Sunday, April 5, 2015

Iraqi City of Tikrit Freed from Tyranny, Looting Follows

When 20 houses were set on fire, 50 shops looted, and trucks loaded with stolen goods escaped unhindered, an Iraqi official explained: "No plans were made for what to do with the city after it was liberated[.]"  Now, where have we seen that before?

Wednesday, March 18, 2015

RIP Internet Explorer

Microsoft is killing its Internet Explorer brand.  Maybe because anyone who knew better snickered at itCodenamed Spartan, the next browser from Microsoft should suck less.  How could it not?  Hopefully for victims users the revolution is more than skin deep.

Tuesday, March 10, 2015

Berkshire: High Growth?

Seeking Alpha recently published the Jaded Consumer article "Berkshire Hathaway: High Growth Stock?"  To get another view on this, look at Berkshire vs Microsoft chart in "Apple's Future After Joining Dow: Brighter Than Microsoft's", which compares Berkshire to Microsoft in the decade and a half following Microsoft's addition to the Dow.  Solid >8% annualized performance at Berkshire  trounced the global desktop OS leader over the period.

Apple's Future After Joining Dow: Brighter Than Microsoft's

Last week, Apple Inc. (once known as "Apple Computer Inc.") replaced AT&T in the stock index called the Dow Jones Industrial Average. (The author says "called" because it is not, in fact, an average.) The responses to this - ranging from "Apple is doomed" through "So what?" to "Yay, index funds now have to buy Apple!" - largely overlook the fundamentals that will drive whatever future Apple will provide its investors. This article contrasts Apple's position to the future that lay before Microsoft Corp. when it joined the Dow in 1999.


From November 1, 1999 (the date MSFT joined the Dow) through last Friday, Microsoft's stock's ups and downs landed it down over 8%. Since its market cap declined even faster, it's clear the current price benefited from its share buyback program, without which the company's declining market cap would have left each share down more than three times that much:

Microsoft has paid dividends since 2003. After an annual dividend of 8¢/sh in its fiscal 2003 and one of 16¢/sh in its fiscal 2004, Microsoft paid a $3 special dividend in December of 2004 a regularly quarterly dividend thereafter. Including 31¢/sh payable March 12. 2015, Microsoft's dividend history - since the inception of dividends in 2003 - paid shareholders who held over the period a total of $9.97. Added to Microsoft's Friday close of $42.36, this puts holders for the period at $52.33, up from its split-adjusted close on November 1, 1999, of $32.87 - a total return (before taxes) of $19.46 (59.2%), or nearly 3.1% annualized over the period. Although this initially looks better than the ~47% return of the S&P 500 over the period …

… it doesn't match the S&P 500 period return with dividends (>90%, and >4% annualized). Although Microsoft's dividend has been reliable since its inception - enough to beat its stock price decline - its competitor Hewlett Packard Co. began paying dividends earlier, putting Microsoft only modestly ahead over the period compared in investors in its biggest publicly-traded OEM vendor.

The apparent yield of Microsoft in 2005 results from its $3 special dividend in December of 2004; it never had a double-digit dividend yield. YCharts presents a total-return chart showing returns adjusted for dividends as they're paid, showing the relative performance of Microsoft, its largest remaining US-listed OEM vendor, the S&P 500 (because it's a common benchmark), and Berkshire Hathaway Class B (BRK.B)(because it's a widows-and-orphans investment always worth comparing to anything):


Annualizing these numbers over the decade and a half period since Microsoft joined the Dow renders them fairly modest. Berkshire's total return of 248.1% annualizes to a bit over 8%, which isn't bad considering the market dislocations of 2001 and 2008. The fact that investing in a tech giant like Microsoft would fail to beat the S&P 500 probably came as a surprise to high-conviction long-term investors certain Microsoft would continue to dominate the world in market cap as it once did.

What Microsoft Was Up To When It Joined The Dow

To understand Microsoft's lackluster performance as a Dow component, it's not enough to nod knowingly and say that it'd grown too big. When Apple passed Microsoft in market cap on May 26, 2010, mathematical law didn't halt its outperformance. Far from it:

(The total return chart reflects both companies' dividends.)

To understand why Microsoft's performance in the early 2000s held the company back, it's necessary to look at what it was doing to grow at the time. In 1999, Microsoft owned the PC desktop operating system market and held a hugely profitable share of the market for server operating systems and tools, and was just deciding to make gaming consoles, a loss-leader business in which it only lost money until 2004. Its zeal to obtain a monopoly in digital music formats and to secure royalties from every music player in every car, home stereo, and Walkman, Microsoft drove Apple into music players and inspired Apple's Music Store to protect Apple's customers from losing access to new music promised by Microsoft's threatened era of Microsoft-only music formats. Frightened of losing control of servers to virtualization firms like VMWare, Microsoft bought VirtualPC from Connectix Corp. (now dissolved) and rewrote its already-complicated licenses to charge customers a premium if they wanted to install Microsoft's products on virtual servers - something high-uptime management makes mandatory. In doing so, it raised OEM and customer incentive to consider alternatives. When Microsoft's FUD campaign against Apple music players failed, Microsoft gave up securing music file format hegemony through its PC model (i.e., having OEMs make hardware while licensing its software at little cost to Microsoft), and leapt into the portable music player market only to abandon it. Microsoft created, marketed, and abandoned a Microsoft eBook reader, only to fund an eBook venture with Barnes & Noble Inc. (BKS) in which Microsoft lost hundreds of millions before bailing out in December.

Meanwhile, Microsoft made its operating systems costlier for OEMs to deploy on desktops. It also complicated its OS licensing scheme to ensure that while it would hold the bottom end share (to prevent encroachment by newcomers), it would profit much more from the higher-end market segment and command a premium from enterprises and pro users who depended on highly parallel application operation, remote administration, and access to networks through centrally-controlled credentialing systems. While working to leverage its OS monopoly into earnings growth, it saw mobile platforms grow in relevance - non-Microsoft mobile platforms that offered competitors a foothold in bringing developers and customers from dependence on Microsoft-controlled APIs, developer tools, and licensing fees. Microsoft's mobile device licensing fees drove mobile OEMs to competitive platforms, but mobile hardware is a cut-throat business and Microsoft optimistically cheered while firms with an established history making and marketing hardware were driven from the field.  (Whether Microsoft cheered oblivious to its own plight or to distract attention from it is your guess.)

Apple's entry into smartphones in 2007 changed the face of mobile competition. Besides Apple, only the world's unit sales leader profited in the smartphone market. But Apple added to its hardware complete control over the software it shipped, so that it produced superior performance for users even in areas in which its hardware specs arguably lagged. Competing with Apple required vendors to invest their own resources in their mobile OS development, reducing margins on a device count that could not compete with Apple's comparable products. (The bulk of the smartphone market consists of cheaper, lower-margin phones whose hardware wouldn't compete even with software customization.)

Eleven years after joining the Dow, Microsoft used expertise it acquired with the Danger acquisition to launch its own phone hardware in May of 2010 - but it didn't effectively market the phone's greatest strength (cloud backup) and failed to include features users had come to depend on in the profitable segment of the phone market. The billion-dollar Danger acquisition led to a major product flop. (Apple had product flops, too - as described here. Marketing isn't everything.) After subsidizing Nokia Oyj to produce hardware shipping a Microsoft mobile OS, Microsoft purchased Nokia's hardware division only to share a non-iOS/non-Android global share of 4% with such struggling competitors as Blackberry Ltd. (formerly Research In Motion, which approved a sale of itself to a third party a few years ago but was apparently stymied by regulators) and Jolla Ltd. (privately-held 125-employee vendor of the Sailfish OS). On the way to this ignominious position, Microsoft had to endure headlines like "Samsung's Bada OS growing faster than Windows Phone". (Samsung merged Bada's best components into the Linux-based Tizen project, with which Samsung - much like Microsoft - hopes against the odds to take the "third choice" OS spot behind the market leaders.) Using Nokia to sell phones probably looked better then it still led global cellphone unit sales, but recently it's been struggling only to lose not only share but absolute sales.

What Apple is Doing As It Joins the Dow

Apple earns more profit than all other smartphone vendors combined, and the smartphone market remains a growing market. In the first quarter of 2014, only Apple and Samsung profited selling smartphones: together, they shared 106% of the global smartphone profit. The also-rans - including Microsoft - lost money to stay in the game. The interesting fact is that Apple made most of this money - 65% - while holding less than 16% unit sales share. In the last calendar quarter of 2014, Apple's phones reportedly raked in 89% of the world's smartphone profit even as the profit pie grew.

Apple is doing this while selling a minority of global units. Not only is the market growing, but Apple hasn't come anywhere near saturation.

Even as Microsoft commands the majority of the market for PC operating systems, Apple makes more profit than any of Microsoft's OEMs despite holding relatively modest share. In the last quarter of 2012, Apple's computers took 45% of the PC market's profits while selling but 5% of the PC units. By the third quarter of 2014, Apple grew PC profits to 50% of global share on the same 5% unit share. This isn't the result of some flash-in-the-pan Mac fad but of the market segment Apple pursues - what ZDNet called "the only segment of the PC market that still matters". And by holding a sizeable minority of this richest segment, Apple not only establishes itself among those who need machines in that segment but establishes a base from which to grow its reach into that segment.

Unlike Microsoft, Apple hasn't joined the Dow controlling a saturated low-growth market that forces it to look toward loss-leader markets like game consoles for growth. Apple didn't enter music players or phones with the idea of losing money to gain share, or even profiting on a razor-and-blades model of earning back on content what was lost on hardware. Apple makes good money on its hardware, and keeps post-sales revenue as pure gravy. And it's an interesting gravy market. After selling $10 billion through the App Store in 2013, App Store revenue grew 50% in 2014 - during which Apple paid developers $10 billion. While this may be modest in the scale of Apple's overall revenue, the key is to consider what this does to Apple's ecosystem: Apple developers have earned $25 billion from iOS development alone. What developer would leave a market like that? Apple's successful after-sales program ensures developers target Apple platforms first and support them with the most engineering resources. The points made in 2012 about Apple's ability to tempt developers with a user base that pays for and updates software remain valid. By building MacOS X - and therefore iOS - upon a Cocoa environment that allows a single application to support an unlimited number of languages, Apple built international support into every product it sold since departing MacOS 9. As a result, Apple's products enjoy predictably hard-to-satisfy demand in markets - like China - in which Apple couldn't compete at all when Microsoft joined the Dow.

As Apple continues to thrive in its high-margin market segment, Apple puts devices in the hands of customers with a proven willingness to pay for quality. As predicted in 2011, Apple expanded its iOS electronic wallet system into a payment processing business. Since the ApplePay rollout, Whole Foods Market Inc. saw "significant growth" in mobile payment use with double-digit week-over-week growth of ApplePay volumes and 400% growth in mobile payments by the end of January. In under a month, Apple had 1% of Whole Foods' entire transaction volume. By the end of January 2015, ApplePay accounted for 80% of all mobile payments at Panera Bread Co. (PNRA). Three months into the product's launch, ApplePay handles $2 of every $3 spent through contactless payment across the three largest card networks in the U.S. ApplePay's security doesn't keep card-issuing banks from foolishly believing fraudsters actually hold the bank's cards, but since each issuing bank sets the procedure it will use to determine whether an ApplePay user is its authorized card holder, this should improve. The ApplePay global rollout is still underway. But since Apple's mobile customers outspend competitors' customers, Apple stands to participate in a prime section of the payment processing market. Despite having a smaller number of users, iOS devices drove five times Android users' spending between Black Friday and Christmas last year. Not only were purchases more frequent, but average purchase size doubled on iOS. Whatever might be said about Samsung's mobile payment platform, it's Apple's customers that will make its payment processing more profitable.

And that's not the only growing business. Apple's "hobby" in AppleTV poises it to assault a multibillion-dollar television market while vending content. Apple's also about to launch a smartwatch, which Piper Jaffray said would face disinterest as only 14% of those surveyed would buy one for $350 without having been able to see or use it (up from 12% in an earlier poll). No disrespect, but if 14% of those surveyed would buy a product for $350 without being able to see or use it beforehand, this is either a very acquisitive demographic that's being surveyed or there's a shocking demand for an Apple watch. Most of us tell time on our phones, no? Recall, if you will, that Apple first entered the phone business with an ambition of gaining 1% of the cellphone market.

In the last quarterly results announcement, Apple guided to a March-ending quarterly revenue between $52-55 billion. At the top end, this represents 20% growth over the year-ago quarter, even accounting for foreign-currency headwinds.


Adding Apple to the Dow may result in some transient sales as funds adjust holdings, but the real returns will follow Apple's performance. Unlike Microsoft when it joined the Dow in 1999, Apple stands at a high-growth period that starts with a projected growth in this March-ending quarter of some 20% over the comparable quarter last year. Apple continues to strengthen its high-margin product segments even as it grows the value of its ecosystem through post-sales opportunities. Rather than descending into low-margin market segments in the quest for growth as Microsoft did following its addition to the Dow, Apple is still growing its most high-margin businesses while adding mechanisms to improve post-sales revenues opportunities. Apple isn't dead after being added to the Dow, but very much alive - and represents much better deal than Microsoft did when it joined the Dow at the end of the millennium.

Monday, January 12, 2015

Disney's Alchemists Turn Lead Into Gold

Seeking Alpha just published the Jaded Consumer article Disney Alchemists Convert Lead to Gold On Command.  Read how Disney reorients its resources toward unencumbered intellectual property to improve its margins.

Wednesday, January 7, 2015

Myke Cole Hits Target with Gemini Cell

Set in the universe of his first Shadow Ops trilogy, Myke Cole's new novel Gemini Cell requires no background from prior books to enjoy. This was also true of his first trilogy's capstone volume, Shadow Ops: Breach Zone (reviewed here);  Cole has a gift for writing books that you can enjoy without additional background. That having been said, you should go enjoy them, especially if you're reading this while Gemini Cell is still a few weeks from release.

Gemini Cell is set in an alternate universe in which modern-day military technology and tactics meet paranormal superpowers poorly understood by the government (or by initially-oblivious citizens).  Unlike the first Shadow Ops trilogy – in which government regulations spelled out how individuals who manifested powers should register and be dealt with – Gemini Cell is set in the early days of the paranormal awakening that sweeps the globe, before the rules are clear, and before the protagonist has any idea what he's in for once he find himself "in business" with supernatural practitioners.

The fact that nobody seems to understand the rules governing the supernatural powers on display in the book means that the protagonist has little ability to tell when he's receiving accurate information about the limits and consequences of his paranormal predicament, when he's being fed a line of bull, or when he's looking at fools who have no idea what they're talking about.  This raises one of the major themes of the book: information quality.  The protagonist's work in a security-conscious military organization means that he's used to activity that is strongly intelligence-driven.  Once we begin to understand that all the information he has is doubtful – or  subject to limitations that impair its utility – we see that for all his personal power the protagonist is blind, unable to achieve his goals, because he needs credible intelligence on which to act.

Another theme is reason over passion.  Professional calm is presented as the only way to obtain useful results from violence; an antagonist demands impassioned indulgence of bloodthirsty urges as the price of physical power, creating an ongoing conflict.  Myke Cole illustrates the futility of seeking balance in a series of conflicts engineered to demonstrate that without care and control, violence has no utility at all to a civilized person.

More themes appear, but why spoil the story?

By planting numerous themes early and carrying them throughout the work, Myke Cole ensures the reader understand the problems they pose when they entangle the protagonist and complicate his conflicts. The result is conflict with more than the merely-physical dimension, and resolutions readers can care about.  This is a book well done.

Protagonist and Adversity
Gemini Cell is the story of Jim Schweitzer, a Navy SEAL who doesn't expect to star in a mashup between Revenge of the Ninja and Frankenstein mixed with a dose of Ghost.  From the back-cover copy, we know Schweitzer is going to bite it – and soon.  So we are kind of at the edge of our seats from the outset, expecting him to die at any moment, but hoping he'll manage to come out okay despite everything.

The story opens in an art gallery where Schweitzer wants to support his wife Sarah as she advances a few big steps in her dream career as a visual artist.  He knows Sarah expects him to flake out over work, and he assures her he's good for the night.  He really wants it to be true, too.  You know how this scene ends already, don't you?  It helps define Schweitzer, to ground him in a world that's larger than his job, and to establish both his values and the priorities with which he grapples.

Jim Schweitzer's plot arc in Gemini Cell may be complicated by his unexpected career as an unkillable (being already dead) special forces operator, but it's largely his confrontation of the first-scene conflict writ large: he wants to do right by his family – but since his death, his job's demands have only grown worse.  His desire to make good on his role as a father and husband is so obviously doomed (the "why" risks spoilers), but you can't help rooting for him – just as you hoped he'd manage to cheat the death promised on the back cover, even if just for another page or two.

Of course, questions overhang – how, exactly, did Jim get into this mess in the first place?  There's more to learn, and you can expect future volumes to satisfy hunger for answers.

Other Characters
The story isn't all Jim Schweitzer, or testosterone-drenched white men gunning down whole armies by one-handing belt-fed machine guns whose ammo chains never shorten.  Scenes cut between plotlines about Jim, and about people wondering what has become of Jim.  The supporting cast includes people who seem by the close of the book to be mostly good, and some whom we might be persuaded have become treacherous bad backstabbers fueled secretly by cackling villainy in an IV bag.  And they're not all male: Sarah proves to be a badass in her own right, and Jim's immediately-senior NCO is a Chief Petty Officer who boards target vessels with her team and shoots as effectively as she commands.  Techs in the unit Jim lands in after his re-animation are a co-ed lot, and guards appear in both genders.  Names and physical descriptions paint a full-color world with multiple nationalities and racial backgrounds.  Jim's best friend is Asian.

The supporting cast isn't just a cheering section or a mook squad.  Repeatedly Jim finds himself in positions in which his ability to act effectively turns on support from others.  It's not an ensemble cast, of course;  the story really is about Jim Schweitzer.  But it's not Conan – and in the twenty-first century, that's a good thing.

As in prior Myke Cole books, Gemini Cell includes a lot of conflict that starts close to the heart.  Tension isn't presented purely by targets:  characters suffer internal conflicts, trouble with work, concern about information that's withheld from further up the chain of command, known and unknown betrayals by people in positions of trust or authority, and more.  Jim depends on his unit to support him following his re-animation, but can he trust what its spokespeople tell him?  The whole scale of revealed and suggested conflicts risks spoilers, but the fact the good guys live in a world of iffy intelligence and dubious loyalty makes the place a lot darker than military thrillers that focus more on the gung-ho aspect of unfolding neat military plans on an unprepared opponent, or manly men outnumbered and surrounded but fighting their way to victory with their backs to wall.

There are unprepared targets in Gemini Cell, of course … but are they all bad guys?  How would the good guys ever learn?  The book hits a few times on the ambiguous position of good guys who act (with finality) on information they know is incomplete.  They trust the information, and the instruction to shoot, even without the means to tell independently what treatment best suits each target.  This invites interesting questions.  What if the wrong people ended up in charge of the unit?  (Either one, really: the one he started in, or the one into which he was re-animated….)

Are the wrong people in charge already?

Well.  We'll see.  I hear the next one's called Javelin Rain.

On social media and in interviews, Myke Cole has revealed that he is not a seat-of-the-pants writer, but meticulously plans his stories and subjects his manuscripts to a grueling edit process that yields multiple successive drafts.  From his comments, it's clear the process is painful.  But from this end of the product pipeline, I can say this: it's worth it.

Cole knows where his protagonist must go and what mysteries he must unravel, so with careful planning he is able in this volume to set up and solve a one-book problem while laying the groundwork for the protagonist to advance into bigger problems that require the first volume's knowledge to solve.  There's no question that Cole's grueling production process yields a better-designed, better-paced work of fiction than one can expect to get from a less rigorous process.  For an example of another author who relies on a demanding planning process to engineer reliably outstanding stories, book after book, without painting himself into a corner or writing duds, consider Jim Butcher, author of the 6-volume fantasy series Codex Alera and the still-in-progress-after-fifteen-volumes Dresden Files series.  Jim Butcher's praises have been sung here since 2008.  It's about the craft.  Butcher's success proves rigorous process works, even after dozens of books, and Cole's universe is a wonderful place to see the result of this technique on display.  It's hard work, but Cole understands it's necessary.  And he's out there right now, hard at work on the next volume, suffering for your amusement.

Readers: you're in good hands with Myke Cole.

Cole's universe is populated by characters with interesting internal and external conflicts that are easy to get interested in seeing resolved.  People who worry about picking up a series' first book out of cliffhanger-dissatisfaction concerns need not worry.  Gemini Cell closes the story arc on which it opens, and it feels done when it closes.  Sure, the characters identify some doorways for later books to breach, but rather than detract from the work this builds anticipation for the character’s development.  The climax puts Jim to the question he's needed to answer from the first chapter, and sets him on the path to solve the problems he's unearthed on the way.  It’s a good day.

And it's fun.  After the initial anticipation to see the back-cover discussion of Jim's death play out – turns out, he’s tough to kill – readers enjoy a long sequence in which the action and suspense in the two main plot threads make the book hard to put it down until the end stands in sight.  Unless you enjoy losing sleep, pick it up early in the day.  You've been warned.

Myke Cole’s Gemini Cell offers an exciting story about a new character with a novel superpower-problem, set in a universe he's had three other books to understand fully enough to embed a mystery that will take another couple of books to solve.  I look forward to those books – and so will you.

(For those interested in an interview with Myke Cole, try this one, on which the author says, "I love new and unusual questions."  Also, his mother read it and said, "What a great interview!"  So read it, already.)

Thursday, December 25, 2014

Gotham: A Review

I recently read Devin Faraci's pan of the TV series Gotham, and felt obliged to respond.

Gotham is for people interested in what Batman's world looks like without the Caped Crusader to rescue anyone.  Without Batman, the city retains all its grit, corruption, deceit, danger, and weirdness – just no Batman to save the day.  This makes it much more like a gritty crime story, except that the weirdness of a superhero's city is added – without offering a built-in rescuer to save the city and its inhabitants.  Gotham is Batman for the self-help crowd, as it were.  But it's a it more: because it's set in Batman's Gotham before Batman comes into his own, it offers a view of Gotham from an angle we've never seen.  Gotham's pre-Batman history isn't delivered in flashback to inform some years-later adventure, but in its own story: how Gotham created Batman and the villains he opposes.

This isn't just back-story for Batman fans, though. Batman fans will enjoy watching Bruce Wayne's eventual foes develop into the supervillains only Batman can battle – some, as they ascend in the criminal ranks … and some, as they work alongside the protagonists as apparent allies, not yet having turned to the dark side, or perhaps not yet getting caught.  But the villains' ascent and Gordon's fight against Gotham's corruption offer story enough without needing to see how young Bruce Wayne becomes Batman (a story we've seen depicted enough not to be exactly on the edge of our seats about).

The writing is patient: it shows us characters we know become major parts of the Batman canon, building anticipation for their development into the personas into which we know they will evolve.  It doesn't rush this.  At the same time, though, the writers understand viewers want to see stories end with episodes: we get fully-formed stories involving characters with which the audience is unfamiliar, which allows surprises. And it does more: it allows us to look at the characters while they are still malleable, still fully human, and before they have become roles in a comic book.  The show's chief, Bruno Heller, understands exactly why these characters are more interesting before they don their capes and masks:
Frankly, all those superhero stories I’ve seen, I always love them until they get into the costume. And then it’s, “Oh, okay, they’ve ascended, they’ve stopped becoming humans.” It’s their apotheosis. They go to heaven and they’re Superman. There have been so many great versions of it. This is a version of something else entirely.
Bruno Heller, interviewed by Entertainment Weekly
And the acting is outstanding.  Just.  Outstanding.

Although the show is built around the police work of James Gordon, it's hard not to start with Gotham's rising villains.  Jada Pinkett Smith's Fish Mooney is such a gloriously ambitious crime boss, just waiting to take the crime-lord crown from the old guard gangster running Gotham, that you can't help cheering for her bloody advance.  She's that good.

Robin Lord Taylor's Oswald Cobblepot begins his ascent-to-supervillany character arc in the very first episode, in which he acts as Fish Mooney's umbrella-holding toady and must suffer jeers and sleights with stoic endurance as, for example, his post-leg-injury gait earns him the undesired nickname "Penguin".  He's so obviously not a supervillain – yet – that it's hard not to ask how this pipsqueak becomes a feared Gotham crime lord.  It's delightful to see just how awful the timid-looking toady proves to be once set in motion, how he develops in strength as he manipulates and threatens and kills … hard not to watch.  It's a much faster development than we see from the child Bruce Wayne, which offers us patience for the longer plot arcs.  And Taylor's so compelling in the role you can't help cheering his Cobblepot against his criminal competitors.

When is Cory Michael Smith's Edward Nygma going to snap?  We keep seeing him as a crime scene tech.  But one day – one day ….  Selena Kyle, portrayed by Camren Bicondova, isn't a villain yet, just a street-smart survivalist with sticky fingers.  (And a host of survival skills to teach young master Bruce!)  There's plenty of mid-level thugs, including one played by David Zayas (as "Don" Sal Marone), but they become burdensomly numerous. Behind them all stand John Doman's crime boss "Don" Carmine Falcone – maybe the most vanilla villain on the show, but plenty scary for all that.

But the show is built around James Gordon, long before he becomes Commissioner.  Benjamin McKenzie portrays James Gordon as a newly-minted Detective in a crime-ridden city that suffers corruption so deep it eventually surprises even jaded TV viewers familiar with the Batman universe.  Gordon's effort to retain his life without losing his soul is the heart of the show, and it's wonderful to see.  Occasionally grounding him with his as-yet unfulfilled promise to find the boy's parents' murderer is David Mazouz' Bruce Wayne – who's done an outstanding job – who in turn is being raised by his badass butler and guardian Alfred Pennyworth (absolutely beautifully done by Sean Pertwee), who has some firm ideas how a boy should be raised.  Heh, heh.

Gordon's older, jaded partner Harvey Bullock (masterfully portrayed by Donal Logue) is a piece of work from the start: friend or foe? Both?  Gotta love Gotham.

But, the bit players are important, too.  People who've never appeared in the Batman canon – blank-slate characters whose fates a viewer can't know in advance – make the episodes possible.  It's these whom Heller uses to shape the personalities of the canon characters, and they offer us delight after delight as we see characters we know learn for the first time lessons that later define them.

Cinematically, it's gorgeous.  Filmed in HD, the grim and gritty Gotham is as full of people as it is of litter.  The streets, the buildings – it's got the beauty of a feature film without the distant-as-Olympus feel of some of the sets shot in the Batman movies.  It feels like a city you could see destroyed by greed and corruption while you watch.  Backed by the superb acting of a huge cast – crime bosses and their lieutenants, rank after rank of police, crime witnesses and victims, administrators and prosecutors, nascent supervillains, crooked politicians – there's little so big on TV.

I'm dying to go to the defense of the Balloon Man episode that drove Faraci from the show (it taught Bruce the hunt for justice can't itself be murder, a lesson we know survives into Batman), but it contained all kinds of graphic-novel-ish goodness and irony.  For one, the scheme: corrupt government employees are handcuffed to a weather balloon and launched to a fatal altitude … until their corpses plummet back to Gotham.  What's better than this for a vigilante murder scheme?  Imagine the fear as the cuffs click, once officials know what's coming.  But, it's murder – and Gordon is sworn to bring murderers to justice.  The fact he sympathizes with the killer's frustrations with Gotham's broken government is a bitter pill to swallow.  And then there's Bullock's preference to let the Balloon Man soar into the stratosphere himself.  Critics have attacked the fact that a dark show like Gotham uses something as whimsical and comic as a balloon for a villain's calling card.  This is exactly backward, for two reasons.  The Balloon Man isn't a villain at all, he's an anti-hero being busted for the felonies he commits in his misguided attempt to set Gotham straight.  He is, in fact, exactly what Batman must not become.  The whimsical balloon motif is perfect for Gotham: it's a nod to the culture that must exist to produce the weird future full of costumed villains with which the city is doomed to be inundated.  The bizarro scheme is exactly what Gotham needs; the anti-hero collar is exactly what Gordon needs to taste, sour in his mouth, to prepare him for a future in which Batman running free feels a reasonable compromise;  and all the little conflicts with other characters are perfectly balanced to nudge everyone where they need to go.  Oh, and the epidode's story problem is solved while moving everybody a little forward in his or her appropriate character arc.  It's a solid work, fun, awful, and in every other way a delight.

Fans of Batman can hardly find a better show.