Is Netflix Ignoring the Hearing Impaired?

Stan Taylor, bless his heart, nails Netflix (NFLX) for its apathy towards the hearing-impaired community:

"Hearing-impaired get no love from Netflix "

So Netflix will be charging more for mailed movies? However, there is no word that they will fully provide CC and SDH (closed captioning and subtitles for the deaf and hearing impaired) on their downloads. Nor is there any information suggesting they will waive the increased cost for mailers for the deaf and hearing impaired until they can provide CC and SDH. The Americans with Disabilities Act should protect hearing-impaired people from a company that just doesn't seem to care about them.

(From SJ Mercury News, letters, November 26, 2010)

I have a love-hate relationship with Netflix. I love their DVDs and movie recommendations, but I cannot understand why they won't get their act together when it comes to online captioning. Many online video outlets already offer online captioning, including Hulu. In 2009, Netflix CEO Reed Hastings claimed that Hulu didn't offer captions. His comment really irked me, because Hulu did offer captions, and the fact that he got it wrong indicated online captioning wasn't even on his radar screen. (More here on that particular exchange.)

But Netflix isn't behind just Hulu--it's also behind YouTube, which offers online captioning on many of its videos. If you want to see the difference captioning makes in the lives of the hearing impaired, watch this YouTube video. It's only 1 minute and 28 seconds, but it will give you excellent insight into online captioning. The participants point out that online captioning also exposes content to a foreign audience that wants to learn English. I'd go a step further--Google has amazing translation services and tools, which means that eventually, every single show can be put online and watched by anyone, anywhere. Without captioning, however, most of those shows, including amateur user-made content, will be inaccessible to the majority of viewers. The loss of potential markets aside, why would Netflix choose to exclude the hearing impaired community when Hulu and YouTube are able to be inclusive?

Netflix's preference that its viewers watch films online certainly saves the company money on postage, but at what price to its viewers? Someone like me--severely hearing-impaired since birth--relies heavily on Netflix for entertainment. Since I function best in one-on-one situations where I can focus on a single speaker, I tend to feel lost during common social activities, which are usually group-based. For example, dance clubs and bars, which are noisy anyway, are terrible places for me and other hearing impaired persons who want to socialize. Now that Netflix is moving from DVDs to online streaming without captions, does it realize it is making another form of socialization harder for the hearing impaired?

Making matters worse, ordering a Netflix DVD isn't any guarantee that it will be captioned. You'll notice some Netflix DVDs are colored gray. Those plain gray DVDs are made specifically for Netflix. These DVDs sometimes lack captions, because Netflix doesn't require them. For example, I still haven't seen Clint Eastwood's Gran Torino. I know it's supposed to be a great film, so when my first gray-colored Gran Torino DVD didn't have captions, I ordered another one. The second one had no captions. Being the persistent type, I got another one. Still no captions. I finally tried to watch it without captions, but Clint Eastwood has a very soft voice, and it's impossible for me to hear him without captions.

To be fair, it's not just Netflix that ignores the hearing impaired community. During Cisco's most recent annual meeting, CEO John Chambers indicated that "66 percent of the world's mobile data traffic will be video by 2014." (More here.) He did not mention the issue of online captioning, nor did he seem to consider that its absence might impact web traffic in the future. However, if senior citizens--who tend to lose their hearing over time--cannot fully participate in online activities, wouldn't online retailers and businesses lose a large group of potential customers?

For instance, let's assume that an online commercial has sound and speech--why would the company who paid for the advertisement want to exclude senior citizens from its reach? Even if they don't buy the product for themselves, most senior citizens have children and grandchildren, don't they? Let me give you an example of what Cisco and other online companies are missing. Make sure you have your computer's sound off or your speakers silenced. Now check out this Cisco advertisement. It's not a bad commercial, is it? Now go back and look at the commercial with the sound on. Amazing, isn't it? It's easily one of the best corporate commercials in 2010, if not the best.

Most hearing impaired people have some ability to hear sound (though not all speech). With captioning, hearing impaired people and senior citizens can mentally fill in the parts they miss and enjoy the full experience of television shows and online advertising. But let's set aside our altruistic side for a moment and say you don't care about the disabled, the hearing impaired, the deaf, and senior citizens. Fine. Yet, we all know people who watch videos and surf the web during work. If advertisers made it easier for employees to watch commercials and videos in a way that didn't alert their managers, perhaps productivity would decline, but online exposure would increase. (I said upfront I was ditching the moral choices in this particular argument, and once you've already accepted ditching the disabled and the deaf, time-theft seems almost vanilla.)

Overall, the fact that Netflix can't keep up with Hulu and YouTube should concern not just customers, but any company interested in acquiring Netflix. If Netflix can't handle online captioning, what else can't it handle? And why would any company consciously tarnish its public image by ignoring seniors, the disabled, the hearing impaired, and the deaf?

Disclosure: I currently own fewer than five shares of Netflix (NFLX), but my holdings may change at any time.

Accuray's Annual Shareholder Meeting (2010)

[Note: the third paragraph from the end of this article discusses the TSA's full body scan machines from the perspective of a medical doctor and a Ph.D. in radiation physics.]

After I attended Accuray’s (ARAY) annual shareholder meeting, I had a chance to tour its Sunnyvale campus, where I learned more about CyberKnife. CyberKnife is a radiosurgery tool that attacks and destroys cancerous tumor cells using highly precise radiation beams. CyberKnife is much less invasive than “scalpel” surgery. Its high accuracy (hence, the name Accuray) allows patients to minimize exposing their healthy organs and body parts to radiation. I rarely feel optimistic after shareholder meetings during this Great Recession, but Accuray gives me hope not only for its own future, but the future of medicine.

THE ANNUAL MEETING

Accuray’s annual meeting took place in a well-known law firm in Palo Alto. Shareholders were offered orange juice, coffee, various fruits, bagels, and pastries. About 25 people attended the meeting, including founder Dr. John Adler. Prior to the meeting, Dr. Adler seemed well received by most Board members, who engaged him in friendly conversation.

President and CEO Euan Thomson opened the meeting by introducing the Board of Directors. There was one Asian and one female on the Board.

General Counsel Darren Milliken, a Santa Clara Law graduate, set forth the shareholder proposals and asked after each proposal if shareholders had any questions about them. (Some companies make the mistake of not allowing shareholders to ask questions or make comments during the introduction of shareholder proposals, which makes a farce of the voting process. Accuray did not make this mistake and followed best practices.)

After the formal portion of the meeting concluded, Accuray said it would not have an open Q&A session; instead, if shareholders had questions, they were welcome to ask them one-on-one with any executive team members or Directors. I have attended many shareholder meetings, and it’s highly unusual for companies to avoid an open Q&A session. (One notable exception is Cisco (CSCO), which asks shareholders to write down their questions on index cards, but its meeting is much larger and not restricted to shareholders.)

When a shareholder–not me–protested the Q&A format, Accuray said that its 1-on-1 approach was common in some business meetings. Instead of calming the waters, this explanation prompted Dr. Adler to deliver a verbal smackdown. This is the second year in a row that Accuray has attempted to avoid a public Q&A session, only to be trumped by the Adler family. (Last year, it was Mrs. Adler who delivered the fireworks.)

Now, before I tell you about Dr. Adler’s comments, it is important to note that Dr. Adler left Accuray and now works for a competitor, Varian (VAR). Dr. Adler said that he had heard people speak of their “disgust” at the way they had been treated by Accuray’s management. He said that Accuray is a “reflection of me and Marilyn [his wife], who named this company,” and he was “dismayed by [Accuray's] deteriorating business reputation.” Dr. Adler did not mention specific incidents, but lamented what he felt was a general lack of passion on the part of the executive team.

I usually have one or two questions for management, centering on Warren Buffett’s “wide moat” analysis. Accuray allowed me to ask my question, but directed me to the CFO. I read from page 29 of Accuray’s 10K, which lists Accuray’s various competitors, and I asked Accuray about the competitive advantages of its products. I felt a little guilty about asking CFO Derek Bertocci a technical question, but he actually answered it very well. After he was done, CEO Thomson jumped in and explained that Accuray’s CyberKnife uses over 100 different positions and can correct for any patient movement. I asked if other products could do the same thing–he responded, “Not to the extent of the CyberKnife.”

After the meeting, I had a chance to talk to CEO Thomson one-on-one. He said that he had a great deal of respect for Dr. Adler and his achievements. He also informed me that the Board (including CEO Thomson) "unanimously" voted for Dr. Adler to stand for re-election, and Dr. Adler chose to resign. CEO Thomson politely explained that it wasn’t unusual for a founder of a company to feel less involved as time passes. As a company matures, he said, it tends to listen more to its customers and persons with business-oriented perspectives. Consequently, said Mr. Thomson, it’s not unusual for a founder’s “personal vision” to be changed. The trick, CEO Thomson said, is to progress forward “without losing passion.”

You might wonder how Dr. Adler, a genius who has advanced radiosurgery by light years, and CEO Thomson, an accomplished Medical Physicist with a Ph.D. in radiation physics, can both mention passion and yet reach different conclusions about its levels at Accuray. After spending time with both men, my theory is that the difference is cultural. Dr. Adler is a very direct, charismatic man who commands attention wherever he goes; in contrast, CEO Thomson is British and more low-key. While it is hard to get a word in edgewise when Dr. Adler speaks, CEO Thomson encourages others to speak when he sees they have something to say. In short, both men have different communication styles and come from different cultural backgrounds.

CEO Thomson and Dr. Adler are clearly passionate, competent, and knowledgeable, but their personalities could not be more different. Having lived in England and the States, I can see the cultural differences very clearly, but Americans who've never crossed the Atlantic must have also heard of the famous British stiff upper lip, where Brits are expected to handle adversity and pain with stoicism. Such stoicism--generally speaking--tends to promote a culture of outwardly reserved emotions. (Side note: when I was jogging in Hove/Sussex as a teenager, I remember waving at various people and saying hello, only to have all the Brits in my path quite shocked that I was a) crazy enough to be exercising in the cold weather; and b) greeting strangers along the way. No one waved back or said hello.) Some Americans may not know it, but we are some of the friendliest people in the world. Unlike Europe, our ability to avoid years of war on home soil has allowed our culture to be generally more open and friendly.

Yet, it is not surprising that Dr. Adler would see others as less passionate–indeed, almost anyone would appear less passionate when compared to him. Within the field of medicine, Dr. Adler is the closest thing to a rock star. When I posted on my Facebook wall about the CyberKnife, I almost immediately got the following comment: “I actually had the CyberKnife done on a tumor by Dr. Adler himself (the inventor). It is amazing, sci-fi, and scary at the same time. He is AWESOME!” How many doctors can garner such adoring fans?

POST-ANNUAL MEETING

A few days after the annual meeting, CEO Thomson was kind enough to take me on a tour of the company and, along with Dr. Omar Dawood, teach me more about CyberKnife. Before I tell you about my introduction to CyberKnife, I will summarize a meeting I had with Accuray’s general counsel, Darren Milliken.

I have never heard anyone at Accuray speak negatively about Dr. Adler, but Accuray continues to receive major criticism from Dr. and Mrs. Adler. I asked the company’s lawyer, Darren Milliken, to discuss his thoughts on Dr. Adler’s criticism of Accuray.

Mr. Milliken said that Dr. Adler had left Accuray to pursue other interests. Moreover, under SEC and federal rules, when a director resigns, a company and director must disclose any disagreement on issues surrounding the director’s departure. Mr. Milliken said that Dr. Adler not only failed to raise any issues of disagreement with the company’s 8K filing relating to his departure, he actually approved of the 8K in an email to Mr. Milliken. According to Mr. Milliken, “If there was a disagreement with Adler, we would have filed an 8K [as the law requires].” No 8K was filed relating to any disagreement with Dr. Adler by Accuray.

Mr. Milliken also informed me that Accuray’s corporate governance committee and its Board of Directors recommended that Dr. Adler remain with Accuray as a Director. In fact, according to Mr. Milliken, Dr. Adler stood for election as a Director–even though he could have opted out–only to resign shortly after he was elected.

I asked Mr. Milliken about his opinion of Dr. Adler. Mr. Milliken said, “What he invented here is over-the-top incredible, [and] John [Adler] invented that, and that’s amazing to me.”

I then went to meet CEO Thomson and Dr. Dawood to learn about CyberKnife. I have never been so impressed with a medical device in my entire life. Both CEO Thomson and Dr. Dawood were able to explain the CyberKnife to me in about an hour, even though I have no medical training or expertise. The main points I learned are as follows:

1. According to Accuray, competitors’ products rely either on radiation therapy or a Gantry-based system, which is not as focused or accurate as Accuray’s CyberKnife. For example, let’s say you want to treat a cancerous tumor in your prostate. Well, if your body parts around the prostate are still reasonably healthy, you probably want to minimize the level of radiation you receive. According to Accuray, the CyberKnife is able to pinpoint the location of the tumor and deliver hundreds of quick, highly-concentrated doses of radiation directly to the tumor itself--leaving non-infected parts alone.

According to Accuray, other products are not able to move around to the same extent as the CyberKnife; as a result, the company believes that CyberKnife is more accurate than the competition, which minimizes the risk of collateral damage to a patient.

(I said the CyberKnife compared to Gantry-based systems sounded like the difference between a sniper and cluster bombs. They didn’t disagree with me, but they said they preferred not to use military terminology.)

2. What’s amazing about the CyberKnife is that its software is able to locate the tumor automatically. Think about that–there's no one using any levers or buttons to sync up data–the CyberKnife takes the pictures, finds the tumor, and attacks it automatically. (I am still enthralled about the idea that a machine can do that without major and constant human intervention.) Because the process is mostly automated, Accuray believes that using the CyberKnife tends to reduce human error.

3. According to Accuray, the CyberKnife’s higher accuracy allows patients to receive fewer treatments to destroy cancerous tumors. For example, using radiation therapy instead of radiosurgery might require forty separate treatments. According to Accuray, most patients need only one to five CyberKnife treatments. Thus, if someone is working, or is located in an area far away from a hospital, or has other responsibilities to handle, the CyberKnife reduces forty treatments/fractions to perhaps five. The fewer number of treatments may also result in cost-savings for insurance companies and Medicare, which supply approximately 90% of reimbursement for CyberKnife treatments. (According to another person within Accuray, Aetna and Blue Shield of California have already seen the value of CyberKnife.)

I will leave you with an interesting anecdote. The TSA has received a lot of flak for its handling of travelers who “opt out” of its backscatter radiation body scanners. I asked CEO Thomson and Dr. Dawood what they thought about the risk of radiation from the airport full body scanners. Both doctors indicated that there is currently not enough information to make a valid judgment about the safety of the full body scanners. Although we receive radiation in small doses almost every single day, much of it is “non-ionizing.” A cell phone, for example, has non-ionizing radiation; however, the TSA scanners use ionizing radiation. Ionizing radiation can alter a person’s cells to the point where the cells cannot recover. In contrast, non-ionizing radiation will jumble or vibrate your cells but will not permanently alter them. More here. In case you're wondering, I'll be opting out when I travel.

Disclosure: I currently own about 400 shares of Accuray (ARAY); however, my holdings may change at any time. Other than ARAY, I do not own individual shares in the other companies mentioned in this article.

I have emailed Dr. Adler and Mrs. Adler several times and have done an interview with Dr. Adler in the past. The 2010 meeting was the first time I met Dr. Adler in person. I have a tremendous amount of respect for Dr. Adler, and I feel lucky to know him.

American Education is Failing our Kids

I criticize teachers and their unions. Both are directly or indirectly responsible for the difficulty in changing our current public education system, which seems designed to harm kids at the top and make sheep of the rest. Yet, some people insist that the problem with public schools is a lack of funding when the facts indicate otherwise:

"Per student, we now spend more than all but three other countries—Luxembourg, Switzerland, and Norway—on elementary and secondary education. And the list of countries that spend the most, notably, has little in common with the outcomes... (The same holds true on the state level, where New York, one of the highest-spending states—it topped the list at $17,000 per pupil in 2008—still comes in behind 15 other states and 30 countries...)"

More here.

Year 2010: Americans on the Stock Market

I found two interesting anonymous comments on Yahoo recently:

1. "The U.S. stock market is becoming like the Japanese stock market. If you had $40,000 in the Japanese stock market in 1990, you'd have $10,000 today. [Note: I have no idea if this is true.] There's long term "investing." Expect the U.S. stock market to rally every once in awhile, and continue to fall for the next 20 or 30 years. Wall Street is just a big casino. At least you get free beer in Vegas when they take your money."

2. "How can the small investor participate with any level of confidence in a market controlled by hedge funds and other large institutional investors utilizing program trading capable of manipulating the market? Additionally, small investors make buy and sell decisions with information made available to large investors earlier in the game. Who can they turn to for objective advice and opinions? Standard & Poors? Moodys? Audited financial statements? The events of 2008 made it quite evident these were completely unreliable. How could firms like Bear Stearns and Lehman Brothers, big banks like Wachovia, Washington Mutual and Countrywide go down the drain so quickly when just months, weeks and even days before, these institutions were considered sound investments by the "experts"?

But, first and foremost, how can anyone hold stocks believing they are investments when even the experts refer to that as a gamble or a bet? Long-term investing is dead. And while the pros may lament the departure of the small investor from the stock game, it was them who caused it to happen. This game is not played on a level field. The average person is better advised to keep their money safe. Slow growth is better than no growth or the loss of principal."

Random Thoughts: 2010 Political Edition

1. Almost all conflicts are because of land, money, and/or women, or the protection thereof. Religion, race, etc. are just atavistic proxies that help human beings justify violence and exclusion in order to protect land, money, and/or women.

2. I predict Hilary Clinton will run for President in 2012.

3. I am still sad that Russ Feingold lost the recent Wisconsin election. He was the lone Senator who voted against the Patriot Act in 2001. [Senator Landrieu (D-LA) abstained.]

In 2006, the following Senators voted against the Patriot Act's renewal:

Akaka (D-HI) Bingaman (D-NM) Byrd (D-WV) Feingold (D-WI) Harkin (D-IA) Jeffords (I-VT) Leahy (D-VT) Levin (D-MI) Murray (D-WA) Wyden (D-OR)

3. The more I learn about Tom Harkin (D-IA), the more I respect him. (What is it about Iowa that seems to produce reasonably progressive people instead of the scorch-the-earth-to-change-the-world California types?)

Ken's Genius on Display

Ken has written many amazing posts, but this one takes the cake:

http://www.popehat.com/2010/10/28/trust-in-the-devil/

Giving the government the power to do things we like tends to give the government the power to do things we don’t like. In a perfect world, conservatives would see that reposing uncritical trust in prosecutors and cops ultimately promotes the government’s power to regulate their businesses and their health care. Liberals would see that trusting regulators and bureaucrats increases the government’s power to jail citizens upon flimsy evidence.

Maybe one day more people will meet in the middle and recognize that the appropriate stance of an informed citizen towards all elements of the government is vigilance, skepticism, and firm support of individual rights against the state. Perhaps more people will agree that the correct response to any government attempt to control the individual is to question: “What evidence do you have to support this? Is it really believable? Can it be trusted? Is it enough?”

Oh, the lucidity.

RIP Terry Vierra

RIP Terry Vierra, 1966 high school wrestling state champion, Westmont High wrestling coach, all-around great guy, and one of the most amazing, down-to-earth people I've ever met.

My heart goes out to Terry's family and his brother, Mitch.