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> Netflix had considered offering movies online, but there were speeds and bandwidth problem in mid-2000. One of the more interesting things I learned from the

by lqet 5y ago

> Netflix had considered offering movies online, but there were speeds and bandwidth problem in mid-2000. One of the more interesting things I learned from the (outstanding) documentary "Enron - The Smartest Guys in The Room" [0] was that Enron planned an online movie streaming service together with Blockbuster in the late 90ies (to start in 2000), but failed for the same reasons. > Enron would store the entertainment and encode and stream the entertainment over its global broadband network. Pilot projects in Portland, Seattle and Salt Lake City were created to stream movies to a few dozen apartments from servers set up in the basement. Based on these pilot projects, Enron went ahead and recognized estimated profits of more than $110 million from the Blockbuster deal, even though there were serious questions about technical viability and market demand [1] But of course Enron "pivoted" to outright fraud some years before that. [0] https://www.youtube.com/watch?v=rDyMz1V-GSg https://www.youtube.com/watch?v=rDyMz1V-GSg [1] https://pubs.aeaweb.org/doi/pdfplus/10.1257/089533003765888403 https://pubs.aeaweb.org/doi/pdfplus/10.1257/0895330037658884...

reaperducer 5y ago
Enron planned an online movie streaming service together with Blockbuster in the late 90ies (to start in 2000), but failed for the same reasons. I lived in Houston during that era, and for some reason a bunch of the local energy companies dabbled in internet video and infrastructure at the time. As you mentioned, Enron. But there's also Williams (https://en.wikipedia.org/wiki/Williams_Companies https://en.wikipedia.org/wiki/Williams_Companies). It built one of the first live business news channels. I knew a few people who worked there, but I can't remember the name of it. Naturally, it was focused on energy. The idea was that people in the energy industry would have it on a screen next to their computers in their offices. It worked, a bit. I saw the channel in the break rooms and lobbies of several oil and gas companies I visited at the time. But, like the Enron/Blockbuster thing, I think it was a little ahead of its time. While today a big oil company would think nothing of deploying thousands of screens to its cubicles around the world, back in those days, it was considered a crazy extravagance. Plus, everyone was still using tubes, not flat screens, so a big chunk of desk real estate would be lost at a time when offices were far more paper-reliant than they are now. Some of the big oil and gas companies saw how the railroads were getting into telecom, and follow that, as well. (The "SP" in "Sprint" is Southern Pacific Railroad.) They figured if the railroads can run phone calls over microwave relays along their rights-of-way, the oil companies could run fiber through their pipelines. And they did. Again, I'm most familiar with Williams. It built a huge fiber-optic network across the country by running cables through its pipelines. One of its services was called VYVX (pronounced "viv-ex"). For years and years, it was the primary way to move video between television stations at a time when satellite hookups were a lot more expensive than they are today. I know at least part of the Williams network became what we know today as Level3. I wonder if the original network is still in use. Kind of ironic to think about all those environmentalist web sites flowing through fiber running through oil pipelines.
- deleted 5y ago
  [deleted]
anyfactor 5y ago
Even after doing multiple assignments on Enron and going through multiple lectures about it, I am still not hundred percent sure what Enron's business was. The most easy to grasp description of their main activity was they were into energy based commodities trading. Yet they had their sticky finger in every industry. It was such a massive complicatedly diversified company, I think it is reasonable to say if it wasn't whistleblowers we wouldn't have never realized what went wrong.
- WoahNoun 5y ago
  The natural gas pipeline industry had it's regulations changed around '85 that made it so pipeline operators had to let anyone use their pipes. This meant Enron didn't have to actually own pipes. They could just buy and sell natural gas from the wellhead to the refinery. They made a lot of money doing this. They then tried to copy that to anything else that can conceivably move over a fixed, expensive infrastructure like electrical power lines, broadband lines, water pipes etc. They wanted to be in heavy industry with an "asset lite" model. The Enron physical pipeline business still exists as Kinder Morgan as Enron sold it off because they didn't want to deal with the physical infrastructure anymore. Everything else was just financial engineering.
- deltree7 5y ago
  Enron, Lehman Brothers and similar companies would have easily thrived in the 2020s. Up until 2015, there was really a true cost of capital. Investors wanted to see real products, real cashflow, else you head straight to bankruptcy. 2015+ changed a lot of things. You can fraud / lie / deceive your way to success if you form a cult around it. Trump, Nikola, NFTs, Crypto, Hertz, Gamestop, AMC, Blackberry, Tilray, Sundial have all shown you can astroturf, gaslight, propagandize a subset of population to fund your fantasies in a world awash with capital and very few assets to invest.
  - dan-robertson 5y ago
    Hertz feels weird to me as an example for two reasons: 1. The company wasn’t really leaning into the thing where they became a meme stock when they filed for bankruptcy for some reason. They did start an at-the-market offering but that was stopped pretty quickly by the courts. 2. It did actually go up for non-meme reasons so the crazy people buying stock of a bankrupt company, or rather, the people who believed what they read on Reddit and bought the stock and didn’t sell it, we’re vindicated as the company did somewhat recover.

by lqet 5y ago

reaperducer 5y ago

Enron planned an online movie streaming service together with Blockbuster in the late 90ies (to start in 2000), but failed for the same reasons. I lived in Houston during that era, and for some reason a bunch of the local energy companies dabbled in internet video and infrastructure at the time. As you mentioned, Enron. But there's also Williams (https://en.wikipedia.org/wiki/Williams_Companies https://en.wikipedia.org/wiki/Williams_Companies). It built one of the first live business news channels. I knew a few people who worked there, but I can't remember the name of it. Naturally, it was focused on energy. The idea was that people in the energy industry would have it on a screen next to their computers in their offices. It worked, a bit. I saw the channel in the break rooms and lobbies of several oil and gas companies I visited at the time. But, like the Enron/Blockbuster thing, I think it was a little ahead of its time. While today a big oil company would think nothing of deploying thousands of screens to its cubicles around the world, back in those days, it was considered a crazy extravagance. Plus, everyone was still using tubes, not flat screens, so a big chunk of desk real estate would be lost at a time when offices were far more paper-reliant than they are now. Some of the big oil and gas companies saw how the railroads were getting into telecom, and follow that, as well. (The "SP" in "Sprint" is Southern Pacific Railroad.) They figured if the railroads can run phone calls over microwave relays along their rights-of-way, the oil companies could run fiber through their pipelines. And they did. Again, I'm most familiar with Williams. It built a huge fiber-optic network across the country by running cables through its pipelines. One of its services was called VYVX (pronounced "viv-ex"). For years and years, it was the primary way to move video between television stations at a time when satellite hookups were a lot more expensive than they are today. I know at least part of the Williams network became what we know today as Level3. I wonder if the original network is still in use. Kind of ironic to think about all those environmentalist web sites flowing through fiber running through oil pipelines.

deleted 5y ago
[deleted]

anyfactor 5y ago

Even after doing multiple assignments on Enron and going through multiple lectures about it, I am still not hundred percent sure what Enron's business was. The most easy to grasp description of their main activity was they were into energy based commodities trading. Yet they had their sticky finger in every industry. It was such a massive complicatedly diversified company, I think it is reasonable to say if it wasn't whistleblowers we wouldn't have never realized what went wrong.

WoahNoun 5y ago
The natural gas pipeline industry had it's regulations changed around '85 that made it so pipeline operators had to let anyone use their pipes. This meant Enron didn't have to actually own pipes. They could just buy and sell natural gas from the wellhead to the refinery. They made a lot of money doing this. They then tried to copy that to anything else that can conceivably move over a fixed, expensive infrastructure like electrical power lines, broadband lines, water pipes etc. They wanted to be in heavy industry with an "asset lite" model. The Enron physical pipeline business still exists as Kinder Morgan as Enron sold it off because they didn't want to deal with the physical infrastructure anymore. Everything else was just financial engineering.
deltree7 5y ago
Enron, Lehman Brothers and similar companies would have easily thrived in the 2020s. Up until 2015, there was really a true cost of capital. Investors wanted to see real products, real cashflow, else you head straight to bankruptcy. 2015+ changed a lot of things. You can fraud / lie / deceive your way to success if you form a cult around it. Trump, Nikola, NFTs, Crypto, Hertz, Gamestop, AMC, Blackberry, Tilray, Sundial have all shown you can astroturf, gaslight, propagandize a subset of population to fund your fantasies in a world awash with capital and very few assets to invest.
- dan-robertson 5y ago
  Hertz feels weird to me as an example for two reasons: 1. The company wasn’t really leaning into the thing where they became a meme stock when they filed for bankruptcy for some reason. They did start an at-the-market offering but that was stopped pretty quickly by the courts. 2. It did actually go up for non-meme reasons so the crazy people buying stock of a bankrupt company, or rather, the people who believed what they read on Reddit and bought the stock and didn’t sell it, we’re vindicated as the company did somewhat recover.