Vizio Latest Manufacturer To Offer More Ways For TVs To Watch Purchasers

Vizio is the latest consumer electronics manufacturer to announce -- publicly, but not, like, PR-onslaught publicly -- that its TVs will be watching purchasers as much as purchasers are watching them. The details of its strategy to generate the most ROI from each and every purchaser willing to blow past the fine print during setup are contained in the company's SEC filing for its debut as a public company. Engadget's Richard Lawler has the details. (h/t to Techdirt reader MarcAnthony)

According to the filing, Vizio has sold more than 15 million smart TVs, with about 61 percent of them connected as of the end of June. While viewers are benefiting from those connections, streaming over 3 billion hours of content, Vizio says it's watching them too, with Inscape software embedded in the screens that can track anything you're playing on it -- even if it's from cable TV, videogame systems and streaming devices.

Here's the potential shareholder-friendly description included in the S-1 filing:

Our Inscape data services capture, in real time, up to 100 billion anonymized viewing data points each day from our over 8 million VCUs. Inscape collects, aggregates and stores data regarding most content displayed on VCU television screens, including content from cable and satellite providers, streaming devices and gaming consoles. Inscape provides highly specific viewing behavior data on a massive scale with great accuracy, which can be used to generate intelligent insights for advertisers and media content providers and to drive their delivery of more relevant, personalized content through our VCUs.

And here's the grand plan, which is a slice of a multi-billion dollar data sales market:

We believe our business focus enables a self-reinforcing consumer use and engagement model that we expect to fuel our growth while driving revenue. Our connected entertainment products and discovery and engagement software increase usage of our platform, enabling Inscape to gather more anonymized data on viewing behaviors, which we can deliver to advertisers and media content providers. These companies in turn can deliver more relevant and personalized content for viewers, further enhancing the entertainment experience. We believe this self-reinforcing cycle will increase our brand awareness and enhance demand for our connected entertainment products.

What's curious about the wording isn't the gung ho appropriation of viewer data to sell to advertisers. What's curious is Vizio's claim that "anonymized data" will result in "more relevant and personalized content" for purchasers. There may be a certain level of anonymity involved, but Vizio still needs to provide enough defining demographic data to make this information worth purchasing. There is some value in general data like number of viewers of specific content at certain times, but Nielsen has done this sort of thing for years and it's a huge stretch to call anything about TV advertising "personal" or "relevant." So, there's something a bit off about the anonymization claims Vizio is making here.

The other issue is that while Vizio is being upfront with regulators about this aspect of its TV offerings, it's not being similarly explicit with purchasers. It is truly the rarest of customers that seeks out a television for its ability to offer "personalized content" in exchange for the sale of his or her viewing data to marketers.

Will users know Vizio is selling their viewing data, including that generated by third-party devices connected to a Vizio smart TV? Probably not. While Lawler noted on Twitter than the SEC filing contains 102 mentions of Inscape, the term fails to surface in searches of Vizio's website. There's also nothing referencing the service in its Privacy Policy.It's not as though this is a feature (which many purchasers would find closer to a bug) still in development. Vizio's own filing indicates this is already in use. While it may be proudly trumpeting its built-in spyware to potential shareholders, it seems a bit more reluctant to inform potential purchasers about the company's thirst for sellable data.

Far too many electronic device manufacturers are unwilling to honestly discuss this part of the business with paying customers, preferring pages and pages of legalese to do the talking for them -- a tactic that allows for both ass-coverage and obfuscation. Vizio does better than some by providing instructions on how to disable this on-by-default "interactivity" early on in its Privacy Policy, but that doesn't necessarily excuse yet another manufacturer that views paying customers as ongoing revenue streams long after they've collected the purchase price for the device. In today's electronics market, it's not enough to simply be a paying customer. You must also be the product as well.

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White House Vaguely Agrees Outdated ECPA Should Be Reformed But Only With An Eye On The Government's 'Interests'

The Obama administration must be doing a little housecleaning in preparation for the 2016 winner. After months of highly-sporadic and belated responses to We The People petitions, it's answered two big ones (that have been sitting around forever) in a single day. It's also issued a handful of other responses to open petitions, some of which are little more than "we decline to respond," accompanied by a link to the site's Terms of Participation.

It took on two big petitions today. The first was a response to a request to pardon Snowden, which it denied under its "No Good Whistleblowing Goes Unpunished" policy. The second asked for a long-delayed rewrite of an outdated law.

The Electronic Communications Privacy Act has been in need of reform for years. If nothing else, the law's misleading name needs to be changed. One of the more notorious aspects of the law is that it gives email less privacy protection than snail mail, which is already an exceedingly low bar.

The administration agrees that reform of this law -- which treats email older than six months as "abandoned" and thus easily-accessible by law enforcement -- is needed. However, it does so both belatedly, vaguely and disingenuously.

The We The People petition calling for ECPA reform was posted November, 12, 2013. It passed the 100,000-signature threshold roughly 30 days later. At that point, a response was "required." 593 days later, that response has finally arrived.

It's obvious that many -- and arguably, most -- Americans today use email as one of their primary means of communication. Particularly in an era where we keep so much of our lives online, the content housed there deserves strong privacy protections -- which is at the core of what ECPA was designed to do. But over time, technology has evolved.

Which is why our policy teams agree with you: ECPA is outdated, and it should be reformed.

This is good news. Or it would be if there were any particular plan to get something done. While the response agrees that the outdated law's take on email privacy protection is pretty much terrible, the administration doesn't seem too willing to push for any specific reform effort.

We know there are still important details being worked out across government and in the halls of Congress. We aren't going to endorse a single ECPA-reform bill at this time. As any given bill goes through committee and makes its way to the House and Senate floors, the draft is negotiated and modified to address concerns and strengthen the bill.

In other words, we like the idea of reform so much we're going to do nothing about it. While efforts have been made over the past few years, they've been stalled/gutted to appease law enforcement and (yes, really) regulatory agencies' interests. Very little forward motion has been made and without something stronger than "we'll probably support whatever actually makes its way to the President's desk" propelling this reform, it could still be several more years before the already-outdated law is rewritten to properly address a communication method that originated nearly 45 years ago.

Finally, the response sends a mixed message about reform in the very last sentence.

That said, we're encouraged by the strong bipartisan support for updating this legislation in both chambers of Congress, and are looking forward to seeing this law address today's technological realities while preserving the interests we must protect.

This seems to indicate it will be more supportive of a bill that has the backing law enforcement and other government agencies. A warrant requirement for emails older than six months isn't that much of an imposition, but so far, it's been a tough idea to sell. This last sentence shows the administration finds the government's "interests" worth protection. The privacy interests of millions of Americans? Not so much.

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Awesome Stuff: A Little Box Of Videos

GoPro cameras were a revolution in the world of video, enabling a level of high-action photography with a low-cost, out-of-the-box solution. In general, there's a growing number of rugged outdoor devices for capturing video, pictures and sound — but there's still a stumbling block for people who venture to the corners of the earth with their cameras in tow. This week, we're looking at the Gnarbox, which could be the final piece of the puzzle for outdoor action photographers.

The Good

What's the one stumbling block I mentioned? Simple: dealing with all your footage. A day out with a GoPro at full resolution generates gigabytes of video, leaving you with two main options, neither of them great. You can carry a bunch of backup memory cards for the camera, or you can add a laptop to your travelling kit — largely negating the ability to just toss a bunch of extremely rugged gear in your bag without fear of damage (or requiring the purchase of a rugged outdoor laptop — something far rarer and more expensive than a camera).

Gnarbox is the new third option: a tiny, heavy-duty device that's halfway to being a full-fledged computer. It has 128gb of internal storage, so you can quickly load it up with the day's footage (by USB or with the built-in SD card reader), but that's just the beginning: it also has its own GPU and CPU, and serves as a WiFi hotspot to create a local network. This means that once you've got the footage loaded up, you can wirelessly connect to the Gnarbox with your smartphone, control it via the app, and actually start editing and sharing videos — even full-resolution 4K ones. Not only does this eliminate the problem of dealing with all your footage and clearing off your camera for the next day's adventure, it also makes it easy to rapidly share the videos you are creating without needing to wait until you reach a computer-equipped home base.

The (Not Actually) Bad

In many of these Awesome Stuff posts, I've bemoaned the fact that otherwise-cool devices are so often limited by the choice to make them exclusively smartphone-controlled. But the Gnarbox is a different case: its entire purpose is to replace more robust computers in situations where they aren't ideal, and to bring a level of video editing capability to your phone that was formerly the exclusive realm of higher-power devices. So, for once, I have no complaints about the fact that it requires the use of an Android or iOS app, since if you're near a desktop or laptop then you don't have any need for it to begin with. That's the right reason to build a smartphone-only device: not because you want to lock people in to your proprietary app or you want to block power-users from getting into the nuts and bolts of your product, but in order to bring a new capability to smartphones that they didn't have before. Editing 128gb of 4k footage certainly qualifies.

The Inexpensive

If any of this has piqued your interest, now is the time to go check out the Gnarbox, because there are some pretty great deals for Kickstarter backers. Even the projected retail price of $250 is attractive for such a device, but the Kickstarter rewards knock 40% off that price and let you order one for only $150, two for only $279, or a big pack of ten for only $100 a pop. But be warned, these are all limited quantities, and not just for the early bird prices but for the device itself — the initial Kickstarter run of 1000 Gnarboxes is already down to less than 200, so there doesn't seem to be much time left.

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Court Surprises Everyone: Says Filmon Streaming Service May Be Able To Get Compulsory License To Stream TV Online

Well this is a surprise. During nearly the entire time of the big Aereo fight over streaming TV online, there was a second player fighting battles on the side: FilmOn, by self-promotional billionaire Alki David (at times the name of FilmOn changed to mock Aereo and its investor Barry Diller, but it was originally FilmOn and eventually became FilmOn again down the road). Aereo appeared to have been constructed carefully to follow the various precedents in court cases, whereas FilmOn appeared to be designed on a whim to just get whatever attention it could. In the early days, it was little surprise that Aereo won and FilmOn lost (often badly). The arguments FilmOn's team made in court were not at all sophisticated and seemed mostly to be daring the judge to rule against them.

Then, after the Supreme Court ruled in the Aereo case using its "looks like a duck test," both companies shifted plans and started arguing that if the Supreme Court was arguing that they were the equivalent of cable TV companies then they should have access to compulsory licenses under Section 111 that allows cable systems to offer local channels so long as they pay a fee to the Copyright Office. In other words, if you're going to call us a duck, then we're going to quack.

In Aereo's case, the court was not impressed. And it looked like the same thing was happening in FilmOn's case as well. In fact, the company was held in contempt as it tried to push this argument forward. In both cases, courts pointed to the ruling against ivi, an earlier online streaming company that based its entire business on leveraging that Section 111 compulstory license. Aereo and FilmOn tried to argue that the Supreme Court's Aereo ruling effectively overruled the ivi ruling. And the courts had rejected this argument.

Until now. In a move incredibly surprising to probably everyone, a court has actually sided with FilmOn, saying that it can make use of Section 111. This is a different case and different court than the one that found FilmOn in contempt last year (Hollywood is suing in a few different places). In this ruling, the judge, George Wu, is well aware of all of the other rulings in Aereo and FilmOn cases... he just disagrees:

... this Court disagrees with the Second Circuit's decision in an analogous case....

In fact, the court argues that the Supreme Court ruling in Aereo actually does support the idea that internet companies qualify for a Section 111 compulsory license, because the Supreme Court keeps pointing back at the Fortnightly Supreme Court ruling, which was the impetus for Congress to change the law concerning cable TV and require the compulsory license. And, based on that, the court thinks that FilmOn has a legitimate argument that its service fits into the same category. Basically, the court says that it can see no reason that "internet" video providers should not qualify for the Section 111 licenses the same way Congress intended cable TV companies to qualify for it. The judge has trouble seeing how suddenly inserting "on the internet" makes things any different.

In finding that ivi's internet streaming service did not qualify for the §111 compulsory license, the Second Circuit affirmed the district court's determination that it was unclear whether ivi was a "facility" that receives broadcast signals and makes secondary transmissions, or whether the "internet" qualified as a "communications channel." ... The Second Circuit held that the statutory text was unclear as to whether the defendant operated a "facility" because "it is certainly unclear whether the Internet itself is a facility, as it is neither a physical nor a tangible entity; rather, it is 'a global network of millions of interconnected computers,'" thus, there is "uncertainty as to whether an Internet retransmission service is or utilizes a facility that receives and retransmits television signals.... And the Second Circuit noted that while Congress added "microwave" as an "acceptable communications channel for retransmissions," it had not "included the 'lnternet'" as an acceptable communications channel under § 111.... The Second Circuit did not purport to find any ambiguity in the phrase "or other communications channels," but nonetheless deferred to the Copyright Office's view that it should not be read broadly to include "future unknown services."

But, the court notes, that really doesn't make any sense under the law:

This is all at loggerheads with the thrust of Plaintiffs' prior "technology agnostic" argument in this case. And it is difficult to recognize the ambiguity the Second Circuit saw in the statute, at least as applied to the facts of this case... The "internet" is not the "facility" urged by Defendants here. And it can't be a "facility" for purposes of the § 111 analysis because without Defendants' facilities, the internet does not receive Plaintiffs' public broadcast signal. Thus, the undisputed facts in this case are that the signals are not received by "the internet." They are received by antennas, located in particular buildings wholly within particular states. They are then retransmitted out of those facilities on "wires, cables, microwave, or other communications channels." We know that they are so communicated because Defendants' users received them....

Thus, the nebulous nature of the internet does not seem to bear on whether Defendants operate equipment that "receives signals transmitted or programs broadcast by one or more television broadcast stations," reformats those signals, and then sends them out to the viewing public." .... [T]he Second Circuit's ivi II opinion focuses on the mysterious "ether" (then spelled "either") through which the retransmission is made, but the "facility" that Defendants have control over and operate consists of the "complicated electrical instrumentalities" used for retransmission, which precede "the internet" in Defendants retransmission scheme.

Thus, contrary to the Second Circuit's conclusion, it is unnecessary to turn to the legislative history or the administrative interpretation: "if the intent of Congress is clear and unambiguously expressed by the statutory language at issue, that would be the end of our analysis."...

Basically, the internet is meaningless here under the statute, and based on this court's ruling, ivi, Aereo and FilmOn are likely no different than cable companies (quack, quack!), and thus they should absolutely be able to make use of the § 111 compulsory licenses.

Of course, knowing that this ruling is different than others and the fact that the FCC is rethinking all of this anyway, the court is allowing the case to be immediately appealed. Still, this certainly makes things interesting and, depending on the eventual appeals court ruling, could set up a circuit split. Of course, it could become moot by the FCC, but at the very least it shakes things up in some interesting ways that say that if a company quacks like a cable duck on the internet, perhaps we really should treat it as a cable duck.

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Comcast's New Half-Assed Answer To Netflix Is No Answer At All

So far, legacy cable operators have crafted an ingenious, two-pronged response to the rising threat of internet video competition. One, mindlessly raise programming and equipment rental rates (since we all know that traditional cable TV is a cash cow that will live forever). Two, pretend to be innovative. This latter part doesn't have to consist of much; you have to do just enough to make it look like you give a shit about television's evolution, like offer a sloppy Hulu clone under your own brand, or launch a "me too" streaming service with so many caveats to make it largely useless.

That's apparently Comcast's MO with the launch of its new creatively named "Stream" internet video streaming service. According to the company's announcement, Comcast's Stream service will offer users a handful of channels (including HBO) with ads, for $15 a month. The biggest caveats: you can only use the service if you're a Comcast "Xfinity" broadband customer, and you can only use the service while at home on your Comcast Wi-Fi connection. It's yet another cable industry attempt to keep cord-cutters in house by offering them something that looks like innovation, but falls well short of the mark.

Comcast and other cable operators are obsessed with the false belief that you can create such wonderful, amazing walled gardens that traditional cable users will somehow be impervious to obscene pricing and will never want to leave. That's the mindset behind the industry's TV Everywhere initiative, and it's a mindset on proud display here. But when you actually look at the pricing and value proposition on display, it's pretty clear where Comcast still thinks it can steer users:

"Here’s some quick math: Comcast sells Internet at different prices in different markets, but right now a basic broadband-only subscription in its home market of Philadelphia is $67 a month. Add in the cost of Stream and you’re up to $82 a month. But Comcast sells a basic TV + Broadband package, including HBO, for $45 a month. You will want to read the fine print when you compare the two offers.** But you might reasonably conclude that Comcast would still rather sell you cable TV than Web TV."

Gosh, yes, you might just reasonably conclude that. Comcast (like all cable operators) is stuck between a rock and a hard place. If it offers a truly disruptive, well-priced internet streaming service, it will start heavily cannibalizing all of the customers currently paying an arm and a leg for traditional television. The answer? Cable will have to do the unthinkable and begin competing on price, offering traditional cable TV and streaming capabilities and a better bundle price. Yes, the reduction in quarterly revenues is going to make investors and executives cry over their lattes, but it's a smarter play over the long haul than responding to fleeing, cost-conscious customers with the inept one-two punch of yet more rate hikes and the pretense of innovation.

Besides, said executives and investors can then turn around and recoup those losses by socking broadband customers with broadband usage caps and overage fees, right?

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Daily Deal: REMXD On-Ear Bluetooth Headphones

Free yourself from tangled wires and leave your music player in your pocket or purse with these REMXD On-Ear Bluetooth Headphones. Save 28% off of retail and get up to 15 hours of playtime on one charge. The headphones work up to 33 feet away with any Bluetooth device. Buttons on the headphones allow you to skip/rewind, adjust the volume and answer calls for hands-free talking.

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