Flip Video Was Successful! So They Killed It? - Krazy Ken’s Tech Talk
- The Flip Video camera was so successful it cost the company $300 million. Wait, no, that can't be right. Oh, sure enough, $300 million.
What the heck happened? (lively upbeat music) Hey everyone, how are you all doing? If you're new here, welcome. My name is Krazy Ken and the Flip Video product line was popular for several years. And I believe for many people, this was their first video camera. This was during a time when smartphones had little to no video capabilities, so a compact and affordable camera like this was appealing. But despite selling millions of units, the popularity rose and fell really quickly.
So let's see what happened. Say hello to Jonathan Kaplan, a Carnegie Mellon graduate and entrepreneur who worked at several companies, and eventually founded MovieStreet in 1998. Their product was an online entertainment store named KidFlix where parents could buy or rent kid-friendly media. In 1999, KidFlix and MovieStreet were consolidated and rebranded to Family Wonder, and they expanded their portfolio into video games, books, and music.
"Wow, this is cool!" said Sega. So they bought Family Wonder on December 6th, 2000. In addition, Jonathan was now a CEO of sega.com and he oversaw the online PC and console gaming business of Sega in North America, along with some other responsibilities too. But about seven months later, he left.
If I had to guess, he probably wanted to go out and exercise that entrepreneur muscle some more, and make a company of his own. And that's exactly what he did because on July 25th, 2001, Jonathan founded Fish Sticks. - Fish sticks, get your Fish sticks here! - Sorry, FishSix, FishSix. I can't find details on this company. Even the archived website is extremely nebulous, but maybe it was just a placeholder name.
Because in June 2002, FishSix changed their name to Pure Digital Technologies, with a single goal in mind, create inexpensive digital cameras and bring the benefits of digital photography to mass market consumers. And their first product was the Dakota Digital Single-Use Camera released on July 28th, 2003 by Ritz Camera Centers. And it's only 10.99.
That's a low price for a digital camera in 2003, but keep in mind, it's a single-use device. Dakota Digital wasn't the first single-use digital camera in the world, but it was one of the earliest, and it was the first to be mass marketed in the U.S. And even though it was cheap, it didn't skimp on features.
It had auto exposure, photo deletion, a flash, a timer, and enough storage for 25 photos. But you can't import the photos to your computer. This is the limitation that makes it single-use.
You have to go to a Ritz store to get the pictures printed and burned to a Photo CD. The processing cost $11 and then the store would keep the camera, refurbish it, and sell it to the next person. However, some hackers found a way to make it reusable, and we'll talk about that soon.
Despite the cool digital features, the tried and true film disposable camera still reigned supreme. But that didn't stop Pure Digital. They released the PV2 for 18.99, which added a color LCD. And they started selling these cameras at CVS and Rite Aid under the new one-time use name. But this was just the beginning. Pure Digital had an ace up their sleeve.
On June 6th, 2005, Pure Digital partnered with CVS to make the CVS One-Time-Use Video Camcorder, which sold exclusively at CVS locations for $29.99. This camera is pocket-sized. It weighs just under five ounces, and it's powered by two included AA batteries.
The lens and the microphone are on the front, and on the back is a 1.4-inch color LCD with four buttons. Play, record, delete, and power. There's also a built-in speaker. These camcorders can record 20 minutes of 640 by 480 video at 30 frames per second.
But just like the predecessors, you can't import this stuff to a computer. You had to bring the camera to a CVS and pay 13 bucks to get everything put on a DVD for you, so you can watch your stuff. But just like with the previous cameras, hackers found a way to make it reusable. All these cameras had a connector, which was covered up by a sticker.
Pretty sneaky, sis. You could use a Palm hot sync cable and a USB cable, solder some wires to specific traces which connect to the proper pins, and Bob's your Uncle. Kipkay actually made a brief video about this process in 2008.
Then you had to use special software to properly read the files and copy them to your computer. Et voila, you can now enjoy your 320 by 240 videos and your new reusable digital camcorder. Okay, so the hackers clearly caught on, and Pure Digital just said, okay, if we can't beat 'em, join 'em. So on May 2nd, 2006, Pure Digital introduced the Point & Shoot Video Camcorder model 225. And this was a pivotal product in the company's history because this... is where the flipping started. With the built-in flip out USB connector, users could easily transfer videos to their computer.
The design was similar to the previous version and it still featured that curved grip, but there were some other tweaks. Overall, it looks much sleeker and has a D-pad for UI navigation. And it has a volume control, which was lacking on the previous model. The camera can also record 30 minutes of 640 by 480 video, and the battery life is about two hours with two AAs. And I'd love to show some sample footage from these, but I've already purchased two and none of them work.
I also purchased two others of a different model, and The Krazy Ken Curse continued to strike because those were just leaking forbidden battery sugar everywhere. (record scratching) What? It's tasty. (buzzer) - Oh hi, I'm one of Krazy Ken's attorneys here with a quick PSA. Do not eat batteries, especially that potassium hydroxide stuff, that white sugary-looking stuff. No matter how delicious it may look, do not eat it. Please don't sue us! - So I'm gonna skip testing these, but it's okay.
An upcoming model has the same internal guts, so you're not missing anything. Anyway, you could also watch your videos on a TV with the included RCA cables. They simply plug into the camera's TV port. The camera also came with a wrist strap and a soft carrying case. Importing footage was easy.
You plug it into your computer and simply drag the files out of the DCIM folder. Or you could use the included software. There was a Mac version and a Windows version. And oh my gosh, I love those old user interface buttons. And if you wanted to get your videos developed at a store, you could still do that.
The connector is still at the top. And all this can be yours for $129. And this was great value at the time because back then smartphones cost hundreds of dollars more. And let's face it, video quality was not a prioritized feature.
For example, the Nokia or Nock-e-uh depending on where you live, N73 could only record at 352 by 288 at 15 frames per second. Not even close to the 225. On the other hand, there were many DV tape-based camcorders, which is what I started taping and editing with, but the lower-end offerings of those cameras was around 280 to $400. Arguably, the quality was slightly better, especially with the optical zoom. But that price could still be too high for consumers. And these cameras were more challenging to operate.
So in terms of price and ease of use, the 225 was the clear winner. In November, Pure Digital released an updated model of the 225 called the PSV-351. There was also another version called the 352, which could record up to 60 minutes, and that was $169. And both cameras also received a software update with sharing features. So if you wanted to share your videos to Google Video for example, you can now do that built in. Okay, Ken, I thought this was called the Flip Video.
What's with all these other weird names? Don't worry, we're getting there. But we have to take a little detour first because this next event might have altered tech history as we know it. According to internal emails uncovered in 2020 by the House Judiciary Committee, in January 2006, Google Video product manager Peter Chane tried to convince Google to make a deal with Pure Digital.
This deal would make Google Video the primary video hosting platform for the camera. And they were also talking to YouTube and Yahoo as well. This was the era of YouTube before Google owned them. In February, the deal evolved beyond simply hosting video. There was a possibility that Pure Digital Cameras could become a Google-branded product.
However, Google Video Director Jennifer Feikin had something else in mind. (scanner beep) Buy YouTube, which was probably the smarter idea in the end. Who knows what would've happened if Google went with Pure Digital instead of YouTube. You may not be watching me right now. Long story short, none of these deals went through, but there was someone else who would have their sights on Pure Digital.
It was only a matter of time. That aside, Pure Digital's cameras were selling like hotcakes. I don't know where that expression came from. I don't know why we quantify sales with cake. They were reaching double-digit percentages in terms of U.S. market share. So that's nothing to sneeze at.
(person sneezing) And that brings us to a historic day for Pure Digital. May 1st, 2007. Pure Digital was raising money this whole time, but on this day, they announced they raised another whopping $40 million in their sixth and final round of funding, bringing the total to over $95 million. And more importantly, they relaunched their Point & Shoot camcorder under a new name. Finally, it was called Flip Video. (crowd cheering) By the way, the flip mechanism was inspired by those car keys when you push down the button, the key flips out.
It's just really satisfying. The first official flip model was referred to as the F130 for the 30-minute version, and the F160 for the 60-minute version. And the latter also came in a black option.
So the branding was new. It now said Flip on the front. The black option was new. Guess what? They were also $10 cheaper, some nice changes.
But other than that, the guts of the F160 were more or less the same as the guts of the 225. Now we can't talk about cameras without testing them, right? So we'll do that soon. But first, we should talk about something that goes very well with a camera. A teleprompter.
I've been using Prompter People's products for years before they reached out to me, so I was delighted that they wanted to sponsor my show. Prompter People make super-high-quality teleprompters with U.S.-made optical quality glass for every need and every budget.
With their teleprompters, I can read the words I'm saying right now, but I can also keep my eye contact with you. That's because the camera sits behind the one-way glass and the words simply reflect off it. But their products are also adjustable and modular. So I can add a talent monitor on the bottom and see myself, and my giant head. This is the Proline Plus model, which comes in various sizes.
And if you already have an iPad, you can choose the iPad Cradle option, and you can easily attach your iPad and use it as the prompter monitor. And check this out. This is the Pocket Cue V2 and it's really nice for traveling because it's super tiny and light, and it simply uses your smartphone as the prompter monitor.
Or you can use one of Prompter People's monitors like the one I have. And with the Pocket Cue V2, you can film with a camera or your smartphone, and it starts at only $249. Prompter People makes teleprompters for every need and every budget.
So check out the links in my description to get your own Prompter People teleprompters today. All right, let's test out these cameras. (rock music builds) There's a wall there. Should have known that by now. Other way! (record scratching) Oh yeah, the 225 doesn't work. We'll just focus on the F160.
(rock music continues) Right off the bat, Flip's ease of use is phenomenal. It's literally just turn on and press record. Everything else is automatic.
And when you throw fresh AAs in this thing, despite it being from 2007, the battery life still works great. It never died unexpectedly on me. And even after letting it sit for a week and picking it back up again, it just continues to work how it should. Instinctively, we may see the quality and think it's bad, but we have to put our brains into 2007.
While assessing the quality, I didn't notice any significant issues except for the easily blown-out highlights, but I'm spoiled. Realistically, I can't expect a ton of dynamic range out of a product like this. You'll also see an abundance of compression artifacts due to the codec's design and the low 2.8 megabit per second bit rate,
but it's all about trade-offs. To achieve this 30-minute or 60-minute record time with 512 megabytes, or one gigabyte of storage respectively, the video has to be extra compressed, sometimes at the loss of some quality to make all of that record time fit on the storage. And there is a built-in zoom, but it's digital, not optical.
So the quality will degrade even further the more you zoom in. And I also noticed the screen, yeah, very tiny, but it also doesn't have a great angle of view. So it's pretty hard to compose a shot. Especially outside on a sunny day. But don't worry, Pure Digital is taking all that into consideration and they will address it soon.
Regarding sound quality, it's hard for me to gauge it with my Flip because there's a ringing sound, probably due to aging circuitry. So we're testing the original standard definition Flip Video, which was the F130/F160. However, this is what it should sound like.
- And it's pretty darn cool. I think I paid $119 for it today. - By in large, when you consider the compact size, the low price, and the time period, the Flip was actually a good product.
And that's what kind of frustrates me about this whole freaking story. The Flip is one of these weird exceptions to the other tech fails that I talk about. Like the Lytro and the L16. Remember when I talked about those? Those companies completely flopped, but the products weren't really that good to begin with. So from a high level, it kinda makes sense as to why the whole thing failed.
But with Flip, the products are actually good. So why did they just fizzle from existence? Let's keep looking. Introducing the Flip Video Ultra with an all new design. And the 60-minute model was available in multiple colors. The Ultra also featured a higher quality 1.5 inch display,
a built-in tripod mount, and up to two-and-a-half hours of battery, compared to two in the non-Ultra. Pure Digital also launched new accessories. Tripod Action Mount and a USB extension cable. But more importantly, the Ultra claims to have improved color and a higher average bit rate of 4.5 megabits per second compared to 2.8 in the non-Ultra. Right away, I noticed the Ultra screen is much easier to see, and the boot time is about 10 times faster.
And the quality improvements are evident. Immediately, I could see better color accuracy with the grass, sky, and water. On the F1-60, many scenes have an unbalanced warmth to them. And I also noticed way less macro-blocking in artifacts in the Ultra compared to the F160.
Sometimes the F160 and the Ultra both performed well with the color. I guess it just depends on how the automatic settings kicked in at the time, and there's barely a noticeable difference. But regardless, I still favor the Ultra's higher bit rate because it results in less icky compression artifacts.
Soon the Ultra became the second best-selling camera in the United States. Oprah even put it on her list of favorite things. - Yeah, and I'm actually the person filming this right now.
I'm excited about having a product so simple I can use it. - That was the idea. - By 2008, Flip captured over 13% of the U.S. camcorder market.
And later in the year, Flip Ultra started selling in Canada and UK. Needless to say, Flip was getting big. Which means it's time to do something small. The Flip Video Mino. Essentially it was an Ultra camera squeezed into a tinier package weighing only 3.2 ounces.
And I think the thin black glossy design just looks so sleek and the Mino has an extra satisfying flip. (mechanism clicking) Oh yeah, that's the stuff. Now instead of just transferring data through USB, the Mino's internal four-hour battery charged over the same connection too, making it the first flip camera with a built-in battery.
Another feature exclusive to the Mino at the time was customizable designs. Pure Digital collaborated with CafePress, so users could go to the website and customize their own look, or they could choose from a gallery. And this feature made its way into future models too. But there was one more new feature the Mino line introduced. High definition. That's right, on November 12th, 2008, Pure Digital launched the Flip Video Mino HD.
Pure Digital's first-ever HD camcorder. So now you can film in 1280 by 720 as opposed to 640 by 480. The built-in software was now named FlipShare, and it featured a redesigned user interface. It was also available on the Flip website for download. By late July 2008, Flip sold over one million units, becoming the number one bestselling camcorder in the U.S.
And by April 2009, the Flip Video lines sold over two million units in total, which means in terms of market share, they were only behind one company. (deep, echo-y impact sound) Sony. On April 30th, 2009, Pure Digital launched new Flip Ultra cameras.
The first was a second-gen Flip Video Ultra with two hours of capacity, compared to one. It also featured a two-inch color display, and it could recharge optional rechargeable batteries through the USB connection. But it was still standard definition. But no worries. Meet the Flip Video UltraHD, which despite its name, does not actually record in UltraHD.
That term wasn't common in 2009. So it wasn't 4K, it was 1280 by 720. For $199, the Flip Video UltraHD gets you two hours of 720P capacity, mini HDMI, and it included a rechargeable battery. So Pure Digital has an amazing camera line, tons of great products, and a couple million in sales. What a happy ending.
We don't get those often. Thanks for watching, and I'll see you next time. (device dinging) All right, that's a wrap.
Good job, everybody. - [Director] Keep speeding. - [Ken] Let's go get some lunch. - [Director] Wait, Ken, you forgot something. - [Ken] No, I got everything. - [Director] It's not what you signed up for.
You know, you gotta talk about it. - Fine. - Thank you. All right, we're still speeding.
All right, pick it up when you're ready. - How do I word this? Okay. When you have a brand like Flip that gets extremely popular, it also becomes extremely valuable.
Back in early March 2009, TechCrunch reported Pure Digital was looking to sell. And there was one rumored buyer in particular. A company which has bought and invested in consumer startups for several years, Cisco. And the rumors were confirmed on March 19th, 2009 when Cisco announced they would buy Pure Digital Technologies for $590 million in stock. Cisco's Ned Hooper said in the press release, "This acquisition will take Cisco's consumer business "to the next level "as the company develops new video capabilities "and drives the next," (yawns) sorry, I can't even finish reading this corporate-speak. However, this acquisition seems to align with Jonathan's vision because in an interview, he said he wanted Cisco to buy the company so the operation could expand.
And so more features could be added. You know, I remember when I first heard about this acquisition, I was so confused because when I think of Cisco, I think of networking and infrastructure. I don't think of consumer video camcorders.
So hopefully, they're not getting too out of their comfort zone. The deal closed on May 21st, 2009, and Jonathan became the general manager of Cisco's consumer business division, which included Linksys. Over the next 21 months, Cisco heavily marketed the Flip with ad campaigns, product placements, and event sponsorships. Apple also wanted in on this market.
They added a video camera to the iPhone 3GS, which had comparable quality. And they added a camera to the iPod Nano. Yeah, that feature didn't last long. Cisco also launched many new products including Flip Share TV, a second-gen MinoHD, and the SlideHD. I don't really know why they needed a separate touch surface for navigation and scrubbing. You already have a three-inch touchscreen here, but whatever.
It looks cool, and this is just fun to do. And to Jonathan's wishes, the operation continued to expand and more of the Flip lines spread to Canada and Mexico. By September 2010, nearly five million cameras have been sold. And according to NPD Group, at the start of 2011, Cisco surpassed Sony as the bestselling camcorder company in the United States.
Truly, this was a flourishing, appealing product that many consumers craved. (glass shattering) But everything changed in 2011. On February 10th, Jonathan stepped down from his Cisco position to, quote, "Pursue other career opportunities."
In my opinion, he probably saw the writing on the wall. Or, heck, a Cisco executive may have spoken with him directly about what was soon to come. Two months later, on April 12th, 2011, Cisco announced a restructuring of its consumer business. They would exit aspects of their consumer business and they'd salvage whatever remained, and realign it with their four core businesses.
Core routing, switching, and services, collaboration, architectures, and video. And during this restructure, one of the brands that got the ax was Flip. (metal slamming) It really is a shame to see a successful product get treated like this. I understand business is business, but still. Dang it.
Cisco didn't even sell Flip. They just shut it down, which shocked a lot of people. And you know, maybe they tried to sell it.
I don't know for certain. That information isn't publicly available. But even if they did try, I'm not sure they made much of an effort. I only say that because journalist Kara Swisher from the New York Times and all things digital said that she received three calls from companies who considered buying the Flip brand.
But none of these companies actually bought the brand. So did Cisco even make any offers in the first place? (somber pensive music) Either way, this shutdown cost Cisco $300 million, and 550 employees lost their jobs. And to add insult to injury, a new Flip camera, Flip Live, was set to launch on April 13th, but the shutdown announcement dropped one day before that.
You'd think a successful brand now with seven million unit sales and 35% U.S. market share would have no chance of being shut down so abruptly. But that is what happened. And it kind of makes you wonder if job security actually exists. And it sucks, I get it.
I used to work with Full Screen Incorporated, that was my foray into the business side of YouTube. But when Warner Media acquired them, I was one of the people that got the ax. That happens, it's business.
- Business, business, business... numbers. Is this working? - Yes. - Yaaaaay! - Really, it's important to be grateful during those times because you don't know when the status quo is going to change. And it doesn't hurt to keep your network healthy.
Don't burn bridges and keep those doors open because you never know when you might need that connection to get you to the next thing. On the bright side, according to The Guardian, Cisco said it would try to find the employees new jobs within the company. So you get some points there. So that leads us to why.
Why did Cisco shut down Flip? Despite it being successful. It's no secret that smartphones at this time were getting competitive camera upgrades. So the competition with smartphones maybe influenced this decision, at least that's what I initially thought.
David Pogue from the New York Times argued against this, and Jonathan himself also doubted the proliferation of smartphones was the reason for Flip's demise. He said there's still a huge demand for single-purpose devices. And later, he said he was unsurprised by Cisco's decision. Stating it was clear there would be a lot of pressure to focus on the core business. And I think that's the key word here, focus.
Focus is about saying no. And when Cisco tried to move into new consumer markets, they wound up saying yes too much. While Cisco was working on these new markets, sales in its core networking business slowed down. This resulted in investors losing confidence. "We're not confident," said the investors, probably.
On top of that, profit margins for Cisco's consumer electronics weren't as fat and juicy as their other divisions. Cisco's consumer business accounted for one billion dollars of the annual 45 billion in revenue. That's a significant amount of money, but in Cisco's eyes, the juice wasn't worth the squeeze. On April 5th, Cisco CEO John Chambers sent a memo to employees. He admitted the company has, to paraphrase, lost its way. And after several disappointing quarters, John said, we will take bold steps and we will make tough decisions.
NPD Steven Baker said, "There is no compelling evidence "that Flip was failing." And when you see the solid track record Flip had, you might agree. Even in Cisco's 2010 fiscal report, Flip was credited with $317 million in sales.
So it seemed fine, but ultimately the final decision isn't up to the customers or the analysts. And part of me thinks Flip would not have lasted more than a few years anyway, mainly due to smartphones. But the other part of me thinks it could have succeeded. Compact non-smartphone cameras still exist today, like GoPro. So perhaps it could have prospered, but Cisco cut its life short.
Despite the Flip shutdown, Cisco retained the technology, patents, and other IP. So even though they didn't keep the employees, they still had other assets. So what about Jonathan? The guy that went from selling movies to selling tools for people to make their own movies.
What has he been up to? Oh boy, I can't wait to see what amazing technology he develops next- Grilled cheese. Yeah, shortly after Jonathan left Cisco, he started a chain of restaurants named The Melt, operating under a familiar-sounding company name, FishSix... Restaurant Corporation. He actually had this idea since college. The Melt is still open today with multiple locations in California, but it's under different leadership now.
Jonathan left in 2016 to focus on charity, including EducationSuperHighway, which he co-founded in 2012 to help bring internet access to school kids in America. And then something kind of crazy happened in 2021. And I bet a million bucks you will never, ever guess what happened to Jonathan next. Joe Biden nominated him to be the next U.S. ambassador to Singapore. Holy French, Jonathan assumed office on December 6th, 2021.
And as of today, he is still there. Congratulations, Jonathan. You can now top anyone's story at a dinner conversation.
No matter what anyone else says, all you have to do is say, I was nominated by the president. Good job. (stirring cheerful music) Even though I grew up on Sony, I still have great appreciation for what Jonathan did. Because I know for many, the Flip was their first camera.
And I'm certain Jonathan and his team left a huge impact on the camcorder industry, which helped push pocket-sized video tech forward. And aside from receiving multiple broken units from eBay, I had a ton of fun playing with the Flip for the past month and a half. And I hope you had a fun time coming along with me and learning all about it. And I recommend you subscribe and stay tuned because next month's episode is gonna be spherical! Catch the crazy and pass it on. (lively upbeat music) - Batteries.
2024-08-23 07:56
