Liberty on the Rocks™ Denver

ari | December 23, 2009

I attended the Red Rocks Liberty On the Rocks December 7 meeting, where Adam Schrager discussed his inspiring book about Ralph Carr. Jimmy Lakey, a candidate for Colorado’s 7th Congressional district, also attended that meeting, so I pulled out my audio recorder and asked him some questions.

In business Lakey promotes Christian music. Lakey adopted a son from Africa and continues to participate in charity work there. His biographical notes take up Part I.

For Part II, Lakey said he is running to protect the future of his son as a new American citizen. He said he is not and does not want to be a career politician. He questioned the decision of Ryan Frazier — another Republican in the race — to extend same-sex benefits in Aurora in a time of fiscal downturn.

For Part III, Lakey contrasted his views with those of incumbent Ed Perlmutter. While Lakey stressed his fiscal conservatism, Lakey also discussed his “faith-based beliefs” and endorsed the “personhood” measure slated for the 2010 ballot (defining a fertilized egg as a person).

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ari | December 23, 2009

I have been dismissive of Dan Maes, who is challenging presumptive front-runner Scott McInnis for the Republican nomination for governor. (See my first, second, and third set of comments.) But Maes shows up and answers questions, and that counts for a lot. His tenacity earns him at least a second glance — especially given that McInnis is the ideal candidate of few.

I talked with Maes at the December 21 Liberty On the Rocks holiday party (er, “Christmas party!”) hosted by the Independence Institute. We talked about a number of issues, but I assured him the conversation was off the record. He also complained that I had not given enough consideration to his candidacy. So I figured I’d invite him to further articulate some of things we talked about, on the record. I sent him five questions, which he generously answered. My questions are in bold.

I appreciate you giving me your time at the II event to discuss your campaign.

I would like to again give you the opportunity to further articulate your views, on the record. I have a number of questions arising from our conversation. I will be happy to publish your replies, unaltered, on my web page.

1. As governor, what would be your role in dealing with the military’s desire to expand Pinon Canyon operations? [See the write-up about McInnis's statements on eminent domain for background.]

I would like to act as a mediator and seek out a mutually beneficial solution if possible. I do not see issues like this as zero sum. I only have the ranchers’ input thus far and they have presented a very strong case for preservation based on many valuable criteria not limited to private property rights, less federalization of state land, and cultural history. I await the Army’s position in detail beyond a GAO report that has unaddressed exemptions in it.

2. Generally, when do you believe eminent domain is appropriate, if ever?

It is a constitutionally acceptable process and should be applied on a case by case basis. Application of the practice should only be exercised when there is a clear and convincing case for a purely public use and benefit.

3. Please explain what specific economic policies you would adopt. Would you seek to cut specific taxes?

Yes, personal income tax and business property tax. Possibly explore a Fairtax (consumption tax).

Cut specific state programs?

Yes, TBD.

Roll back specific economic controls?

Clarify please.

[I was under the impression that Maes wanted to cut certain regulations on business, and I was trying to figure out which regulations he might want to repeal or modify. I will be happy to post Maes's additional comments on the matter if he cares to send them.] Many politicians, including W. Bush and Obama, promised to cut taxes, so I’m looking for some specific proposals.

I see our energy industry and the accompanying tax revenues as an enormous potential for our state just like our energy producing neighbors. With aggressive and responsible energy policies we could increase these revenues dramatically. Simultaneously, I have articulated my position on downsizing government FTE [full-time employees] by up to 4000.

I will defend Tabor while seeking a better balance with the effects of Amendment 23. I am a strong advocate for public schools as I have two children attending them, however; we must seek more fiscally responsible reform.

Cutting taxes is part of my plan but only after we have struck an appropriate sizing of state government and started a statewide recovery.

4. As you know, the Colorado legislature directs corporate welfare to a variety of industries, including tourism and energy. What are your views of corporate welfare?

I would like to examine the specifics in each case. Our state constitution clearly states we are not to make investments in private entities. I want to honor the spirit of our federal and state constitutions. I do see tax breaks as viable incentives to spur our economy.

5. The “personhood” measure slated for the 2010 ballot states, “As used in sections 3, 6, and 25 of Article II of the state constitution, the term ‘person’ shall apply to every human being from the beginning of the biological development of that human being.” Please explain your views on this measure.

I support it with the understanding that the life of the child is equal to that of the mother and shall never be considered more important than that of the mother.

I appreciate your pledge to answer the survey coming soon from my dad and me. That will probably come out the first days of January.

In closing, understand that we have 3 months until caucuses, 5.5 months until state assembly, and 11 months until the general election. It is still a tad early to have all the answers but I hope I have given you something to start with. Contrary to my opponent, I do have a copy of the current state budget and will continue to examine it, get consultation on it, and come
ready to provide even more specifics in the near future. Thank you.

I will indeed be interested to see whether McInnis is as forthcoming in his answers to the upcoming survey. (I also hope the survey prompts even more specific and revealing answers from Maes on a variety of issues.) I believe the voters of Colorado deserve to know where candidates stand on the issues.

By the way, a People’s Press Collective article discusses some of the recent comments of the candidates, including McInnis’s comments about the CSU gun ban.

Talking both with Maes and with Clive Tidwell, the underdog in the U.S. Senate race, I picked up a “throw the bums out” vibe, which is to be expected from candidates with no political experience running against seasoned former politicians. However, I have no interest in replacing one bum with another, potentially worse one. While experience and biography do matter in these political races, I hope ultimately they are about fundamental ideas and their application to policy. So I will continue to try to get candidates to articulate their ideas and policies as fully as possible. I hope the voters — and other political writers — join me in this.

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David K. Williams, Jr. | December 23, 2009

Linda Lodenkamper wrote a letter to the editor of the Denver Post taking the paper to task for its position regarding Stephanie Villafuerte.

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ari | December 22, 2009

I’ve been complaining quite a lot about Amazon’s e-book service. My basic complaint is that, because of Amazon’s proprietary software, Amazon e-books will only play on devices supported by Amazon’s reader software. Presently that excludes my Mac, which means that the only way I could buy Amazon e-books was to also buy Amazon’s Kindle (or an iPhone or Touch, which runs the software).

I don’t want to buy a Kindle because it does way more than what I want it to do, and as a result it is quite overpriced for my budget and needs.

Thankfully, I have friends who tend to be early adopters of new technology. One of these friends (Diana Hsieh) lent me her Kindle for a few days so that I could check it out. This was quite helpful, because, as Amazon has no physical store front, it is otherwise impossible to pick up and play around with the Kindle before buying it.

I also purchased Karen Armstrong’s The Case for God from Barnes and Noble (BN), because it will read on my computer (with the BN reader) and I wanted to try it out. I’m contemplating buying several more books through BN but I worry that they won’t read on the e-reader I may ultimately buy and that I won’t be able to integrate my purchases from different suppliers. (The word is that Apple is also getting into the e-book game, which could change the industry dramatically.)

BN’s Nook is not yet available for purchase, so I cannot directly compare the two services. I’m reading the God book on my Mac screen and comparing that with text on the Kindle. But that’s what I have to work with.

I’ll begin with the BN e-book. It was easy to buy (once I set up my account), and the BN e-reading software installed and functioned flawlessly. The text looks fabulous on my great Mac screen, and it is easy to increase the font size and resize the window for a narrower column of text.

There is a huge disadvantage with the BN e-book and a minor one. The huge disadvantage is that the e-book will only read with the BN e-reader software, which bugs the living hell out of me. What is the point of having universal formats like pdf and HTML if e-book sellers refuse to use those formats? By contrast, an mp3 song you buy from any vendor will play on any device on the standard software. You don’t buy mp3s from Amazon that play only on the Amazon music reader. (Apple-formatted songs will only play on iTunes, but, as I’ve noted, Apple can get away with this because the company is so great at making players.)

Incidentally, today I spent $63.10 at the Cato Institute’s store to purchase seven e-books. These were straight pdf downloads, so I don’t have to worry about the compatibility issues of DRM. I do think that publishers should sell both pdf and HTML formats so that users can select the format best adapted to the reading device.

The minor disadvantage is that the BN e-book has no standardized page numbers. Instead, the pagination adjusts to the window and text. The problem is that BN e-books are useless for citation purposes, unless we’ve gotten to the point where nobody cares about page references because books are so easily searchable. If I do a review of the book, I’ll look up the page numbers, ironically, with Amazon’s “look inside” feature. Perhaps that should give Amazon the idea that its business model in this area sucks.

There are some advantages to reading an e-book on a computer screen that I did not anticipate. For note-taking, I can easily open a text window next door. The BN e-book allows the reader to cut-and-paste short passages, which is awesome. I also love the way the endnotes work. Click on the endnote to move to that note at the end of the document; click the number again to go back to that point in the text. That beats the hell out of flipping back and forth in a paper copy.

What about the Kindle? Previously I had indicated that I didn’t much like the Kindle’s design, whereas the Sony e-reader looked more appealing. I have since visited a Sony e-reader in a Target store, and I now think it completely sucks. What I didn’t notice before is that the Sony device features ten menu buttons on the right-hand side, which screams poor design. The Target model didn’t even work right, which didn’t fill me with confidence. It seemed a lot more like a toy than a serious reader.

The Kindle, by contrast, is an elegant machine. The screen looks marvelous, and, while I have not yet spent hours reading from it, I have no doubt that will prove no problem. The Kindle’s controls are a lot more intuitive than I thought they would be. One key control is a miniature joystick, which works fabulously. (I’m used to operating a similar control on my Canon video camera.)

The Kindle, then, is great at what it does. The problem is that it does way too much for my needs, and therefore costs way too much for my budget. The Kindle is like a Hummer, when all I’m looking for is an economical and reliable little Honda. Because I don’t want to buy a Kindle, and because Amazon e-books will not yet read on my Mac, I am simply not going to buy any Amazon e-books. (Again Amazon might consider the fact that its business model is completely stupid, though at least the company is working on more readers.)

The main thing that the Kindle has that I absolutely do not want in an e-reader (for the money) is wireless technology. What I want is a cheap little USB cable through which I can load e-books from my computer library onto my reader. The ability to buy books on the road is of practically no value to me.

I didn’t realize you can browse the internet on a Kindle, which is cool, but again the coolness is not nearly worth the money. Of course I loaded up my own web page. The browser was tracking the loading progress — I kid you not — in kilobytes, with a “k.” I finally got irritated by the wait and hit the stop button, at which point (at least part of) my web page displayed, and quite nicely. But, seriously, who wants to browse the internet s-l-o-w-l-y in black and white? If I want to browse the internet on the go, I’ll buy an iPhone or Touch. I’d much rather carry two devices that do what they’re supposed to do than one device that sucks at most of its functions.

Speaking of suckage, I tried the Kindle’s audio reader software. Painful. If I were blind, I imagine I could get used to it. But it would be a real struggle. Think of the challenge of getting past Keanu’s acting to enjoy the Matrix, then multiply that by a thousand.

The Kindle has a built-in speaker and audio-processing software, so it will play mp3s and audio books. That’s cool, but I’d much rather buy a less-expensive e-reader plus a $59 iShuffle. Just sell me the reader. That’s all I want it to do.

As an e-reader, the Kindle works great. If I could just buy the e-reader part of the Kindle at a lower price, I’m pretty sure I’d do it. The dictionary is very cool. You just push the joystick until the cursor is in front of the word of interest, and the definition pops up at the bottom.

It is possible to take notes and record them with a Kindle document. Again push the joystick until the cursor is where you want it, then start “typing” your note. The keyboard, as I anticipated, is horrible. I mean, if you were a sentient ferret or something, it would probably be the perfect size. Maybe it’s okay for the “texting” generation. But I absolutely hate it. I’d much rather scribble down a few notes on a piece of paper. So, Kindle minus wireless minus the keyboard minus the high price is a device I’d love to buy.

At least the Kindle has standardized “locations” (rather than “pages”), but these don’t match the paper version. They are also listed as ranges (such as “locations 14-19″), which is strange. Will publications allow Kindle-specific citations, or will Kindle buyers need to check the page references against the paper versions? I don’t know why publishers don’t simply insert a page counter into the text itself matching the hard-copy page counts. This is trivially easy to do, though it would be a minor distraction while reading the text. Granted, some older books already have many different paginations. But there’s no reason for new books not to feature the same page references for the hardback, softcover, and e-book versions.

The Kindle will run pdf files fine. You can even upload them via USB. But to run files like Word and HTML, a user must send the file to a Kindle-specific e-mail, then Amazon “will convert the document to Kindle format.” So, in other words, to get an HTML file from my computer to my Kindle sitting right next to it, I need to send the HTML file half-way around the world to wherever Amazon keeps its computers, where Amazon will convert this already-standard-format file to the completely-non-standard Amazon format, then send the file back to my Kindle wirelessly. Did I mention that Amazon’s business model for the Kindle is completely ridiculous? I mean, God forbid that I’m able to send an HTML file via a USB cable and read it with my $259 e-reader. I mean, Amazon can install software that will (sort of) read the text out loud, but it can’t figure out how to let me read HTML files directly?

I only had one minor problem while using the Kindle: at one point, when I was trying to jump to a linked table-of-contents entry, the Kindle thought I was trying to highlight some vast portion of the document. But I soon figured out how to cancel out of that mode, and with a little jiggling got the joystick to do what I wanted it to do. (Much of this tinkering I was doing while reading Amazon’s tutorial, which is a pretty good document.)

If my income were more upper-middle-class than lower-middle-class, I’d gladly buy the Kindle, despite the risk of betting on an e-book reader that turns out to be the equivalent of Beta or HD DVD. But, given that the Kindle does way too much and therefore costs a lot, I’ll wait to buy a reader until the market has settled down a bit, the formatting issues have been resolved, and I can buy a nice low-end reader for $150 or less. At this point I will either wait to buy e-books or buy BN e-books that at least will read on my Mac.

It was a fun date, but the Kindle is not yet marriage material.

December 23 Update: I just had a thought: why doesn’t Amazon allow e-book purchasers to view the books in a web browser with password protection? Then Amazon wouldn’t even need to release additional readers. Any device with a browser would suffice. Also, I sincerely hope that Apple makes an economy-model reader, as I imagine the Tablet will be priced well outside my budget.

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ari | December 22, 2009

The following article originally was published December 21 by Grand Junction’s Free Press.

Ralph Carr shows politicians can stand for liberty

by Linn and Ari Armstrong

If you still have last-minute Christmas shopping to do, we have a suggestion. Adam Schrager, the thoughtful 9News reporter, wrote a book called The Principled Politician: Governor Ralph Carr and the Fight Against Japanese American Internment. This delightful account of important Colorado history came out in paperback earlier this month.

Carr served as governor from 1939 to 1943, an era spanning parts of two of the nation’s greatest challenges: the Great Depression and World War II. Carr responded to both these crises by defending liberty and individual rights.

As Carr entered office, Colorado government faced a $1.8 million deficit. Unlike many of today’s politicians, whose answer to deficits is to raise taxes and “fees” or increase government spending, Carr called for fiscal responsibility.

Schrager writes that Carr “announced plans to abolish many of the state bureaus and boards established by the last administration.” He also “proposed shifting the net income tax benefiting schools into the state’s general fund.” During a speech he “told the crowd that anyone who joined the civil service to have an easy job financed by taxpayers… could expect to be fired.”

We wish we could hear Carr’s common-sense wisdom reflected in today’s political debates. (All quotations are from Schrager’s book.) “The way to save money is to stop spending it.” “Spending and lending is unsound and… thrift and the full payment of debts… is simple and common honesty.”

While seconding the nomination of Wendell Willkie, who lost the presidential contest of 1940, Carr said, “If we are ever to save this country, we must first save business. Every one of you is in business — big business and little business, farmers, stockmen, laboring men, industrialists.”

Carr turned down a chance of running with Willkie (a wise move in retrospect) to continue his work in Colorado. Carr said, “What have we done to justify your returning us to office? We have taken the income of the state of Colorado. We have lived within it. We added not a dime of new taxes. We cut the levy for state purposes… and we balanced your blooming budget.”

Carr opposed Roosevelt’s expansive political controls: “The New Deal has usurped the powers of the state [and] undermined personal liberty.”

Carr added, “It is not disloyal to oppose and to question the policy of one who has not yet proved himself omnipotent and to require that he too be limited and circumscribed by those same ideals and standards governing others. We insist that the president recognize and follow the Constitution which created him.”

Carr summarized his basic political philosophy with an eloquence rare in politics: “The individual is supreme and government is established only to protect and foster his rights.” He later added, “Every time the individual submits to a central government for a solution of another problem of business or life, there is a consequent surrender of individuality, of privilege, of right.”

Carr argued that the term “liberal” had been stolen by the left. He said, “The true liberals are those who consistently follow the proposition that liberty means freedom to exercise individual rights unaffected by external restraint or compulsion… The underlying theory of the Constitution is found in the proposition that every man may use the talents which God has given him, may reach any goal toward which he sets his eyes, and may enjoy the fruits of his ambition, his study and his toil, provided only that he does not use his powers to injure his fellows.”

The fate of the nation changed on December 7, 1941, when Japanese bombers attacked the U.S. base at Pearl Harbor. Carr rose to the challenge, setting up “an emergency meeting of the Colorado Council of Defense for the next morning,” Schrager writes.

While most Coloradans responded to the crisis admirably, some turned to paranoia and racist threats. Some called Japanese Americans “vipers” and “yellow rats.” Various politicians and media personalities wanted to put them into concentration camps. The Denver Post wrote, “To hell with the Japs!” Nels Smith, governor of Wyoming, said “there would be Japs hanging from every pine tree” if sent to that state.

Carr rejected racism. He said, “We have among us many of a new generation of Japanese people born in the United States — sincere, earnest, and loyal.” He offered a “hand of friendship” to immigrants. He urged protection of the Bill of Rights and the “security, freedom, and opportunity” it offers.

In a public address, Carr granted the existence of enemy “fifth columnists” and assented to federal relocation policies. Yet he also spoke for “loyal German, Italian, and Japanese citizens who must not suffer for the activities and animosities of others.” He warned against “the danger of inflammatory statements and threats against these unwelcome guests” forcibly sent to Colorado.

Though we may not approve every detail of Carr’s career, he has richly earned his place in history as a man who defended liberty. We thank Schrager for telling his inspiring story.

Category: Adam Schrager, Free Press, Ralph Carr | Comments Off
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ari | December 22, 2009

What is extraordinary about my lifetime is that I will have witnessed the birth of the home computer industry and (if things go well) the complete conversion of all relevant media forms to digital formats separate from any particular physical “carrier” medium.

In recent days I have written about the still-problematic e-book industry as well as the move toward online video content. Fittingly, today I found an article by Matt Buchanan covering both these stories in the context of Apple’s business innovations. Before getting to that story, though, I thought this is a good time to step back and gaze at the landscape.

The basic art forms are these: music, painting, sculpture, literature, dance, theater, film, and architecture. There are certain hybrids, like opera (musical theater) and illustrated fiction.

Art presented as a structure (sculpture, architecture) may be photographed and filmed, and only in these derivative forms digitized. (One may view a photograph of the Parthenon, but obviously viewing the photo is not at all the same experience as visiting the place.) Performance art may be recorded in audio or on film, and the recorded presentations may be digitized. Going to hear a symphony is a different experience than listening to a recording of a symphony, though the audio quality might be very similar.

Paintings obviously may be digitized, and the similarity of the digitized piece to the original, while generally fairly close, varies significantly by art work. The School of Athens is fantastic on a modern computer screen, but it simply does not compare with the real thing, whereas the Mona Lisa is nearly as impressive digitally (I write as I duck the stones).

Literature is readily digitized, for the same reasons that literature can be translated and read aloud. Literature is the most purely conceptual form of art, and its mode is language, and language is inherently separable from any particular medium (which is not to discount the qualities of a musty old book).

Film inherently converts a performance to a two-dimensional image, so the digitization process is perfectly natural. Some modern “films” may begin with hand drawings but develop primarily digital animation.

For our purposes, the upshot is that film, music, and literature are the most-easily digitized art forms, with paintings following behind. Regardless of how we categorize photography in terms of art, obviously it has joined film in making the natural jump to digital formats. (General retail outlets don’t even sell film cameras any more.)

The basic modes of mass communication are text, photographs, speaking, and video (I’ll say rather than film, which is now mostly outdated).

The above facts indicate that the modes of digitizing the fine arts match up pretty will with the modes of digitizing mass communication. Whether we are talking about fine arts or mass communication, in the digital world we are basically talking about text, still images, audio, and video. Any digital content basically combines those four sorts of presentation. Basically, if you can see it or hear it, where the seeing or hearing is the point of the thing, it can be digitized. (Whether the sense of touch can be effectively digitized remains to be seen, but a world where more than a few would want such a thing would be a very different world from our own.)

Music has essentially gone digital now. My first album was a record, as in a disc of plastic etched to stimulate a needle. (Genesis, baby, as in the band.) Interestingly, I’ve never actually looked up the term “analog” until just now: “of or pertaining to a mechanism that represents data by measurement of a continuous physical variable, as voltage or pressure.” Anyway, within my lifetime music has gone from entirely analog to almost entirely digital.

Moreover, music has largely made the break from a particular, dedicated medium. While the music CD remains popular, increasingly people buy music online and save it to a hard drive or flash drive.

Video similarly has largely gone digital. Due to its increased file size it remains more tied to the DVD, though this is rapidly changing. My step-dad had one of those VHS video recorders you had to rest on your shoulder to operate. I own a digital video camera that records directly to flash memory. YouTube allows pretty much anybody to upload any video that’s under ten minutes, while a variety of services display movies and “television” shows online.

Obviously photography has gone digital. While 35 millimeter film was the standard consumer-grade film in my childhood, today I can’t name anybody I know who owns a film camera.

Strangely, text, while far more easily digitized than audio, photos, or video, remains largely bound to ink and pulp. They still print newspapers and books in large quantities. The stickiness in converting text to digital formats is funny given that the analog formats are created from digital source files. Word processors were among the first computer applications.

My mother used a real typewriter in college. I mean, you hit the key, and it caused a metal arm to strike the paper through an inked ribbon. No electricity! When I was in high school, I learned how to type on an electric typewriter; the metal arms were replaced by a rotating ball, but the mark was still made by a metal form striking the paper. Now I don’t know anybody who uses anything other than a computer to generate polished text. (Well, I’ve met two people who still write by hand, a novelist and a philosopher, but they lie well outside the norm. Of course somebody then transforms their scribbles to digital text.)

So why is it that practically everyone generates text digitally but then many still convert it to ink on pulp? There are two main reasons, one involving technology and the other business organization. The technological problem is that reading text on computer screens tends to create eye strain (as I am already experiencing in the writing of this post). It’s a lot easier to sit down for several hours and read an ink-on-paper book than it is to read a digital display of the same text. But the new eye-friendly e-readers seem to be on the road to solving this problem.

The second problem is that nobody has yet figured out a great way to sell e-books or profitably publish news online. I think it extremely likely that some combination of business leaders will solve all of these problems within the next few years. I think that, within the next decade or so, printed newspapers will be mostly gone and that the paper-on-ink book industry will look a lot like today’s record industry.

Whether we look at video, audio, still images, or text, the trend is the same: people will no longer buy a physical good, they will buy a digital file online and store it on some sort of data drive.

Today I went to Target and spent just over $15 to purchase a four gigabyte “thumb” drive. I loaded it with videos, photos, audio files, database files, and text files, then dropped the device into my pocket. We no longer need dedicated physical objects to store these things. We buy them via an energy stream, then we store them on a universal storage device and enjoy them via some software program running on a gizmo.

I know that techies have already rolled their eyes and closed this page in annoyance, but I stand in awe of the digital revolution that has occurred in just a few years. These simple, obvious, and mundane facts all around us mark a turning point for our species.

As for Buchanan, he reports that Apple appears to be gearing up to expand its online video market and its small-sized computer market. As Philip Elmer-DeWitt indicates for Money, Apple’s “Tablet” and associated deals may revolutionize the e-book industry.

Very soon digital content via the internet will be the norm, and records, tapes, CDs, DVDs, newsprint, and pulp books will become quaint (and even eccentric) throwbacks to an earlier age.

Update: I was just poking around at the Cato Institute’s web page, and I noticed that the outfit is selling Tom Palmer’s new book as an e-book for $14. This is available through Kindle for $9.99. However, I called Cato and was assured their digital books are straight pdfs, and to me that is well worth the extra four bucks.)

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David K. Williams, Jr. | December 21, 2009

Just prior to the Senate passing a version of Obamacare, Democratic Senator Tom Hawkin, from Iowa, said “let’s make history.”

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David K. Williams, Jr. | December 21, 2009

A headline from today’s Denver Post reads

That’s like winning a temperance award from Dean Martin.

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ari | December 21, 2009

As I wrote last month, I’ve stopped doing business with Redbox, the DVD kiosk service, because that company initiated antitrust actions against film companies.

Last week I learned that NCR has acquired DVDPlay and plans to convert those “kiosks to its BLOCKBUSTER Express brand.” It turns out that, in my region, these kiosks are placed in many Safeway stores.

On December 17, I sent the following e-mail to NCR:

Dear Mr. Dudash,

I no longer do business with Red Box because that company initiated antitrust actions against others, and I regard such action as unjust and a violation of individual rights.

Before I decide whether to do business with NCR/ DVDPlay, I’d like to know whether your company has initiated any antitrust actions or intends to do so. I will be happy to publish your response, and to make my consumer decisions accordingly.

Sincerely,
Ari Armstrong

Today I received the following reply:

Hi Ari, we have not initiated any lawsuits against the movie studios at this time. We have said publicly that we do not believe that is the right approach, and we are instead working with the studios to find a solution that addresses their needs, our needs and — most importantly — the needs of our consumers.

However, as I’m sure you can understand, I cannot comment on what actions we may or may not take in the future. But, certainly, we have not filed any lawsuits to date and have said publicly that we do not agree with the approach of litigation.

Jeff

Jeff Dudash
Public Relations
NCR

That is certainly good enough for me. I have already rented two videos from DVDPlay to see how the system works, and now I plan to rent from the service regularly.

The DVDPlay kiosk worked very well. The problem is that the consumer cannot view DVD availability by kiosk online, nor can the consumer reserve a rental online. Redbox allows both of these things, which makes that service quite a lot more useful. Hopefully, once the conversion to Blockbuster is complete, the service will upgrade its online capabilities. (I asked Dudash about this and will update this post if he answers.)

After I dropped Redbox, I upgraded my Netflix account from one-at-a-time DVD rentals to three-at-a-time. Now that I’ve found DVDPlay, I’ve reduced my Netflix account to a the single disc plan.

I figured that, while I was at it, I’d ask Netflix about its business plans. It seems to me that Netflix could offer the best of both worlds by renting DVDs through the mail and charging an additional per-rental fee for online new releases.

Right now Netflix rents DVDs for a monthly fee and offers online content at no additional charge. I’ve found some outstanding online offerings this way, such as Jim Henson’s The Storyteller. But Netflix offers none of the hot new releases online.

Obviously Netflix also rents new releases by mail. The problem is that they tend to be delayed. I dropped the new Terminator film and Hangover from my Netflix list and rented them from DVDPlay. Currently Inglourious Basterds is listed on my Netflix queue as a “very long wait,” as is Four Christmases. Public Enemies and Julie & Julia are listed as “long waits.” My plan is to remove all these films from my Netflix queue and rent them at DVDPlay (if available).

Meanwhile, Amazon and iTunes rent new-release movies online for $3.99. So I can pay a dollar at DVDPlay, or I can pay four times as much to view the same content through my cable modem. For me, this is no contest. The kiosk is within easy walking distance, and I like to walk around, anyway. While I have rented many movies from kiosks, I have paid not one red cent for online video rentals (not counting the online content included with my Netflix membership).

Is Netflix planning to compete with the kiosks and with the online rental sites for new-release business? No.

I called up Steve Swasey, Netflix’s Vice President of Corporate Communications. He graciously took my call. He said that Netflix is and intends to remain a subscription-based company. He pointed out that Netflix has been growing despite the competition.

Moreover, Swasey said that Netflix users tend to be more interested in the company’s deep catalog and excellent customer service. (I readily granted that these are strong points for the company.) Swasey sensibly said that “a great release from 1974 is a great movie,” whereas a new release may not be so great. With Netflix, he said, customers can find older movies “tailored to you.” As examples, he noted that the films Crash and Hotel Rwanda have been Netflix favorites. (I hated the first film and appreciated the second.)

Swasey said that “new releases just aren’t that important to most Netflix users,” who instead enjoy the large catalog, tailored recommendations, and “extreme simplicity” of the monthly subscription.

As much as I enjoyed talking with Swasey and appreciate his perspective, I just don’t buy his rationale. I think it would be in Netflix’s interests to offer pay-per-view online rentals for new releases.

I would gladly pay Netflix an extra couple bucks to watch a new release online, rather than wait for weeks for the DVD or deal with a kiosk. This would be an added service, so only customers who wanted it would have to worry about it. Everyone else could maintain the “extreme simplicity” of the monthly subscription. (I don’t regard online rentals as terribly complicated or confusing.)

I think it’s obvious to everybody that the DVD is a dated medium. Its days are numbered. So, within a few years (I don’t care to guess precisely how many), both DVD kiosks and the Netflix mail service will be aborted. Interestingly, NCR plans to enable consumers “to download movies from the kiosks to portable memory cards,” but I don’t see how this will ultimately compete with online rentals.

DVDs must be produced and physically distributed, whether by store, mail, or kiosk. They break. They cost money on top of the digital content. Meanwhile, as streaming costs go down, the marginal production cost of an online rental will drop closer and closer to zero.

Obviously Netflix is aware of this, as the company has already started offering online content. The problem is that Netflix wants to limit the number of any particular disc it buys, which is why new releases end up with “very long waits.” Yet Netflix can’t offer unlimited new releases online for $8.99 per month, which is the minimum plan for unlimited online viewing.

As I suggested to Swasey, I think the reason a lot of Netflix users aren’t as interested in new releases from Netflix is simply that it’s difficult to get them there, and, like me, they use some other service for new releases.

At some point Netflix is going to have to figure out how to offer new releases via online rentals, if the company wishes to continue to exist. Here’s my ideal plan: I pay $8.99 per month for unlimited online viewing of older content, plus $1.99 per viewing of a hot new release. (New releases could drop into the general pool after a certain number of weeks.) Under such a scheme, I would give Netflix 100 percent of my video rental business.

The problem for Netflix is getting from here to there. The company is stuck in a “Netflix hole” in which new releases are largely inaccessible to members.

How to solve this problem? Here is my suggestion. Netflix can keep its current plan for whoever wants to keep using it. Then Netflix can create an entirely new, online-only plan, as described above (monthly fee plus a modest pay-per-view fee on new releases).

Update: Here’s another obvious approach: Netflix could offer a standard online video program for, say, $9 per month plus pay-per-view on new releases, and a premium program that includes unlimited viewing of new releases for, say, $20 per month. That way, people who care nothing about new releases, or who only want to watch them occasionally, can sign up for the less-expensive account, while others can pay more for full access.

That, Mr. Swasey, is what I call “extreme simplicity” — and a business model that would vault Netflix to the top of the competition.

Until then, I will be happy to do new-release business with NCR, which has, at least for now, sworn off unjust antitrust actions.

Category: Blockbuster, Netflix, Redbox | Comments Off
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David K. Williams, Jr. | December 19, 2009

The backers of this boondoggle said it would cost $4.7 billion. Too many people believed this fraud and said “OK” and approved a tax increase.

Woops. Now RTD says the actual cost will be $7.0 billion. They want voters to approve that, too.

Many will vote for it, thus sanctioning and approving their own robbery.

It starts to get hard to feel sorry for those that willingly submit to fraud. Of course, the bad part is that those voting for RTD want those that have not fallen for the scam to contribute, too.

And, due to the power of democracy, they can make it happen.

Category: Dilbert, Government Incompetence, PPC, RTD, government force | Comments Off
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