Wednesday, 29 August 2012

Telly Addicts Part 2 - What is the "Right Stuff"?

The most important tech company in the world

The TV is the next great technology background. And as I wrote last week, whoever triumphs in the battle will become the most important tech company (and probably the most important company) in the world.

So what does it take to win? What is the "Right Stuff"?

The company which wins the TV war needs the following arsenal:
  • Broadcast content: Its King, let's face it. The biggest reason Apple won the iPod war is that it cajoled the record labels to fall into line - like a pack of lemmings as it turned out. 
  • An app ecosystem: Sort of a riff on content - but rather than broadcast content you need additional apps games that people want to a) use and b) pay for on your TV platform.
  • A physical presence: Whether its a set-top box, a smart-TV or a Playstation, you need a physical presence in the living room. Partly because of the added security it gives for rights management (that's why every broadcaster has a unique set-top box), partly because if you just rely on pumping it down the web browser you lost control of the viewer experience.
  • A direct relationship with the consumer (and with their credit card number): If you control the customer relationship everyone else in the ecosystem has to go through you. This is an enormous competitive advantage - the customer is paying you for the content, and everyone else is paying you to get to the customer.
  • A great user experience: Wanna know what a bad user experience is? Hit the Menu button on your remote and try to navigate the system. Both the controller and the menu system need to be elegant and usable (think of clunky thumb-boards supplied with some internet TVs and shudder). Steve Jobs thought he'd cracked it before he died. Maybe Siri still has something to say about the matter...
  • The right price point: Logitech is the only company I've seen to ever report negative sales for a product, in this case the Google TV. The reason why? Largely because they were charging $249 for the box, which was simply the wrong price for a beta product (something Apple picked up with when they priced Apple TV at $99). To succeed you will need an impulse-purchase price point. Ideally zero, subsidised with content sales (a la Kindle Fire model).
Tomorrow in my last post on this topic I'll give some thoughts on how the vendors stack up. But here's the initial scorecard (disclaimer - all very big picture, of course):


No comments:

Post a Comment