Why the NFL and YouTube would make such great teammates

I'm a long-suffering Philadelphia Eagles fan. Not only am I apparently destined to be perennially underwhelmed by the team's on-field results, but as a resident of New York City, I'm forced to make my way down to the local sports bar where I'm subject to the conversational whims of inebriated Giants fans. Since I’m not a DirecTV subscriber and therefore don’t have access to the NFL Sunday Ticket offering, the local sports bar is my lot in life if I ever want to watch my team on television on most Sundays.

But there may be a glimmer of light in the distance: According to reporting from AllThingsD, Google has begun early negotiations with the National Football League about putting out-of-market NFL games on YouTube. This could prove to be a wonderful thing, for both Google and for NFL fans.


First, we must note that these are little more than conversations between two large corporate entities. Companies have conversations all the time, but that rarely means that anything will come of it. Heck, Yahoo was having conversations with Mark Zuckerberg about buying Facebook back in 2006. Still, Google teaming up with the NFL at this particular time would make sense for a variety of reasons.

First, Google has a lot of money—certainly enough to best DirecTV’s $1 billion-a-year deal with the NFL (and Google has been more than willing to engage in billion dollar deals as of late). For its part, the NFL may indeed be interested in teaming up with Google, but at the very least is willing to let DirecTV—whose contract ends at the end of this season—know that it has other pigskin suitors.

Google has been on the fringe of TV for years, but has never been quite able to make its way into the endzone of the American living room. This is something the NFL can help with. Hands-down, professional football is the most popular sport in the United States. And aside from the eyeballs and attention it brings, NFL games carry the cachet of being all-American, mainstream, apple pie. It was arguably the NFL that gave legitimacy to the upstart Fox network (then associated with low-brow fare like Married with Children) when it first won the rights to broadcast NFC games in 1994.

Mainstream cachet—and ubiquity—is something that Google desperately wants right now for its video-on-demand options. This is particularly true now as the Mountain View, Calif., tech giant may have finally discovered the key to America’s collective living room in the form of Chromecast. At only $35, Google’s little TV dongle will give every modern TV access to the Web via Google in a way that Google TV has never been able to accomplish over the past three years. Since its introduction last month, Chromecast has sold at a brisk pace—so much that Google has had problems keeping up with demand.

It is also important to note that Google was represented in its talks with the NFL not only by CEO Larry Page but by YouTube content boss Robert Kyncle as well. YouTube has been steadily building its brand recognition as an original content studio, rather than a mere conduit for adorable cat videos and other meme-ish oddities. In just the past year, YouTube has championed paid subscriptions for its popular channels, established original content events like Comedy Week and Geek Week, and re-vamped its mobile app to make it more Chromecast-friendly (and therefore, friendlier to living rooms as well).

Whatever happens, Google appears to be making all the right moves to make YouTube a content network, not just a user-submitted video repository.

Easy polyscreen access to America's favorite game might be coming soon.
As consumers lurch over the tipping point of comfort with streaming content, there is increasing competition to become the go-to conduit for streaming-to-TV access with suitors in the form of Microsoft, Apple, Roku, and countless others.

The NFL could prove to be just the product that could tie America’s heart to one preferred medium—as the league did for Fox two decades ago. And as with Fox in the early 1990s, Google may be willing to take a financial loss with expensive NFL rights—at least, at first—as the real return on investments will be further down the line in the form of brand legitimacy.

This is all conjecture, of course, but a theoretical YouTube NFL channel would give fans more affordable access to the out-of-market game across multiple screens. (It's very unlikely the NFL would give up very lucrative in-market network TV deals for now.) Unlike with DirectTV, YouTube would be able to offer access to just the NFL channel. Currently, Direct TV requires users to buy a DirecTV home subscription when available. (The provider does offer online access to Sunday Ticket without a home connection for $300-a-season, but only when DirecTV is not available).

Google could certainly offer a better deal than this. In the process it might sell a lot of Chromecasts and—more importantly—get more eyeballs acquainted with YouTube on the TV.

For the 2013–14 season, Sunday Ticket remains a DirecTV exclusive. So for the next several Sundays, as I’m forced to interact with with drunks recalling all of the Giants’ past Super Bowl victories, I will have at least some hope that in the not-too-distant future, I may yet get access to the NFL in the comfort of my own living room. 

What if Steve Ballmer ran Apple?

Bear with me, I know my premise is ridiculous.

Imagine Steve Ballmer was right now the CEO of Apple, with the same set of products and opportunities. Suspend disbelief about cultural clashes, or organizational structure. Presume Ballmer could set the strategy, and that Apple would execute it accordingly.

In this scenario Apple would make more money in the next five years than they will under Tim Cook.

At this point, I’ve fully backed off of last week’s post and believe the iPhone 5C will cost (at least) $450 (I’ll explain why soon); Ballmer, however, would push out the low cost version I advocated and attack non-subsidized markets. Ballmer would do more than catch enterprise accounts that fall in his lap; he would aggressively court CIOs and make changes to the iPhone to accommodate them. Ballmer would expand the iPad range to multiple screen sizes and price points, and would push for every school district in the world to standardize on them, far more aggressively than Apple is today. Ballmer would leverage iTunes, and all those credit cards, by making a play for payments and identity. As for computers, well, the XMac might even become a reality.

There would, of course, be handsome incentives to make this happen. Apple’s sales team would be hugely expanded, and their pay directly connected to the above becoming a reality. The product teams would be pedal to the metal filling in all the holes in Apple’s current lineup, and marketing would be aggressively targeting everyone from CIOs to developing nations. Apple would give both China Mobile and NTT Docomo whatever concessions necessary to gain access to their customers, and Apple’s carrier base would double, perhaps even triple to Samsung’s level.

The revenue and profits would flow.

And yet, under Ballmer, everyone at Apple would be working so hard, and be making so much money, both for themselves and for Apple’s shareholders, that they would ensure that Apple never again reinvents consumer computing.

See, if Steve Ballmer were the CEO, Apple would make more money, but they would slowly but surely become irrelevant. Just like Microsoft.

The more thoughtful summaries of Ballmer’s time at Microsoft suggest his tenure was a mixed bag. Profits have tripled, but the share price has stagnated. Mobile and tablets have been missed, but Windows and Office remain strong, and Server has added a third leg to the stool. In short, Microsoft has maximized the revenues and profits from its existing businesses, but failed to create any new ones of significance.1

This though, is not a “mixed bag.” Ballmer’s successes and failures are fully intertwined.

Ballmer is a master at pushing a successful product to a dominant position and extracting the profits that follow. He demonstrated this not just in his time as CEO, but in his previous role as the head of sales and marketing. Microsoft’s truly remarkable run of ever-rising revenue and profits is the direct responsibility of Ballmer. But, this run of ever-rising revenue and profits, and the means by which it was generated, were also the same reason opportunities have been missed.

It is my contention that a strategy that seeks to maximize revenue and profits – i.e. the sort of strategy at which Ballmer excelled – necessarily precludes the creation of significant new products.

Part of this is certainly due to the innovator’s dilemma, the idea that a successful new product can’t be pursued because of its impact on margins, yet can’t be dismissed because of its impact on revenue. But I think the issues presented by a strategy predicated on profit maximization run even deeper.

Said strategy – both its upsides and downsides – is about much more than CEO decisions. It is necessarily part and parcel of a company’s culture and organizational structure. Microsoft has been structured and incentivized around the goal of maximizing revenue and profits, and while Ballmer may be exiting stage left, the Microsoft he built remains (Bizarrely, Microsoft recently re-orged away from a divisional structure incentivized by profit-and-loss; however, as I’ve argued, a reorg doesn’t change the culture).

Mary Jo Foley had a chance to ask Ballmer what he was most proud of (emphasis mine):

I’m proud of being I would say a significant part even of the birth of intelligent personal computing, the notion that people use computing technologies, whether that’s phones, PCs. I mean, we kind of birthed that over the course of the ’80s and the ’90s, and that’s had such an unbelievable impact on people’s lives. I would say a billion plus people and now more with phones, even if they’re not all our phones, I’m very proud of what we’ve accomplished there.

If I had to sort of couple it, I’m very proud that we were able to make this incredible impact on the planet and at the same time do a good job for our shareholders.

There it is, unprompted. In addition to putting a computer on every desk, Steve Ballmer is most proud of “do[ing] a good job for [Microsoft's] shareholders.” And, by definition, shareholders care about dollars and cents.

And so, dollars and cents were a central focus for Ballmer, and for Microsoft. Employees were incentivized by dollars and cents in the form of bonuses and stock grants. Bonuses and stock grants were tied to a stack ranking system, that devolved your performance to a number. What was measurable mattered, particularly if it was measured in money.

The result is inevitable: Microsoft is a company filled with people motivated by measurables like salary, bonus, and job level. Anyone who isn’t would necessarily leave.2 Unsurprisingly, said people make choices based on measurables, whether those be consumer preferences, focus group answers, or telemetrics. The human mind is flexible, but only to a point.

In other words, over time, as you incentivize your workforce through measurables, you eventually have a workforce that only thinks in measurables. You ultimately have a workforce of mini-Ballmers.

Yet, if Apple’s success has proven anything, it’s that measurables aren’t the half of it. Things like design can’t be measured, nor can user experience. How do you price delight, or discount annoyance? How much is an Apple genius worth?

In the consumer market, it’s the immeasurables that matter. It’s the ability to surprise and delight, and create evangelists. It’s about creating something that developers demand access to, and that consumers implicity trust. The consumer market is about everything you can’t measure, everything Microsoft’s legion of mini-Ballmer’s can’t see and will never appreciate.

It turns out that all of Ballmer’s good qualities, especially when it came to maximizing revenue and profits, were also his worst qualities, especially as the consumer market came to dominate computing. And, to Microsoft’s short-term benefit but long-term detriment, the incentives Microsoft gave its employees to achieve Ballmer’s aims choked out the sensitivity to truly understand what’s next.

A friend ascribed Ballmer’s failings not to lack of vision, but rather to poor R&D (which, given Microsoft’s earlier entry into phones and tablets, seems reasonable):

The bit that is hard to understand is why R&D efficiency is so variable between companies. Is that about the CEO or the rank and file troops? If so what drives it? Bezos and Jobs have very different styles but amazing R&D productivity. Chambers/Mark Hurd have very different styles but equally poor R&D productivity. What is really happening here? What is driving this?

I think the driver is motivation.

Last summer Jony Ive said:

Our goal isn’t to make money. Our goal absolutely at Apple is not to make money. This may sound a little flippant, but it’s the truth…Our goal and what gets us excited is to try to make great products. We trust that if we are successful people will like them, and if we are operationally competent we will make revenue, but we are very clear about our goal.

There was scoffing a plenty, but I actually think it’s true; Apple employees are (for the most part) intrinsically motivated. And Apple, relative to Microsoft, is infinitely more relevant to the future of computing.

Amazon, the other company my friend mentioned in a positive light, is similarly up-front about its motivation. In this year’s letter to Amazon’s shareholders, Jeff Bezos wrote:

As regular readers of this letter will know, our energy at Amazon comes from the desire to impress customers rather than the zeal to best competitors…

One advantage – perhaps a somewhat subtle one – of a customer-driven focus is that it aids a certain type of proactivity. When we’re at our best, we don’t wait for external pressures. We are internally driven to improve our services, adding benefits and features, before we have to. We lower prices and increase value for customers before we have to. We invent before we have to. These investments are motivated by customer focus rather than by reaction to competition. We think this approach earns more trust with customers and drives rapid improvements in customer experience – importantly – even in those areas where we are already the leader.

Amazon famously makes minimal profits; Microsoft made more money last year than Amazon has made ever, yet Amazon too is far more relevant in the consumer market today than is Microsoft.

There is a tradeoff when it comes to strategic goals, and relatedly, motivating a workforce. Using dollars and cents makes the most dollars and cents,3 but it breeds a certain culture and way of thinking that is out-of-touch with what matters to consumers and with what’s next.

One of the single best pieces I’ve read in the last month was by John Kay entitled Sometimes the best that a company can hope for is death:

Humans have always found it hard to cope with the idea that every individual has a lifespan even as life itself goes on. The idea of a natural life cycle for a business, or industrial centre, is even more difficult to accept. So we ask: what can be done to revive Detroit? Can BlackBerry find a new role? [...]

The marketing guru Theodore Levitt elaborated this theme in an article half a century ago. Levitt denounced marketing myopia. There was always, he suggested, a future for a company; the key was to look for a creative answer to the question: “What business are we in?” [...] Levitt did not recognise that competitive advantage, rather than a fertile imagination, is the key to success.

Kay’s analysis absolutely applies to any company that has optimized itself for its shareholders; extracting the value of a competitive advantage is profitable, until it isn’t. And then, creative destruction dictates the company, having shined so brightly, contracts and ultimately burns out.

Still, it’s not clear that not pursuing such a strategy is better. Amazon is a particularly relevant example: from a profit and dividend perspective, one would have been better off investing in Microsoft, the last decade notwithstanding. If one were to truly embrace capitalism and the idea of shareholder value, isn’t Microsoft the better company?

Yet, it’s hard to imagine living without Amazon, or Apple. It’s far too easy to imagine living without Microsoft.

Ballmer did exactly what our capitalist system dictate he do: he maximized profits to the benefit of Microsoft’s shareholders. The implications of suggesting he was a failure are far more profound than most of his many critics likely realize.

Xbox is the exception, of course. That said, Xbox is net negative – by a wide margin – over its lifetime, and in a niche market to boot. I’m not a fan from a business perspective ?Relevant ?Yes, Apple makes more profit than Microsoft, but that’s because the mobile market is so much bigger than the PC market. As I noted, I think it’s probable that a Microsoft-like approach with Apple’s product line would result in even more profits than Apple is making currently in the short-term ?
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Two free and easy ways to share big files

Sending big files can be a big pain, but in this week’s video tip you’ll learn two simple ways to do the job at no cost.

Most of us are used to emailing files back and forth with friends and colleagues. But when it comes to big files, you might end up feeling like you’re trying to stuff a package through a mail slot. If your attachment is too big—Gmail’s limit, for example, is 25MB—you’ll receive errors and alerts, saying that your message exceeds the mail server’s limits. So what then?

Here are two easy—and free—ways to share big files.

In the past, transferring a big file from one computer to another could be a big pain, even if the computers were sitting next to each other. Apple built the answer for that kind of problem into OS X Lion. But if you haven’t needed AirDrop, you’ve probably overlooked this great OS X feature.

What do you need to make it work? OS X 10.7 (Lion) or later and a Mac made in the past few years. (Apple keeps a list of acceptable models online.) Any Macs that are located within about 30 feet of each other and have Wi-Fi turned on should be able to share files via AirDrop. And by turned on, I mean turned on. You don’t need to be connected to a Wi-Fi network. AirDrop uses special Wi-Fi hardware to initiate a direct connection between the computers.

Here’s how it works: Open a Finder window and click on the AirDrop header. (Or in the Finder, press Command-Shift-R.) You’ll see your computer represented by an icon. Ask the intended recipient of the file to open his or her AirDrop window, too. When that happens, the other person’s Mac will appear in your AirDrop window. Drag and drop the file onto the person’s icon. AirDrop will ask if you really want to send the file. If you really do, click Send. On the other person’s computer, a notification will appear that asks whether to Decline, Save and Open, or simply Save the file. When the person answers in the affirmative, the file will download into the receiving computer’s Downloads folder. That’s it!

AirDrop is great if you’re trying to move a big file to a Mac that’s close by. But what if you want to send a big file farther afield or to a person who doesn’t use a Mac? My choice in such situations is Dropbox. This free file synchronization service is so useful in so many ways that it’s a favorite of Macworld editors, including me.

If you need to send just one file, use a Dropbox link. In your Web browser, navigate to the file in Dropbox and hover your cursor to the right of the Modified field. The words Share link will appear. Click this, add email addresses and a note, and then send. The recipients won’t have to sign up for a Dropbox account to download the file.

If you’ve downloaded Dropbox’s desktop software to your Mac, you can navigate to the file in the Finder and control- or right-click on it. Select Share Dropbox link from the contextual menu. Nothing will seem to happen, but a link has been copied to your clipboard. Go to your email program, paste the link into the message, and send it out.

If you need to share a group of files and receive corrections and new versions, your best bet is to share a Dropbox folder. In the Finder, create a folder within your Dropbox folder, control-click on it, and select Share this folder. This opens your Web browser to a window where you can enter people’s names and write a brief message describing the contents of the folder. Click Share folder to email instructions on how to view the folder.

Each person must sign up for a free Dropbox account, which means giving a name and email address to the service, and creating a password. Once they’ve done that, however, people can see and edit the folder’s contents, add items, and download as they wish. Dropbox works with Windows, Mac, Linux, iOS, Android, BlackBerry, and Kindle Fire, so you can share big files with just about anyone.