Sunday, May 31, 2009

Basketball: Orlando and Cleveland

Stat of the Orlando-Cleveland series: Ben Wallace, 22 total rebounds in six games. Remember when that would be his nightly production? I'm not blaming any single player for the loss, but Cleveland needs to give LeBron bigger/taller teammates.

When I look at Cleveland's roster, I see no defensive presence. Wallace is only 6'9''. Gibson, Szczerbiak, and Mo' Williams aren't great defenders. In fact, on many teams, they would be sixth men. I've said it before, and I'll say it again: you can't win an NBA Championship without great defense. If you could, Steve Nash's Phoenix Suns would have three rings now.

My prediction? Orlando in 7 against the Lakers. Orlando's success should not be surprising to fans who followed R. Lewis's career in Seattle. He was putting up 20 points a night regularly. With Turkoglu, Lewis, and Alston, Orlando is always a threat to make a three-pointer, which opens the paint for Howard. As we've seen, that inside-outside threat is difficult to handle. Also, between Pietrus and Howard, Orlando brings enough toughness on defense to win the championship. Pietrus's three-point shooting has been a nice surprise, and if he keeps shooting a high percentage, Orlando will always be in the game.

As for the Lakers, they have Gasol, but he's no Howard. Bynum isn't developed yet to make much of an impact (he scored a whopping 2 points in his most recent game). When you really look at the Lakers' roster, they've got Kobe and Gasol, with the occasional trey from "The Machine." That won't be enough to beat Orlando.

In fact, the only way I see the Lakers winning the championship is if the referees hand them the game. I give Orlando seven games to close out the Lakers, not because I think the talent level is close, but because I think the referees help the Lakers. Orlando is still a young team looking for respect, which hurts them when it comes to getting calls.

For example, did you see the ref call a taunting technical on Howard? On church-going, gospel-listening Dwight Howard?! Meanwhile, Kobe has become much better at handling the referees. Did you see him get Artest tossed? Hands in the air, a look of displeasure on his face, as if to say, "I can't believe I'm in the same room as you." And he still got Artest thrown out. If I'm Stan Van Gundy, I tell my team, "No technicals. I don't care how p*ssed you get. No technicals. We get the ball back and score. Forget the refs. If anyone gets tossed, it'll be me, not you."

Orlando in 7 or fewer.

Sotomayor a Yankees Fan?

The Boston Globe's Ellen Goodman has a great article (May 29, 2009) on Judge Sotomayor:

http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2009/05/29/a_wise_person_for_the_court/

Apparently, Ms. Sotomayor is a Yankees fan. I'm no BoSox fan, but how can she be accused of being pro-underdog when she's cheering on the Yankees? She should have had the good sense to root for the Mets instead, like Julia Stiles.

Best line in the article? Someone describes Justice Roberts as a "relentless champion of the overdog." Hilarious.

Ellen Goodman makes another good point. She reminds us that Justice "O'Connor...praised her successor, John Roberts, saying, 'He's good in every way, except he's not a woman.'"

I talked about Sotomayor before in this post.

Saturday, May 30, 2009

Weekend Recap: Book and Film Rec

Last weekend, I saw a great movie and read a good book.

1. The movie, Sin Nombre, is about two immigrants. One is trying to cross the border to get to New Jersey, while the other is trying to escape being killed by his own gang members. The story is about redemption, loss, and perseverance. Catch this one if you can. A review is here.

2. Mohsin Hamid's book, The Reluctant Fundamentalist, is about an immigrant named Changez ("Changez" is Urdu for "Genghis" Khan, the Mongol invader who attacked the Muslim world). Although this story is about a legal immigrant, one wonders if Changez's troubles aren't as woe-inspiring as the two characters in Sin Nombre.

Changez, a Pakistani immigrant, attends Princeton and falls in love with a woman, who, at first glance, appears to be a beautiful "lioness." After 9/11, she changes, trying to burrow herself in the past, which prevents the relationship from moving forward. By this time, she has become an unexcisable part of Changez. In fact, he has willingly given up part of himself to ensure her happiness and acceptance. Despite gaining the trappings of wealth and prestige (and an American Express expense account), Changez eventually returns to his homeland, a fact we are told upfront.

The story begins with Changez telling his story to an American in a cafe in Lahore, Pakistan. Both men are tense and wary of each other, and while Changez tries to reassure his visitor, it is clear the visitor is on guard. Changez is also on guard, something we see as he provides clues about his visitor. For example, he wonders out loud whether a bulge in the visitor's pocket is a gun or a hidden fanny pack commonly used by theft-wary tourists. We do not know who the American is, but the story builds tension bit by bit and leaves us with an ending that will be interpreted by each reader differently. The Reluctant Fundamentalist can be called a foreign policy Rorschach test. Depending on how you interpret the ending, you will know your view of America, the world, and how they interact.

An interview with the author is here.

Friday, May 29, 2009

Netflix's Annual Shareholder Meeting (2009)

[Note: this 2009 post caused an uproar in the online community, leading to a small Facebook revolt and support from star Marlee Matlin. Within a few weeks, Netflix announced it would enable online captioning by 2010 (but didn't provide specific benchmarks). The real surprise? As of November 7, 2009, not a single mainstream media outlet had formally covered either the issue of online captioning or Netflix's response. Finally, on February 24, 2011, Netflix announced 80% of its streaming content would be captioned by the end of 2011. Thank you to everyone who supported the online captioning campaign.]

[Note: A major media outlet did eventually cover the issue of online captioning--a year later. See here for June 20, 2010 NYT story.]

Netflix, Inc. (NFLX) held its annual shareholder meeting yesterday at its headquarters in Los Gatos, California. The meeting lasted less than half an hour and around fifteen non-employees attended. As usual, only cookies, water, and soda were offered.

The meeting consisted of CEO and Founder Reed Hastings answering shareholder questions. There was no presentation.

I like Reed Hastings. He has great ideas on education reform, and he is smart enough to have caught the eye of Microsoft (MSFT), which placed him on its board of directors. When it comes to annual meetings, however, Mr. Hastings seems like he can't wait to get back to work. That's a laudable trait in a CEO, and most mathematicians (he majored in math) aren't known as overly social animals anyway.

Shareholders' comments were generally half-question, half-compliment. One shareholder praised Netflix's compensation factors, also known as "performance factors." (See 2009 proxy statement, pages 14-15: "to attract and retain outstanding performers, it must provide a challenging work environment. To this end, the Company strives to maintain a high-performance culture.")

Netflix also evaluates employee performance based on several factors, including judgment; innovation; impact; curiosity; communication; courage; honesty; selflessness; and passion. It's unusual for a company to openly tell shareholders that it bases compensation partly on goals like "honesty." Netflix rightfully deserves compliments for having a multi-faceted compensation analysis that includes an ethical component.

Another shareholder asked what the company was doing now that more players were entering the streaming video business. Mr. Hastings answered that Netflix "is always having to compete," and businesses like www.hulu.com were changing the competitive landscape. At the same time, he said, "It's a big landscape," and while there will be "more competition in the future," Netflix was continuing to add subscribers at a healthy rate. Mr. Hastings also said that the most competition came from cable and satellite companies.

Another shareholder asked what Netflix would look like in five to ten years. Mr. Hastings answered that he didn't have a crystal ball, but Netflix currently had millions of subscribers and he hoped to to keep increasing its customer base.

I asked two questions. Page 10 of Netflix's 10K states that Netflix had issues with Starz Play service:

Many of the [streaming video] licenses provide for the studios or distributor to withdraw content from our service relatively quickly...For example, in December 2008, certain content associated with our license from the Starz Play service was withdrawn on short notice.

I asked why Starz Play revoked its license in 2008. Mr. Hastings said he didn't know about that (perhaps he didn't understand my question) and said Netflix currently had a good relationship with Starz Play. When I later pointed him to the 10K, Mr. Hastings said he did not want to comment. He reiterated that Netflix currently has licenses for Starz Play. [Update: when I followed up on the Starz Play question, I read out loud the relevant section in the 10K to Mr. Hastings. He appeared to understand my question the second time and immediately said he had no comment.] I was a little stunned, because Mr. Hastings was not willing to answer a question about a publicly disclosed fact. I realize as a small shareholder, Mr. Hastings doesn't owe me answers on every question I ask, but the Starz Play revocation seemed like an important issue, and an issue that might impact the share price. Although I didn't say it, I was thinking, "If Netflix doesn't want to answer reasonable questions about its company, why did it go public?"

I then mentioned Netflix's failure to add captions/subtitles to its online streaming videos. Netflix's "instant play" option doesn't include captions, making its online video option unusable for many users. As a result of not offering captions, Netflix is alienating its hearing-impaired, deaf, and senior citizen customers. According to some estimates, there are 34 million hearing-impaired persons in the United States. One would think Netflix would think better than to alienate such a large customer base.

I asked what Netflix was doing to make its website and online video accessible to everyone. Mr. Hastings said other online streaming sites didn't offer captions, and mentioned hulu.com as one of them. He said as time progresses, captioning technology will become more widespread, and Netflix would then incorporate it into its own technology. He also said that customers can continue to receive DVDs through the mail, and most DVDs contained captions.

Unfortunately for Mr. Hastings, I use hulu.com to watch Simpsons episodes. Except for a few episodes, every Simpsons episode I've watched had captions. Obviously, the technology exists to make online video accessible to everyone, so I wasn't quite ready to let this topic pass. I gave Mr. Hastings another chance to explain how he would make his business accessible to everyone. I mentioned that hulu.com did indeed offer captions, and I said (paraphrased), "It sounds like you're not planning to do anything to add captions to your site. Am I correct in understanding that you don't plan on making your online videos accessible to the disabled?" Mr. Hastings said he would check out hulu.com, but essentially agreed that adding captions wasn't an active agenda item. Now, I don't want to go Kanye West on anyone, but it didn't feel like Mr. Hastings or Netflix cares about deaf people.

Mr. Hastings is making a poor business decision by not maximizing his site's accessibility. First, Netflix has already signed up the "low-hanging fruit." In order to keep growing and to justify its relatively high P/E, it will now have to maximize its customer outreach efforts. By not even trying to make online video accessible to the disabled, Netflix is losing goodwill and a large potential customer base.

Second, although Netflix wants to grow its online video business, it is subject to the whims of the studios and other content providers. Netflix doesn't have much leverage over the studios, who control their online content and may wonder why they should license content to Netflix. The December 2008 Starz Play incident shows just how vulnerable Netflix is to having its access unilaterally cut off. To encourage content providers to grant Netflix licenses on reasonable terms, Netflix needs to add something of value. Providing captions for online content may be one low-cost method of offering value to content providers. (I don't know exactly how much it would cost to create online video captions, but there are plenty of people in English-friendly countries who would be willing to do the work.)

Third, being insensitive to the disabled will harm Netflix's public image. I am surprised that Microsoft's good corporate citizenship in this area hasn't rubbed off on Mr. Hastings. Although Microsoft gets a lot of bad publicity, it is actually at the forefront when it comes to offering tools to assist the disabled. Here is a list of the awards it has received as a result of its work on behalf of the disabled. Here is one relating to the hearing-impaired community:

Microsoft was recognized among 12 companies and two educational institutions for "extraordinary efforts in promoting equal access to telecommunications and media for consumers who are deaf, hard-of-hearing, late-deafened or deaf-blind..." "TDI commends Microsoft for its special commitment and allocation of resources over the years to introduce and offer accessible and usable software applications for all Americans. With this technology, deaf and hard-of-hearing Americans can fulfill their potential as full, active participants in the general mainstream—regardless of differences in culture, language and communication."

Bet you didn't know about Microsoft's good reputation in the disabled community. That reputation has created lots of Microsoft supporters willing to speak up when others bash the company. In short, there is no need for Netflix to alienate an entire community, especially not one that contains millions of potential customers.

I understand that Mr. Hastings founded Netflix, controls much of the stock, and probably feels like he doesn't need to listen to anyone. At the same time, Netflix needs to more carefully manage its reputation so it maximizes its customer base. It already has many loyal fans and will probably keep growing (though its rate of growth may not be as high as some shareholders would like). Despite my criticism, I love Netflix and am a huge fan of the company. The algorithm that recommends movies has pointed me to many wonderful films I might have never found on my own, like Germany's Ali: Fear Eats the Soul, China's Shower, and Iran's Children of Heaven.

Mr. Hastings did shake my hand after the meeting and told me he wished he had better answers for me. He gets points for that gesture. I hope he will actually do something about Netflix's inaccessible features. In the meantime, I will not be adding to my small position in the stock. Absent a buyout, perhaps from Microsoft, Netflix looks fairly valued to me.

Bonus: I also blogged about last year's annual meeting here, calling it one of the strangest meetings I've attended.

Disclosure: I own an insignificant number of Netflix (NFLX) shares.

Update on June 1, 2009: unfortunately, this doesn't apply to online video, but if you have a complaint about a television show not being captioned, the following link shows you how to make an effective complaint:

http://www.hearinglossweb.com/Issues/Access/Captioning/Television/file.htm

Update on June 13, 2009: Netflix finally issued a statement re: captioning:

Captioning is in our development plans but is about a year away...I would expect to deliver subtitles or captions to Silverlight clients sometime in 2010...

It appears Netflix has changed its tune somewhat, but if you read the comments on the Netflix post, many readers are questioning Netflix's explanations and statements.

As of today, the Facebook group, "Netflix Watch-Instantly Needs Closed Captions!" had 983 members--most of whom joined after my review of Netflix's annual meeting was published.

Update on June 18, 2009: Here is my follow-up post to this story. The pro-captioning Facebook group continues to grow--"Netflix Watch" has 1,129 members.

Update on August 29, 2009: "Netflix Watch" now has over 2,000 members.

Update on April 18, 2010: Netflix has finally captioned some online videos, but only 100 so far. More here. Looking at hulu.com's options, which include online captioning and transcripts, I am still not happy with NFLX's slow progress. I guess it's a start, and better than nothing. Thanks to everyone who helped NFLX realize the importance of online captioning.

Thursday, May 28, 2009

Sotomayor and Judicial Realism

1. Next time people want to place their faith in a judge, remember this name: Judge Samuel Kent. He was a judge in the Southern District of Texas who was sentenced to almost three years in prison for lying about his assaults on two women who worked for him. (See WSJ, 5/28/09, A5). Judge Kent was a federal judge--which confers a lifetime appointment. Guess who appointed him to the bench? President George Bush the First.

2. And now let's move on to Judge Sotomayor. I don't know her. I don't really care, because she'll be replacing a judge who seems to rule in a similar fashion. I'll get interested when someone replaces Alito, Roberts, Kennedy, Thomas, or Scalia. The idea, though, that she's unqualified to be a Supreme Court Justice is ludicrous. She made a comment indicating that a Latina female would have a different perspective than a white male. I heard Justice Sandra Day O'Connor--a conservative Reagan appointee--talk about the exact same thing in a Santa Clara Law school lecture many years ago (around 2002).

Justice O'Connor was talking about the Gail Atwater case, where a small-town cop hauled a Texas soccer mom to jail because her kids weren't wearing seatbelts. Justice O'Connor dissented in that opinion. See Atwater v. Lago Vista, (2001). Every single justice in the majority opinion was male. Every single female justice dissented. Justice O'Connor mentioned the gender disparity in her speech with a sigh and a shaking of her head. I interpreted her body language to mean that if more women were involved, the case would have been decided differently.

It should go without saying that a person's background will influence his or her personal opinions. For example, growing up female will present someone with a different--not better, not worse--perspective than growing up male. Does a person's ethnicity or gender mean that s/he will not be impartial when applying the law? Of course not.

Why, then, should we care about diversity on the bench? First, judges hold so much power over Americans--a non-homogeneous group of people--that diversity on the bench is a laudable goal, as long as excellence is not sacrificed. Second, most of us would probably recoil at the idea of a Supreme Court that is 100% African-American, 100% homosexual, 100% Hispanic, or 100% Muslim--why is that the case, if someone's background is irrelevant? I think it's because a lack of diversity indicates that the system for selecting powerful people is flawed. Assuming there are many people qualified to be on the Supreme Court, we should be able to draw from a wide pool of applicants, not just people from one particular ethnicity or gender.

Here, Judge Sotomayor's most relevant characteristic--the diversity of her work experience--is outstanding. She has been a criminal prosecutor (government lawyer); a civil litigator (private lawyer); and even a solo practitioner.

In any case, if Judge Sotomayor is a radical judicial activist, then so is Justice O'Connor.

Battle of the Sexes

Classic line, from Elia Kazan's A Face in the Crowd (1957): 

You cold-fish respectable girls...inside, you crave the same thing as the rest of 'em. 

The single most regressive piece of American culture is our attitude towards sex. Because we can't address it in an adult fashion, Americans only seem to accept sex when it's watered or dumbed down. Even in Hollywood--hardly a bedrock of decency or morality--Paris Hilton gets attacked by comedians for being sexually promiscuous. Meanwhile, to paraphrase anthropologist Helen Fisher, "If you think men are more promiscuous than women, who do think the men are sleeping with?" (Another one of her gems is, "We were built for reproduction, not happiness.") 

 I am not sure where I was going with this, except to say that gender stereotypes are as alive as ever. We've progressed from burning witches at the stake, but until women fully harness their sexual power by becoming comfortable with their bodies, it seems they will never attain full power in America. That's a shame. At the end of the day, although men and women are surely different, it makes no sense to use a naturally connecting activity to drive them apart. 

A memorable exchange from Kazan's film: 

 -For a mild man, you sound vicious. 

 -Didn't you know? All mild men are vicious. They hate themselves for being mild and hate the extroverts whose violence seems to have an attraction for nice girls who should know better.