| Woodlawn Associates

Innovation in Internet TV

Posted on June 4, 2012 by Josh Lutton

A client asked us a few days ago for our thoughts on Aereo, the internet TV start-up that delivers “broadcast” TV to Apple iPads, iPhones, iPod Touches, and—used with one of those devices and an Apple TV or Roku set-top box—regular televisions.

Aereo also offers a network-based DVR, so users can record the shows they want to see and watch them anytime they like. And, because Aereo uses an iDevice as the primary user interface, users can search for content by typing on the on-screen keyboard. The service costs $12 per month after a three-month free trial. (Aereo is only available in New York City for now, so you may have to wait to try it.)

The request for a comment on Aereo is a good opportunity to highlight what we think is happening with the internet TV more broadly.

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Determining Sample Size

Posted on May 21, 2012 by Josh Lutton

Developing proprietary insight often requires doing primary research. We are often asked how we determine the sample size necessary for such research.

Larger sample sizes usually require higher cost. Therefore, we want to use the minimum sample size that will provide a useful answer. When the costs of being wrong are very high, it may be worth the cost of a large sample size to achieve very high confidence in the answer. For example, if a client is considering a $400 million investment whose success depends on the true value of a particular variable, she is likely to be willing to spend a fair amount to be highly confident in an estimate of that variable.

In other cases, limits on the resources available may require smaller sample sizes. However, when we know very little to begin with even a relatively small sample can achieve significant reductions in uncertainty. This reduction in uncertainty can be worth far more than the cost of obtaining a modest sample.

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Apple Television Set Unlikely to be Solo Effort

Posted on May 14, 2012 by Josh Lutton

Many rumors suggest Apple is developing a television. Journalists report Apple has held talks to secure content for such a device, that suppliers are getting ready to build it, and that consumers would snap it up (see The Wall Street Journal, Techcrunch, and Wired).

The speculation often suggests that an Apple television set would offer subscription-based, à la carte content delivered over the top of broadband networks (“OTT”). Consumers would pay one bill—to Apple—for all their video content.

Undoubtedly Apple is looking into all the possibilities, but we think the rumor mill has a few things wrong.

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The Superiority of Algorithm-Driven Interview Techniques

Posted on April 29, 2012 by Josh Lutton

The last of the ideas from Daniel Kahneman’s book, Thinking, Fast and Slow, I’m going to write up is the superiority of algorithm-driven interview techniques in personnel selection. This is related to his thinking about when to trust intuition I wrote up in a previous post.

Kahneman says that hundreds of studies have been completed comparing the effectiveness of clinical vs. statistical predictions of long-term mental health in psychology. Sixty percent show statistical prediction is better; the remainder show no difference, but statistical prediction is much cheaper.

Kahneman believes, therefore, that for predictions in similarly “noisy” environments (he calls them “low-validity”)—such as personnel decisions—we should also use algorithms rather than intuitions to make our selections. He thinks algorithms are superior for four reasons:

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