have you seen sports ratings lately ? Just this week:

The NBA on TNT had its highest ratings in TWENTY SIX YEARS .  Versus had its highest rated regular season NHL game EVER.  The first game of the World Series was the highest rated in 5 years.  The NFL was setting records on cable and achieving viewing levels not seen in TWENTY YEARS !. College Football ratings are killing it as well.

But wait there is more.  TV viewing is up considerably in each of the last several years. We can even look at the box office for movies and the fact that the industry is seeing a theatrical revival.

The question is simple. Whats going on ?

The answer is simple as well.

The internet has trained us.

It has trained us to assign two distinct values to content that is available to us, regardless of media.    The 1st variable is participation value. The 2nd variable is shelf life.  The two variables go hand in hand.

Every type of content has some quotient of participation value. At the bottom of the spectrum are games/shows/movies/events that you watch or attend by yourself, and you have no interest in telling anyone about.  Those shows have zero participation value.  They could be Perry Mason reruns (happened to catch one while I was working out on the road) or shows you watch when you have nothing better to do.

At the top of the scale are games/shows/movies/events that potential viewers have predicted to have high participation value.  These are events that we look forward to not only watching or attending, but that we plan in advance how we are going to extend our participation.  We may plan on tweeting about it or posting a facebook update because we know our friends are there and we are bragging to each other, while at the same time showing off to friends who cant be there. Think going to the opening of Cowboys stadium, or going to a concert or opening night of a movie, or watching the big game.

Or we may plan on going online and participating in discussion forums or chats. Or we may be planning on posting comments on our favorite websites where others have shared interests.  For others it may be some version of gaming, ala fantasy sports.

Sports of course have high affinity engagement, and because of the internet, they have increasing participation opportunities.  You may watch a Magic game just to be able to tweet to Dwight Howard what you saw while watching the game.  You may watch the Giants Eagles game because your fantasy teams are stacked with players from those teams and your league allows first come changes. Or you may just want to see how your guys did so you can text your friends in the league and give them a hard time, or take a hard time. Its very, very common for fans of MMA (mixed martial arts) to stay up to the wee hours to watch our Dream Fights from Japan on HDNet , all the while online discussing the fight and then arguing over the outcome with others doing the exact same thing.

The higher the participation value, the shorter the shelf life.  The role of the internet for high participation games/shows/events is not to show them, its to enable the participation. The explosion of Social Networking and social networking enabled games and applications has strengthened this as the internet’s role. Its improving TV ratings of shows with high participation value.

While some may think that combining the presentation of events/shows/etc and the participation into a single webpage makes sense. It doesn’t.  The internet has also trained us that if it can be shown on the internet, its probably not going to have a high participation value. Why ? Because the expectation is that if its on the internet, you can get to it any time you want it.  Its out there waiting for you to stream or download at your pleasure. There is a long perceived shelf life.  So there is no rush.

The latest U2 concert on Youtube is a perfect example.  I thought that when I went to Akamai’s status page the number of concurrent users would be in the millions. As you can see from this link, it was about 1.15mm. Nothing to sneeze at, but that is for ALL of the streaming Akamai was doing at the time and its not dramatically more than a normal night for Akamai (as I write this, the total on the akamai visualization page is 1.3mm, more than during the concert) .  I shouldn’t have been surprised.  There was no reason to rush to watch it. Its available now and probably forever more on the net.

Compare this to live, competitive reality tv.  THe opportunity to watch a train wreck or to catch a spectacular performance, live , can easily trigger a high participation event.  Think watching me on Dancing with the Stars hoping or expecting me to wipe out.  You go in knowing and hoping and ready to let all your friends who werent watching know about it, and to talk about it with all your friends who are watching.  So while the ratings may have fallen off some for these shows, one episode comparable to Marie Osmond fainting, which led to a huge surge in viewing on my DWTS season, or a Brett Favre last second touchdown or interception return, or even a movie that is a hugely positive surprise like Paranormal Activity, all have short shelf lives while creating the expectation among viewers that they are or could be high participation events.

Which brings us to our conclusion. THe longer the shelf life, the more likely that there is a lower perceived participation value. Sure you may want to talk about your favorite TV show with others, but there is no rush.  You can get to it when you get to it. More importantly, networks and production companies should work a lot harder at creating realtime  participation around their content. If you can increase the value of participation, you increase the value of the show and the desire to watch the show at the same time as others.  Which is exactly what is happening with sports in record numbers.

You cant stop people from recording shows on their DVRs, and you shouldnt try. But you should try to give them as many reasons as possible to take advantage of the increased entertainment value of participating  with others. High participation  equals high viewership. That is exactly what record ratings for sports are telling us.

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I am so firedup for this season to start.  No predictions other than to say I think we are much better than last year and if we can stay healthy….

And of course off the court, we are always trying to do new fun things that create fun and value for our fans. From the new amazing VideoBoard (largest and highest resolution indoor board in the world !),  to the new soundsystem, because great sound matters ! And as always , we have lower ticket prices and great season ticket deals available. Some even include All  Star and Event tickets as well . Mavs.com has all the scoop.

You will also see continued improvements in the Mavs websites.  Mavs.com , Friends.Mavs.com, Mavswiki.com, all will have more original content,and we will be twittering and updating facebook pages with scoops, pictures, videos, everything and anything we can think of.  Most importantly, rather than the very limited AP post game reports that are the bane of the sports business, we will have complete write ups about every game minutes after the game is over.  So Mavs fans should make Mavs.com your starting point for all things Mavs !

We have also partnered with Hewlett Packard to create a really cool new opportunity for Mavs fans called The HP Insider ( www.theHPInsider.com).  We are going to be offering select Mavs fans the chance to go “deep inside” all things Mavs and become the ultimate insider. You will have access to pretty much everything that we are allowed to give you access to, and then some !  I dont want to give it all away, the scoop is on the Insider website, but lets just say you will not only get to sit next to me at a game, but we are going to take you with us on a road trip !

All you have to do is go to www.theHPInsider.com and upload a video showing me why you are the Mavs biggest fan.  If you are chosen, you get to go where no Mavs fans have gone before and HP is going to throw in a ton of really cool goodies to help you document your experience.  After all, you do need a new HP Touchsmart Laptop and an HP PhotoSmart printer to look all official and all when you travel with us and print up all the pics you take, dont you !

Thanks to  HP for coming up with this idea and supporting Mavs fans everywhere.  Its going to be a fun year !

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The “conventional wisdom” of internet intellectuals is that its a foregone conclusion that the future of content delivery is via the internet.  Furthermore, the same internet panel populaters seem to be of the mindset that traditional entertainment and content companies “just dont get it”.  History has written that if it can be gotten for free, it should be gotten for free.  It’s a given that the next re-make of Planet of the Apes is supposed to end with  Taylor looking not at The Statue of Liberty, but an enormous Comcast or DIRECTV logo when he screams  they “blew it all to hell”.  That major content conglomerates like Viacom, Disney and the like, that depend on traditional TV models are doomed because they just dont understand the new world.

I agree.

Those big companies just don’t get it. Forget the Internet.  For some reason they want to kill off the DVR. They think the DVR is the bane of their existence.  That because consumers fast forward through commercials, DVRs must be dumbed down,  limited in any and every way possible and even eliminated.

To this I reply, “Are you serious ?”

Do you not realize that the DVR is the one device that can save all things traditional and holy to your business and stock price ?  That the DVR is what every internet based TV delivery device or service aims to be when they grow up ? That the more powerful and feature rich that you allow DVRs to become, the sooner your customers, the people that pay  an average of what, $80 dollars a month to consume your content,  will realize that all the capabilities that the internet pundits predict that the future of the internet will offer, are available today for the DVR ?

Let me ask a simple question, if everyone had a DVR that could record any and every series they liked, enabling them to watch the shows they missed immediately, why would they go to Hulu ever again ? Lunchtime at work you say ? I respond simply with “slingbox enabled DVR”. Let them stream the shows from their homes. Oh, and one more thing. When they do stream it from home to work, they pay for the bandwidth, not you.

Traditional media should be blasting the cable/telco/sat companies for not adding DVR features and dropping pricing fast enough.  Not only should remote internet access to content be a given, but the ability to save shows at “internet quality”  and original quality, side by side, should be as well. This would not only improve streaming, but also increase the number of shows that could be saved. I could go on for days with features that could and should be added to DVRs, but I will shortcut this by once again butchering a quote from Charlton Heston, this time from Soylent Green. “Its PCs. DVRs are made out of PCs.”.  Which means that they can not only be upgraded with features, but if someone where smart and fully opened up  Tru2way and added net connectivity, it could be a rich foundation for applications. Anyone got a Charlton Heston quote for the Iphone App store ? So what if Netflix does instant streaming to it.  Go out and get the same rights and add them to your VOD Offering and create a movie on demand subscription service that you host on the internet or  implement when you go IP. The full feature DVR is the killer of all boxes designed to integrate internet video into traditional TV viewing.

If you have gotten this far, you need to wipe away the tears.  Yes, advertising dollars could take a hit. Sometimes the business world requires you to make a choice.  Call me crazy, but a device that consumers love and further commits them to paying the cable/sat/telco distributors that PAY YOU BILLIONS EVERY YEAR, IS A GOOD THING ! A device that can pre empt whatever threat there might be from over the top video, is a good thing for you.  A device that makes people watch MORE traditional TV is a good thing too, right ?

I know its tough recognizing that 40pct plus of DVR users want to and will skip through commercials.  But do you think if you kill the golden goose and push people to the internet they will be more likely to watch your commercials ?  No. They won’t.

Its time for you to finally understand the new world of technology and content. You have an amazing technology, the DVR,  that has almost tripled its installed based to more than 30pct in just 2 years.  DVR users watch 8 hours per month of time shifted TV, which by the way is more than total average consumption of 3 hours of internet video per month.  Even kids 18 to 24 watch more video on their DVR than they do on the net ! Don’t you think its worth noting that the number of DVR users is growing faster than the number of video watching internet users ? The individual  consumption of DVR video far exceeds internet video. More importantly, since most DVR users are cable/telco subscribers, they actually PAY YOU MONEY to do all the above.

Its time you come not to crush the DVR but to praise it.

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First, let me say I love when I can talk about other leagues. It’s a freedom I really, really enjoy.  But lets get to the issue.

I’m guessing the NFL doesn’t really care about what Rush has said before on his show and on other platforms. If it were really an issue, they never would have let him in the broadcast booth a few years back.

What they should be terrified about , and why they should keep him out,  is what he might say AFTER he was an approved investor in the St Louis Rams.

The NFL has plenty of owners who I am sure have very strong political opinions.  I’m willing to bet that many of them back up those opinions with donations that are all part of the public record.  I’m sure some of those probably don’t align with the best interests of the NFL or even the majority of their fans and customers.    I can give you a minor example I have had with the NBA.  I am never on the same page as the NBA when it comes to copyright issues. I believe we waste too much  NBA money trying to fight piracy and other intellectual property issues.  We have agreed to disagree on this and other issues. It’s not a problem.  Nor do individuals who fall on either side of the copyright issue make their sports consumption decisions based on copyright positions.

Its a great thing that we all  just accept the fact that owners, leagues and fans can be on different sides of a variety of issues.  We love our sports and want to reserve a spot for them away from life’s partisan issues and problems. Thank goodness for that !

The problem with Rush is that its his job to take on all of life’s partisan issues and problems.  Not only is it his job to take on these issues and problems, its key to his success that he be very opinionated about whichever issues he feels are important to him and/or will cause his very large audience to tune in.  Given that we will never know what the “next big issue ” in this world that Rush will be discussing on his show is,  its impossible for the NFL to even try to predict or gauge the impact on the NFL’s business if something controversial, or even worse yet, something nationally polarizing happens. There is an unquantifiable risk that comes with the size of Rush’s audience.  The wrong thing said on the show, even if its not spoken by Rush himself,  about a sensitive national or world issue could turn into a Black Swan event for the NFL.

Thats a huge risk that is not commensurate with the value a minority investment in a franchise brings.

This isnt about Free Speech. Its about the NFL protecting their business.  There is no reason to put it at risk.  If Rush were to retire from his show, or become a local DJ in Sacramento, or just about anything else he may want as a vocation, then I dont think they would have any problem with him being an investor in a team.

Given the current set of circumstances, they would be crazy to approve him as an owner.

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The World Wide Leader in Sports is without question minor league when it comes to ESPN Dallas.

I only care about the coverage of the Dallas Mavericks.  From ESPN Dallas, its non existent.  Its hard to offer any coverage when you dont actually have anyone at the games.  Last two Mavs games. No local reporter.  Maybe the ESPN Dallas standard of coverage is to have their reporters watch the game on TV. IN which case I guess I should be happy since most of the preseason games  are on HDNet.

The Dallas Morning News on the other hand has the ever reliable Eddie Sefko and apparently is adding more coverage to the Mavs.

Maybe this newspaper vs internet thing is changing.  The newspaper is adding people who will actually attend games. The world wide leader in sports thinks its acceptable to not send reporters to the game and instead have them report from what they watch on HDNet.

The impact of this approach isnt just about the coverage Mavs fans get.  It also impacts the business decisions the Mavs make. We have already beefed up significantly the behind the scenes, interviews and game highlights video and reporting we offer on Mavs.com, and via a wide assortment of twitter options from our broadcast crew and others.   And we will continue to add more.

Behind the scenes it impacts who gets the “scoops”.  If we have just done something, trade, signing, whatever. Guess who gets the heads up email first ? The website with no one at our games, or the Newspaper/website with more than one reporter at our games ?

I hope ESPN Dallas decides to make a commitment to the Mavs, the more Mavs coverage the better. But until they do..

If you are a Mavs fan, diehard or casual, make your first stop Mavs.com and your next stop The Dallas Morning News, or just open up your morning newspaper.

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The only way to address executive compensation and the inevitable boom and bust cycles that will happen in perpetuity in this country is to finally recognize the difference between financial engineering and investing.  For some reason no one in any of our regulatory agencies seems to want to admit or deal with the differences.  Too much pressure from Wall Street ?

In any event, the following is  a post from a year ago. I thought it was worth republishing.

Let me get this straight.  In 2008, funds trying to squeeze out another basis point or two thought they were being conservative  buying insurance on heavily leveraged portfolios of sub prime loans and other debt. Once those loans started to default, it  created a cascading deleveraging event which lead to major financial institutions failing and the “smartest” minds on Wall Street being forced to dump everything to raise cash, which in turn lead to a crisis of confidence and deleveraging that created the worst week in the history of the stock markets. Did I get this right ?

In 1987, funds, trying to squeeze out another basis point or two thought they were being conservative buying insurance on leveraged stock portfolios. Once the stock prices on those portfolios started to drop, their insurance programs pushed them to dump everything AND sell stock index futures to raise cash, which in turn lead to a crisis of confidence and deleveraging that created the worst single day melt down in the history of the stock markets.  Did I get this right ?

Think it wont happen again ? Of course it will.  Whatever money the Fed makes available to  entrepreneurs and businesspeople will be used as intended, to create and grow businesses.

Unfortunately, it  will also be used by financial engineers to try to find a way to make HUGE profits from  highly leveraged,risk laden financial packaging. Why wouldnt they ?

If you can borrow  cheap money  , invest  in some asset that can be marked to an increasing market, borrow  against the gain and buy something else and do it as many times as possible,  wouldnt you ? Its exactly how homeowners In a bull market drove up real estate prices with a few making huge money.

If you could do the same thing, but instead of with houses, with stocks or asset backed securities, and instead of with thousands, do it with billions so you could profits in the 10s of millions or more, wouldnt you ?

Hell yes you would. You certaintly arent going to tell yourself that you could be creating the next big bubble that could rival 1929, or for future generations, would rival 2008, so dont do it. You would go for the money.

Which is the genesis of our problem in the US.  Its not wrong to run with bull markets and leverage to the hilt. That can be a very good thing. But we have to make the upside based on investments, rather than financial engineering. Which is exactly why we have to change our tax code. We want to encourage investment, not financial engineering.

The financial  markets  were originally defined as markets that created capital for businesses to start and grow.

Today, that is rarely the case. Sure companies do come to the markets for cash for growth and that should be encouraged.  But those examples are a tiny percentage of the market.  When a stock turns over its float multiple times in a day, those are not investors buying and selling the stock. Those are traders or financial engineers.

The ONLY WAY WE ARE GOING TO END THIS BOOM AND BUST CYCLE IS IF WE DIFFERENTIATE BETWEEN INVESTORS AND EVERYONE ELSE.

Investors should be rewarded for actually owning companies and gaining returns on their investments. Financial engineers should have to pay a premium for the risk they introduce to the entire financial system. It was not investors that brought on the last 2 crashes. It was the financial engineers.

The beautiful thing about this country is that we like to work hard, and we like to take chances. Unfortunately, over the last 15 years, the incentives have been to take chances as a financial engineer rather than as an entrepreneur. We give far more money to people who play games with financial instruments than we give to people who come up with ideas for the next big thing.  That needs to change if we want to remain a leader in this world.

Here is what I would do to change things

I would change to zero the taxes on any gains from the sale of stock or bonds purchased during an IPO and held for 5 or more  years. All dividends/interest paid by that stock/bond would be tax free. If you sell it prior to the 5 years, you are taxed at your personal regular income tax rate.

In addition, I would not allow the stock to be borrowed against in any way. If it was, it would be considered an effective sale. Which means you couldnt borrow on it tax free until you have held it 5 years.  Bottom line, if you hold the stock/bond , like a real investor would, you are rewarded for it.

For purchases  post IPO, in the open market,  the same rules apply, except I would tax a personal income rates the dividends/interest  for the first 5 years of ownership.

For all other transactions, whether they are options, derivatives, stocks, bonds, whatever, all gains and losses would be taxed at personal income rates.

If you are a great financial engineer and make tons of money at what you are doing, more power to you.If you are good at what you do, you pay more to Uncle Sam, but you still make a boatload of money.

I would keep taxes on private transactions, just where they are. Private transactions are less liquid and harder to value, which in turn makes them harder to borrow against. Which reduces leverage in the system and encourages investment. Its hard to financial engineers a private company. I would tax gains and losses in private companies at capital gains levels, but I would extend to  3 years the marker to not be considered a short term investment. I would keep the active vs passive rules.

Next there is the issue of leveraging. No one ever complains when cheap cost of funds creates leverage and drives a market up.  And no one ever will. So we have to set strict leverage limits. We set margin/leverage limits on day traders as the tech bubble burst. The only difference between the day traders of the tech bubble and the Investment Banks and AIGs of the world that cratered in this bubble is that the big guys started with more chips at the table. And they picked their own credit lines and there was no pit boss to watch over them. I would limit to 2x the leverage available on any asset that is insured by the government or is offered by any organization that is elgible for government insurance  or tax incentives of any kind.

Of course, I would still levy a fee of anywhere from 1c to 10c on every transaction of stocks or bonds which would go into a general fund, that I will call the “Oh Shit We Missed It Fund”. It will be there to fund the inevitable situation where someone figures out how to work around whatever regulations and tax code that is created.

As an entrepreneur, I can tell you that this would not change how I ever started or invested in any business. As someone who trades stocks, It would impact my investment decisions. I would only trade out of necessity. I would be willing to take lower yields on my investments, making it cheaper for companies to raise funding.

I also recognize that it would mean that the chances of the Dow ever hitting 14k in 2008 dollars is about as likely as my catching my elbow on the rim playing basketball. I dont think thats a bad thing.

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Ok, so here is the deal. I really, really like going to IHOP for breakfast. I go there all the time because they have this  omelette that only has 370 calories and I think it tastest great ! (especially with Salsa).  I liked it so much i tweeted about it a little while back.

So today, I went back again. Had the omellete and a large fruit bowl. Total listed calories, 480. Perfect. Tastes good. Low cal.

Then horror of horrors, the manager comped my breakfast.

He couldn’t understand why I was visibly shaken.  I thanked him. Left a $20 tip (i wanted to be able say I left enough to more than pay for the meal).  Then I immediately called my law firm of Bakem, Shakem and Takem and had them assign their best attorneys to figure this out.

I don’t know what my disclosure requirements are going forward and whether or not I need to fill out any forms.

Can I tweet about IHOP again after Dec 1st ? Am I under some special reporting obligation ?

Does any one have any connections at the FTC that can clarify things for me ???? I read this article, and I just dont know what to do !

Im open to all advice !!

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