Over the past few years, many of you have heard me evangelize the gospel of home carbonation. At work we’ve recently taken things to a new level, and I’ve had a couple of people ask me questions about it. As you can imagine, I’m delighted to answer them. But let’s begin at the beginning.

My interest is in making seltzer water — growing up we called it “bubbly water”, and my dad bought it by the case. I’m not sure why I like it so much: the slightly acid tang of the carbonic acid in solution? The cooling, quenching sensation I feel as the dissolved gas pushes the water out of my stomach, into my intestine and on to my bloodstream? I’m not sure. But I really like it.

Until recently, soda siphons were the only way to make seltzer at home. But the pricing doesn’t work: the tiny CO2 cannisters that power the things, while handy — my dad once told me that in his youth he used to stuff empties full of matchheads to create what must have been an awesomely dangerous projectile — are so expensive that you’re much better off lugging liter bottles home from the store.

My then-neighbor Rob Goodspeed was the first person I knew to have a Soda Club. It was during the golden age of PR flacks sending bloggers things for no apparent reason, and Rob had cofounded DCist, earning him rights to substantial swag. Most of these pitches were laughably inept either because the product was awful or the pitch was tone-deaf (as a technology blogger, of course I was the right person to email about custom popcorn flavoring powders). It didn’t feel like much of an ethical conundrum — it was all too stupid for that. But occasionally the flacks would succeed, and the original Soda Club was such a case. Rob was justifiably enthusiastic about the product, and as soon as I saw it I decided to buy one for myself. I’ve gone on to buy units for friends and parents and siblings, and I’ve talked many more people into doing the same. It’s a great product.

The company has since rebranded to SodaStream (I like to think our Club is no longer accepting new members), and is even publicly traded (as $SODA, of course). My original Soda Club carbonator is still going strong.

its operation is simple. You fill a bottle with a liter of cold water and screw it into the unit. You depress a button several times, until the overflow valve starts to make a horrible flatulent sound. The bottle leaves the machine with an infinitely satisfying chffff noise, like a tiny, refreshing alien disembarking from his pressurized spaceship. You’re then free to add flavored syrups (carbonating anything other than pure water is a big no-no). SodaStream is happy to sell you those syrups, of course — their Red Bull knockoff isn’t bad, and avoiding giant flat bottles of tonic water is worth some flavor sacrifices. But the last time I checked (2005) many of the other flavors were underwhelming. Oh well: soda’s bad for you anyway.

Even if you just want seltzer, you’ll need SodaStream to sell you replacement CO2. This was their real innovation: the carbonator units contain replaceable cannisters of compressed gas that are much larger than those used by soda siphons. A refill costs $25 or $30 bucks (there are two sizes — I strongly recommend the larger) and can either be delivered to your home or, as of late last year, picked up from most Bed Bath & Beyond or Ace Hardware stores. I go through two or three of the larger cannisters per year.

As you might imagine, there’s a bit of a markup on the gas. Quite a bit, in fact, though it’s still a great deal compared to the alternatives that used to exist. Still…

I work with a number of fellow seltzer enthusiasts, and more than a few of them are also people who don’t like the idea of business models based on lock-in. So once we had resolved to get a SodaStream for the office, it wasn’t long until we came across co2doctor.com.

Compressed CO2 is easy to buy, as I found out in college when I built a kegerator. Any welding supply shop will be happy to sell you the stuff — the good old boys in the Charlottesville shop asked if I was “makin’ some suds” (I was). And like any good industrial byproduct, it’s cheap: refilling one of tanks those guys use costs about the same amount as a SodaStream refill, but provides many times as much CO2.

SodaStream’s gas cannisters — they’re properly referred to as “bottles” from here on out — aren’t designed to be refilled with standard equipment. There are booby-traps built into the valves. If you want to use bulk CO2, you need to avoid those valves. You’ve got two options for doing so:

1. You can connect a CO2 cannister directly to your carbonator using the FreedomOne.
2. You can replace the valve on a SodaStream bottle, then use the FillStation to refill it.

Option 1 is appealing if you’ve got the space for it (SodaStream carbonators look good on a kitchen countertop; industrial CO2 cannisters do not). Our office chose the second option in order to make it possible for staff to refill CO2 cannisters for home use.

The option you select has implications for which CO2 tank you buy. If you’re carbonating directly from the tank (option 1) you need a tank that dispenses gas. If you’re refilling bottles, you need one that dispenses liquid CO2 — a so-called siphon tank, which connects the tank valve to the bottom of the cylinder via a sort of metal straw. Either type can be acquired, full, for less than $100.

Replacing the valve was pretty easy. Discharge the bottle fully by pressing in the valve pin with a pen (do this outside; wear glasses or goggles). Find yourself a vice, or a couple of friends with excellent grip strength. You’ll need a proper wrench, but once you have one the operation is easy: the valve simply unscrews. Replace it with the FreedomValve, using the supplied o-ring. Tighten it very securely.

Refilling the bottle is also easy. Once again: eye protection. Make sure all valves are closed. Connect to the tank; connect to the bottle. Open the FillStation’s smaller valve to flush any pressure in the bottle. Close it. Open the large valve on the tank. Open the large valve on the FillStation. Listen for satisfying whooshing and gurgling. The good CO2 Doctor is very insistent that you fill your bottle by weight, and that you never overfill it — but he also acknowledges that the laws of physics make it impossible to fill it to capacity using a mere siphon tank (as opposed to the exciting machinery that presumably exists at SodaStream World HQ). We weighed the bottle carefully and filled slowly, but we found that letting pressure completely equalize between the two worked just fine and left us within safety limits. Close the FillStation valve. Close the tank valve. Disconnect the bottle (there will be whooshing!). And for pete’s sake remove the FillStation from the tank, lest it tip over, break off the valve and turn everything into an episode of MythBusters.

And that’s it! At work Scott has crunched the numbers and determined that refilling bottles for home use will entail a $4 per-bottle fee. That gets you about 80% of a full charge — not bad! The $30 valve replacement will have paid for itself in just two bottles. But if you don’t have a group that wants to share a siphon tank, you might be better off using the direct-to-tank adapter (for a breakdown of cost recovery using that method, see this post). Or hell, just use SodaStream’s bottle refill service like a sane person.

It came out pretty well, I think. The boots are off-model, but that was mostly because the paint on them needed some more time before I could put stuff on it. And parts are secured with magnets! Ah, magnets.

I won’t bore everyone with an explanation of the character (I did quite enough of that last night) but if you like superhero comics and haven’t read Invincible, you really should. It’s sort of like a reboot of everything in the big two’s universes, but without the inevitable backsliding.

I originally posted this the night Steve Jobs died, then pulled it down the next morning: I hadn’t changed my mind about its contents, but had thought better of speaking ill of the dead. A number of people saw it in their RSS readers anyway, and enough of them have sent me notes encouraging me to repost it that I decided I would.

I’m sorry the man is dead. I’m sorry when anyone dies. He accomplished a lot; he made my life better.

But Steve Jobs’ life is a tragedy. Read this interview. And this one. Jobs was a man who understood the problems facing our society. But he was also a man who canceled all corporate philanthropy at Apple upon taking control; who cited profitability concerns as the reason, but who didn’t reinstate those programs even after creating the most valuable technology company in the world. He was, it seems to me, a man who wielded incredible power, but who chose to devote himself and that power exclusively to the creation of beautiful, perfect consumer objects. A man who seemed frightened of trying to address real problems directly.

I think he was absolutely nuts.

Bill Gates might be responsible for foisting a worse operating system upon the world, but you can’t deny that he behaves like a conscientious human being.

In the past I’ve been vaguely aware that the Booker Prize list was a good source of reading suggestions, and also that people gamble on it, which almost makes reading seem cool (obviously it’s not, if any kids are reading this you should probably be off learning to smoke instead). But this year is the first time I’ve had an informed opinion about the books that are up for the prize. Well, the ones on the short list, anyway: I’m not a particularly fast reader, but I happened to make lucky guesses when I decided to read some things from the long list. When the short list came out, getting through it seemed surprisingly achievable, thanks in part to all the shows I’ve been watching on Netflix settling into storylines that I found unwatchably depressing.

So hey! Let’s blog about it, since that’s something I’m trying to do more of:

• Though it’s not the quote-unquote best of these novels, I had the most fun reading The Sisters Brothers — man, do I ever love westerns. Reluctant killers! Lonesome dignity! It’s all great, and if you liked Deadwood or Blood Meridian or Unforgiven you’ll probably like this book, too.
• I think Snowdrops is being turned into a movie and I imagine it’ll be a pretty decent one, like The American or The Ghost Writer or any of those Graham Greene or Le Carre adaptations that sort of make you remember how great the Jason Bourne movies but also allow you to pat yourself on the back for being so much more sophisticated than all that (which compensates for how much less bored you’d be if you were watching Matt Damon beat the hell out of some guy in a customs office). The book itself felt a little thin, but since a lot of my friends are Russophiles I won’t hesitate to recommend it. This is one of the few on this list I own as a physical artifact, too, so if anyone’s interested in borrowing it they should let me know.
• The Sense of an Ending is beautifully written, but meditative and depressing. This book has got a lot of contemplating-a-life-lived-and-going-”meh”. Maybe that’s the kind of thing I’ll want to read when I’m contemplating my life (lived). But I sort of hope not, and it certainly isn’t the kind of thing I want to read today. Still, this is a undeniably masterful novella and if it wins I wouldn’t be surprised (having just checked the odds after writing the non-parenthetical part of this sentence, it seems no one else would be surprised, either).
• Jamrach’s Menagerie is the worst of the lot. It’s pretentious and melodramatic and hasn’t got much of a plan or a point. It did make me tear up at one point, but that’s because I’m a sentimental idiot. Also: it’s about a doomed sea voyage, not a menagerie, and only barely includes a guy named Jamrach. The author seems to think that Moby Dick was great, and you know what, she’s right. Read that instead. (Also: yes, yes, the actual titular menagerie is the motley collection of characters, or whatever. Bah.)
• Half-Blood Blues is very good, but the narrative voice was a little hard to take. The protagonist is supposed to be a world-weary Baltimore jazzman, and his conversational, dialect-filled means of speaking is how the story is related to the reader. But it’s a little strange to be constantly dropping pluralization and contractions, only to turn around and describe a waking bandmate’s eyelids as “fluttering like moths.” Do jazzmen speak this way? Maybe I’m being unfair to jazzmen, but I doubt it. For the record, I am completely on board with the idea that someone can speak in vernacular while still having a rich inner life. For instance: I sometimes say “y’all”, yet I still care deeply about composing rambling, grandiloquent humblebraggy blog posts about the novels I’ve read! But I feel like some separation needs to be maintained. Edugyan’s decision to allow vernacular into the narrator’s sometimes-ornate inner monologue didn’t ring true. On the other hand, this is a lovely book about jealousy and rivalry and friendship, and the action is set against the fascinating backdrop of the jazz scene of Berlin and Paris at the start of WWII. It’s a well-executed, graceful book, and if you aren’t bugged by the narration you’ll probably really like it.
• Speaking of narrative voice: I am kind of shocked that Pigeon English is not the favorite to win. The book’s success is an inspiring true story, and its content is a tragic true one, for one thing. It’s also just kind of amazingly good. The story is presented in the voice of its ten year-old protagonist, and the feat is pulled off perfectly. I have serendipitously gotten to know a kid that age over the last year; if I hadn’t, I’m not sure I would’ve believed how crazy and simple and wonderful PE makes their minds out to be. But that’s what they’re like! It’s probably torture to be around one for more than a couple of hours, but spending a few hundred pages in one’s head is a surprisingly rewarding experience. I think this is the only book of the six that’s going to stick with me, and I hope it wins.

Anyway, as you can see I’m toying with the idea of having opinions about novels instead of opinions about music, as I’m now super-old and it’s all just noise anyway (young people! so awful, right?). If you feel like joining me in this endeavor you should consider signing up for Goodreads, which is kind of a terrible site but seems like a useful way to subject yourself to social pressure to read more and better books. Kay alone has probably shamed me into reading an extra thousand pages this year.

While I’m posting an inexplicable amount, let me just say that I appreciate Matt’s response to my post about Dylan Ratigan’s proposed ban on money in elections. In principle I agree that public financing could help with this problem. In practice, I think it’s very, very rare that campaigns feel they spend beyond the point of diminishing returns (you do occasionally hear this about particular states or markets, so it’s possible, just rare). That means that raising outside money will still be perceived as an advantage, which means politicians will keep doing it. Public funds might just inflate the prices of things that campaigns buy.

But hey, maybe not. I suppose the elasticity of fundraising behavior is the real question here (it might even be one that could be empirically tested). Perhaps easier money would help, but I think there are reasons — mostly having to do with the culture of Capitol Hill — for doubting it.

I had a little bit of back and forth with Tim on Twitter about Solyndra and loan guarantees. When I first came to Sunlight I worked on Subsidyscope, and while I wouldn’t want to claim deep expertise on the subject, it’s certainly the case that I used the phrase “loan guarantee” several thousand times more frequently than the average pre-Solyndra American. I have no interest in defending Solyndra or the specific decision to subsidize their work, but I think at least some of the interest in this issue is driven by genuine confusion about this subsidy type and not cynical partisan scandal-seeking.

Subsidyscope has a great explanation of how loan guarantees work; you should have a look at it. But wouldn’t it be wonderful if there was a metaphorical version available that was full of folksy nonsense? I thought so, too.

So let’s say the government needs some dynamite. Maybe Capitol Hill has some stumps to clear; maybe the Vice President is going fishing. Whatever the reason, there’s a problem: the market isn’t supplying enough dynamite for what they have in mind. In fact, a 22 year-old intern at GAO has recently estimated that we will need the output of fully three more dynamite factories to reach the necessary supply level (though he is also quick to point out that all of his input data is of terrible quality; that dynamite experts express varying opinions; that more research is necessary; and, of course, that Challenges Remain. His report does have a rather nice introduction about the history of governmental involvement in the explosives industry, though).

Fine, maybe we ought to build some dynamite factories. Not so fast! Each factory costs $1 million, which also happens to be the entire amount available at current GSA fishing trip reimbursement rates. That won’t get the job done!

Luckily, the market can help us out. It turns out that there are businessmen interested in building dynamite factories. The problem, as any dynamite entrepreneur will tell you, is that any such a factory has a 25% chance of blowing up shortly after the ribbon-cutting ceremony. Unfortunately, the current state of the market makes this an unacceptable risk, what with all the regulatory uncertainty and undocumented workers and job-killing health care bills and whatnot. The businessmen wish they could help, but right now there’s simply no way they can justify building those factories. If a factory exploded, its owners would be ruined.

“Aha!” says the government. “I know what we can do! We’ll just pick the four most promising dynamite factory proposals and tell their authors that if they go ahead with building, we’ll promise to cover the cost of their investment if their factory explodes.”

With this guarantee in hand, the businessmen proceed. They build four factories. One explodes. Whoops! Don’t worry, no one was hurt and it looked pretty rad. Uncle Sam cuts a check and everyone’s happy. The government has now spent a million dollars and gotten the three factories it needed. Nice! If they had tried to build a factory themselves, they could have only afforded one — really, three-quarters of one, since it might have blown up (some say government-built dynamite factories are even more prone to this defect that those of the private sector).

So this is the idea: that the government can offer guarantees that tip unacceptably risky — but not totally foolhardy! — economic activity over into the realm of realization. The government is using its unique powers to shift risk instead of shifting resources directly. Sometimes shifting risk can allow money to flow through the economy in new and desirable ways. And it’s often dramatically cheaper than spending funds directly to achieve the same result.

In some ways this is a very efficient way to spend subsidy dollars. In others, not so much: you’re picking winners, you’re shoving money into the finance system where some will be skimmed off, you’re relying on risk estimates which sometimes just aren’t that good. CFDA.gov lists 68 such programs right now; here’s one that helps build ships and shipyards. Here’s one that subsidizes the purchase of Boeing aircraft (note that in this case the default costs are balanced by gains from interest on successful transactions).

I haven’t followed the Solyndra story very closely, but my understanding is that changing market conditions overtook their business very rapidly. The financing pipeline supporting them should have noticed this and shut down but didn’t, either because of bureaucratic inertia or special favors or both. That’s unfortunate. Luckily, the government’s total exposure is likely to be much less than the $500 million face value that’s being widely cited, and the final cost of the program that administered the loan guarantee is likely to be a small fraction of the face value of the lending it enabled.

All of this is a separate question from whether the government should be intervening in the economy in this manner. I think that’s a conversation worth having. But it should be a conversation about programs, not transactions. To focus on one failed loan is a bit like pointing to a lottery winner and saying, “That’s how they think we’re going to pay for our schools — by handing out checks? What a bunch of dopes!” But of course this ignores the bigger picture. Perhaps there is a problem with that lotto payout, but that’s a different and frankly less important issue than whether it’s wise for the government to run a lottery. This is why the intense focus on Solyndra strikes me and many others as a transparently partisan feeding frenzy rather than a considered discussion of energy policy.

I’ve noted before that it’s a bit horrifying. If you haven’t read this essay about it, you should. The plotting that the author relates is very similar to how a Zynga employee explained his work to me.

Usual disclaimer: I’m not speaking for my employer.

Matt wrote a post keying off of Dylan Ratigan’s proposal to outlaw money in politics. He doesn’t see the point of it:

Like let’s say you’re Elizabeth Warren and you want to run a campaign against Scott Brown. How do you pay your campaign manager? How do you let people know that you’re running? To me, this doesn’t solve the problem that when Washington regulates the financial system, it’s dependent for expertise on people with ties to the financial industry. It doesn’t solve the problem of the revolving door. It doesn’t solve the problem that politicians need the “legislative subsidy” of lobbyists to do policy analysis. Nor does it solve the problem of monied interests exercising disproportionate influence over think tanks, advocacy groups, or even (through speaking fees and the like) journalists and pundits. Presumably the people who make the F-22 will still be allowed to advertise about how high levels of defense spending are awesome, just as ExxonMobile will still be allowed to advertise about how fossil fuel extraction is the road to prosperity. You’ll have created some big new logistical hassles for political campaigns without, I think, addressing any concrete issues.

I don’t watch Ratigan’s show, so I don’t know for sure, but I would be surprised if he was pitching this proposal as a way to end lobbying as a legislative subsidy, much less as a means to address the revolving door problem. And of course there won’t ever be a silver bullet that makes money completely irrelevant to the political process.

But, contra Matt, I think it’s easy enough to see Ratigan’s motivation. In the absence of contributions, campaigns would have to deprofessionalize and rely to an even greater degree on motivated volunteers. An optimist would say that this might produce less homogenous candidates and campaigns, but you could easily make the case that it would just entrench the electoral power of crazy old people.

On the legislative subsidy front, well-funded lobbying campaigns would no doubt still yield results. But it’s not crazy to think the situation would be improved if corporate lobbyists were competing for legislators’ attention with public interest NGOs on a level playing field. Matt says that “it’s too difficult for elected officials to get expert technical opinion on issues without relying on interested parties,” but outside of the government itself I’d say that avoiding interested parties when seeking advice is pretty much a non-starter.

I think the most compelling argument for defunding elections is that it might select for a different class of politician. I’ve read estimates from retired congressmen that put the share of their time spent fundraising in the 30% range. That’s insane. To endure the rigors of constantly begging wealthy supporters for large sums of money — to say nothing of excelling at it — must require a very strange set of skills. I suspect that those skills don’t relate much to aptitude for governing. And I suspect that that time investment comes at the expense of other duties. I’m not naive enough to think we’d have a wave election that stuffed Capitol Hill with policy experts. But perhaps we’d get a few, along with some better orators, coalition-builders, horse-traders and glad-handers.

To be clear, it’s obvious that Ratigan’s proposal is mostly about making good TV (a nobler motivation than most proposals to amend the Constitution). And I don’t want to pretend that it wouldn’t carry substantial problems. Offhand, it seems very likely that, short of explicit restrictions on political speech, this policy would just formalize the de facto requirement that candidates be personally wealthy; celebrity candidates would be massively empowered by their name recognition; the press’s political coverage pathologies would become all the more problematic as their role in conveying campaign messages increased in importance; turnout might drop, leaving an electorate that behaves more like primary voters, selecting for politicians with more extreme views; and the whole thing would be an enforcement nightmare.

Still. It’s hard to escape the sense that federal politicians have become so professionalized — so good at the game they play, so aware that the incentives they face have little to do with the quality of governance they deliver — that we’re all beginning to suffer for it. I’m not sure there’s a solution to this problem short of a societal collapse and reboot, but it’s easy to see why an optimist reach for a different answer.

Matt pointed me to this post, by Matt Rognlie, as an argument against my previous post‘s a la carte pricing dreams.  I’ve seen this pro-bundling argument before, but I’m not swayed by it. Still, since I now have several people who are smarter than me about economics telling me I’m wrong, perhaps it’s best to spell out my objections here rather than via sputtering, half-formed tweets.

Unbundling might be desirable even if it reduces efficiency in dollars per entertainment program available. It might be desirable even if it raises the price per entertainment program consumed!  As you might’ve guessed, what follows will have more than a whiff of paternalism about it. I know that some people feel that so long as a dollar isn’t spent on a drug raid, a war, or some other destructive purpose, the appropriateness of its use shouldn’t be questioned. I’m at least a little bit sympathetic to that view. Still, I think the TV industry has understandably structured itself in a way that maximizes television consumption (in both dollars and time–but mostly dollars), reaching a level above what most consumers would prefer. I think the industry has been able to do so because of various limits on competition. Consequently I’ll be glad to see its size reduced, even if by some measures the result is a worse deal.

It’s obvious that we have too much television.  This should be apparent even if you consider me a snob for thinking society would be improved if Repo Games were disappeared forever (and, ideally, its creators imprisoned). The still-recent advent of high-quality time-shifting/on-demand technology removes 24-hour programming as a requirement for television outlets; and allows content, free of time constraints, to be efficiently recycled to viewers who previously couldn’t watch it. This should have allowed us to dramatically reduce the amount of television that’s being produced and sold while keeping viewers’ satisfaction constant. But of course that didn’t happen[1].

Now to Rognlie’s argument. While in broad terms the windfall of utility from infinite supply born of zero marginal cost seems like it should dwarf any fixed costs, in practice — at the level of an individual subscriber — it seems as though the utility we derive from additional television consumption and variety falls off quickly. Netflix streaming’s success — despite wide acknowledgement that its selection is poor — speaks to an appetite for satisficing behavior in this area, doesn’t it? Most people would agree that there is a lot of garbage on TV and that they are paying too much for it. I appreciate that Rognlie’s argument anticipates this, but in practice it seems doubtful that everyone will have perfectly idiosyncratic views about what that garbage is in the way that his parks example supposes[2]. It seems like there are good reasons for thinking that we are investing more resources in television production than a real market dynamic would afford.

I don’t like Rognlie’s use of parks. I think it’s an appeal to emotion, and that it ignores parks’ function as a means of progressively redistributing resources and as a source of positive externalities. The metaphor that’s more commonly applied to the cable industry — correctly, I think — is an all-you-can-eat buffet[3].

The buffet business model allows for a lot of variety in dishes, but at a low level of quality.  Diners will be stuck cross-subsidizing one another in fairly arbitrary ways, and may face incentives to overconsume as they draw near the grim end of their personal utility functions.  Decisions about how to allocate resources within the restaurant will be made in a way that’s only vaguely connected to market signals; to the extent that those decisions reflect diners’ preferences at all, they will probably be plagued by selection effects.

Buffets suck. They’re a bad deal for almost everyone.

Right now the home TV industry gives consumers few non-buffet choices. I think that’s likely to change, that it’ll mean fewer total resources will be directed toward the industry, that consumer satisfaction with the programming they buy will increase, and that that will be a good thing.

[1] There’s no reason that consumer satisfaction would have to remain constant, of course. But in a real market you’d expect consumers to be able to take the gains from this type of innovation either as consumption or by saving money while keeping consumption constant, right? The television vendors’ market power means that this latter scenario is not an option; gains have to be taken as consumption. The falling share of per capita hours spent on TV suggests to me that consumers would prefer to allocate this windfall differently.

[2] And in practice it doesn’t seem as though the proliferation of channels really has afforded the kind of utility-enhancing long-tail variety that a la carte opponents suppose.  Not to get all Current TV on you (assuming Current TV still exists), but economic and cultural realities have led to each new channel  just carving out tiny new “lifestyle” niches in the same suburban, straight, white, consumerist orientation. The model can’t even support a music video channel, for pete’s sake, or programming for huge market segments (women! black people! hispanics!) that isn’t an insulting, low-budget joke.

[3] Food has a real marginal cost, of course, but the price of cranking out one more steam tray of crappy lo mein is minimal compared to the operation’s fixed costs (which, for this argument, include the costs of adding each new menu item). And in most cases adding another menu item won’t push a diner to consume more in absolute terms; it’ll just improve the diner’s lot by providing them with more variety, shifting how they allocate their choices prior to getting full.

It’s not often that I disagree with Tim Lee, so let me relish this.  I think Netflix is being smart!  Or at least not-that-unwise. Tim casts his argument in terms of movie availability, and from that perspective he’s probably right: the DVD-only Qwikster (or however you spell it) might have a bit less leverage in amassing movie libraries than the currently-unified Netflix (then again, it might not; as far as I know Netflix has only committed to splitting its brand and customer base; the two entities might still sit together at the bargaining table).

But I think this fails to recognize the ambition of Netflix’s plans. They’re not competing with Blockbuster, or Redbox, or jeez, who is even in the movie rental business anymore?  They’re now competing with DirecTV and Comcast, first by agreeing to sell consumers video content by the ounce instead of the unwieldy, one-size-fits-all sacks of the stuff that the cable companies insist upon.  Second, I imagine they’ll begin riding the inevitable logic of a la carte pricing to its conclusion, making more deals with both marquee and low-cost cable channels, allowing customers to add that pre-time-shifted content to their lineups for a couple of bucks a month.  Netflix is also pursuing original programming, establishing itself not only as a cheaper, higher-tech and more convenient disintermediating marketplace for television, but as an exclusive provider of certain high-esteem shows (imagine if they do manage to land an exclusive on one Mad Men-style success…).

To Netflix customers who mostly think of the service as a way to get movies, I can understand why today’s move seems dumb.  But as someone who mostly thinks of the service as a way to watch television shows, it makes perfect sense.  And of course I’m delighted to see a business/tech innovation achieve what the cable/satellite market and federal regulation could not: a la carte programming and the consignment of cable network operators to a bulk-bandwidth-vending fate (I’ve been saying for a while that the natural monopoly implied by the physical realities of cable systems means that they ought to wind up as utilities, every bit as boring and regulated as the water company; I think the net neutrality fight is best understood as the death throes of an industry that, understandably, doesn’t want to be in a commodity business).

I think that this shift means that your Netflix bill will inevitably get more complicated as new option plans are made available.  That by itself is a pretty good reason for isolating the DVD-by-mail side of things; those customers want different things, and the situation was already getting confusing.  And I think the move really will free the company to concentrate more on the streaming product (I expect that they’ll soon be pushing for more uniformity in the interfaces to the service that various integrated media solutions provide, for instance). The poisonous rage of the network operators that carry those streaming products’ bits remains a real threat, but if Comcast & co. can be successfully coaxed into a gentle senescence, I think the future of a net-only Netflix is bright.

INCIDENTALLY: I think all of this can be understood as a huge indictment of Apple.  Not that iTunes hasn’t been a big success, but they’re retreating from the rental/streaming market.  They never quite managed to move past thinking of the service as a content-supplier/”we have legal content!” validator for Apple hardware products, nor to meaningfully relax their quality standards (well, except for the iTunes software, of course) in order to compete for the market segment Netflix pursued. It’s ludicrous that new receivers don’t come with big “iTunes-ready!” stickers on it; that stereo equipment manufacturers have to play catch-up, begging Apple to let them provide iPod support. It’s flat-out insane that Airplay is a closed standard, its proprietary nature used to help prop up a consumer router business.  A fucking consumer router business!  If ever there was a market you wouldn’t want to be in… At any rate, it’s a reminder that even Apple misses occasional opportunities.  And note that I say all this as a mostly-satisfied Apple TV owner.  They settled for a lucrative niche when entertainment industry world domination was within their grasp.