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Author: Goofyhoofy Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 202995  
Subject: A Marriage Not Made in Heaven Date: 8/29/2012 9:40 PM
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Google has hired Goldman Sachs to find a buyer for Motorola Mobility's cable set top business. Reasonable estimates for the price hover around $2 billion.

Apple has, for several years now, sold an aftermarket set-top box called Apple TV, and has, by persistent rumor, tried to find an opening into the cable set-top box business. Most recently they were said to be "in discussions" with several cable MSOs about incorporating an Apple box into the food chain.

Little more about that has been heard, and it might seem at first blush that this provides an easy opening for Apple to get into a business they've long coveted. The problem with Apple TV is that the software (TV shows) is so fragmented, it's hard to put together a "complete package" as they were able to with iTunes. There are dozens of networks, hundreds of independent producers, and other competitors all banging away trying to do the same thing, more or less (Netflix, Hulu, Roku, TiVo, etc.) and all running into the same problem: "We've got NBC but not HBO. We've got Universal but not Fox."

An easy end run is to forget about the program providers and jump in line with the cable boys, who control what box gets put where and how much to pay for it. It might seem this is the same as the cell-phone model, once upon a time, but despite similarities there's one big difference. In the cell phone market consumers had some choice. Oh, it wasn't wide ranging, but you could have a KRZR or StarTac or whatever, and you could have an AT&T or a Verizon or a Sprint or Cellular One, and while we might laugh at the "choices" customers had then compared to the plethora of options that greet us today, it still beats the "cable company says I have to use this box to decode the programming."

(I'm overstating slightly. Comcast, for instance, has 3 different sized boxes, all of which do the same thing, or you can rent a cablecard from them, which also does the same thing, only less.) The cable guys are not eager to turn over their iron fisted control of the customer without a huge fight, and they have the advantage of seeing what Apple has already done to the music industry.

Clearly Google has decided that the set top business is a stalwart, not worth pursuing as they chase Android dreams across the mobile landscape.

Still, I can fantasize: an Apple box, sold to the MSO's and rented monthly to consumers, with a slick interface and the ability to hop programming seamlessly from TV to computer to mobile device and back, a market of 100 million homes, each of which requires such a device, and which integrates other features and services like apps and shopping and games and interactive television and other things that the cable boys will never master because it's so antithetical to their DNA.

Ah, if only Apple weren't such a big, scary company (my, how times change) and if only the cable masters weren't such butt-heads, the skies would open, birds would sing, and the stock would go to $900. Apple gave 70% of iTunes revenue back to the music industry. Is that not enough to entice Comcast or Charter or some of their brethren to take a chance and say "OK, see what new revenue and products you can create."

Stay tuned, but don't hold your breath.
 
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Author: Maraith Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 186266 of 202995
Subject: Re: A Marriage Not Made in Heaven Date: 8/30/2012 12:18 AM
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I hope Apple finds a way into this morass. I hate the cable companies.

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Author: tangoev Three stars, 500 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 186267 of 202995
Subject: Re: A Marriage Not Made in Heaven Date: 8/30/2012 2:55 AM
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Yes indeed. You and every other Cable Customer. Never has an industry been help in such low esteem by its customers.

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Author: platykurtic Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 186268 of 202995
Subject: Re: A Marriage Not Made in Heaven Date: 8/30/2012 5:10 AM
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Clearly Google has decided that the set top business is a stalwart, not worth pursuing as they chase Android dreams across the mobile landscape.
I'd say 'YouTube dreams' in this case. GOOG are building out the availability of professionally sourced YouTube content (channels like Geek&Sundry with - for example - Tabletop a boardgame program & web tie-in etc.). Interestingly GOOG is doing this with the smaller web-video production companies rather than the big TV channels probably after having decided that the cable/TV folks were never going to change into the future, so you might as well build it yourself. The economics isn't there to fund the big TV companies - at least today - and so working with leaner companies that can work more cheaply and across media makes a lot of sense for content.

Under this approach GOOG will use any device that can handle streamed video, so Android is just another delivery device, as is iOS, AppleTV, Roku boxes, Macs, Windows devices et al.

Overall not a bad approach IMO. Increasingly I've been watching more and more YouTube professionally produced content - TableTop, The Guild, some Jos Whedon produced content etc. I can watch that content when I want, where I want, on more or less all capable devices, heck I'd even be prepared to pay a smallish fee for ad-free access. The future is coming, just more slowly than we all want.

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Author: dsbrady Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 186272 of 202995
Subject: Re: A Marriage Not Made in Heaven Date: 8/30/2012 11:49 AM
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it's hard to put together a "complete package" as they were able to with iTunes. There are dozens of networks, hundreds of independent producers,

The vast majority of networks are owned by only several companies (which means it's not all that different from the music industry when the iTunes Store came out). Additionally, most shows are produced by a lot of those same companies' studios (which may air on different networks). So, I don't think it would be THAT hard to at least put together a sizable package that gets most of the major programs people watch.

That would, of course, require signing deals with those major companies (and given that all of the NBC networks are owned by a cable company, that may be a tough road). But, it wouldn't really require signing deals with everyone at first.

iTunes wasn't a "complete package" when it started, either.

dsbrady

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Author: mauser96 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 186273 of 202995
Subject: Re: A Marriage Not Made in Heaven Date: 8/30/2012 12:18 PM
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The main reason music producers gave into Apple was because much of their content was being stolen. Better 70% of something than 100% of nothing. That hasn't happened with video yet .Making TV sets is a profitless business unless you are making them in a country with a weak currency and low labor costs. (the Japanese are no longer competitive). If the internet is used to bypass cable companies too much they will just throttle bandwidth. They are monopolies. Carriers don't want to give up power even if it might good for their profits in the long run. It might be a long time before media and cable people can learn to think about creating NEW revenues and products.

Given these facts it's hard to see where Apple can make a breakthrough.

The good thing is that Apple stock has a decent chance of going to $900 even without the cable-masters or iTV.

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Author: HMALETTER Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 186274 of 202995
Subject: Re: A Marriage Not Made in Heaven Date: 8/30/2012 12:25 PM
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Overall not a bad approach IMO. Increasingly I've been watching more and more YouTube professionally produced content - TableTop, The Guild, some Jos Whedon produced content etc. I can watch that content when I want, where I want, on more or less all capable devices, heck I'd even be prepared to pay a smallish fee for ad-free access. The future is coming, just more slowly than we all want.
__________________________

Same here, although the Flash content on You Tube ends up having me running to the door.

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Author: maracle Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 186275 of 202995
Subject: Re: A Marriage Not Made in Heaven Date: 8/30/2012 1:53 PM
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a market of 100 million homes, each of which requires such a device

The two problems I see here are...

1) If you want to require everyone with cable to buy an Apple product, it had better be free or a similar monthly fee to what other cable providers charge to rent a box. Apple has never seemed eager to get into the "give away hardware to sell content" model.

2) Cable is a dying business, and while it will be a long death that again doesn't seem like Apple's model. Of course, the alternative channels of deliver would favor them but I'm struggling to figure out how Apple and the cable companies play nice with this kind of dynamic at play. I mean right now they're planning to ban people from paying for Hulu if they don't also subscribe to cable to defend those cable subs! This is an industry not interested in providing a good experience for the consumer.

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Author: maracle Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 186276 of 202995
Subject: Re: A Marriage Not Made in Heaven Date: 8/30/2012 1:56 PM
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The main reason music producers gave into Apple was because much of their content was being stolen. Better 70% of something than 100% of nothing. That hasn't happened with video yet

It's going that direction pretty fast with movies, and I don't see the movie studios getting very friendly with digital distribution. There's a lot of crossover between movies and TV, so maybe we just aren't to the tipping point for the video side of the industry...

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Author: stevenjklein Big funky green star, 20000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 186277 of 202995
Subject: Re: A Marriage Not Made in Heaven Date: 8/30/2012 2:45 PM
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the Flash content on You Tube ends up having me running to the door.

So get rid of Flash!

Youtube videos don't require Flash. I don't have Flash installed on my Mac, but I can still watch YouTube videos in Safari.

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Author: Goofyhoofy Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 186280 of 202995
Subject: Re: A Marriage Not Made in Heaven Date: 8/30/2012 5:33 PM
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The vast majority of networks are owned by only several companies (which means it's not all that different from the music industry when the iTunes Store came out).

Actually it's very different. While there are five large companies which control a vast swath: Viacom, Comcast, Time Warner, Disney, News Corp, there are also lots of smaller players with important holdings:
Scripps Interactive (Food, HGTV, Great American Country, DIY, Cooking)
AMC Networks (AMC, IFC, Sundance, WEtv, more)
Cablevision (local news channels)
Liberty Media (Starz, Encore, QVC, McNeil/Lehrer, HSN)

But wait, you also have to include all the local television stations which are carried through the cable,, and which get almost 50% of all viewing. Without those, your "all encompassing" service is small, indeed. Lin Broadcasting, Cox, Fisher, Gannett, Hearst, Media General, Meredith, Raycom, Scripps Howard, Tribune, Post Newsweek, Young, and dozens of other, smaller players.

It's also true that most network productions these days are co-produced (and co-owned) by other "independent" producers, everyone from CastleRock to Merv Griffin. You have to get them to say yes, too.

Look at it this way: you could start a record store without access to a few small folk and jazz labels, and even without a couple of heavyweights like the Beatles and Led Zeppelin as long as you had everything else. You couldn't if you didn't have access to all artists with names from A through L.

The main reason music producers gave into Apple was because much of their content was being stolen. Better 70% of something than 100% of nothing. That hasn't happened with video yet

Yes, the music companies had a real, demonstrable motivation. The video people do not. That's why I say if you're going to "aggregate" and take over the industry, the only logical way is with the cooperation of the cable industry, which already has all those agreements in place (and who sit in a commanding position in those negotiations.) But unless they change their DNA, it seems unlikely they're going to cede even an inch of control to that nice little fruit company in Cupertino

1) If you want to require everyone with cable to buy an Apple product, it had better be free or a similar monthly fee to what other cable providers charge to rent a box. Apple has never seemed eager to get into the "give away hardware to sell content" model.

Oh, totally agree. But the cable companies now pay cash for the boxes from Motorola (and Scientific American, and whoever else), they just do it at a small margin and without much investment, which is why they're all so limited, so crappy, and so unimaginative. Look at the data charges the cable companies are racking up with smartphones; does anybody think that would be happening if I was still punching HHH-EEE-LLL-LLL-OOO on my KRZR? But you can't get the cable guys to see the future, so here we all sit.

But to give Apple a flat payment is a non-starter: Apple will continue to be a dongle rather than be a commodity producer with no margin. Give them a piece, a real piece, and they'll open up new markets and revenues, just as they have done with music and data. Will the cable industry believe? I doubt it.
 


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Author: HMALETTER Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 186284 of 202995
Subject: Re: A Marriage Not Made in Heaven Date: 8/30/2012 8:01 PM
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So get rid of Flash!

Youtube videos don't require Flash. I don't have Flash installed on my Mac, but I can still watch YouTube videos in Safari.
______________

I can do some, I even installed an extension that will convert to HTML5. But many I can't see without Flash. What else do I need?

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Author: dsbrady Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 186301 of 202995
Subject: Re: A Marriage Not Made in Heaven Date: 8/31/2012 12:16 PM
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Scripps Interactive (Food, HGTV, Great American Country, DIY, Cooking)
AMC Networks (AMC, IFC, Sundance, WEtv, more)
Cablevision (local news channels)
Liberty Media (Starz, Encore, QVC, McNeil/Lehrer, HSN)


I'd argue that most of those aren't required to launch the initial service. They'd be nice to have, but could probably be signed on later.

But wait, you also have to include all the local television stations which are carried through the cable,,

Ummm ... why? Other than their newscasts, most of the content they air is owned by the large studios.

I'm not saying that Apple should do such a service. But I am saying it's a lot more like the music industry than you make it out to be. The iTunes store started with a lot of the major labels, but not all of them, and none of the smaller ones. Conceivably, Apple could do the same thing -- if they could get most of the major studios (which would be a more difficult task at this point).

dsbrady

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Author: stevenjklein Big funky green star, 20000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 186305 of 202995
Subject: Re: A Marriage Not Made in Heaven Date: 8/31/2012 3:02 PM
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I even installed an extension that will convert to HTML5…

You have to tell YouTube to deliver content in HTML5 format.

Go here: http://www.youtube.com/html5

Then click then link near the bottom that says, "Join the HTML5 Trial."

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Author: Goofyhoofy Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 186312 of 202995
Subject: Re: A Marriage Not Made in Heaven Date: 8/31/2012 7:07 PM
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I'd argue that most of those aren't required to launch the initial service. They'd be nice to have, but could probably be signed on later.

Point well taken. I'd say "Food" is one with rabid fans that would be missed, but yeah, not crucial.

Ummm ... why? Other than their newscasts, most of the content they air is owned by the large studios.

Besides the 4 hours a day or so of news, they also carry a lot of syndicated programming (again, owned by others, but who will zealously guard against it being distributed outside of their paid conduits: the local stations.) I mean stuff like Oprah, Ellen, Regis & Kelly, Jeopardy, Wheel of Fortune, lots of other game and talk shows, and anything that's a rerun off-network (Seinfeld, Star Trek, etc.) Most stations have at least another 4 hours a day of that, total is about 8 hours out of an 18 hour day (not counting overnights.)

I thought the iTunes store had ALL the major labels (minus a couple of big artists who had to assent individually), and more to the point, there was no competition. Now there are already "exclusive" contracts in force for quite a bit of this television stuff.

The dam is breaking, however. Just a few years ago you couldn't find a network offering ANY of their programming a-la-carte; their affiliates were screaming bloody murder since they didn't want people to have access anywhere but good ole' Channel 6. The wall is coming down, but it is coming down a lot more slowly than it did for "music."
 


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Author: dsbrady Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 186321 of 202995
Subject: Re: A Marriage Not Made in Heaven Date: 9/2/2012 1:20 PM
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I thought the iTunes store had ALL the major labels (minus a couple of big artists who had to assent individually),

They do now. But at the time of the launch, I believe it was only 5 major labels (which did cover a LOT of available music, of course). Of course, you could probably argue the definition of "major label" and whether the ones who weren't signed really count.

I guess if you look at the launch of downloadable TV shows, only a few major companies were included (Disney was one, and there might have been a few others), with others signing on later.


The dam is breaking, however. Just a few years ago you couldn't find a network offering ANY of their programming a-la-carte; their affiliates were screaming bloody murder since they didn't want people to have access anywhere but good ole' Channel 6. The wall is coming down, but it is coming down a lot more slowly than it did for "music."


That's true, and I guess the question is if Apple is able to break the dam they way they did with music.

dsbrady

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Author: Goofyhoofy Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 186347 of 202995
Subject: Re: A Marriage Not Made in Heaven Date: 9/4/2012 11:50 AM
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But at the time of the launch, I believe it was only 5 major labels

There are only 5 major labels. (There were six, but Polygram was absorbed.) At the time they controlled 80-85% of the market, depending in how the figures were calculated. (Units, dollars, profit). The only thing that fell outside that group was small regional companies specializing in things like bluegrass, folk, jazz, some gospel, etc. There were also some "independents", but not that many at the time (they have increased in importance in the last decade, but the majors still control 75-80%.) None of those listed above had over a 1% share.

That's true, and I guess the question is if Apple is able to break the dam they way they did with music

Clearly they can't. Some of the majors are already locked into "exclusive" contracts with services: Netflix / Dreamworks, for example. And Hulu, owned by NBC, Fox, and Disney seems unlikely to offer up the full menu to Apple, although they might allow some and not others.

Offering "part" of a solution isn't much of a solution, especially if people also want some things that aren't offered by one vendor or another. (Obviously you can have a business doing that, Hulu and Netflix do OK, but they don't own the world in the same way Apple does with music.

That's why getting the (even fewer) cable MSO's to put an Apple box in front of everybody's stream is the gold standard. Not realizable, though, so I'm just wishing and hoping.

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Author: DutchMark Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 186348 of 202995
Subject: Re: A Marriage Not Made in Heaven Date: 9/4/2012 12:51 PM
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That's why getting the (even fewer) cable MSO's to put an Apple box in front of everybody's stream is the gold standard. Not realizable, though, so I'm just wishing and hoping.

I agree, it's hard to see this happening. The only way this could even have a shadow of a chance is if they manage to persuade one big cable provider to work closely with them and create an experience so compelling that it will reverse the trend of cable-cutters and convert the others to adopt it too.

But I dont know if cable providers are seeing their business decline enough (yet) to make such a jump into the dark. Also, Apple will have to drop the demand of a double-digit share in the revenues. I doubt cable providers would agree to any share above low single digits, if even any.

Mark

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Author: NailThatJello Big gold star, 5000 posts Top Recommended Fools Ticker Guide Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 186349 of 202995
Subject: Re: A Marriage Not Made in Heaven Date: 9/4/2012 1:00 PM
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Offering "part" of a solution isn't much of a solution, especially if people also want some things that aren't offered by one vendor or another. (Obviously you can have a business doing that, Hulu and Netflix do OK, but they don't own the world in the same way Apple does with music. That's why getting the (even fewer) cable MSO's to put an Apple box in front of everybody's stream is the gold standard. Not realizable, though, so I'm just wishing and hoping.

Yeah I don't know what trick Apple has up its sleeve, but it seems they are surely going to sell a TV of some kind. For that TV to fly off the shelves, it will either need to offer revolutionary technology, or a much better content experience, or both. If there is no solution for content, then the technology better be spectacular.

Another solution could be for Apple to buy a couple big content companies. Disney would be a good one to start with. But Tim Cook said earlier this year that he does not want to go into the content business. Well that takes us back to wondering about spectacular technology alone.

It's a perplexing issue.

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Author: mauser96 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 186351 of 202995
Subject: Re: A Marriage Not Made in Heaven Date: 9/4/2012 1:17 PM
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concerning Apple TV
http://www.usatoday.com/tech/news/story/2012-09-03/apple-tv/...
if this survey is to be believed, radical developments might not be needed to sell an Apple TV. This item particularly surprised me
Nearly 80% use a "second screen" while watching TV, most commonly laptops not connected to the TV. Apple owners are more likely to use smartphones (87%) and tablets (66%), too.
All of the desired Apple TV Features list are possible without content company cooperation... Maybe members of this board are looking at a distant horizon when we should be looking right in front of us.
Do users really know what they want in future products? To be really successful, not just a hobby, does Apple TV have to give the public something it didn't know it wanted?

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Author: HMALETTER Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 186375 of 202995
Subject: Re: A Marriage Not Made in Heaven Date: 9/5/2012 10:18 AM
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Just saw this.

Thanks again Steven.

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