The biggest players in technology have been vying for your living room (otherwise referred to as the “10ft interface”) for years now. The only problem is that no one has gotten it quite right yet, but the device and software manufacturers may not be to blame.

Core Problem

As Steve Jobs clearly pointed out at a recent conference, the problem isn’t really with the hardware or software of 3rd party devices (such as an Xbox 360, AppleTV, Boxee Box etc) but the problem actually lays with the Cable and content distributors. The business model that these companies deploy make the cable box a free or incredibly low cost part of the business and have thrust the competition out of a good “go to market” strategy.

We all know that the software on Cable boxes is beyond terrible and is in fact probably the worst UX I have ever seen. The devices are slow, the results laden with advertisements, multiple versions of a show (HD or SD?) and programming comes around a clock set by the networks. Obviously On-Demand content helps alleviate this problem some, but there is more to it than that.

What about content variety, being able to watch it when you want to? Are you willing to “pay to play”, or are you willing to take a barrage of advertisements to offset the cost to view content? What about some kind of happy medium where your cost is reduced, but you also get less ads? These are all potential ideas that are being implemented, but lets dive a little deeper.

Solutions

There are essentially 3 accepted business models for approaching this pain in the marketplace, each filled with heavy hitting players. Here are some of the notable ones:

Advertisements – Good content, zero price

In a world where consumers are trained that there IS such a thing as a free lunch due to services like Napster, BitTorrent and others we have come to demand access to high quality content without paying a penny. Google did a great job delivering free text based information to the masses through their AdSense program that allowed content producers to display advertisements against their content in hopes of tricking customers visitors finding value in ads so they could get paid.

Most people thought that premium video content had finally arrived after Hulu launched with a ridiculous name, backing of the major studios (thanks to their heavy equity investments) and high end advertisements pre-roll and interruption clips that were clickable and offered up other metric advantages over traditional ads.

http://www.hulu.com

Pay-to-Play – Top notch content, top notch price

As advertisers were weary to plunk down large media buys for sites like Hulu in a diversified way (that the studios would accept), we saw video content from the likes of Apple (a la iTunes) and Amazon race in to fill the void of people who were looking for a wider variety than what was offered by Hulu or perhaps would rather pay a hefty penny to avoid the annoying interface that advertisements offer. Both services now have accompanying hardware to deliver their content to our favorite screen – the TV.

These models have simply followed in the footsteps of dvd and blu-ray sales but are more agile in that they can deliver on a per episode basis, are without a physical disc and other common digital only advantages. Microsoft has been another player in this space that has been innovating without nearly as much press through their Zune Video service. Delivering fantastic 1080p video with 5.1 surround sound through a well established user base of Xbox 360 users.

http://www.Apple.com/iTunes

http://www.Amazon.com

http://www.Zune.net

http://www.Netflix.com

Hybrid – Minimal annoyance, premium content on demand

The 3rd category is both the newest player to the game and the oldest at the exact same time. We are used to paying for content with advertisements baked in (cable, satellite etc), but now Hulu Plus hopes to take this model with on-demand into more places and with less storage concerns. Hulu Plus works with iOS devices (iPhone, iPad, iPod Touch), select TV’s (apps), blu-ray players and soon even the Xbox 360. The catch? It’s $10/month and still has advertisements. However, for that compromise you get beautiful HD quality content, the entire current season instead of just the last few selected episodes.

http://www.hulu.com/plus

But what about the newest player? Google TV holds intense promise because it tries to take the best points from each model and mesh them together. In fact, Google isn’t trying to be in your second input from a second box, they want to go for the gold be in your first input as the information source and/or as an overlay to your current video stream. They bring “the whole web” to your favorite screen and if you are using Dish Network you can even schedule DVR recordings etc right from the Google interface. Existing Android Apps will work in the environment which leaves a wide open door for rapid innovation.

Great, but when?

Google TV lands sooner than you think with an expected delivery date of October 11, 2010. Like Hulu Plus, we can expect it to be on select hardware launch partners (which looks like a Sony TV and a Logitech Harmony box for existing setups). We can expect however, given the nature of android based software and development to see this great software on a ton of different devices and ecosystems. How do you think Apple, Amazon and Microsoft are going to respond to this new player? Video of the Google TV features below.

http://www.google.com/tv/

Informational products have always been an interesting beast, there is certainly value in information as Google has completely solidified, but what is it worth and who should actually buy it? That is a tough question to answer, but it is a question that so many so eager to fulfill.

Why they suck

We all need information. That much is fact, but the question is not “do we need it” but rather “who is best to give us this information?”. Often times we buy from people we have heard of, not people who are actually the authorities in any given field. This is the same reason that Tiger Woods is paid millions to represent Buick, when we all know that Tiger Woods is not the best mechanic on the face of the earth (among other things). While this is not always the case, it seems that far too frequently the people who are least qualified to be creating and promoting an information product are the leaders in the pack.

Who makes money

Importantly, the often is not the person who ends up buying the product to fulfill a need they think is currently unmet. Many of these products prey demographics who shouldn’t be shelling out the $50, $500 or $5,000 to “get started” when they could instead be paying off Credit Cards, Loans and other things that are absolutely eating them alive. So many times it seems that informational products pitch “How To’s” based on theory, models that no longer work or BOTH. So who really makes money off of these products? It’s often times JUST the information product producer who leaves little value on the table that can be quantified by customer.

Apologies

Here is where I directly apologize to you and the community as a whole. Not because I have created an information product and charged for it (I haven’t), not because I have made money from informational products (I have..), but mainly because I have subjected my audience to the same flavor of bullshit that has been floating around in the performance marketing industry for the past6 months more than ever. I am sorry for sharing information products that made me money because now I feel like I have done a disservice to you.

From here on out, I promise to more heavily screen the people and offers that I connect you to and make sure that the value is easily quantifiable for YOU before wasting your time talking about it. I hope that you can forgive me for buying into the hype a little bit, I just wanted to set things straight.

If there is one thing Apple has been phenomenal at over the at last 3 to 4 years it has been anticipating the needs of the average consumer before they really understand that the need exists. Much like Starbucks did with a premium coffee experience, Apple has been able to take a market that was in a race to the bottom and instead of purely going for the lowest price of entry they decided to change the way we use technology through out our daily lives.

This is more significant than it first appears because what Apple is really doing here is catering to the human emotional needs of computing, and not purely the functional need and for technology that completely changes everything. By having such a strong push and obsession around content, experience and quality they are simultaneously hitting consumers from directions they didn’t even know existed. These emotional pulls not only help Apple sell impressive units at even more impressive margins, but they have raised the bar for consumer expectations to mind boggling heights. Have you seen the wireless data consumption of AT&T? 4932% growth over 12 quarters! That is INSANE for a company that was the largest wireless carrier during part of that time (however is currently eclipsed by Verzion due to VW’s aggressive acquisitions).

The same kind of massive shift in the way consumer interact with their devices, and additionally what they have come to expect from them was seen in the portable music player category which seemed to have the secret sauce for an ecosystem that generated a better, and more reliable experience than what users had at their disposal before. iPod + iTunes has certainly proved to be a winning combination that is still paying off to this day, granted through a much more expanded form than what was originally conceptualized I am sure.

So what’s next?

Steve Jobs has described the iPad as possibly being the “most important thing [he] has ever worked on”. Bold words coming from a man who has had a fair hand in turning the music industry upside down, but what makes this device so important to the Apple lineup and how will it shift the way we expect our devices to perform for us?

Near 100% reliability

While many would argue that devices with offerings such as Android provide a ‘superior’ experience because of their limitless functions and features that can be added at any point (Flash anyone?). However, while competition is fantastic and I strongly believe that every market segment needs bold innovation to push the boundaries in order to understand what works, for mass adoption to take place the devices need to provide a stable foundation that users can depend on to carry out their tasks. If this element is missing, all of the emotional bonuses that come along with the Apple ecosystem are quickly discounted.

Masked price point

This one is kind of tricky with Apple, especially for those who are not drinking the Kool aid because there is most certainly an upfront premium that has been put on Apple products and the accompanying culture, buying habits etc that come with living in an Apple/Mac world. What IS interesting however is how Apple has clearly hinted at the iPad as a “sign of things to come” (Jonathan Ive) and while at first this devices seems like an over-sized iPod Touch; it is really going after the entry computing market. Think about the type of accessories and ways that a user can interact with this device, consider its price point and then think about what kind of computing experience you can get elsewhere for the same dollar.

For $500-900 can you get an industry best (IPS) display? Multitouch? 10 hour batter life? What about a seamless experience between the content you truly care about and the ability to quickly access information that you need? The Google Chrome OS will be a very interesting challenger to this type of experience game changer but until they are both out in their second generation, it is anybodies guess.

Dead simple usability

One thing I always found interesting as I went through High School and I am not finishing up College throughout the “iPod Generation” is the big draw that people had through word of mouth marketing, and the perceived ease of use. One of the people that I really look up to is Gary Vaynerchuk due to his ability to capture the essence of what is driving the market and understand that the key fundamentals haven’t really changed, only the delivery. People were buying iPods for two very simple reasons.

1. They were extremely good at doing what they were built to do

2. Everybody else had them, so everyone already KNEW how to use it

When you combing those two factors you have a potent recipe for buying decisions to stem directly from word of mouth marketing, where even better yet prospective buyers were able to hold a “sample” product in their hands and experience the ecosystem before buying. The trial-ability for the Apple brand, ecosystem and value proposition was phenomenal.

Developer community

This is a huge competitive advantage that Apple has with their ecosystem right now, and ironically is something they were openly against at first and ever since opening up their doors they have been slammed ever harder for not being more open (regardless of the fact that being at least semi closed is what makes the user experience so amazing). What Apple really gets at this point though is that by taking an agency approach to 3rd party software development with a 30% cut from all App sales they are directly profiting off of the innovation, marketing and value that their community is coming up with.

This last part is what I really want to drive home as to why I am bullish on these entire product line and ecosystem: Apple is no longer in the passenger seat when it comes to understanding the pulse of the consumer and even being a few steps ahead. It took them a few hard punches in the early rounds of computing to polish what they have wanted to perfect all along; content and the user experience. With the introduction of the iPad and the realization that Apple is now a “mobile company”, the firm is very much firing on all cylinders regardless of what type of traction this first generation iPad produces.

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