TightWind is written by Kyle Baxter. Stay Hungry. Stay Foolish.

Jon Siracusa :

The solution is a device that is unabashedly omnivorous. Yes, in traditional Apple fashion, it must provide a simple, elegant, user interface. But behind the scenes, it must be willing and able to accept content from as many sources as possible. This is what makes the device valuable and desirable: dealing with and hiding all this complexity!

Is this show on cable? Satellite? Downloaded from the Web? Streamed from Netflix? Is it on my Mac? My iPhone? Does it need to be transcoded? Upscaled or downscaled? These are the things geeks deal with manually right now, and regular people have little chance of figuring out. People will pay for a device that will handle all of this for them. It might take a while, but word would get around about the new device that actually makes your living room less complex, for a change. One box to rule them all.
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The only realistic solution is to make an end-run around the existing players. Instead of trying to establish yet another isolated beachhead, accept and absorb all available content by any means necessary and concentrate on providing a unified interface to all of it… Apple-vended content included, of course. Win the consumers’ hearts and minds first by being the hero they need to save them from the current mess surrounding their TV. Win all those other content deals later, once everyone has your device in their living room. Step three: profit.

This would require a Google TV-like approach, where the device builds an interface on top of the set-top box rather than replaces it. This isn’t a satisfying solution, and I don’t think his logic holds up for this leading in the long-term to networks acquiescing and agreeing to place content on iTunes for reasonable terms. Allowing people to watch cable TV content (whether it’s live, DVR, or On Demand) is kind of like allowing Flash on the iPhone to get people to adopt it: in the short-term it might solve a content problem, because it makes existing websites, games and videos compatible with the iPhone, but it also makes those content owners complacent—why should they move their content off of Flash when it already works well enough on the iPhone?

I think Apple’s hoping to use the same strategy for the Apple TV they used against Flash: make the Apple TV popular enough to where networks have no choice but to make their content available on it. There’s two possibilities. First, they’re hoping that the $99 price point along with Netflix access is enough to make up for the lack of available TV shows and it will succeed well enough to push NBC and CBS to make their shows available for rental on iTunes. The second possibility is they aren’t betting on the low price and Netflix to make it popular, and instead want to build a SDK and App Store for the Apple TV and will use that as their advantage.

If they’re betting on the first possibility, then they better switch to the second one quickly. While Netflix streaming and the low price point are great, and necessary for the device’s success, it isn’t enough. Opening it to applications, though, would be. Imagine the fantastic games that would pop up, short films, news applications, or whatever else we can come up with. That would give people a great reason to purchase it that has nothing to do with negotiating with CBS and NBC.