand, more live sports — basically everything a cable TV package has to offer.

Getting that by jumping over Big Cable’s head would mean carving out dozens of deals directly with content producers, some of which may balk if their cable godfathers lean on them even a little. And cable wouldn’t stand for it — they’re already scared enough of the cord-cutter trend; the last thing they need is one of the most popular consumer electronics corporations in the world serving up a full-access, all-Internet entertainment package in a neat little black box.

It’d be a messy and complicated process, and odds are good that at best it would end up being a half-baked product.

The easier route: Sit down with the cable providers themselves. And that’s just what Apple is doing, according to a Wall Street Journal report. The company is supposedly negotiating terms for letting cable providers pump their content directly into Apple TV. Customers keep their subscriptions; they just use Apple’s equipment as the cable box instead of renting a more or less generic one from the provider.

Cord-cutters won’t be pleased about that — it still means cable subscriptions are necessary to get full access to all content. But it could save customers a few bucks in the long run, if set-top Apple TV devices remain available for US$100. It’s not a totally alien idea for some cable providers — a few of them already have similar deals with Microsoft’s Xbox 360. And a deal like that does get Apple’s foot in the door — and once it’s there, the company often proves itself to be very good at wedging things open a lot further.

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The Gauss That Roared

Strange and new species of malware continue to pop up in the Middle East. The latest has been dubbed “Gauss” by Kasperksy Lab, the Russian outfit that first ID’d it.

Gauss appears to be capable of some highly invasive and dangerous activities. It can intercept user sessions, steal browser cookies and browser history — even swipe passwords. It can collect information about a computer’s network connections, processes and folders. And it can install spy modules on USB drives.

Just because Gauss has been uncovered, though, doesn’t mean it’s completely understood just yet. Kaspersky is presently trying to decrypt various parts of the malware — the parts that carry some of Gauss’ most dangerous payloads. Those bits are locked up, and the AV company is inviting any cryptobrainiac with some time to spare to take a crack at it. It’s also trying to figure out the mystery behind a strange font the malware delivers to the system, something called “Palida Narrow.”

One interesting thing about Gauss is the systems it’s infected so far. Lebanese banks seem to be the major target — Lebanon is by far and away the most Gauss-ridden country.

Another interesting part of Gauss is its lineage. Kaspersky says there’s a very good chance Gauss shares an ancestor with Flame and Stuxnet, two cyberweapons also recently discovered in the Middle East which were apparently built specifically to befuddle Iran’s nuclear efforts. Kaspersky was careful not to specify who or what may have created the malware. But various reports have linked its relatives, Flame and Stuxnet, with the U.S. and/or Israeli governments.

Tapping the Wire

The U.S. Court of Appeals came down with a ruling this week that’ll have McNulties and Freamons and Bunks all across the Sixth District jumping for joy.

The court has ruled that location-tracking in real time by way of a suspect’s cellphone is not a Fourth Amendment violation, even if no probable cause warrant is obtained.

The case in point was that of convicted drug trafficker and money launderer Melvin Skinner, who was nabbed by investigators thanks to cellphone tracking. Law enforcement would call him and immediately hang up, then check which cell tower took the signal. When his location was finally pinpointed, federal agents caught him with more than 1,100 pounds of marijuana.

The court ruled that Skinner had no expectation of privacy as he traveled along public roads using his phone. It likened the act of tracking a phone’s signal to tracking a person’s scent with bloodhounds. Critics countered that people do indeed have a reasonable expectation of privacy in their movements. Attorney Yasha Heidari compared cellphone location info to a safety deposit box in a bank — even though it’s kept by a third party, it’s reasonable to expect it’ll be kept private.

At the moment, the ruling applies to cellphones and is only binding in the Sixth District, which covers states like Michigan, Kentucky and Tennessee. But a federal appeals decision could set quite a precedent, and a case could be made for extending the rationale to various other technologies too. And it’s still possible the U.S. Supreme Court will eventually clarify its stance on the matter once and for all.

Sweet Deals Go Sour

Groupon investors are beginning to regard their shares in much the same way Groupon users look at those discounted vouchers for cheese-making classes they signed up to buy two and a half months ago. Specifically: What the hell was I thinking?

The company recently posted 45 percent revenue growth from a year ago as well as its first-ever profitable quarter since going public. Sounds like good times, right? Investors didn’t think so. Despite those stats, Groupon value plunged 30 percent following that report as Wall Street poked and prodded the company’s weak points, which were many and more.

For one thing, most of that 45 percent gain did not happen recently. Revenue is up just 2 percent on a quarter-over-quarter basis. And billings actually declined from the previous quarter, down 5 percent.

Shares approached $5 — a new low for the company and a loss of 72 percent from its IPO value.

Some of the blame was placed on the performance of Groupon’s European branch, with the continent’s economic turmoil taking its toll. Also, Wall Streeters often stuff the daily dealer into the same mental cubby hole as companies like Zynga and Facebook, and bad performance from one tends to stink up the others sometimes.

But some investors are beginning to think there’s a little more too it than that. They suspect that maybe Groupon’s entire business model is running out of gas.

Groupon’s M.O. is to approach businesses — mostly small and local ones — and convince them to offer a special deal through the company.

The business will have to sell its products at a deep discount, and it’ll have to give Groupon a cut of the money it does make, but it’ll get lots of new business, chances for upsells, possible repeat customers. Also, Groupon sometimes gives the business a cut of the take up front.

Some businesses say offering a Groupon deal is a great opportunity, but for others, it turns out to be a huge money-loser. Critics say Groupon salespeople sometimes don’t fully explain the risk to client businesses, and those risks can be substantial. If you sell way more Groupons than you expected, well, you’re still on the hook to sell your goods for that price. And there’s no guarantee those deal-hunters will ever set foot in your store again.

Valid or otherwise, that reputation seems to be growing, if investor behavior is any indication. Instead of just touting a system that turns a one-time profit for Groupon, gives users some cheap stuff and leaves behind a trail of participating businesses wondering what happened to all their revenue, investors are looking for approaches that foster actual loyalty between sellers and customers.

Rank Reorg

Since its earliest days as a company, Google has positioned itself as a champion of the free flow of information. Its stated mission is “to organize the world’s information and make it universally accessible and useful.” It doesn’t take responsibility for what’s on the Web; it’s just here to show you where to go to get what you’re looking for. Universal access to information — make everything available to anyone.

That’s nice in theory, but in practice, compromises apparently need to be made sometimes. And even though Google was a vocal opponent of legislation like SOPA and PIPA, which threatened to saddle Internet companies with tough new regulations aimed to cut down on piracy, it seems the company is very comfortable dealing with the problem in-house.

Google has instituted a new policy under which sites that frequently get dinged for illicitly carrying copyrighted material will lose traction in Google’s all-important search rankings. That means that if copyright holders often knock on Google’s door to tell it your site is pirating their stuff, and Google decides the complaint is legit, your search ranking will take a tumble.

Critics have said the decision directly counters Google’s philosophy of List All the Things. They cite the give-a-mouse-a-cookie rule and say that organizations like the RIAA and MPAA won’t stop here — that they’ll just keep digging at Google until those sites are eliminated from the engine entirely.

For now, though, this does ease up the often tense relationship between Google and content producers. Movie studios and music labels applauded the new policy, and Google will probably benefit in buttering them up. It’s trying to establish itself as a portal for legit content distribution with things like Google Play and Google TV. If that’s the business it wants to get into, it needs to please the right people.

But rights holders aren’t the only ones who’ve applauded the move. Some regular users see it as a way for Google to clean up search pages that are often covered in links to shady junk sites when all they really wanted to find was a legitimate way to hear a song.

This does create an awkward situation for some of Google’s own properties, though. Google is a content carrier itself — it owns YouTube. And since users are constantly posting stuff on YouTube, the site is a hotbed for copyright violations. Not that Google doesn’t take its DMCA takedown notices seriously. It just gets a lot of them. And getting lots of legitimate takedown notices is apparently what will demote a site’s rank under the new system.

So will YouTube listings sink like a stone? Probably not. Google told Search Engine Land that while it will count takedown notices filed against YouTube, it still doesn’t expect that site or similar user-generated content sites will be demoted. Google did not specify exactly how that will work.

1 Comment

  • The problem with a Apple deal with a Cable company will be Apple. Because Apple makes deal that benefit Apple and hardly anyone else. Just look at the lost subsides the Wireless phone companies gave up for the iPhone. Many actually complain their "net" profits went down not up after the iPhone. At the same token Cable has its own ideals of streaming TV. Comcast has already been working on its own streaming services. Could their be a desperate cable company willing to commit to Apple’s demands? Sure. But given you not only have to deal with a cable company but also all the networks that have done a deal with that cable company. I think your adding a lot of layers of negotiations and deals. At what cost?

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