CEO Pay - Productivity Multiplier

Comment on Hacker News.

The range of potential CEO productivity effect is much greater than that of most employees and I suspect is a multiplier effect on the whole company rather than a simple addition. The worst case is a negative effect on a scale that bankrupts the company. On the positive side if a great CEO gets 1% more productivity out of their staff than a good one that difference in a company employing thousands is worth paying upto 1% of the total salary budget for a great rather than good CEO (if that is what they cost in the market and you can identify them).

There are big issues about how you identify great CEO's but there are real reasons to pay massively for the best.

The other factor is that people (CEO's, traders, salesmen) who can directly point to profit/income that they are responsible for can more easily show their value and in many cases claim a portion of that rather than a wage based on more normal market competition.


Why is no-one attacking the Smart TV space with gusto?

[Original Hacker News comment.]

I used to work for Sony in TV Product Planning and the Business Development for TV platforms in Europe.

> Why is nobody attacking this space with any gusto? Boxee, Roku, Apple TV, Google TV, YouView, Windows MCE and various no-hope proprietary platforms (Samsung - you'll never build a platform anyone wants to build on. Please give up).

It is hard. Smart isn't what people really want from TVs. They want content (games may be a exception but games consoles have that mostly covered for now). The interaction is too indirect (opposite of touchscreen) and the TV screen is shared with everyone in the room making even less suitable for interaction.

To be an interesting content platform you need real scale so Samsung should be interesting as they probably sell 20-30% (haven't been following recently) of TVs globally. If you have compelling content it makes massive sense if you have a working revenue model. If you don't have strong content I wouldn't bother.

> Will someone sort this out? We need a decent open Smart TV ecosystem.

No we need (fairly) dumb TVs able to play various sorts of local and internet content streams with standardised interfaces allowing content selection on tablet devices. DLNA/UPNP has the local network side quite well covered but the TV companies fed up of their zero margin business are trying to get some revenue on the content side and it a complex massive job getting good local content available globally.

andybak > Maybe I'm abusing the term 'Smart TV' but what I mean in the short term is something fairly close to your last paragraph BUT with some way for 3rd parties to innovate on the platform.

Your argument largely consists of 'people don't want that' or 'it's the wrong format' which sounds suspiciously like how people described smart-phones pre-Apple.


Why would anyone want information services or casual games (apart from those to be played with others in the room) on the big screen rather than the phone/tablet?

In the pre-iPhone case there were lots of people wanting information services on phones (on the move especially) and people trying to provide solutions greatly limited by available technology and bandwidth prices (no wifi on phones at the time either). People were trying to read books off phones, listen to music and do many things including some apps even when the capabilities were extremely limited.

Its really not just a "people don't want" argument but TV prolonged screen interactions don't generally fit into people's lives except in a very few narrow scenarios watching, sharing and showing content. In all these cases controlling with a smart controller and interacting offscreen really works better than indirectly manipulating a big-screen GUI.

If we imagine a TV with unlimited computing power what would it be used for? Well it would replace games consoles. It would offer smarter ways to find content (but the availability of content is probably at least as important) and better search isn't generally a game changer in this market.




Sony's decline

[Original Hacker News comment.]

I worked at Sony until about 18 months ago (European TV Product Planning and Business Development getting content onto the TV Internet platform).

This data makes it look like it could be going down quicker than I thought but it did have major problems and no clear route through them.

I think a lot of the engineering problem is that now the growth has gone there isn't large amounts of fresh recruits bringing new ideas. It also isn't THE place to work anymore which it once was in Japan (think Google 8 years ago levels of cool). The engineers are now mostly managers and outsourcing large amounts of development (particularly software to India). Manufacturing is outsourced so the benefits of having deep understanding of production and being able to optimise the products for that just isn't there. These combined outsourcings may be essential for short term survival but rob further from capability to differentiate and innovate.

Exchange rates are also killing Sony (and the other Japanese manufacturers). Massive proportions of their costs are in Japan and inflexible but their income is significantly in dollars and euros. They would be much better off if they spread their costs to regions where their income is.

The end of CRTs removed Sony's price premium in TV and Samsung at the high end and LG at the low end are brutal competitors in an industry where no-one is making money. However it is almost impossible to escape the TV industry as that would completely kill all the Sony franchise retailers (and with it a lot of other electronics sales) and any potential position as an entertainment platform/gateway company. It would also be a big admission of defeat and a lot of jobs would disappear.

A lack of real leadership has been a core problem but I'm not sure there is any way to fix it now.

Don't get me wrong many of the products are still really good and even competitively priced but that doesn't mean Sony is profiting on them. In TVs I think the processing on the mid-high models is better than most competitors and the internet services are pretty competitive but there is a lack of nimbleness and imagination to really take a lead in anything other than picture quality. The PS3 is a good value product these days.

Thinking about it some more I think the best chance of surviving into the medium term is some cataclysmic shift in exchange rates (maybe not so improbable given the Japanese Government debt). An effectively free drop of 20% in Japan based costs would give quite a massive boost that might give time to attack other problems but isn't enough on its own (assuming Sony's debts are in Yen as the value of many assets would also fall which could put them under before they could benefit from trading against the stronger currencies).

Japan printing itself out of debt might be quite a good move although clearly not without its costs amongst savers.

Anyway getting well out my expertise here.

elchief > Man, I had a Sony Wega CRT, and I seriously couldn't tell the difference between it and the first incarnation of 720 flatscreens.


Yes the first flatscreens were rubbish and for interlace SD video the best type of screen is a CRT (the screen, the encoding and the transmission technology were all built around each other to actually gain benefit from the weaknesses).

However the deinterlacing, upconversion and motion interpolation are massively different now to the first models. Plus content is available in HD (progressive) formats and you can get 1080P models.

A 40" LCD can be moved by one person and a 36"CRT would probably need two people to move it at all, was full of nasty chemicals, used more power and takes up more space in the room. If you still have a CRT that you use much it is probably worth replacing it, the phosphors will be substantially diminished in brightness so power consumption will need to be higher to achieve the same colours/brightness as before and HD video is truly here now.

Progress is amazing (even if there are the odd dips on the way). I joined Sony just as they were killing the non flat screen products.



Apple TV - The market challenges

In Hacker News discussion "TV will be Apple's Undoing"

TV won't be Apple's undoing but it also isn't obvious that they can win big there.

It is a complicated business with a number of interlocking players at different levels and vested business interests. It is also a global business with rights packaged up at a very national level and sold with exclusive deals.

While the biggest MSO's in each country (cable, satellite and terrestrial operators depending on the market) have the scale to lock in key content/channels to exclusive deals it will be fairly hard to break into the market in a devastating way. At the moment they have the scale and the revenues to do exclusive deals with the content creators (that they don't already own) to keep a large proportion of their customers from leaving. They (not the content creators/owners) are the big bullies in the market and would be hard and expensive to topple.

An AppleTV (including screen) if it does happen will need to be a good enough content offer for most people or it will not be a massive success. If they still have to use their cable box it can't be a game changing user interface because you are looking at the STB interface most of the time.

It's not impossible for Apple but it also won't be easy, particularly to go global. It will cost money to get content which might break Apple's principles and set a bad precedents for them. They also can't go that expensive because while I'm sure the UI will be better Samsung/Sony and some of the others really aren't that bad and the cosmetic designs don't leave that much room for minimalist improvement.

The business case for Apple is far from clear for me at this point but it would be a way to take the war to Samsung that would cost Samsung far more than a billion dollars even for an Apple relative flop. The collateral damage might kill Sharp unless they supplied the panels and would be another knife in Sony/Panasonic/Toshiba that they could do without.

batista > Funny, the said the exact same thing about mobile...

Nearly true but I think the situations are really different - the rights packaged up and sold with exclusive deals didn't apply in a relevant way and there wasn't the same level of complexity.

Carriers were essentially indistinguishable from a customer viewpoint. There was no significantly different content depending on which carrier you used or at least nothing that you would care about if you had an iPhone. This does not apply between broadcast platforms. The exclusive deals any carriers had for content were small scale apps or information services not multi-billion deals for packages of content for particular countries.

Apple played divide and rule between the carriers brilliantly working with a single operator in each country. In some countries that might work for TV where there are well balanced alternative platforms but in others it won't work because there is a dominant player who won't give up control and the challengers are too weak to help Apple much.

In TV there are the content originators (movie studios, sports leagues, independent production companies), one level of aggregators that commission and purchase from the originators and bundle it into channels and another level of aggregation by the service/delivery/billing platforms (MSOs). And then it is sold to the customer. These divisions are not clear and ownerships ofter cross levels.

In mobile it was fairly simple with carriers being the clear centre of the business, buying and subsidising phones and running the infrastructure. There were a couple of platforms running across different phones such as BREW and JavaME but they were more feature tickboxes than major market players.

This doesn't mean it was easy for Apple but the fact they had at the time a truly revolutionary product and reality distorting leader AND there was level competition between the carriers meant that they could pull off an amazing industry changing deal. They had to pull off this deal once in each country not with dozens of different rights holding players (they don't need them all but one deal per country would only be enough with the dominant MSO and probably wouldn't be on good terms as the MSO would know that there is a risk that Apple would want to cut them out when they were big enough).

I also didn't say that it was impossible for Apple to break into the TV market in a massive way but I certainly don't think it is easy or that there is a clear route to massive success. I certainly don't believe it is possible at their current margin levels for either hardware or content but it will be interesting to watch.

I used to do what was really a Business Development and Product Planning role for Sony's European TV Business so I have met with many cable, and a few terrestrial and satellite operators in Europe to persuade them to make their content available over their networks to consumers TVs with CI+ (think European CableCard but not quite such a broken model). Later I worked with many channel operators to bring them onto Sony's Internet TV platform so I do have some understanding of the TV business.

MS Surface Pricing Strategy

[Original Hacker News comment.]


Initial price is critical because initial reviews and overall reputation will be based on that. Nexus 7 shows that pricing cheaper doesn't harm the product perception if it is clearly a good product.

The other issue if pricing is deliberately set with particular reference to the iPad is that it might need readjust everything when the next Apple product arrives.

The main thing they need to do is show that it a really great product. If it is better than the iPad at three things but there is on dodgy aspect that is what everyone will hear about.

Who is the target market for the Surface? Those who would otherwise get a Netbox/laptop? Existing iPad owners? Current Windows users with no tablets? Mainly business?

I think if they want to hit the non tablet owning consumer they need to offer better product than the Nexus 7 at pricing just a bit higher. I don't think that they can match price with the iPad for that market unless people are treating it as PC replacement (which is dangerous ground for Microsoft but may be the correct self disruption move in the innovator's dilemma.