Deathbed of Television
Lewis, Michael
BY MICHAEL LEWIS A ugust 4,1997, was the beginning of the end of one of the remaining socialistic aspects of modern life: the mass market. Forty years from now, when you have your...
...He could also skip the ads...
...Not even General Motors can spend $3 million on an ad that will only be seen by 40,000 people...
...TiVo would help each and every American to create his own private television channel...
...The cradling effect of your Cuddle Ewe is nearly impossible to put into wordsuit's like trying to describe an intensely satisfying stretch or yawn...
...With my interest piqued I asked him to show me one...
...They had another idea, though...
...Now on warm nights your sheets remain dry while you stay cooler and sleep much better...
...Giant corporations whose sole purpose is to massmarket consumer goods exist in their current form because the television shaped the mass market...
...A Decorative, Authentic, 1933 Replica of the...
...Surfacing in an old warehouse on the i south side of Chicago, Atwood's "ll Constitution prints were discovered after ti decades of obscurity...
...They had no idea what that company might do...
...And so now the two companies-which were nothing more than handfuls of outsiders with a bit of venture capital--were in roughly the same position...
...You merely accept that persistent tired or even achy feeling when you get up in the morning as a fact of life...
...At the moment, there isn't much field hockey out there on the tube...
...By 1933, thousands of lithographs were produced, pack- 1 aged and stored in crates...but that's all we "I know about their history and what happened to them--until the mid 1980's...
...And still others believe it is needed to help your brain process events and experiences of the day...
...If it gets soiled, simply sponge it clean with a damp cloth and mild detergent, then air dry...
...I'm so sure you are going to be impressed with your f his magnificent and colorful document is the perfect purchase, I offer you 60 days to keep it in your posses- U addition to any home or office...
...The one question our investors did ask us," said TiVo's CEO, Mike Ramsay, "is 'How long will it take for the TV networks to hate you so much that they shut "78 THE AMERICAN SPECTATOR 9 SEPTEMBER/OCToBER 2OO...
...Or he could simply tell the box to go out and find him the kind of programs he liked...
...Ramsay went back er Perkins Caufield & Byers and Paul Allen's Vulcan Ventures...
...When someone asked Barton or Ramsay, "Tell me again what this gadget does...
...Between 1996 and 2000, companies were born to do nothing but track where people went on the Internet and what they did there, so that they could be "profiled" and matched up with people who wanted to sell them things.The CEO of DoubleClick, the most famous of these so-called data-mining companies, had put a fine point on the nature of the fever fo consumer ~ ~~~..i...
...Doug Smellie Director ORDER NOW BY CALLING...
...but"When this gadget changes how Americans watch television, what else will it change...
...In this new market, there will be dozens of versions of Tide...
...After testing out the Underquilt(s) in the size(s) I've marked below...
...homes--the easiest homes on the planet to sell new gadgets to--and that would cost money...
...I was taken to an old garage and shown several antique, wooden crates caked with dust...
...electronics stores...
...But the black box was not where the money was-the box was, in fact, a big money loser...
...To use the consumer's mind as a highway to his wallet sounds invasive, and perhaps it is...
...The wool we use is the most resilient and one of the softest varieties we have found to date...
...New mothers will see ads for SUVs, middle-aged people will see ads for sports cars, and so on, and all the litde groups will have been identified for GM by the new black box...
...It might not mean the end of commercial television, but it most certainly means the end of commercial television as we know it...
...I and ask for Priority Code #Me0903 ] I Deliver To: Name: Street Address: (Orders cannot be sent to P.O...
...Several times since the first encouraged people to watch even more of it...
...That was the official sto W . It was the sto W that enabled TiVo and Replay employees to interact pleasantly with network and advertising executives, as it left the insiders with their dignity...
...Please send me the Cuddle Ewe Bed | want to keep it...
...Not very long after it began to falter as a socially acceptable guide for explaining anything about a human being, demographics began to falter as a tool for explaining and predicting consumer behavior.Any generalization based on race, age, sex,.and religion (though perhaps not zip code) was widely regarded as a form of bigotry in most of the developed world...
...By June 2000 the companies had sold about 100,000 boxes between them, and they had done so largely without advertising their products...
...Like a lot of really smart engineers, he They called it a personal television receiver, but never mind about that...
...But you can have our queen-size Cuddle Ewe for much less~and our quality is still superior...
...Instead of transforming the entire modern home, they decided to focus )n the one appliance that was the closest thing the center of attention in the modern home: Le television...
...They can play havoc with the most powerful establishments...
...ternet makes it possible to judge people on a new criterion: their behavior, 3f sucing it in ne slot, people JngTV...
...Order yours today...
...That was just the polite way of telling someone that you intended to destroy his business...
...A final advantage was that you could explain it all to an ordinary human being...
...Will the furnace and the fish feeder and the vacuum cleaner respond to commands from the office desktop...
...Barton was an American Midwesterner in early forties and Ramsay was a Scot in his...
...He started by calling me and everyone involved with this technology'the devil incarnate'"Jolna says...
...Whatever...
...The seams are then closely locked so they won't ever unravel...
...Once the black box think again...
...The Cuddle Ewe will bring a whole new meaning to the time you spend sleeping, as well as the time you spend going about your daily activities...
...Its unique deepwool cushioning gently forms to the contours of your body and its pressure points, redistributing your body weight more evenly...
...Most of the changes the black box so grandly encourages are merely extensions of trends under way: decentralization, control at the edge of the network, free agency, the rooting out of all kinds of antimarket behavior, and so on.The mass market is a collective...
...dent of the CuddI~ Ewe y--then order your Cuddle EWe and prove it to yourself...
...The question now being posed by the television establishment--and it emerged from the belly of the beast as a weak burp rather than a loud blast--was no longer, "Is this new gadget going to affect us...
...Lots...
...He agreed, and here we are...
...It's as if what matters to them is not the absolute size of an audience but the relative one, and the three major networks still offer them the biggest...
...works...
...You and I may not care to watch a commercial for Preparation H" said Josh Bernoff...
...The others cost a lot more and you still won't enjoy the same comforts of a Cuddle Ewe...
...Replay, soon renamed ReplayTV, at first took the position that the networks' interests were irrelevant.What the American consumer wanted, the American consumer eventually got, and if you failed to give it to him right away you risked losing his patronage to someone who would...
...Prior to the Internet Boom, the capitalists were chary about sinking one-tenth of that sum into a small, risky venture...
...They'd merely enable the television industry's current rulers to make the industry an even better place...
...If you're on one side of the line, you're their friend...
...Order yours today and start enjoy! @2001 GP ing the best sleep you've had in years...
...II RS...
...They went back to their venture capitalists and told them that home networking was a bad idea because they couldn't explain it to anyone but other geeks...
...But the sheer financial value of the data that TiVo could collect cast the human desire for privacy in a new fight...
...Ramsay put it this way: "When you build a company around a technology and someone says, 'Tell me again what this thing does?' you need to be able to say,'It does this.'We found that we couldn't say what home networking did...
...And so, after a few months, Barton and Ramsay abandoned home networking...
...Nick Donatiello, the head of a San Francisco market research company called Odysse3~ says that the black box~along with related technologies like the Internet~makes it likely that ads will be tailored not to outward characteristics but to the more fundamental attitudes of the consumer...
...You can't do that anymore.We've become too fragmented and autonomous a society...
...The box worked.And yet no one cared...
...He was already exploring the trove of information that came into TiVo from its three hundred thousand or so black boxes and was brimming with insights into the mind of the American couch potato...
...The g0al of producers will be to intersect with consumers who are most receptive to their pitches, at the moment of highest receptivity...
...and it was the technology that was sure to win...
...The Replay device doesn't do any good if it doesn't have anything to broadcast," LeMasters said...
...It can extract far more profit from every viewing minute of American television by creating endless clusters of new and very valuable groups of people with some common commercially exploitable interest...
...Instead, enjoy peaceful, easy or II sleep that recharges your system and leaves 1~1 Charge my: Q ~j [21 II you feeling totally revitalized, happily anticiII paring the full day ahead...
...The 1933 lithography sion...
...there are not enough words to explain what a sensation it gave me, [like] something in my childhood...
...Forty years from now, when you have your grandson on your knee and he asks you, " Grandma, how did one hundred million people eve," let themselves be talked into buying the sam~ brand of toothpaste...
...It's another to transform the television into an Internet-like renegade force for individualism.The television, pretty much all by itself, defined the mass market...
...The mass market is crude and inefficient and ripe for reevaluation because Market Man is, too.The new technology enables the market to redefine the consumer along significantly different hnes.What a man does with his remote control may not be a perfect reflection of the contents of his character, but it is a lot more perfect than judging him solely by his simple surface traits--especially when the ) ple who watch ads with ironic detachment...
...I want you to see one of these rare masterpieces for yourself--feelings of pride and honor for your country will well up inside as you view this marvelous document...
...But even that is a retrograde example.The operative unit in TV ratings will no longer be the program but the moment.Advertisers and networks will know with weird accuracy who and what within each program best holds television viewers' attention.The black box can determine which joke in a comedian's monologue prompted certain viewers to switch the channel or which medical emergency inspired viewers to exit ElL...
...Cable TV fractured the mass audience into slightly smaller pieces, but again without a huge effect on the economics of the business...
...product...
...Or, at any rate, there is a way to construe the new highly personal relationship impersonally...
...As one customer put it: "Ten seconds onto my Cuddle Ewe and I vowed never to sleep without it...
...Take Procter & Gamble or General Motors as examples," said Ghashghai...
...Ii~2 THE AMERICAN gPECTATOR . SEPTEMBER/OCToBER 2OO...
...the urge to innovate preceded the actual innovation...
...This went some way to answering the obvious question posed by the box: How do you get people to watch ads when, with the press of a button, they can eliminate them...
...there was more than enough booty to go around.The only question was: did the TV industry's central authorities have the power to prevent the technology from spreading...
...We avoid all the costly overhead by offering our Cuddle Ewe directly to you...
...TWo was also able to ferret out strange correlations...
...If your Cuddle Ewe doesn't give you a wonderful sleep, night after night, simply return it for a full refund--no questions asked...
...How handy, therefore, that the Internet and Internet-related gadgets made it possible to judge people based on other criteria: their behavior...
...If you talked to enough people at TiVo and Replay and pestered enough people at the U.S...
...But with the price of computer memory falling by half every eighteen months, the price of the box would plummet: in less than a decade, a black box costing no more than $100 would be able to store the equivalent of an entire Blockbuster SEPTEMBER/OCToBER 2OO...
...The sad truth about most popular TV programs is that they are poor vehicles for delivering advertising messages.And the sad truth about adsmeven the ones that cost $3 million to make and win the Golden Lion at Cannesmis that the people who watch Tide or Rice Krispies or Alpo it matters very much indeed...
...The ambition of the thing was breathtaking.The company intended to plop itself down between the 102 million U.S...
...We've received so many letters from Cuddle Ewe owners who love the way it helps dissolve their tension and pain...
...Replay's remote control has a button marked " QuickSkip" which enabled the viewer to leap ahead in increments of thirty seconds, the length of a typical television commercial.The owner of the Replay box was thus the open adversary of the television establishment...
...Advertisers have proved willing to pay the networks more for less...
...They want to believe it because they are seeing data for the first time that shows young people are watching less and less TV and spending that time on the Internet...
...Unlike, say, the VCR, it required almost no technical aptitude...
...BY MICHAEL LEWIS A ugust 4,1997, was the beginning of the end of one of the remaining socialistic aspects of modern life: the mass market...
...Another advantage was price...
...The consumer wouldn't even see it...
...If Jennifer Aniston wants to remain a Friend, she might need to don a T-shirt that says Diet Coke--assuming that the "Friends'"audience winds up being viewed as one that is particularly receptive to pitches from soft-drink companies...
...The official sto W nice- ~ ~t, ly illustrated the etiquette of the new , v...
...Perhaps the growing taboo of stereotyping people by race, age, sex, and religion helped people to free themselves from the behaviors associated with the stereotypes, and so they were becoming, all by themselves, more elusive to More to the point, they know, in great detail, the viewer's interests, as recorded by the black box...
...P.S...
...Consumers needed to be reunderstood by the market...
...If he liked intelligent blood and guts, he didn't need to wait until TNT's Clint EastwoodWeek~he could just instruct his black box to fetch Clint Eastwood movies as they played...
...When Barton and Ramsay returned to the television, they had in mind another black box, less technically but more socially ambitious than the interactive television...
...1/ said that /~~_-~:_'~_~:.~m ,, , / ~~~:, personal / ~~".[:7'i informa-~ "" ( is ubiquitous, an advertiser need not buy the whole audience...
...The new companies were proposing to do politely to the television industry what Napster was about to do to the music industry: help consumers to help themselves to entertainment without "paying" the networks and advertisers, by watching the ads...
...Naturally, this disturbed the television networks and advertisers...
...And it was...
...The box was more than a box, it was a butler, and the more it learned about its ~.~._~__~ master's whims, the more it would be able to fetch what its master wanted...
...can pay for it by selling commercial time during that program...
...Put another way, an audience of 200,000 people you know intimately might be more valuable than an amorphous mass of 20 million.After all, a person with a deep interest in a subject is more likely to watch an ad about that subject...
...9 THE AMERICAN SPECTATOR 77 decided to call their new company, was not a maker of black boxes but a service for people who owned black boxes...
...They know...
...television networks and the big advertising firms, you came to realize that they had two stories to tell: an official sto W and a true sto W.The official sto W , even in early 2000, when the boxes went on sale formally, was believed by practically no one, not even journalists...
...Simple demographics were irrelevant to who they were.They were technologists in search of an idea...
...Put the box in all 102 million American homes, and you got a pointillist portrait of the entire American television audience.Which raises the second and more disturbing question for the TV industry: What do you do when you actually know who is watching and why...
...Already TiVo knew that people who watched football games watched, on average, only ten minutes of football games, and which ten minutes were the most heavily watched...
...The black box also enabled the viewer to treat all televisionneven live televisionnas television he had recorded for his own private use...
...The only question is how far its logic will be takenmto what level of detail will the consumer's state of mind be measured and priced...
...Well don't...
...So long as TiVo the receiver can send back the anonymous 2001 9 THE AMERICAN SPECTATOR data, there are tremendous gains of efficiency to be had"TiVo or Replay or some blackbox service company will be able to present some mass-market company trying desperately to stay alive with 40,000 consumers classifted as People Who Live for Onions...
...Wood, who made a lot of money in computer games, had been frustrated by his inability to persuade his VClK to record episodes of his favorite show,"StarTrek...
...That was the thing about this technology: it didn't need the companies to succeed...
...Privacy is no longer a right but a wasteful luxury...
...it was fuzzier by the day...
...The remote control enabled people to surf, but not so much that they spooked Procter 8,7 Gamble and General Motors and the rest...
...You ask yourself why everyone else seems to sleep effortlessly while you struggle night after night...
...It's that easy...
...This is the Trojan horse for the computer industry to gain control of the entertainment industry," said Marc Andreessen, a Netscape cofounder who invested his own money in Replay...
...The box was perfectly designed to seize control of a $50 billion industry from its creators...
...Call for special shipping rates outside the continental U.S...
...9Tranquil, undisturbed sleep that recharges your body and mind...
...Microsoft announced it was entering the business, with an identical product it called Ultimate TV...
...And its ambition wasn't limited to the United States...
...One was its phenomenal simplicity...
...After all, the consumer would obviously prefer not only the message precisely tailored to him but the products as well...
...It's an average measurement of the number of viewers watching an individual program that does not even measure the commercial break.When you think about improvements in measuring viewer habits, you think not about incremental changes but great leaps...
...Underquilt ! We're so sure our Cuddle Ewe will give Order Reservation I you the deep, peaceful sleep your body's I been craving, that we're offering you our total satisfaction money-back guarantee...
...but "How does P&G survive...
...Of course, in the beginning, they would need to build the black box and sell it to the masses...
...By pressing a button he could skip the credits, the huddles, the time-outs, the weather, the endless clicking of the 60 Minutes stopwatch, and all the other boring stretches of television designed by producers to lull the viewers into watching ads...
...Yes, we're messing with your business," they argued to the networks...
...It's true--the natural fibers of wool actually capture the air and act as a buffer to changes in temperature...
...that will change.The maker of the new field--hockey-related shows will rent cheap time--at, say, 4 a.m.mto broadcast...
...K 88 THE AMERICAN SPECTATOR 9 SEPTEMBER/OCToBER 2001...
...now they didn't think twice...
...If television ceases to be a mass market, the mass market largely ceases to exist.The question isn't"How does P&G sell soap...
...H. Fuller Atwood...
...The new black box made the Internet wild-~ catters look like shallow drillers...
...YES!Iwant to enjoy the deepest, most comfortable sleep I've had since childhood I Just try it for 90 days...then decide if you and wake up feeling refreshed and full of energy...
...The other point is that by making television more appealing, the black box Every show competes against every other show ever broadcast, / as they agreed to ~ / k e e p up appear~ / ances, the rule ~~~~~P'//( breakers enjoyed a new ~X-'~.../ kind of access to the ~offices of the rule makers...
...This isn't an invasion of privacy" said John Ghashghai, "this is an enabling thing...
...One of the guys goes out and acquires field-hockey content.The other guy calls people who make field-hockey equipment)' The same slice-'em-and-dice-'em logic applies even to such seemingly mass-market events as the Super Bowl and the Academy Awards.The broadcaster that owns the rights to a mass-market event will be under tremendous pressure to carve the audience up into little pieces and to sell each piece to the highest bidder...
...television networks had 91 percent of the viewing audience in 1978 and only 45 percent in 1999...
...Several market analysts estimated that TiVo and Replay--or some yet"How long will it take for the networks to shut you down...
...He had sunk the better part of three years into building Silicon Graphics' interactive television, and it had been a commercial disaster...
...i~ ~ ~ili~i~i~i~!~i!~!~!~iii!~!i~il ~i~!~!i~i~i~,~;~;~ With the Cuddle Ewe, the best night sleep you've had in years is lust a phone call away/Road on...
...Almost all of them were snatched up by collectors and dealers...
...LeMasters struck a much more conciliatory note.Though he wasn't able to scrap QuickSkip, he let it be known that he would not promote the feature, and that ReplayTV saw itself as the symbiotic type...
...or even "Will this gadget eventually change how Americans watch TV...
...This little pocket of socialism came into being at least in part because the technology did not exist that could measure, and put a price on, the attention of individual consumers.The mass market put a price not on individual states of mind but on the average state of mind of commercially very different people...
...it might even know why...
...I By the way, our nice wool pillow is yours I to keep forever--whether you return your Cuddle Ewe or not...
...The new data whetted the appetite for the even richer information that was likely to follow, and the obvious endgame: perfect mutual understanding between producer and consumer...
...No...
...All over Silicon Valley engineers were founding companies before they had any idea of what their companies might do...
...The black box put an end to that racket...
...Any ~technology that gives the consumer what he wants, when he wants it, at a better price, is likely to succeed, in spite of a lot of objections from hoary old privacy nuts...
...He saw the same big trends that lit a fire under Barton and Ramsay: the falling price of computer storage, the TV viewer's desire for choice, the continued inability of Americans to program their VCRs...
...How a Cuddle Ewe helps you drift off to sleep instantly...
...one that cost $699 would be good for six hours...
...I'd sooner send all my I other assets, but not this one...
...data when he...
...Marc Andreessen, for one, believed that this argument was persuasive to networks...
...A Replay box with thirty hours of storage cost $499...
...On the side of each crate, on faded, yellowed paper were the words...
...The picture of the consumer that producers depended upon to sell them things was not merely crude...
...But, with his goal in sight, and completion of his masterpiece within reach, Atwood died...
...But as I say, no one could possibly have believed it, and it became less plausible every day thanks to the information pil80 THE AMERICAN SPECTATOR 9 SEPTEMBER/OCToBER 20OI mattered...
...Every Cuddle Ewe begins ....'~~ with seven to nine inches of pure wool batting before it's condensed to approximately three inches that "hugs" your body...
...Ninety percent of this can be done without knowing who you are--without separating you out from the group you've been identified with.We might find you are a boat lover...
...1-800-720-1112 MC0901 you down?'" A good question...
...people are just too lazy to avoid them...
...Field-hockey enthusiasts will simply record the shows...
...A lot of these guys had their bell rung four years ago by the Internet" Steve Shannon of Replay explained to me,"and they don't want to be humiliated a second time" The Internet had spawned a new corporate religion to replace the one it killed.The religion said: Change is inevitable, so you might as well pretend to love it lest you be taken for a doomed species...
...It's one thing for the Internet to poach a bit of the global attention span from the television...
...he can buy a piece of the audience...
...television networks that a device that stole power from the networks and handed it to consumers was actually good for them.They offered two points to support the case.The first was that the television viewer is too inert for the television ever to change...
...Thus, the ~/long-term goal of ~ ~ the black box was to ~ " ' ~ become unnecessary...
...P.P.S.Order your Cuddle Ewe by Nov...
...If you're on the other side of the line, you're their enemy.Advertising the ability to skip commercials is on the other side of the line...
...Don't pass up the chance to own this historic collectible...
...That was the day a pair of Silicon Valley engineers named Jim Barton and Mike Ramsay started their own technology company...
...homes...
...In the distant future--a decade hence--the technology would be free...
...Network psychology is to have a line in the sand mentality," explained Ramsay...
...Anything is possible.That was the good part about home networking as a business idea: the Internet had made it feasible...
...It was widely assumed that even ordinarily smart engineers with the desire to create something new could do so with impunity, and Barton and Ramsay were more than ordinarily smart...
...Fairly quickly TiVo and Replay became, in some sense, redundant.The box had a life all its own...
...I couldn't believe how well each lithograph was preserved...
...The entire history of commercial television suddenly appears to have been a big corporate plot erected, as it has been, on control from above rather than choice from below...
...And~voil~--a new business is born...
...Three million dollars was poc} change," Ramsay explained...
...For instance, he'd discovered that the television viewer was not nearly so sedentary as formerly suspected.The typical viewer of live television clicked some button on his remote control one and a half ual studies in small samples--what if they had a perfect snapshot of America, with 50 million people instead of five thousand.The waste that can be eliminated by fitting the product to the market, then getting your product in front of the right person at the right time, instead of just hurling messages indiscriminately into the ether, is enormous)' The notion that the producer could come to know the consumer in whole new ways had been hammered into the business mind by the Internet Boom.The Internet gave rise to fantastic efforts at data collection...
...A lot...
...If you thought the pressure on entertainers to be perpetually entertaining couldn't increase, The new data whetted the appitite for even richer information, times every five minutes.The typical viewer of recorded television went to the remote once a minute...
...Due to the climate and unique vegetation of this region, the sheep raised there yield thicker, softer, and more resilient wool than other breeds...
...dialogue between ~ 6; 9 outsiders and insiders...
...No one knows how quickly the companies might arm the entire American population, or even if they would do so...
...Their first idea was to turn the modern home into a network...
...The moment you had one you couldn't understand why you hadn't had it all along...
...The company would come to know the subtle preferences of each and every television viewer...
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...At the start, Barton reckoned, a black box that cost $1,499 would be able to store about twenty-eight hours of programming...
...It has created terrifying economic incentives for people to abandon their charming old attachment to their privacy...
...Now you can own an original Atwood lithograph...
...That's because these countless air buffers also absorb your water vapor, which is then evaporated into the air...
...And he went on from there.The basic attitude of the U.S.TV executives was that we were somehow going to destroy a $50 billion business model...
...As a tribute to her husband's legacy, Atwood's wife, Maude, was determined to finish the work her husband started...
...The Internet has not merely suggested new weapons for the Invasion of Privacy...
...Instead of mass-producing some new toothpaste or automobile based on individSEPTEMBER/OCToBER \ tion is the \ oil of the twenty-first century...
...Computer people have long imagined that the ordinary American home qne day would be fully networked, leaving ~veryone else to wonder exactly what that means.Will the refrigerator order fresh milk directly from the grocery store...
...It is an elaborate network of invisible taxes and subsidies, paid with human attention...
...Cheviot wool can only be found in one place in the world--the Cheviot Hills, which separate Scotland from England...
...We do all of our own assembly, and we don't sell our Cuddle Ewe through bedding or department stores...
...Dear Friend, Maybe you've simply learned to live with wakeful nights or soso sleep time (I know I used to...
...But in the end, you'll love us for it because three more hours a week means billions for you in additional advertising revenues...
...Technology is unravelling the last great socialist collective, gram had to be broadcast by someone, sometime...
...Just call 1-800-720-1112...
...The basic formula for making and selling TV programs hasn't changed since ~-I,~ L~ " ~L"~ TlInlerhe net~elops a )gram it can ;ee a pie who watch soap operas to drink beer...
...It was aVCR that did what it was supposed to do, even if you were a moron...
...If it was valuable to observe the two hours each day that half the population spent on the Internet, imagine how valuable it would be to know what the entire population did with the six hours each day it spent watching television...
...It would know when he changed channels...
...Some even think sleep is necessary to recharge your immune system and help you fight off disease...
...As for me, when I snuggle into my Cuddle Ewe, my body seems to "let go" as my aching limbs and tired muscles surrender to its gentle relaxation...
...Barton had become obsessed with the teleon a few years earlier, when he'd worked at :t was then the hottest computer company in Excerpted from Next by Michael Lewis 9 2001 by Michael Lewis With permission of the publisher, W WNorton & Company Inc "76 THE AMERICAN SPECTATOR 9 SEPTEMBER/OCToBER 2OOI Silicon Valley, Silicon Graphics...
...Special Advertising Supplement to The American Spectator Tired of not sleeping like a baby...
...To kick-start the market, Ramsay, now CEO, and Barton, the chief technology officer, would need to pay some consumer electronics company like Sony or Philips to manufacture the black boxes and to sell them below cost...
...3:The whims of the American consumer are the eighth wonder of the world...
...Transform your ordinary mattress into something extraordinary you are cradled in...
...The picture was created mainly out of demographic data-race, age, sex, religion, zip code--and assumptions about how people with certain demographic characteristics behave...
...One of our company associates will help you...
...Of the few people who dwelled on the way the Internet had swamped interactive television, Barton may have dwelled on it the most...
...The black box would turn the television into a computer, but without making any computer-like demands on the viewer: all the consumer would see was a slightly busier remote control...
...That's because our thick, wool-packed Cuddle Ewe underquilt cradles and soothes every contour of your body...
...That is the market promise of the new black box...
...Against the backdrop of the Internet this arrangement struck the newer sparks of the ad and marketing business as terribly retro...
...There were several lessons in this: No...
...If I'm not completely satisfied, I can 11 Cuddle Ewe, one customer wrote: return it within 90 days for a full refund of the price of the Cuddle Ewe...
...It would know how long he was likely to watch any particular show, and whether he preferred the Allbeginning~tse, " / ~ ~ 5":~:':':':':':" would go a n d /~,~~.[[.~, record shows / ~ ~ ~ that it calculat- / ed the viewer \ might like to watch...
...The bad part about the idea was that it was hard to see the point of it...
...The company will probably use the time differently, though...
...Demographics used to be a good proxy for attitudes" Donatiello says...
...people directly influenced by ads subsidize peoIf television ceases to be a mass market, the mass market ceases to exist, ~ / for ever more / stuff at ever cheap~ / e r prices is one of ~ / the great deterministic ~~ in history...
...1st and receive a FREE wool pillow--a $39 value...
...That it arrives at a moment when all forms of market socialism are on the run is either a magnificent stroke of luck or a good example of a society getting the technology it deserves...
...Deep-wool cushioning makes the difference Lying down concentrates body weight at your hips, shoulders and other pressure points...
...right from the start Ramsay and Barton planned to dish out boxes in Western Europe and Asia...
...the future, embedded in new TV sets, cable boxes, or satellite .7": ".':'''':v''' receivers made by companies to the venture capitalists and told them that he and Barton needed to lose between $300 million and $400 million before they became profitable...
...But we won't separate you out from the other boat lovers...
...Privacy is newly inefficient if the larger social goal is to get the most stuff to the i;::~":':;.:ii:!:: most people at the cheapest prices.And who would deny that the consumer demand them really don't ask to see them...
...True, the big three U.S...
...Now, suddenly, the technology has appeared that can unravel the collective, and it has created fantastic incentives for capital to complete the job...
...Which is to say that another mad scramble to transform the television was under way, but this time it was more attuned to the spirit of the marketplace--the approach came from the fringe rather than the center...
...They needed, in effect, new identities...
...Instead of saying'No,'" says Ramsay,"they said, 'Great.'" What made the enthusiasm of TiVo'S financial backers even more astonishing was that a rival company had already sprung up...
...That's because we buy directly from wool and cotton mills...
...Best Regards...
...It would then be able to charge a fee to anyone who wanted to locate TV viewers or groups of viewers: networks, cable companies, advertisers...
...Our bodies need quality sleep to recharge and restore vigor...
...Constitution Lithographs...
...I:A big company is not necessarily the best place to create a revolutionary technology...
...those who wished to understand them for commercial purposes...
...There ensued a mad scramble, and Barton was a part of it...
...homes with televisions and the $50 billion U.S.TV industry...
...It is the first box built by Silicon Valley that is compelling enough that people want to hook it up to their TV sets...
...Please allow up to 4 weeks for delivery...
...I Cuddle Ewe Bed TM I You won't risk a thing with our 90-day special trial offer...
...I was amazed and impressed...
...It would be built into satellite and cable boxes...
...In a world filled with black boxes, GM might use its thirty seconds to distribute fifty different commercials to fifty different clusters of consumers...
...And the economic value of that knowledge is vast...
...It coincided with the astonishing realization that if the company was willing to lie about its intentions, the establishment might actually help them to succeed.Wood was replaced as CEO by Kim LeMasters, the former president of CBS Entertainment, who saw the point of network support...
...Advertisers would pay dearly for scoops such as these, but really they were just the crude beginning of a new pseudoscience...
...In March 1999 the first TiVo and Replay boxes went into U.S...
...Once the box was in place,TiVo would be the hub of the global television industry...
...Card #: Exp...
...I spent a lot of the first year getting thrown out of meetings at networks," Anthony Wood admitted, with some pleasure.Then, tellingcommercial broadcast in 1939, a new accessory has appeared that promised a revolution-the VCR, the remote control, cable TV--only to be assimilated without greatly disrupting the existing social order...
...If you are not completely thrilled with your lithomakes this 68-year old antique a rare and valuable graph, simply send it back for a full refund--no questions asked...
...There was one other cool thing that the black box did~though Barton didn't appreciate how important it was until later.While the viewer watched the television, the box would watch the viewer...
...Turn the page to learn about our no-risk trial offer and your FREE $39 gift...
...Replay Networks took the other approach...
...they now had a simple answer:"It lets you watch anything you want to watch when you want to watch it...
...In the early 1990s Time Warner, AT&T, Microsoft, Silicon Graphics, and other big technology and media companies fell in love with the same idea: that they could change the way Americans watched television.A new device--variously known as the telecomputer, interactive television, or the black box~could be plonked down on top of the American television to offer the viewer an entirely new experience, one in which he would be able to e-mail, shop, and access a virtual library of movies from his couch...
...A Cuddle Ewe can be a special blessing...
...therefore beer companies buy ad time in the middle of football games...
...or "Why did people with things to sell ever think it mattered what country they were selling them in...
...But it was far more versatile than that.The viewer could record a great many hours of programming...
...But for someone with hemorrhoids, it might be the thing he is most eager to hear about.And he's the one the makers of Preparation H want to talk to...
...The box had certain advantages over every other attempt to transform the televisionwand there had been many...
...You'll make another pleasant discovery when you look at Cuddle Ewe pricing--especially if you do some comparison shopping in department stores or catalogs...
...They were so smart that a pair of venture capital firms--New Enterprise Associates and Institutional Ventur~ Partners-advanced them several millio dollars to get them started, few questio~ asked...
...As a result, your discomfort and pain are significantly reduced...
...It could record any program as it was watched, as well as anything its owner instructed it to record.This is, of course, what VCRs were designed to do but didn't, since no ordinarily intelligent person, not even a geek, could figure out how to make them work.The new box would be simple to program...
...Instead of a button that explicitly enabled the viewer to skip commercials, for instance, Barton designed a technically inelegant but diplomatically ingenious fastforward button with three speeds, which might be called fast forward, faster forward, and faster-faster forward.The TiVo user was able to pass through the commercials at blinding speed but not skip them entirely: the ad still made some sort of blurry impression ly, came a change of the Replay heart...
...Even if you thought itmeven if it was true---you couldn't say it, or appear to act on it...
...Constitution of the United States of America...
...Either the ads need to become as entertaining as the programs or the programs need to contain the ads, so that they cannot be stripped out...
...Your Cuddle Ewe will warm you in the winter, and cool you in the summer...
...In the fifties, you could tell a lot of things about a person if you knew where he lived...
...A lot of our customers tell us it alleviates their symptoms...
...like Sony or / Philips...
...It must transform itself from a maker of massmarket goods into the world's largest boutique...
...But-here's the important point--it's nothing personal...
...He called his new company Replay Networks...
...r /..;.::::!::;~ 9...
...Continued on next page) I The Cuddle Ewe TM Bed Underquilt is not available in stores...
...Replay now had actual data to prove that its new customers watched, on average, three hours more television each week than they did before they got the box...
...It was as if they were destined to come forth at this time in history...
...y fifties, but their identities had nothing to do with the wheres and whens and how longs of their lives...
...No...
...The VCR had proved too unwieldy to be used for anything but rented videos...
...The verdict is in...Cuddle Ewe 9 Sorry, shipping and handling are not refundable...
...It would record the owner's viewing habits in a way that TV viewing habits had never been recorded.The viewer's every decision would be stored in a kind of private museum of whims...
...On the other hand, some people would be upset about the loss of privacy-of course they would...
...i:~!i!iii~i~i'i~i~iii~:~/ii...
...You show them ads that they want to see, when they want to see them, in the form most convenient to them...
...Once the new boxes were proved to delight their audience,TiVo would then offer its services to the masses: the company's programming software would be in millions of new homes either in tandem with existing cable boxes or, in .-.v...
...It didn't matter: the Internet Boom had entered its most selfindulgent phase...
...In constructing each Cuddle Ewe, strong nylon thread is pulled through the tufting to prevent any possibility of the wool shifting inside the ticking, and means you don't have to worry about buttons poking you through your sheets...
...The networks have coerced, or attempted to coerce, consumers into watching programs and commercials in which they have no native interest.The advertisers who pay for the commercials agree to believe, on astonishingly weak evidence, that some meaningful percentage of viewers actually watch commercials.They have further agreed to believe, again without good evidence, that the sort of people who watch a particular program have more than an ordinary interest in the products advertised on that program...
...All you need to do is place the Cuddle Ewe directly on your mattress and under your regular fitted or flat-bottom sheet...
...Through a series of coincidences, I met a colleague who had access to what he referred to as "old documents...
...Once the box was up and running, the viewer's only constraint on choice was that the proVideo outlet...
...Dear Patriotic Subscriber, H. Fuller Atwood dreamed about making the Constitution of the United States a beautiful work of art, as well as a living document for our country...
...The TiVo and Replay boxes accumulated, in atomic detail, a record of who watched what, when they watched, and even how they watched...
...I I "1 wouldn't return my Cuddle Ewe if you held me at gun I point...
...Perhaps you suffer from arthritis or back pain and can never really get comfortable, or the tensions of the day start to run through your mind the minute you lie down...
...Or, rather, a telling slice of that behavior: how they handle a remote control...
...1933...
...And when you suffer with pain from sensitive joints, this increases your discomfort, making you move more, which aggravates your condition even further...
...We recommend placing a cotton or flannel blanket between your bottom sheet and your Cuddle Ewe to keep it clean...
...It did this because it made no economic sense to parse in microscopic detail what each and every one of us did with our attention and why we did it.And so the market just lumped us together and assumed we all paid more or less the same attention...
...People who enjoy pro football are more likely than peoThe data-gathering talents of the black box--of the Internet in generalmwas another good example of society getting the technology it deserved...
...He helped to build the only interactive television that actually worked, installed in late 1994 by Time Warner in four thousand homes in Orlando, Florida, and then watched in dismay as his beloved project was overrun by the Internet.The Internet did a fraction of what the new TVs promised, but at a fraction of the price...
...Or perhaps that is to mistake cause for effect...
...Everyone in the world with an interest in field hockey can punch "field hockey" into their box, and the box will go and find and record any program having to do with field hockey...
...In any case, the old categories were inadequate...
...Over time, the box would come to know what the viewer liked maybe even better than the viewer himself...
...That data, generated by Nielsen Media Research, uses a sample of five thousand homes to determine how many households tune into a given program, not how many watch the ads...
...It was a black box.The main thing about the black box was that it had a memorymthe ability to store programs...
...I wouldn't ask anyone to consider the Cuddle Ewe if it didn't work--you'll be amazed...
...It would know when he turned his TV on and off...
...Even now, advertisers pay a lot more per viewer for a targeted ad--however imprecise the targeting might be--than they do for the sort of near-blind matchmaking that the networks, historically, have made their chief business...
...Any attempt to acquire or locate one was futile...until 1995...
...Now compare all these costs to our queen-size Americanmade Cuddle Ewe at only $349...
...People who watch commercials subsidize people who don't...
...Only Hundreds Available...
...It was pure ritual, made necessary by the desire of everyone concerned not to contemplate the violence about to occur inside a huge industry...
...Many things changed when television was able to whisper finely tuned messages to likeminded consumers rather than hollering crude messages through a bullhorn at millions...
...I asked my friend if I could make them available to American Spectator subscribers...
...You also might want to turn your Cuddle Ewe when you change your sheets, and occasionally hang it outdoors to air...
...Cheviot Wool--The Key Ingredient...
...They presented themselves to the networks not as a threat but as a wonderful business opportunity.To pull this off, of course, they had to play down a lot of what made their box desirable to a consumer...
...Best Regards, Acquire: Unframed --$249 or Framed --$495 (Best Offer...
...The television advertising business," said Tim Hanlon, a media director at Starcom Worldwide, a large advertising and marketing conglomerate,"is a science based on specious data...
...Ramsay and Barton decided that in spite of appearances, TiVo, which is what they (_ _ had the air of a man used to figuring things out quickly.When you asked him a question, a little smile, and just a hint of self-satisfaction, flickered beneath his light brown mustache and reminded you, gently, that he knew a lot more than the answer...
...Most TWo users watched recorded television, so the typical TWo user was sending a little piece of information about his viewing habits once a minute...
...The measurement we use today is very crude" said Daryl Simm, the former head of worldwide media and programming for Procter & Gamble and the current head of media at Omnicom, yet another large advertising and marketing conglomerate...
...Already TiVo and Replay know what each of their users does every second, though both companies make a point of saying that they don't actually dig into the data to find out who did what, that they only use it in the aggregate...
...The trick was to get the box into those 102 million U.S...
...The trick was knowing in advance, in precise detail, what people wanted to see.You only had to spend a few hours at TiVo to see that the possibilities along these new lines were endless.The company employed a young man named John Ghashghai, who had a background in analyzing complex data...
...We designed the technology so that it doesn't infuriate the networks...
...2: Brilliant gadgets for a mass market do not go anywhere if the masses cannot afford them...
...But the TV gnawed at him, precisely because he didn't have the answer...
...Many scientists believe that the deepest stages (stage 4) of sleep are the keys to sleep's restorative powers...
...The trick was to get as many black boxes into the American home as possible...
...In early 1998, not long after Barton and Ramsay got their first financing,Wood generously agreed to accept $8 million from the venture capitalists KleinJolna, TiVo's liaison with the networks, appeared on a panel before the National Association ofBroadcasters.Jon Mandel, an ad executive with MediaCom, was also on the panel...
...So long on him...
...quality sleep...
...In early 1999 Stacy to-be-created competitor--will have sold five to seven million boxes by the end of 2002--and that within a decade they would be in 90 million U.S...
...The official story was that these new black boxes would not destroy the television industry as we know it and undermine the businesses of all those who depend on the television to sell their products...
...One wrote: "1 have severe arthritis, in constant pain for the past five years...the first night I slept on the Cuddle Ewe, all pain disappeared in about ten minmes...that happens every night...
...For the big brands, life without television is no life at all...
...Unlike an ordinary bed, where your body heat is continually drawn away from you to the steel coil mattress, your Cuddle Ewe suspends you in insulated layers of air and plush wool...
...The individual consumer need never be mentioned by name or separated from his discrete group of onion obsegsivesmat least not yet...
...Of course, General Motors may still buy time during the Super Bowlmand pay a lot more for it...
...The commercials then get flung at whoever happens to be watching at the time...
...One thing that changed was the price of the messages...
...His ability to do this would depend on the amount of computer memory in this box...
...A TiVo box with thirty hours of storage cost $399mbut then the company generally charges a subscription fee of $9.95 a month...
...But that was just guessing, and probably a great exaggeration of the truth...
...date: / II Yours truly, Signature: (For charge orders only) , | Richard Layer Mail orders to: II President GPLLC 9 291A Main Street 9 Great Barrington, MA 01230 II Cuddle Ewe Company Handmade and shipped from manufacturer...
...you'll say, "Well, you have to know how things were before August 4, 1997...
...And with a Cuddle Ewe beneath you, the summer humidity in your bed is reduced...
...O0 I And if your Cuddle Ewe isn't everything I I say it is, simply return it to us and we'll I promptly refund its purchase price to you...
...The Cuddle Ewe's quality is superior but it still costs less...
...Box Addresses) City: State: ZIP: Phone: (,~ (Important: To ensure prompt delivery) Don't put off ordering your Cuddle Ewe...you simply have nothing to lose, II except all those fitful hours you endure each Choose Your Payment Method: II night...your body exhausted and begging for [~1 Check made payable to GPLLC...
...A letter from Rich Layer, President of Cuddle Ewe...
...If he liked unsubtle and indiscreet women, he could record and store every episode of "Sex and the City...
...Over time, the viewer would create, in essence, his own private television channel, stored on a hard drive in the black box, tailored to his interests...
...This makes it impossible for you to sleep...
...But it is also true that of the $45 billion of television advertising in 1999, $14 billion went to CBS, ABC, and NBC, which was $10 billion more than they collected in 1978...
...General Motors will run one commercial, perhaps, for people with a tragic view ofhfe and another for people with a comic view ofhfe...
...There's a sense of being lightly embraced--of dreamy peace and contentment...
...Caring for your Cuddle Ewe is easy too...
...Without the television, there never would have been Tide or Rice Krispies or Alpo but fifty smaller versions of Tide and Rice Krispies and Alpo.This may not seem like a big deal to a user of Tide or Rice Krispies or Alpo, but to a manufacturer of endgame is his habits as a consumer...
...This prospect may cast doubts on the future of intelligent life, but it should, in theory, be good for people who currently make and sell TV programs...
...Once again' I~ so sure you will find the Cuddle Ewe to be perfect, I have mranged with Rich for you to try it RISK FREE for 90 days...
...So you'll be toasty warm in a bed that matches your body temperature~but never overheated...
...By June 2001 they had sold 300,000, and the box was experiencing one of the fastest uptakes ever of a new piece of consumer electronics...
...The business is two guys" Barton explained...
...If they are to become more valuable, the targets must shrink, and as the targets shrink, the tools used to hit them must shrink as well...
...This technology will encourage all sorts of niche brands" said Jim Barton of TiVo, "as well as whole new markets)' His favorite example is the field-hockey channel...
...Both were arguing to the giant U.S...
...For example, people who watched sitcoms were more likely to skip commercials than people who watched hour-long dramas...
...We'll know we've succeeded when the TiVo box vanishes," Barton says...
...There was room for a lot of different companies to sell the same seditious technology and to coexist happily with one another...
...Department store's "luxury" versions of queen-size wool mattress pads can cost $700-$900...
...In all of their meetings with television and advertising executives TiVo rather absurdly represented itself as the soul of corporate responsibility, mainly because Ramsay and Barton wanted to avoid the sort of expensive lawsuits that ruined Napster...
...A young entrepreneur named Anthony Wood had stumbled on the same idea as Barton and Ramsay at roughly the same time...
Vol. 34 • September 2001 • No. 7
