Tag Archives: Netflix

Is 2015 The Year Of Hope For Net Neutrality?

As we have entered a bright, shiny new year, 2015 has us looking forward with hope and wonder about what BIG events will alter our futures the most. I’ve been thinking (and hoping) for quite a while that the most influential technology and business event of 2015 will be the solution of the Net Neutrality conundrum.  I inserted “hope” above because I don’t think it’s going to resolve itself anytime soon, but there is a huge amount of success or failure relying on a resolution.

Part of the problem is the confusion about whose responsibility it should be in the first place.  I don’t even claim to know all of the intricacies, so forgive me if I come across as naive in trying to simplify. There are certainly many (like Nick Castelli) who have different takes and do decent jobs of laying out what’s at stake. You can always do more research and come back to straighten me out…

To me, one of the main issues stems from the following:
In the United States, laws were set in place that – when telecom companies laid down cable, fiber, networks, infrastructure, they need to allow other companies to make use of their infrastructure. The companies using the infrastructure may be paying to use the pipes, but it was found to not fully cover their part of the costs – especially when they are able to offer services utilizing those infrastructures at a lesser cost than what the bigger companies paid to have them laid in the first place.  What happens is that any incentive to upgrade services is diminished because competitors can utilize those very same upgrades almost immediately with no capital expenditure. Because of this, you can find areas in major metropolitan cities who don’t have fiber network access and, therefore, slower connections than individuals or businesses residing just blocks away.

On the other side, we consumers don’t want to pay more to get the things we feel we’re entitled to. As has proven  lately, this is great when there is an entity willing to foot the bill (i.e. advertising supported) but not so good when the financial support dwindles so as to be inconsequential. This leaves entities searching for other forms of revenue – whether it be only providing content by subscriptions or fees.

Companies are jumping into the fray from left and right to serve the needs of the public and businesses via the internet – with huge distribution expenses offset by existing infrastructures. The concern is, the longer the lack of clarity continues, we’ll be seeing more executives like Reed Hastings of Netflix paying ISPs for a perceived fast-lane from one hand while lamenting the position ISPs are putting us in on the other. The confusion leads to many disjointed decisions that look to solve current issues (fleeting as they may be) and, perhaps, setting bad precedent for the future.

Ultimately, the question of Net Neutrality is much broader than who raises prices and who gets stuck with the bill.

Going to the basics of broadband, there have been studies on the effects of faster internet connections on the GDP, education and society. In 2013, Ericsson published a study with Chalmers University of Technology and the Arthur D. Little organization that pointed to a direct growth in GDP of 0.3% based on the doubling of broadband speeds between 2008 and 2011. Beyond the growth in GDP, there were other bumps that benefited society in ways that are harder to quantify.

Property of Ericsson, Chambers University and Arthur D Little. From the 2013 publication, ANALYZING THE EFFECT OF BROADBAND ON GDP.

Property of Ericsson, Chambers University and Arthur D Little. From the 2013 publication, ANALYZING THE EFFECT OF BROADBAND ON GDP.

In some ways, I question the wholeness of the data based on the years they were measuring.  For instance, South Korea had already installed a phenomenal broadband infrastructure that was inexpensive for it’s people and provided speeds far beyond most other countries. One example of the difference was illustrated when, in 2006, I was checking paid media creative maximums in many of the key countries I was working with around the world.  In the US and UK, the heaviest K size for standard banners was 12Kb.  In South Korea, it was 400Kb.  The reason is because their pipes were so wide, 400Kb needed as little load time for their consumers as it did for consumers in the US, UK, DE and most others. But, even in its simplest form, the study proves a point that there is much more benefit to fast connections than just being able to watch movies (or make more money for the ISPs.)

Now comes the part where my naivete or idealism comes into play – the truth is, I’ve been trying to find alternative solutions in my own head since before the United States Supreme Court struck down net neutrality rules in January of ’14.

As broadband is key to growth for any country – not just for GDP, but education and society as a whole, it seems that there needs to be a solution that the government foots most if not all of the bill. I get that there should be a true opportunity for industry to grow and not be dragged down by the masses, but in this age, the hottest commodities are digital solutions and the distribution and development of those products.

We usually get into trouble when we bring up politics and not just because of its divisive nature. It’s because politics has become more of a game of sportsmanship trying to move everyone toward their ideal – whether it be governmental or industrial. We can’t have our cake and eat it too.  We can’t abolish Net Neutrality AND feel that we are doing a service for the greater whole.  The wealthier will be able to pay for and get what they want and the large corporations will be able to quash the opportunities for upstarts to make a mark on any given industry.

Until there is clarity on the future (or not) of Net Neutrality, industries will be stunted in their ability to set strategy on how they address their business models and digital distribution of their product, content, marketing, communities and much much more.

With all of that being said, the ISPs should be paid to deliver the required broadband infrastructure that allows for as good of Net Neutrality as we can hope for. The government may be the only entity that can “afford” to pay for this deployment and convey whatever modicum of impartiality they attempt to convey at this point. If that doesn’t happen, 2015 will just be another year on the road to removing hope for most visionaries, innovators and hard-workers about reaching their dream (American or other.)

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Music On The Fast Lane To The End Of The Free Internet Highway

At the end of last week, Google’s future plans for music video subscriptions on YouTube were made more generally known. The coverage in SFGate lays out the details and concerns quite nicely. I’m certainly not the only one who has been touting for a while that fee based content is where the internet needs to be headed in order to sustain itself – but it will take the larger players (beyond news sites like the NY Times and Washington Post) to fast track the shift.  In music, there’s already numerous digital subscription and purchase models. But, even including Apple, there’s no huge previously-free internet platform that has made the transition in the music space to turn us toward the end of the free internet highway. That is until now – if Google moves forward with their plans.CIMG0131

I think YouTube will run into many of the issues they currently have with their subscription business from a consumer perspective because so many are already used to that platform’s free offerings.  I do find it interesting that they are putting the squeeze on content providers by making it that they are either all in or completely out – and I have no idea how favorable or unfavorable those terms are. Either way, it seems like they are trying to play hardball with the music industry in the same way Amazon is.  Amazon pounds away for favorable terms on disc or download sales and then comes back every 10-12 months pounding away for more.

Whether it’s about bandwidth or subscription, the days of the internet being “free” are numbered. On another side of the online content play – but completely related – I’m bothered that Reed Hastings is complaining about bandwidth issues and then going around and paying everyone to enable Netflix to come through unfettered, I get his business perspective in that he’ll be able to charge more down the line while “claiming” that he “fought” it all along.

With that model, I do see a time in the not so distant future that Google products like YT, or dare I say even search, will start charging for a fast lane or specific content…

Privacy Irrelevance?

Another season and another Digital Hollywood ended yesterday and is officially in the books. While there were a couple of recurring themes – social, Netflix, Big Data, social and social – one of the larger “Eureka” moments was the clarity on the idea that debates on privacy and social or browsing are somewhat irrelevant. It is pretty much a foregone conclusion that conversation will come to Privacy when discussing Big Data and the growing opportunity to gain insights from the many bits of data collected on every one of us.  One stat bandied about was that most adults already have amassed 2-3 Terra-bytes of data and will continue to drive 1TB for every year forward.  When you think about that on its own – along with the omnipresence of tracking-enabled products from entities such as Google, Microsoft and others – there is more than enough reason for people to have a growing concern. But, when you get down to the nuts and bolts of it, those concerns of relevant to the invasion of personal privacy might not be what they seem.

Image

There are a few elements to consider when determining how concerned we should be about Privacy:
– The make-up of the data packs,
– The proper use of that data,
– User Differences by Generation,
– and what should be done to protect ourselves.

Before getting into details, the company line across the board is that security of data is of the utmost importance. But, as we’ve seen, that accounts for little to those who really want to breach security – just ask the US Veteran’s Administration, credit card providers and, just last week, Living Social (whose data was breached to the tune of 50K users’ information.) In all of these examples, None of these examples are tied specifically to social activity, or browsing history, or targeted advertising. When the politicians or privacy experts start railing against privacy in big data for use in targeted media, remember that.

The Data Packs

Those TB of data per person mentioned above is a LOT to parse through on an individual basis. It’s effectively counterproductive to draw up pictures of individuals for targeted media as it’s too much work to get to the numbers you need for an effective campaign. In the case of Big Data, the data packs need to be broader in order to be effective. Could some government look to use the specific data for nefarious or “1984-ian” means? Sure.  But remember, credit card companies have effectively had more telling data on us over the past  40 years.

The Proper Use of Data

When you poll most people about their use of the web and mobile, the majority will say they are sick of ads that have no relevance to them.  As those data packs come into play for more targeted media plans, people will receive content and advertising that is more aligned with their interests.  As long as that placement is not uncomfortable or “Big Brother” like, most people will find those well targeted pieces beneficial and the content distributors/advertisers will appreciate their optimized impressions.

Generational Differences

The general perception of the older generation about the younger one is that of disbelief about what people are sharing about themselves. A simplified perspective on the difference in generations is found when looking at mobile; the Brick phone (Motorola DynaTAC 8000X) was introduced 30 years ago and mobile phones that were cheap enough and small enough to sort-of fit in pockets were introduced 20 years ago. Those who are in college or just graduating high school have never been bound to their homes in order to communicate with others who were far away. That difference is just one of many leading to a completely different consideration of privacy.  In fact, ever since any one of us got our first mobile phone (or credit card, for that matter), we should have been concerned about privacy for that matter.

Which brings us to the second part of this element and leads to the next one. What do we care to share and what don’t we?  The beauty is that each platform provides the choice of participation and security settings. The sad part is that some make it harder to refine security settings than others. It comes down to personal consideration of how much benefit one can derive from the information they are sharing. And, looking into the future, everyone needs to consider what they can stand to have on on the internet in perpetuity.

Many older generations question youth (Millennials) and what they share, but shortchange youth on their social intelligence and savvy. As these mediums are ones that they’ve never lived without, they intrinsically have a better beat on how to get around things.  That could be in the platforms they use. Or, the act of children leaving their mobile phones at a friend’s house during a “sleepover” while they head out to have fun. Or, self censoring what they share and how they share it.  In all cases, young and old, we can’t really control who we share it with. Leading us to…

Protecting Ourselves

Just as we wouldn’t step into the street without looking both ways, we shouldn’t be interacting via digital platforms without recognizing where we’re going.  And, just as we can’t decide not to cross the street just to alleviate risk, we can’t disconnect from all devices and still hope to remain connected and vibrant.

Marketplace Tech from American Public Media ran a segment this morning that illustrated exactly what we can learn from the younger generation (listen to the audio as it is not in the text.) While most of Jeremy Hobson’s interview with New Jersey high school students focus on the platforms they use and why, they do end with suggestions for “their parents.” Those suggestions convey exactly how this younger generation understands exactly what the long-term effects of sharing and data are.

That request is that parents need to consider what images they post of their kids as there could be nothing more mortifying than seeing images of yourself as a child on a beach popping up when you are 17.

In the end, the concerns about privacy in the era of Big Data are effectively moot as that ship has already sailed. As systems and algorithms are refined, people (or users) will find content served up to them where they will consider seeing irrelevant content to be as annoying as being tied to the home phone or digging around for coins to feed the payphone.

All through time, the conveyance of personal information has been a personal decision.  Those who want to be more secretive work hard to do so.  Those who don’t care, don’t. The only thing that has really changed might be what people consider to be truly personal information and how that information is used.

In the past, we didn’t have the bandwidth to parse that information to target at scale. Now we do.  There are certain sensitivities we have to be conscious of, but as the interview with the high school students shows, those concerns about data privacy are becoming less and less relevant.

Netflix Brings A New HOUSE OF CARDS To Viewing And Measurement

With the Netflix release of their entire 13 episode first season of HOUSE OF CARDS today, it opens up solid discussion on many levels.  The biggest buzz is related to the mere fact that they are making all of the episodes available from day one. There’s grumblings about spoilers and the effect on social media. In the end, Netflix is being quite smart about releasing all in one day, but it’s not all that groundbreaking. Hopefully, its how they treat it after the release that’ll be groundbreaking.

HOC

We’ve seen all episodes of a season released before in a show’s Home Entertainment window, but those episodes had already aired.  We’ve even seen marathons on cable networks to entice new viewership – I’ve even picked up some current faves through that sampling – but, again, its all old content. What is different is that the larger release is all new original content. So, what can Netflix glean from having everything go out at once?

Absolute metrics.

None of the examples above can fully track all of the variables…

Netflix should be tracking all of the outgoing and incoming information. Whereas other shows with breaks between airings can not attribute exactly what caused drop-off in viewers (and takes 2-3 weeks to start getting the data to figure it out.) Netflix will be able to see how people like t by how quickly they get into the next episode. They’ll even know what times of the day their marathon-style viewing occurs.

If they’re smart, they’ll be able to draw conclusions about viewers and what types of shows to suggest based not only on genre preferences, but on the “marathon” ability. Some people just like to binge view.  Some like to spread it out and have something to look forward to. And some people can only view in holes in their schedule. Netflix will be able to garner deep insights that they might not have been able to before because they never had a case-study based on exclusive original content viewing.

Soon enough, they’ll have a strong enough sampling to determine quickly whether the show warrants another season order.  How many creatives in Hollywood would love to have the opportunity to know the viability of future seasons as quickly? Where it used to take 4-8 weeks of a season to truly know if you’ve got a hit, you could know in a week if the sampling is there.

While Hollywood Reporter’s Tim Goodman shares his concern about how social media might unleash inopportune spoilers, we’re already at risk due to DVRs and the time shifting of our favorite shows.  If people haven’t figured out how to shield themselves, it probably doesn’t matter to them anyway.

Looking more deeply at social media, Netflix should look to glean as much information as possible from when people are tweeting or posting. This “controlled” release environment provides further opportunities that just don’t usually exist when releasing shows, movies, whatever. To be able to review social to see when the most chatter happens by episode or time of day or completion – when you know the exact release for everyone is invaluable.

As Netflix is doing something new in this controlled environment, it allows them to delineate best practices in a way that traditional television cannot.  Whether traditional TV viewing is disrupted by news, sporting or natural events, there are always variables that are hard to pin down when pondering why viewership may have vacillated. Kudos to Netflix not for trying something new, but providing the opportunity to truly garner insights that can help not only HOUSE OF CARDS, but all of their programming (and ours) in the future.

Komen Should Have Kept A Closer Eye On The Core

There was finally an organization or event that was able to generate a buzz that matched the Super Bowl in its big week.  Unfortunately, the buzz was for so many of the wrong reasons and it will be a while before we can understand the true fallout effects.  While there was talk of which team would win, which players would work through injury or which commercials would be the best, the most heated debate was about whether Planned Parenthood would continue to receive funding from the Susan G. Komen Foundation. In a most peculiar set of circumstances, the foundation came out of the social media and PR melee badly bruised and showing a lack of focus on their core remit. That remit is to battle breast cancer and they lost that focus by making a horrible business decision without weighing what was best for their core.

When the Komen Foundation’s decision to end funding to Planned Parenthood came to light at the beginning of last week, social networks and phones went crazy with people conjecturing that the cause was purely a political one against abortion – with the timely addition of an outspoken anti-abortion activist being placed on the non-profit’s executive staff. Some heads were cooler believing the corporate line that it was just an automatic safeguard recently put in place that they would not fund any organization that is under investigation.  Whichever side is believed, people are already beginning to think twice about giving money to the organization and that is a huge issue.

With buzz that long-time walkers and volunteers were going to shift their involvement to other breast cancer organizations, like the Avon Walk, and that corporate sponsors were considering dropping their sponsorships and partnerships with Komen, the ramifications are real.

Even if you believe that the stop in funding was caused by their automatic safeguard, it still poses a number of issues from a business perspective.  Far too often, there is a knee-jerk reaction to quickly make a blanket decision without looking at all of the perspectives.  In this case, if the communications department was not involved in the discussion, that’s a huge snafu.  If they were, they should take a long look at what they are there for.

I’m not so concerned about funding and the long-term health for Planned Parenthood because the publicity and the backlash was a huge win for organizations that are involved in abortion and other women’s issues.  Even New York Mayor Bloomberg donated $250,000 to Planned Parenthood in the wake of the announcement and many more donations flowing in.

I do believe that there was a little bit of politics and a little bit of  off-the-cuff procedural hacking, but this is where being true to your core helps across the board in business.  Had Susan G Komen held fast that their main goal is the treatment of and battle against cancer, they could have stayed above the fray of politics.  They could even protect themselves against fraud had they come out and said they will not continue funding organizations if an audit shows misuse of funds.  But a company cannot stand behind what they do if they blindly or blatantly go cut off options to achieve their goals for anything less than actual proof that illegal actions had taken place.  In the case of Planned Parenthood, the hot-button issue of abortion is legal and they were absolutely helping low and middle-income women in education and detection of Breast Cancer. With that information and Komen’s steadfast commitment to their core remit, nobody could have rightfully contested any naysayers externally or internally.

Komen’s mis-steps sadly have a larger impact than on just the health of a company, but on the much more important search for the cure for Cancer.  Some would say it was a triumph for social media that their decision was reversed by social media, but it was really a boneheaded, not-well-thought-out move that mirrors the recent Netflix fiasco that just points to bad businesses decisions.

No matter how much of a push for a swift decision, a reliance on your company’s core is the key to succesful business and its communications thereof.

Why Is It So Hard To Opt-Out Of History Repeating Itself?

Following on yesterday’s entry about Facebook’s Timeline and that old adage of history repeating itself, I feel like I am back in the end of the 20th century when it comes to assumptions and inconveniences laid before online and mobile users.  While much debate and consideration of best practices led to companies switching to Opt-In rather than Opt-Out, it seems like there’s an entirely new paradigm shift – or pendulum swing – back to requiring users to Opt-Out. 

Facebook has determined that users must effectively Opt-Out by changing their privacy settings to control how much information is shared via the Timeline feature.  Netflix is pushing on Capitol Hill  for a change in a law that would enable them to post what movies and videos people have viewed on Facebook, much the same way Spotify now does with songs heard through the Facebook App.  For whatever reasons, more and more companies seem to be deciding that they know what’s best for users when it comes to sharing their own information.

Unfortunately, the issue persists even for those who had already effectively opted out.  Such an example is shown in the fact that I had set very stringent privacy settings on my Facebook account a few years ago regarding what people could see about my activities.  Since then, I’ve been confident that those bits were handled the same way only to find that something I had blocked to others is showing up.  I was quite bothered last night when my wife mentioned an update on her wall about me that I had thought was not being shared.  The information that was posted was not a biggie, but it exemplified how users may not know exactly what is shared – even if they thought they knew and tried to block it once before.

I can understand how companies would rather make it Opt-Out for participation and marketing reasons.  But, when will it ultimately come back to hurt both the companies and the users in real ways? There are a plethora of activities that skirt with personal information where assumptions are made that the user would rather share such information purely for convenience. Those bits of personal information can come back to harm the user – perhaps in ways we can’t even fathom at this time – and that harm could lead to suits that affect the companies’ bottom line.

In dissecting the discussion surrounding the House’s proposed amendment to the Video Privacy Protection Act and the Senate’s consideration of it, VentureBeat focuses on the act of bringing the permissions for sharing movie information more in line with what is already allowed with music, television or radio/webcasts.  Those accept one-time allowances to govern all future activities and can certainly be a convenience for those who want it. The argument presumes that it opens the law just for the matter of sharing viewing activity for social and promotional activity, but the problem – in regard to the original VPPA – is that it would soften the original intent of the law and open it up to abuse.

Ultimately, my problem is only partially limited to the debate about the intricacies surrounding what’s going on with lawmakers and more about the suppositions of companies that users rely on as instruments and outlets for sharing the details of their lives.  It is about the leap companies sometimes make to go from allowing users to share what they want to under their specific control each time to setting that sharing as the default because they feel the user would benefit by convenience – or the fact that the user might not know any better.  As far as I’m concerned, if the user doesn’t want something to be shared or doesn’t fully understand what they are sharing, then it should not be a challenge to keep those items from being shared. There are still huge amounts of users that want to flaunt what they do.  And, if by requiring users to initiate every share rather than automating, wouldn’t that effectively make each share or post worth that much more?

We have already seen people use their right to just not use a product due to these issues with one glaring recent one being the Spotify App.  The feedback I have heard most is that people don’t want to use it – no matter how convenient – because they don’t feel the need to share every song.  I limit how much I use Facebook because I want to limit how much is shared – and even then, more info is shared than I thought.

We are in the midst of one of the fastest-growing and world-changing mediums of all time.  Even the idea of “Ancient” history in this environment is measured in decades – not centuries – but we are already seeing history repeat itself in the practices that we thought were already played out. It’s a shame that the mistakes will only become more magnified as government and the courts get further involved and regulation becomes the barrier to growth rather than the economy.

There are still actions that are being worked through the court systems related to Opt-Out issues from over a decade ago and both Facebook and Netflix are already involved in suits related to the VPPA (among others). If Opt-In is not required and Opt-Out is confusing, hard to find or inconsistent, it points to many legal challenges and real digital growth hinderance in the future. Let’s be smart and learn from history rather than seeing it come back to haunt us.

The Streaming Could Get Deliciously Messy

Late Friday, Netflix announced that they had struck a deal with 20th Television and Imagine Television to create new episodes of ARRESTED DEVELOPMENT beginning in 2013.  This could have huge repercussions across the board.  Netflix assuredly hopes that this makes people forget about their recent mis-steps and Hulu has got to be wondering how they missed getting a seat at the table. Does it also get messy when formats and structure change to enable the best streaming experience?

Over the past few months, the murmurs had been growing that there would be a feature version of ARRESTED DEVELOPMENT with a limited series of sorts to lead up to its release.  The fan base for the show is strong and had been clamoring for something like this for some time.  The show does well on DVD and via streaming because of that fan base and the fact that the rest of the sitcom universe caught up to what AD was doing years ago.  When the show came out, there were few single camera sitcoms and the type of comedy was more “mature” than most – not in terms of the M rating for nudity, language and such, but just perhaps more cerebral.  Now, there are at least a half-dozen shows on broadcast and cable that carry the same tone and style finding high ratings and an enlarged fan base.

Image Credit: Everett Collection

Are there other shows that might have been ahead of their time that could find a second life on streaming sites?  Perhaps there are, but wouldn’t it have to be considerably different in this new form?  On FOX, AD had the standard three act structure to allow for commercial breaks. Does it change when it no longer has to work on the structured timing of act breaks for commercials? Does it even keep to a 22 or 24 minute length like on broadcast for streaming or does it get shorter or longer?  Do they have the budget to create episodes like they used to?  Of course, a lot of this has to do with the terms of the deal (which we don’t know yet) but I can’t imagine it will be the same as it was – with a cast whose rates have risen since they were last on the show.  I can’t imagine that Netflix would add commercials in there as this would be part of their premium offerings.

Netflix seems to be trying to follow the lead of HBO when they started creating original content in order to generate more subscribers.  It worked so well for them that other premium movie channels followed suit.  The latest is Starz – now headed by Chris Albrecht who was the architect of the original content movement at HBO more than two decades ago.  Netflix had already committed to 26 episodes of HOUSE OF CARDS starring Kevin Spacey.  It’s a remake of a 1990 BBC miniseries about British politics – but they’ll change the locale to the US.  In neither case has the licensing terms been made available, so we won’t know what the creative execution will look like until late 2012 – when HOUSE OF CARDS premieres.

Another element of the messiness is the fact that Hulu is supposed to be so closely tied to 20th Television through their parent, News Corp.  We still don’t know if they were even at the table offering such a licensing deal, but this could end up to be like egg on the face if it helps push Netflix that much further ahead as a streaming content destination.  The act of a studio placing shows on a competitor’s network or outlet is certainly nothing new – it is done all the time and effectively acts as a counter-balance.  Years ago, ABC decided to allow CBS to air the new show CSI because it meant that the financial risk was minimized.  It ended up to be huge for CBS, but it has also made huge amounts of money for Disney. But, those financials were different and it was not in an environment of competition where the stakes are whether your outlet (HULU, Netflix, etc.) will survive if people stop going there.  For all intents and purposes, the financial model is completely up in the air. A show like ARRESTED DEVELOPMENT would be a huge platform for any video site – Netflix seems to have won this battle.

Ultimately, it will take quite a long time to figure out whether this was a smart deal or not. Two years are an incredibly long time in this environment.  Who knows what form Netflix will be in by then? whereas TV provides the opportunity to think in 24 month increments (or longer), the digital pace is much quicker than that.  It could be even more messy if the financials are skewed further in one party’s favor by the time the episodes are produced.  In theory, I think that Netflix’ strategy is a sound one using the model of premium cable.  Except, the world is changing so much – so quickly – that this time horizon may be too long to be succesful.  It will be interesting to see if it ever really comes to fruition or if it just becomes another messy lesson in streaming.  Only time will tell, and 2013 might be too long in this environment.