YouTube: Kitty said what?

YouTube: I spent high school playing this game

Hollywood: Are franchises actually bad?

Increasingly it feels like more and more of the entertainment biz headlines are about companies trying to find a "franchise" (harry potter, high school musical 2, etc). Which made me wonder, what's the right behavior for a company once it believes it has a "franchise?" In film for example, let's define that as something like a movie which makes >$100m and has some sequel potential. I'd conjecture that there are two downsides to "having a franchise" -

1) Often(?) subsequent films get less profitable as production costs get driven up by salaries [counter: given the % of unprofitable films, having a release which is likely to make money is better than rolling the dice on a non-franchise film, even if it's relatively less than the original]

2) Franchises consume lots of time and energy - do they distract studios from new efforts and dull production/marketing skills - i.e. you're not searching for new talent or new ways of promotion [counter: franchises create money which can then be reinvested in new vehicles and add luster to a studio which attracts talent]

So would the best strategy for a studio be to invest minimal resources in the franchise sequel figuring regardless of reviews it will attract some halo effect from the first. i.e. - don't put your best team on the sequel, put an average team. And then if you make a follow-up to that, put your worst team on it.

e.g. let's say it was the talent of a particular director or producer who made a movie which opened big and is labeled a "potential franchise" by the studio. Should you have that director make a sequel to the Franchise Movie or assign lesser talent to the sequel while the talent goes and creates another "potential franchise." i.e. After something becomes a hit, is the NPV of its extensions within a pretty narrow band. For example:

Potential Franchise Well-Executed: $100 NPV ($200 rev - $100 cost)
Potential Franchise Adequately Executed: $75 NPV ($100 rev - $25 cost)

then if my A-list talent or the addition $75 i saved in cost by taking the "adequate road" can be better spent creating another potential franchise, i'm able to get much more overall revenue - i should never pursue making good sequels to a franchise.

I guess one reason you wouldn't want to do this is the repeated game aspect of this prisoner's dilemna - although i think that's more about the above the line talent that participates rather than the studio since outside of Disney/Pixar, most don't have any consumer-facing brand image.

Orders of Magnitude: Mythical Creatures

New YouTube APIs launched

Yesterday we released a new set of YouTube APIs based on the Google Data protocol. These APIs are cool because:

a) enhanced scalability and stability
b) access to Google Data code libraries
c) new types of calls to get stuff like video comments, etc
d) a heady roadmap full of new things coming out in the coming months

congrats to the team! Our APIs are an important part of the strategy to bring YouTube content to audiences outside of our destination site.

Orders of Magnitude: Comeback Tours du Jour

Poker is over, D&D is back

Forget poker man. That's played out. Dungeons & Dragons is gonna come back as the "guys night" replacement. And then watching people play will become the next TV hit. Just as soon as the poker "card cam" is replaced by the view at the dungeon master's rolls. "All in" disappears from the lexicon. Peeps will be saying "roll for psionics" to suggest a high stakes gambit. And social networks will add an "alignment" field in their reg form.

Gotta run and get "1d12" tattooed on my knuckles....

Celeb Scents: sex and drugs

Classy sells? Apparently not for celebrity fragrances. How else to explain:

a) Actor Alan Cumming's not so subtle "Cumming" cologne

b) Tom Ford's new scent smells like cocaine

c) Gwen Stefani wants "you all over me" (oh wait, she's talking about L, her perfume)

Orders of Magnitude: Interest in puppet masters is high

LinkedIn: treat me with some respect

The following admonishment, err helpful reminder, now appears on several of my LinkedIn screens. I previously wrote about my trouble with the LinkedIn invite systems labeling me a spammer. Back then I found their request to reply to them with a specific "yes i understand your ToS and won't do it again" email to be a little patronizing. But now they're really just pissing me off each time i log in with this reminder.

LinkedIn: I was one of your early power users. I knew one of your founders. I tell everyone that I like your service. And you continue to treat me like a puppy by sticking my nose in the poo to remind me to not crap on the rug again.

Since I'm not a LinkedIn Premium user i really don't make you any money directly. But I do get several InMail messages from recruiters each week along with connection requests. Instead of replying maybe i should just tell them to look me up on Facebook?

Grrr, argh.

"The Web does not go down for upgrades on Wednesdays"

Second Life CEO Philip Rosedale opened the third SL User Convention with a promise to improve stability of the virtual world, noting that while they had to work fast in the early days, service reliability is now a big focus:

Eventually, Rosedale said, for Second Life to fulfill his dream of becoming “bigger than the web,” even scheduled maintenances would have to be phased out. “The Web does not go down for upgrades on Wednesdays,” Rosedale said to laughter and applause. [via Reuters]

Orders of Magnitude: 50 v Kanye

So Kanye West and 50 Cent both have new albums coming out in September. 50 had previously vowed that if Kanye outsells him, he'd stop making solo recordings.

Paint Me Not

Anyone know of reasons why, on the same block, some buildings seem to always get graffitied and others don't? I mean besides obvious things like well-lit storefronts or gates. If two buildings are both equally accessible why is one untouched? I see this all the time - do those shop owners have some other tie to the neighborhood? Is graffiti a one-upsmanship thing so a building that gets tagged is more likely to be tagged subsequently by others?

Google Web Alerts - an underused personal info tool

Was talking with a colleague today about Google Alerts, a service which allows you to be notified when information on specified topics appears on the web, Google News, blogs, etc. Many of the people who use it focus on professional interests - e.g. they set them up for their company or their competitors/industry.

But for me the most useful alerts are personal - and about information you wouldn't expect to appear online. For example, I have alerts for my social security and mobile phone numbers. If these showed up on a website somewhere i want to know. Similarly, my street address and family names. Also one for my name + date of birth.

Zagat could have had it all

Maybe it's my middle class New York upbringing which causes me to overvalue the Zagat brand but go back 10-15 years and there was no one else who had nailed local wisdom of the crowds quite so elegantly as Tim and Nina. Zagat became the default arbiter of taste, selling many of their little red books. My guess is that the product extensions into shopping guides was marginal at best but overall the business is probably an enduring cash cow. They've got a subscription-based website and are moving into mobile. But at the end of the day, those books are driving all the revenue.

Which is why i'm not surprised they failed to do more with it. A private company throwing off big $? Likely not too much of an urge to take risks. Reminds me of how James Hong at Hot or Not talks about the few years where they just sat back and collected dough.

What could they have been? Well, how about craigslist + yelp? They had the concept of user gen before it became trendy and great brand that could have stretched. At the very least open up that website and make it ad-supported. Trust me, it's not going to cannibalize the book - better to eat your own lunch than have someone else come and take it.

Google News + YouTube

One of my favorite aspects of being at YouTube is the ability to reach back into Google and integrate with their products. Several have already been launched including a layer on Google Maps which allows you to see recent geotagged uploads to YouTube plotted on a map [go to google maps, click on MyMaps, click on 'add content,' select or search for YouTube videos].

Today the Google News team integrated embedded video from several major news agencies to add another layer of info to their service.

What's especially cool IMHO is that these integrations don't necessarily make use of any special tricks - anyone with a similar service can (or soon will) be able to do the same using YouTube's APIs. In fact, I hope you do! :)

Google Gear: Dance Dance 05

With this year's Google Dance coming up in a few days (a party which corresponds with a Silicon Valley search engine marketing conference), seemed okay to revive the "Google Gear" thread and share some more items from my closet. Here's the 2005 Google Dance shirt - a gem with its bright yellow fabric and groovy logo.

Orders of Magnitude: At least we know where Vick is

Orders of Magnitude: Well, Jesus doesn't have a virtual keyboard

Orders of Magnitude: Clovers, horseshoes and rabbit feet

Facebooks Apps: Display your energy consumption

Was reading something the other day which discussed towns competing to see who could become more carbon neutral. Made me think that an interesting idea for a utility company would be to make a facebook app which allows users to show the energy consumption of their home over time and compared to their friends. Social pressure to be the most green.

Orders of Magnitude: Rise of the Avatar over Reality

Orders of Magnitude: Consumers win!

Orders of Magnitude: The Real Straw Poll

YouTube: Profane and historically inaccurate but funny

There is no spoon

When we started Second Life, I used to joke that we'd get a UN Seat by 2012. Well, the country of Portugal set up an arbitration center in-world [links to article about the "you copied my sex code" lawsuit]

YouTube: Pearl Jam - w/ and w/o AT&T censorship

Freakonomics Link Love

The Freakonomics authors have taken their blog to the NYTimes - it will be interesting to see if the Times is launching a broader Huffington-like strategy of rolling up on-brand blogs.

Personally exciting (besides the fact they are now making videos as well) is that I'm included in their "Smaller Blogs/People We Like" section (i think i qualify for both). Way below the fold but I ain't complaining ;-)

My only beef is it seems their feeds have gone to summary mode as opposed to full text. I understand the economics of this since feeds are difficult to monetize but as a heavy Google Reader user would prefer everything delivered to me.

Tattoo You

Is it crazy to want a "My name is Hunter" tattoo on my left pectoral done in the style of a "My Name Is ____" sticker? You know those ones they use at conferences or mixers?

There's really no downside - my name isn't going to change.

Apple + YouTube, Round 3

Next phase of Apple + YouTube announced today

Round 1: YouTube on Apple TV
Round 2: YouTube on iPhone
Round 3: Upload to YouTube from iMovie

congrats to the team - i love this - getting video out and taking video in

Wither Conchords?

The amusing Flight of the Conchords on HBO (it's kinda like Tenacious D meets A Might Wind) has been tossing in some strange bits recently - like musical dream sequences with a fake David Bowie. This worries me - it's the "Arrested Development syndrome" where funny shows know they're not going to be picked up for another season so they make themselves gloriously unapproachable to the average person via inside jokes and odd humor.

In the Valley, it takes lots of $ to feel rich

Latest NYTimes piece in tomorrow's paper about the local wealth chase: In Silicon Valley, Millionaires Who Don't Feel Rich.

It's time that someone gave us working-class millionaires a shout-out ;-)

Does Sequoia make you more likely to succeed?

In a recent essay on startup funding, Paul Graham (of Y Combinator) provides some handy math to help entrepreneurs think through the value of an equity investment. The simple formula calculates whether the increased likelihood of success is greater than the dilution you're suffering. For example, if you're giving up 30% of your company you need the value of the company to increase 43% because then your remaining portion is worth more than the whole you started with. Of course the evaluation is totally subjective of whether a particular investment (or investor) is likely to increase your value, but at least it creates a framework for evaluation.

In the essay though Paul makes an interesting comment -- it addresses Sequoia Capital.

"Greg Mcadoo from Sequoia recently said at a YC dinner that when Sequoia invests alone they like to take about 30% of a company. 1/.7 = 1.43, meaning that deal is worth taking if they can improve your outcome by more than 43%. For the average startup, that would be an extraordinary bargain. It would improve the average startup's prospects by more than 43% just to be able to say they were funded by Sequoia, even if they never actually got the money."

The assumption that taking money from Sequoia increases a company's prospects almost 50% is an unsupported one. Are we to believe that Sequoia is really smart money? That their connections, advice and follow-on capital is by default that valuable? "Of course," you might note, "look at their track record." But that's the wrong way of looking at it - rather we need to decide whether Sequoia is really good at picking winners or creating winners?

If it's the latter, then yeah, Graham's statement makes sense. But if it's the former, that's clearly a talent which makes Sequoia very wealthy but has little to do with their ability to impact a company's success. Instead they're just good at deal flow and winning the deal.

Later Paul comments on the chances of getting funded by Sequoia:

"The catch is that Sequoia gets about 6000 business plans a year and funds about 20 of them, so the odds of getting this great deal are 1 in 300. The companies that make it through are not average startups."

Exactly - the companies which make it through are exemplary start-ups who likely have multiple funding choices. Which means very competitive deals which should lead to the entrepreneur actually having some leverage on terms.

Graham notes this but actually attributes these valuations to Sequoia's beneficence and wisdom.

"The reason Sequoia is such a good deal is that the percentage of the company they take is artificially low. They don't even try to get market price for their investment; they limit their holdings to leave the founders enough stock to feel the company is still theirs."

So essentially Graham is saying: "Sequoia increases a company's probability of success by taking below-market valuations, which lets the entrepreneur still feel incented, which, along with being able to say you're funded by Sequoia, increases your odds by far more than 43%."

I would posit that an equally supportable thesis is that Sequoia has access to great deal flow, does a superior job of vetting their pipeline and ends up with strong funding opportunities where the founders have enough leverage to derive healthy valuations and reasonable terms from their investors.

Virgin America: create and save MP3 playlists in-flight

Ok, this is a step in the right direction. For years I've wondered when you'd be able to select the movies that you want to watch on a flight. Either they'd have a massive server onboard the plane or you could make your selection up to 24 hrs before flight and they'd load it from a central storage. Of course that's until you can call your TiVo from in-flight in real-time :)

Well Virgin America is heading that way. "Red," their in-flight entertainment system, apparently has a MP3 jukebox where you can create playlists that are saved under your name and accessible any time you fly.

NY'er reviews R.Kelly

Fantastic informative, well-written and humorously tragic review of R. Kelly's new album in the New Yorker. For example:

Kelly seems to have no superego; he is willing to say anything that occurs to him, no matter how strange he sounds or how self-incriminating it might seem. Many people facing serious criminal charges related to sexual conduct would not include a song called “Sex Planet” on their CD, or, if they did, would probably omit the line about a “trip to planet Uranus.”

Chocolate Rain (and the Green Day version)

Reason #172 why online video rocks.

"Chocolate Rain" - weird surprise internet hit song.

And the version by Tre Cool of international superband Green Day.

G4, that's yesterday

You can have the private jet. I'm going to travel by private train!