Jim Louderback

November 5, 2010


Filed under: Commentary — Jim @ 5:20 pm

Q: How hard can it be to spend $150?

A: When it comes to those wacky guys running the airlines, harder than you might think! In fact, sometimes it’s downright impossible.

I’ve spent the last two months trying to give Delta and its partner KLM $150 for a slightly more comfortable seat on my upcoming trip to Europe this Monday. I bought a Delta ticket, but the flight is actually running on KLM’s airplane, using something called a “code share” – where aligned airlines can sell each other’s flights and call them their own.

That seat, called “economy comfort”, offers a small amount more space, and recline than the standard economy seat, which makes it worthwhile for a 10 hour trip from LA to Amsterdam. According to KLM’s website, and every KLM person I talked to, Economy Comfort seats are available to any economy passenger, first come, first serve – as long as they pay for it.

Yet after countless discussions with ticket agents, tech support people and our own clueless Expedia corporate travel reps, for me and many others, apparently, this is a seat too far.

It’s also an international seat of mystery. In my quest to purchase this product, I was first told, by Delta in late August that I could do it at the airport. So a week later I checked in with Delta, and their ticket rep pointed me to KLM.

KLM’s ticket representative, at ticket counter 9-2 inside San Francisco’s airport, sent me back to Delta – who then told me that it was easy to do on KLM’s website.

And yes, it was easy – up to a point. I could easily select the seat that I wanted (12A, if you’re curious). But then as I tried to purchase it, I got the following message “We are sorry but due to a technical error, you cannot select a seat at the moment. Please try again later”

Delta Hell

So I did try later. I tried about 10 times over the course of two weeks. Finally, I reached out to KLM tech support to figure out what this “technical error” was all about. Their tech support person was quite clear – she said that Delta would need to rewrite the ticket from Delta ticket stock to KLM ticket stock for it to work.

Back on the phone with Delta, they said no, that KLM would have to rewrite the ticket, as they did not have “access” to it (which is interesting, because it’s very clearly a Delta ticket). Back on the phone with KLM – and this time I had to call directly to Amsterdam, because Delta handles KLM in the US, and they are equally as clueless. I talked with Ralph Love, a very nice agent, who said that after a lot of back and forth  that it wasn’t about the ticket, as “anyone can book the seat even if the ticket is not issued”. His solution was that Delta needed to change the flight number on my record from the Delta flight to KLM’s flight.

Delta happily obliged, yet I still ended up with the same “technical error”. And here’s where the story takes a Gallic twist. According to yet another KLM agent I reached after another international call, for some reason Air France now “owned” my ticket, which was why neither KLM nor Delta could change it. I’m flying back from Europe on an Air France code-share, and they changed the flight, rewrote the ticket, and now no one else can touch it.

Oh, and after all of that, on Tuesday I finally got an email back from Annemieke Meijer at KLM, in response to a message I sent to customer support more than a month ago. It reads, in part:

Due to unforeseen circumstances, we were unable to answer your inquiry in time. Please accept our apologies. We hope that you have received an answer in the meantime.

And directs me back to their Netherlands phone number for support.

No, Annemieke, I have not received an answer, and I have not figured out how to give you money.  I’ve tried and tried, been obfuscated and misled, and in the end, I’m going to be stuck in a horrible middle seat for 10 hours during which I really ought to be sleeping. I’m not happy about that, but I’m even more fascinated by the fact that I have $150 that I want to give to a company, yet they won’t take my money – even though clearly others have been able to purchase these same seats, as many of them are gone now.

I understand that airline reservations systems are complex things. And I understand that integrating them together is never easy. But I cannot accept a practice that offers a product to a certain class of customer – and denies it to another, based upon their situational circumstances.

That’s a classic case of retail discrimination. I’d consider suing someone for damages, if I had a clue as to who was culpable!

Instead, I’m stuck in Delta Hell, with no recourse. And that’s a frustrating, and ultimately painful thing.

Meet the Vermont Telephone Company That Wants to Kill Cable!

Filed under: Commentary — Jim @ 4:35 pm

Sometimes revolutions start in the strangest of places. Who could predict that the beginning of the end of traditional cable TV would occur in a tiny mountain telephone company called Vermont Telephone (VTEL), led by the quixotic Dr. J. Michele Guite.

Emboldened by a recent grant of $93 million dollars from the Federal Rural Broadband fund, the company has begun building out an aggressive and forward-thinking gigabit fiber network that will reach across its Vermont footprint, along with a state wide 4G/LTE network that promises 100 megabits throughout the crenellated peaks and valleys of the Green Mountains.

The company will offer the usual quad-play bundle to its customers, with video, voice, fixed and mobile internet, but Guite’s promise to explode the multichannel oligopoly is easily the most radical of his plans.

In a recent letter to customers (disclosure, I am one), he insisted that they "should have the legal right to pay less" for their TV service. "We believe that the old cable TV model of making you pay for 250 cable TV channels you don’t want, at prices you can’t afford, is obsolete."

Guite continues by saying that VTEL thinks its customers have "the right to pay for individual TV channels for $1, or $2 or $3 each", and then obliquely promises to cut household TV bills by 66%. My first thought here is that Guite is tilting at windmills. How does he expect to get Disney, Viacom or any of the other big multichannel programming outlets to offer their networks on an ala carte basis. But then I noticed the use of the words "legal right" in his letter, and realized that perhaps VTEL was taking it to the courts to force ala carte on a recalcitrant industry.

I hope he’s successful – but whether his own personal quest can accelerate the process, I still expect unbundling to happen within the next 5 years. Why? Because the history of technology over the last 10 years has shown that when consumers *can* unbundle they do – even if they have to resort to illegal means to do so. Technology that begets consumer convenience invariably, ultimately wins.

Music is the obvious example, as we no longer have to buy 13 mediocre songs to get the one top hit. But newspapers and magazines have become unbundled too – you no longer have to purchase opera reviews if you just want the sports scores.

TV shows themselves have also become unstuck; we can easily watch the funny bits of Saturday Night Live, or the opening news segment of The Daily Show without having to stick through the boring or unfunny bits that inevitably follow.

Guite’s VTel is no stranger to hype, though, so take his words with a grain of salt. The company’s vaunted "24 megabit DSL" provides less than a megabit to my mountain outpost, and when I queried a company representative about the incongruity, he said "no one really gets 24 megabits", and that it depends on how far you are from the central switch.

Still, I consider it a miracle that I get even near-broadband, given that I still can’t even get cell service at my house.

With a war chest of $93 million dollars of federal money, and another $68 million of loans and company funds, VTel now has the resources to build something special in this rural outpost of northern New England. And with a myriad of over the top and web-delivered video services, the company’s customers will soon be able to get much of what it wants without paying for those 250 unwanted channels.

But it’s going to be a long, hard climb. According to Guite, "a la carte is a huge political, regulatory, judicial challenge." VTel has joined up with others to fight what he calls a "lonely battle", and finds it "startling how deep are the tentacles of ‘the other side’".

Will he ever be able to deliver CBS, ESPN or Discovery over those mega-pipes? Entertainment industry traditionalists are probably calling him a crazy old loon right now. But as I recall, they used to say the same thing about Ted Turner.

Fail Alert: Over the Top Winners and Losers

Filed under: Commentary — Jim @ 4:33 pm

Updated: My, how much things change in just a few days.  Since writing this, Boxee announced their ship date, November 10th, and the price, $200, which is substantially less than the $300 I’d assumed it would cost.

Boxee has also totally revamped the interface, and will roll out the new look at a gala event in New York that day. The company insists that their product will pass the babysitter test, the essential ease-of-use bar that requires living-room technology to be easily understood by a hormonally challenged teenage girl – without more than a cursory explanation.

The price and the new interface would seem to position Boxee well against Google (NSDQ: GOOG) TV, which is now shipping.  I spent a half-hour with the new Google TV over the weekend, and left disappointed in the interface, the integration and the overall experience. The remote is a mess, chock-a-block with confusing keys, mysterious functions and unnatural pointing surfaces.
It definitely does not pass the babysitter test, and its quirks and high price could turn the first generation into a “hobby” (or a daily Woot! special) more quickly than Sony, Google or Logitech imagine.

It’s a great time to be a TV consumer, especially with so many cool new over-the-top services launching this fall, and into next year. There are many new ways to get TV, but they differ in many ways – both good and bad. I’ve tried most of them, and have strong opinions on which ones will succeed and which ones will fail. Here’s my handicapping guide – which you could take to Vegas if only they let you bet on these services.

Content and Software Services

Netflix:  A clear winner, Netflix (NSDQ: NFLX) is running on just about every platform imaginable.  The company has a strong content focus, and by lining up distribution deals with Paramount and Lionsgate (NYSE: LGF) through Epix, and Relativity Media, it has great momentum. In addition, it is beginning to offer TV shows on demand, often the day after they air on traditional outlets.  A clear winner.

Hulu Plus:  For $10 a month you get access to shows that you can already access everywhere else around the net – along with Bit Torrent. Sure, the company has access to a strong content lineup, but there are too many negatives for me to be bullish here. Hulu’s content partners hate it, Americans are trying to pare down expensive TV services, not add to them, and a straight-up comparison with Netflix leaves the equivalently priced Hulu severely wanting. I’m not bullish on this one

IVI: These guys are a total darkhorse. They’ve built an internet-streamed retransmission of over-the-air networks including PBS, NBC (NYSE: GE), ABC (NYSE: DIS) and Fox, and are attempting to draft off of the landmark retransmission court ruling that let satellite service Dish bring those networks to its far-flung customers. Predictably, the big networks are up in arms, and their lawyers are up in briefs.  Free for 30 days, this one will either go down in flames quickly, or rewrite the television landscape forever. At $5 a month, it is definitely a bargain for many.  But I fear the legal system will shut them down.  Still, this one’s too close to call.

Play On:  This service brings internet video to big screen TVs via a PC, home network and video-gaming console. Given Microsoft’s inability to craft a winning over-the-top strategy with its Xbox, this solution works for many. But in the end it’s too limiting to become a huge success. Still, with an open architecture that lets anyone build channels to support a wide range of video service (including porn), it’s worth a look for many. A niche winner, but a winner nevertheless.

Yahoo (NSDQ: YHOO) Connected TV Platform: it’s been more than two years, and partner Intel (NSDQ: INTC) seems to have dropped out—yet more and more manufacturers keep signing up. The promise here is that content creators can build one application, and then have it work seamlessly across a wide range of flat-screen TVs, including those from Vizio, Toshiba, LG (SEO: 066570) and Sony (NYSE: SNE). It’s a great concept, but could be doomed by its own success. Unfortunately, these days TV vendors are searching for any scrap of differentiation they can grasp – to make their TVs stand out in what has become a fairly commoditized market. I had one industry exec – albeit one pushing a competitive service—tell me last week that the platform would be dead by Comdex, as TV vendors opt to go their own way.  I like the idea, and our Revision3 app looks pretty darn good on those TVs, but this one also is too close to call.

Windows Media Center: If, If, If.  If cable card had become successful, instead of weighed down by Cable Labs’ intransigence. If it were easier to integrate these boxes into your home infrastructure. If Vista had been better overall. It’s a great niche product, but not likely to break through.


Roku: The clear price leader, Roku’s tiny box gives you access to MLB, NBA, Revision3, Netflix, Amazon (NSDQ: AMZN) on demand and a long tail of quirky channels. It’s cheap, easy to set up, and simple to use. It faces some formidable competitors in Apple (NSDQ: AAPL), Boxee and Google, but I still think it’s got great potential and a two year lead. 

Xbox 360: It’s a great gaming platform, but the lack of content depth makes this an unfortunate loser in the over-the-top space. Because Microsoft (NSDQ: MSFT) exerts such draconian control over which shows and services can play on the platform (where’s YouTube? Where’s the Zune Podcast library?), it’s never going to be as successful as it might be. And Microsoft’s trademark hubris is on display whenever you talk with the Xbox team – surprising, given how the company is losing on so many fronts to Google, Facebook and (dare I say it), Playstation.

PS3:  Sony’s Playstation has crawled back from the dead to become a real competitor here. The company has great plans to implement a wide variety of services that should make it far more open, and far more accessible than either the 360 or the Wii. I didn’t think I’d ever say this a few years ago, but Sony gets it today, unlike Microsoft or Nintendo.

Boxee: $300 $200 is a lot of money. But the box is super-cool looking, the functionality amazing, and the company behind it chock-full of passionate believers in an open video world. I expect it to sell quite a few over the next year, but in the end expect someone like LG, Samsung or Visio to snap the company up – to add differentiation to their flat-panel lineup.

Sony Bravia: This platform lives on Sony TVs and Blu-Ray players, but seems ready to be overtaken by GoogleTV. That’s smart, by the way, particularly if it can maintain some exclusivity, at least for the short term.

GoogleTV: $300 for GoogleTV seems like a stretch, given that Boxee can do so much more, and the Roku is a third of the price.  Still, we are talking Google here, and after the app store opens up next year, the landscape could shift again. I expect Dish to integrate the GoogleTV technology into its next-generation set-top boxes, and expect at least one more TV vendor to join Sony by mid-next year. It is over-engineered for today’s low-cost hardware, and Moore’s law will make this the platform to beat. But not until late 2011 at the earliest.

AppleTV:  Jobs and Ive (the creative genius behind Apple) missed the boat here, proving that Apple stills think of this space as a “hobby.” The inability to run custom apps, the lack of an app store, and the lack of 1080p support will cripple the long-term success of Apple in this market. Sure, the Apple faithful will buy them in droves, but like the first AppleTV, they will remain mostly unused in basements and bedrooms.  Apple could own the entire chain, from phone to tablet to laptop and TV. But it’s got to “think different” if it wants to succeed here.

Popbox:  It supposedly shipped in July, but the current version is buggy, limited and not ready for prime time. Its competitors are leaving it in the dust. Too bad for what once looked to be a promising platform.

Sezmi: I can’t figure these guys out. The company’s reliance on Over the Air technology makes it less of a pure-play over-the-top service, but the company at least can claim to want web content integrated in as well. I like the audacity of the vision, but since I haven’t tried one out yet, I can’t speak to their potential. They could either win big or go down in a huge flameball. I’ll be watching this one closely!

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