Healthcare Concerns

By SHALINI RAMACHANDRAN

Commercial-free prime-time shows—the Holy Grail of TV watchers—has come to Dish Network Corp.

And it’s likely to wreak holy havoc.

Dish Network released a DVR feature that can automatically skip commercials from nationally broadcast prime-time shows, a move that threatens billions of dollars in broadcast-television advertising. Shalini Ramachandran has details on digits. Photo: Getty Images.

On Thursday, the satellite-TV operator began offering its customers a DVR feature that allows viewers to completely avoid commercials—rather than just fast-forward through ads, as the old model digital-video recorders do.

The new “Auto Hop” feature comes on a DVR dubbed the “Hopper,” a device that has been available to subscribers since March. With Auto Hop, viewers see a black screen momentarily where the ads were broadcast, or a glimpse of the first frame of the first commercial. Then the show resumes. Consumers merely have to click an on-screen Auto Hop button before a show to enable the feature.

“You can put down your remote control” and not see an ad again for the entire show, said Vivek Khemka, vice president of Dish product management.

The “Hopper” DVR costs Dish subscribers $10 a month in addition to a $99 upfront fee. Dish also offers a less-expensive traditional DVR with no upfront charge and a $6 monthly fee. The “Hopper” is made by Echostar Corp.,

which like Dish is controlled by satellite-TV pioneer Charlie Ergen.

The notion that viewers won’t see even a whirr of fast-forwarded ads threatens billions of dollars in broadcast television advertising—and risks the ire of the networks.

“There has been a problem with ad skipping and this is just making it worse,” said Tracey Scheppach, innovations director at Starcom MediaVest, a media-buying firm owned by Publicis Groupe SA.

The feature is available on recordings of nationally broadcast prime-time programs aired on Walt Disney

Co’s ABC, CBS

Corp’s CBS, News Corp.‘s

Fox and Comcast

Corp’s NBC but watched after 1 a.m. the day after they air. Dish is the third biggest pay-TV distributor, with more than 14 million subscribers, trailing Comcast and DirecTV

.

None of the broadcast networks affected had any immediate comment. News Corp. owns The Wall Street Journal.

Dish’s move is likely to heighten tensions between TV network owners and pay-TV distributors—cable and satellite operators and phone companies. Relations are already strained because of rising programming costs. Broadcasters have been pushing to get a larger share of “retransmission fees,” paid by the service providers that pipe or beam programming into homes. Traditionally, retransmission fees were paid almost entirely to cable channels, not broadcast networks.

Dish Chief Executive Joe Clayton in an interview acknowledged the tension over retransmission fees. “But that’s a separate issue,” he said. “The Auto Hop feature is all about the consumer.”

Mr. Clayton trumpeted the new feature. “This has been the Holy Grail of television viewers for 40 years,” he said. Dish didn’t provide definitive numbers on how many customers have opted to get the Hopper, but Mr. Clayton said it’s a “big number.”

“What’s wrong with giving the consumer what he wants?That’s my response to anybody who takes issue with this,” Mr. Clayton said.

Introduction of DVRs several years ago raised widespread concerns about the impact on TV advertising. The impact so far has been mixed. The devices have been widely adopted and are now in about 43% of U.S. households, according to Nielsen. Media buyers say about 50% of ads get skipped by DVR users.

Yet TV advertising has increased from $51.6 billion in 2003, when DVRs became widely available, to $58 billion in 2011, according to Publicis Groupe SA’s Zenith Optimedia

Marketers say TV is still a crucial medium for advertising, given its broad reach. Nielsen has developed ratings measures that track how many people watch ads that appear during programs up to three days after it airs, which is reflected in ad deals.

Still, DVRs have changed marketing tactics. Advertisers have worked overtime to embed their products and pitches within the shows. Product placement over the past few years has soared and become a major part of most media companies’ offering to advertisers.

Dish makes clear that it isn’t deleting the advertising from the recorded material; if customers want to watch all the ads, they can. “We spend hundreds of millions on advertising per year,” Dish’s Mr. Khemka said. “I don’t think it makes a very big difference from our perspective to the advertising market.”

Unlike cable channels, broadcasters earn relatively little in subscription fees. Advertising accounts for the vast majority of broadcast networks’ revenue. CBS, for instance, collected $209 million in subscription fee revenue in 2011, compared with $4.9 billion in ad revenue, according to market researcher SNL Kagan.

Now, broadcasters are pushing for higher retransmission fees to bolster revenue. But pay-TV executives are balking at the costs—and are following a legal battle that could give them more leverage in their negotiations.

Pay-TV distributors, including Dish and DirecTV, have said they are closely watching litigation between broadcasters and Aereo Inc., an online video-streaming service that offers broadcast network signals for New York residents. Aereo, which is backed by media veteran Barry Diller among others, has been sued by broadcasters claiming copyright infringement.

“If it is found to be legal, not paying retransmission consent, it’s a very interesting thing,” Time Warner Cable Chief Executive Glenn Britt said on a recent conference call. Derek Chang, who oversees programming negotiations for DirecTV, said in an interview the case “could impact some of the dialogue going forward.”

—Merissa Marr

and Suzanne Vranica contributed to this article.

Write to Shalini Ramachandran at shalini.ramachandran@wsj.com

A version of this article appeared May 10, 2012, on page B1 in some U.S. editions of The Wall Street Journal, with the headline: Zap! New DVR Wipes Out Ads.

For years, some people who wanted to store files on remote servers in the cloud have been emailing the files to their Gmail accounts, or uploading them to Google‘s

lightly used Google Docs online productivity suite, even if they had no intention of editing them there.

Now, Google is formally jumping into the cloud-based file storage and syncing business, offering a service called Google Drive, which will compete with products like Dropbox and others by offering lower prices and different features. It works on multiple operating systems, browsers and mobile devices, including those of Google’s competitors Apple

and Microsoft

. There are apps for Windows, Mac and mobile devices that automatically sync files with Google Drive.

Google is jumping into the cloud-based file storage and syncing business, offering a service called Google Drive, by offering lower prices and different features. It works on multiple operating systems, browsers, and mobile devices. WSJ’s personal technology columnist, Walt Mossberg takes it for a drive.

I’ve been testing Google Drive, which launches today, and I like it. It subsumes the editing and file-creation features of Google Docs, and replaces Google Docs (though any documents you have stored there carry over). In my tests—on a Mac, a Lenovo PC, a new iPad and the latest Samsung

Android tablet—Google Drive worked quickly and well, and most of its features operated as promised. At launch, it’s available for Windows PCs, Macs and Android devices. The version for the iPhone and iPad is planned for release soon.

Google Drive, which can be found at drive.google.com, offers users 5 gigabytes of free storage, compared with 2 gigabytes free for the popular Dropbox, and equal to the free offering from another cloud storage and syncing service I like, SugarSync. That’s enough for thousands of typical documents, photos and songs.

Prices for additional storage drastically undercut Dropbox and SugarSync. For instance, 100 GB on Google Drive costs $4.99 a month. By contrast, 100 GB costs $14.99 monthly on SugarSync and $19.99 on Dropbox. Google Drive will offer huge capacities, in tiers, all the way up to 16 terabytes. (A terabyte is roughly 1,000 gigabytes.) And if you buy extra storage for Google Drive, your Gmail quota rises to 25 GB.

But one of Google’s biggest rivals isn’t standing still. Microsoft is expanding both the features and capacity of its little-known SkyDrive cloud storage service as well. That product started out as a free, fixed-capacity (25 gigabytes) online locker mostly for users of the stripped-down, cloud-based version of Microsoft Office, though it also has been available as an app for Windows Phone smartphones and for iPhones. It’s giving away even more free storage than Google—7 GB, though that is a cut from what it used to offer free. It also is charging less than Google. For instance, you can add 100 gigabytes for $50 a year. And users of the old version get to keep their 25-gigabyte free allotment. I wasn’t able to test this new version of SkyDrive for this column. It also is offering syncing apps for Windows and Mac.

Google Drive is meant as an evolution of Google Docs. While you could previously upload a file to Google Docs using your Web browser, for Google Drive, the company is providing free apps for Mac and Windows that, like Dropbox, do this for you. They create special folders that sync with your cloud-based repository and with the Web version of the product. So, you can drag a file into these local folders on your computer and that file will be uploaded to your cloud account and will rapidly appear in the Web version of Google Drive, in the Google Drive folders on your other computers, and in the Google Drive apps on Android, iPhone and iPad devices. These local apps also sync any changes to the files you make.

One big difference between Dropbox and Google Drive is you can edit or create files in the latter, rather than merely storing or viewing them. This is because Google Drive includes the rudimentary word processor, spreadsheet, presentation and other apps that make up Google Docs.

But there is a catch. If your stored document is in a Microsoft Office format, you can only view it. To edit it, you have to click a command to convert the file to Google’s own formats, or choose a setting that converts Microsoft Office files when uploaded. But this latter feature only works when uploading from the website.

Google’s new cloud-based file storage and syncing business with Google Drive will compete with products like Dropbox. Walt Mossberg reviews the new service on digits. Photo: Google.

Google Drive also is missing some features of SugarSync I like. The latter doesn’t require you to place files in a special folder; it syncs the folders you already use on your PC and Mac. Also, unlike SugarSync, Google Drive doesn’t let you email files directly into your cloud locker.

Google Drive allows you to share files and folders, and collaborate with others. You can also email files as attachments. People with whom you share files can be allowed different rights: to view, comment, or edit them. You can also keep the files private.

Because Google has run into hot water over keeping users’ information private, some people may be reluctant to trust their files to Google Drive. But the company insists that, while it does process and store your files, no human can see them and, at least today, the files aren’t used to target advertising at users. The company notes no file can be placed in Google Drive unless the user wants it there.

The service does a very good job of searching files, even finding words inside PDF or scanned documents. The company claims it can find images when you type in words describing them, like “bridge” or “mountain”—even if those words don’t appear in the image’s file name. But I found this mostly worked with photos of famous places or people Google has collected via its Google Goggles product. Google Drive failed to find images with generic file names on almost all of my own pictures, even when they included things like mountains or other common objects.

Google Drive did a good job in my tests with videos. It converts nearly every common video format into a format it can play, right inside its website. This process can take some time. While Google Drive can store music, it can’t play it directly via its website.

Google’s new service also works with third-party document creation and editing apps that are built to work with it. I used one, called Balsamiq Mockups, to create a quick wire-frame diagram.

I can recommend Google Drive to consumers looking for cloud-based storage, with the added bonus of integrated editing, at lower prices. But the new Microsoft SkyDrive also seems worth a try.

—Find all of Walt Mossberg’s columns and videos at the All Things Digital website, walt.allthingsd.com. Email him at mossberg@wsj.com.

A version of this article appeared April 25, 2012, on page D1 in some U.S. editions of The Wall Street Journal, with the headline: Google Heads To the Cloud For Storage to Sync and Edit.

By IAN SHERR

The patient might have been under water too long. Only a few months old, the victim wasn’t responding.

A doctor, in green surgical scrubs, rushed to his sparkling clean operating room, hopeful the patient could be saved.

After thoroughly scrubbing and putting in some new parts, he tightened the last screw and pushed the power button. The familiar Apple Inc.

logo filled the screen of the phone.

The iHospital is a chain of stores that fixes broken Apple products but takes Apple-care to new levels, Ian Sherr reports on Lunch Break. Photo: Julie Busch Branaman for the Wall Street Journal.

This doctor works at the iHospital.

The chain of repair shops is one of many firms that have sprung up and build their business largely by repairing Apple devices. Far from the dingy, box-and-cord littered shops of the past, these businesses have taken on the Apple ethos with slick presentation and savvy brand building. Their customers come hoping to pay less for repairs than at Apple’s own stores.

“There are about 250 Apple Stores in the U.S., but there are millions of customers,” says Ross Newman, the 27-year-old founder of iHospital, based in Tampa, Fla. “They need somewhere to go to fix their products.”

Other repair shops range from iHospital to Cupertino iPhone Repair in the San Francisco Bay area, to Orlando, Fla.-based uBreakiFix Co. which has stores around the country including in Chicago and Los Angeles.

Apple’s own warranties are considered among the best by Consumer Reports. But until recently the company charged a hefty premium to fix broken screens or water damage—all too common problems as people take their beloved devices almost everywhere, even to the bathroom. The independent stores say they can fix devices for roughly half the cost as Apple.

Apple doesn’t have any ties to the stores. An Apple spokeswoman said Apple’s new AppleCare Plus policy for the iPhone costs $99 and will cover up to two incidents of accidental damage at a cost of $49 each time. The service, which lasts for two years from the date of purchase, also includes technical support in Apple’s stores and over the phone.

Mr. Newman says he can compete. A new front screen for an iPhone would cost about $150, including the cost of signing up for AppleCare Plus and the incident charge. The iHospital charges roughly between $79 and $100 for that same repair, depending on the model. And, Mr. Newman added, his doctors offer tech support and a one-year warranty on repairs. Other repair shops offer similar prices and services.

Keith Fredrickson, 34, and his wife Margaret, 35, of Jersey City, N.J., each bought a brand new iPhone 4S a couple of months ago. A few days after Ms. Fredrickson got her phone, it slipped out of her back pocket in the bathroom. “She had already flushed the toilet, thankfully,” Mr. Fredrickson says.

Once out of the water, the device wouldn’t turn on. They tried putting it in a plastic bag filled with rice, a common recommendation, but it didn’t help. Placing it in a bag with moisture-absorbing desiccate packets from vitamin bottles worked, but only for a few moments.

So, Mr. Fredrickson took the dunked device to an iHospital.

“I walked in and noticed they were in scrubs, and thought it was mildly entertaining,” Mr. Fredrickson says. “I was traumatized and nervous about whether they would fix it.”

They did.

Water damage is among the most common ailments for devices, repair-shop operators say. Hayden Dawes, 25, who formed iBroke LLC in Palm Beach Garden, Fla., last year, says many of the customers who ship him their broken devices have had some sort of liquid damage.

Apple doesn’t supply parts to either business. Both Mr. Newman and Mr. Dawes say their parts come from China, where most of Apple’s devices are manufactured. Mr. Newman says he didn’t have to ask Apple for permission to use the lowercase i and had no trouble getting iHospital registered as a trademark in the U.S. and Europe.

To drive home an image of Apple-level quality, Mr. Newman created a certificate program called D.i.D., “Doctor of iDevices,” which requires passing Apple’s technical-certification tests in addition to his own. Mr. Newman says employees must retake the exams every year, just like Apple’s in-store technicians.

The company’s six stores have rung up about $1 million each in sales in the last year. The company, founded in 2009, started expanding to states outside of Florida last year. While in training, Mr. Newman’s technicians are typically relegated to the “triage” area, where devices are laid out on an antistatic mat and diagnosed before being brought to the “operating room,” a workshop in the back of the store that has a large glass window for customers to watch what’s going on. There is even a “graveyard” bin for devices to be repurposed or recycled for parts.

Mr. Newman says he plans to expand the chain across the country and to stick with his medical motif. He bought an ambulance to do on-site repairs for corporate clients. He emblazoned it with ads for iHospital, and outfitted it with white flashers, not red, so people don’t get confused.

Mr. Dawes started iBroke with an old Volvo, performing repairs at customers’ businesses and homes. Eventually, he bought a new car and outfitted it with work benches and toolboxes. Now, he does most of his work at an office with a clean room.

He says iBroke fixes between 15 and 30 phones a week, though he expects that to grow. He estimates his revenue was between $40,000 and $60,000 in the past year.

Local customers, like Ryan Smith, frequently come in to iBroke with broken screens. The 26-year-old student says he has broken his iPhone 4 several times getting out of his car.

“I keep my phone in my lap when I drive and sometimes when I get out real quick I don’t think,” he says.

Mr. Smith didn’t go to one of Apple’s stores because he assumed it would charge too much. Plus, “I wanted someone independent to do it,” he adds.

Write to Ian Sherr at ian.sherr@dowjones.com

A version of this article appeared March 21, 2012, on page D1 in some U.S. editions of The Wall Street Journal, with the headline: In This ER, Doctors Operate on Pocket-Size Patients.

By PAUL SKELDON

‘It’s the real world—only better.” This is how Jay Wright, business-development director at technology company Qualcomm Inc., describes the latest buzz technology to grip the digital world.

So-called “augmented reality” is the overlaying of digital information onto the real world, and everyone from games designers to retailers to health-care companies to estate agents are gearing up to use it. While the potential for such technology to change the world is vast, the biggest challenge for its backers will be to convert this virtual revolution into rock-solid profits. Fortunately, there are countless ways this can be achieved, but not all are immediately obvious.

WSJ Europe Technology Editor Ben Rooney speaks to Jim Balsillie, co-CEO of Research in Motion, about RIM BlackBerry’s current place in the smartphone market and what to expect from RIM in the future.

Augmented reality has shifted from its high-industrial beginnings at aerospace firm Boeing Co., where it was used to overlay schematics of complex wiring diagrams onto actual wiring via a headset, to being a tool that offers to bring together the real world and the Internet. Such a confluence of the actual and virtual worlds should already have offered a route to riches untold. But the commercial potential of this new technology is very far from being realized.

In laymen’s terms, augmented reality is defined as computer-generated content—which typically includes graphics, audio and other sensory enhancements—that is superimposed over live images to enhance the real world. In mobile devices, where augmented reality’s future seems to be heading, it uses everyday technology such as cameras, global-positioning systems and electronic compasses. These are built into the phone, in combination with WiFi and broadband networks, to bring together location, orientation and context— all adding up to a richer experience of the world around the user.

Retail Potential

Some early examples of augmented reality in action include an “app” on smartphones that will tell a user the location of the nearest metro station, if he or she just points the phone at the street on which they are standing. Another app, from the Museum of London, will overlay on the phone’s “street view” an image of what the street looked like hundreds of years ago. Augmented reality even allows users to point a so-called “Stargazer” app at the night sky and it will overlay the constellations, stars and planets and facts about them. Others offer the chance to see reviews, menus and comments added onto the view of a restaurant or bar.

Such technology is undoubtedly useful, and in the case of the Museum of London’s app, fascinating to some, but does it have any genuine commercial potential? Mr. Wright believes it has. “The means of monetizing augmented-reality apps won’t be any different to any other app,” he says. “Some will pay to download, some will use app-purchasing and others will be ad-funded. There may well be some new players and some new platforms, but the business models for these apps will be the same as all the others.”

For example, Yellow Pages in the U.S. is testing the use of augmented reality to overlay adverts—paid for by businesses—to street views when the app is used. Meanwhile, in the Netherlands, eBay Inc.

is testing a service that will show users all those people who are trading goods in the neighborhood.

EBay’s vice president of local classifieds, Bob van Dijk, is adamant that the future lies in local sales—that and adding virtual technology to its burgeoning real-estate business.

In the U.K., property website RightMove.com has also toyed with a real-estate app, developed by mobile technology firm Mobile Interactive Group Ltd., which works in the same way as eBay’s proposed new service. In this case, users point the phone up and down the street and the app tells them what is for sale, or to rent, how much it costs and gives the user the chance to contact the property agent.

It’s not only in real estate and classified ads that this new virtual technology has money-making potential, says Theo Forbath, vice president of innovation strategy at software company Aricent Inc..

“The real money lies in turning augmented reality into the consumer space with games, entertainment and education,” he says. “In the next 12 to 24 months you will see it everywhere, changing how people shop, by bringing the advantages of the Web to the in-store experience. It will transform business, allowing for better virtual meetings and it will play a big part on both children’s educational toys and adult education. Think of those headsets you currently get given at museums: These will soon all be apps on mobiles.”

Virtual Tech, Real Money

What is exercising the calculators of venture capitalists the world over, however, is how to turn this technology into something that creates genuine revenue streams.

“Retail and gaming are the obvious areas that can deliver revenues with augmented reality right now,” says Mr. Wright. “There are already shoot-’em-up games you can play, interactively, overlaid onto the real world and there are already many games developers working on such games that will sell at a premium—expect to see them on sale early next year.”

Jonathan Chippindale, chief executive of augmented reality retail pioneer Holition, believes that the future of the technology lies in the consumer arena. “We saw huge interest in our augmented reality screens at the front of Selfridges in London. These allowed people to virtually try on Tissot watches without going inside the store,” he says. “Tissot saw sales of its watches rise by 83% in the store while the trial was running.”

Another area where retailers are set to benefit is in applying augmented reality to technology that is already in widespread use, such as bar-code scanners. Built in to a number of retailer apps, bar-code scanners allow consumers to scan a bar code and launch all manner of information about that item. “EBay has built this into its sellers’ app,” notes Roeland Loof, head of mobile in Europe for the auction site. “Now anyone wanting to sell something can simply scan its bar code and use the information provided to create a sales profile. This makes selling via mobile much easier.”

But augmented reality has perhaps one more potentially lucrative surprise up its sleeve. While much attention has been placed on how it can extend things that already exist, many are starting to look at how it can generate a whole new revenue stream through its use in health care—or more specifically, health monitoring.

“Our research shows that 19 out of 22 health-care professionals already see wireless health-care monitoring as vital,” says Andy Zimmerman from Accenture Ltd. “There are already millions of devices in circulation measuring heart rate, blood sugar, asthma and even whether elderly patients are moving or upright. And consumers appear to be willing to pay, often relatively large amounts of money, to get the data from these devices [on their mobiles] from aging parents so that they can monitor them remotely. It all comes down to the fact that residential care for the elderly is very expensive, so they are trying to look after them at home—and wireless technology helps do this.”

This may not be what most people imagine when they think of augmented reality, but it is perhaps the main money spinner for using data to “augment” the real world.

Mr. Skeldon is a mobile telecoms journalist based in London. He can be reached at reports@wsj.com.