Very well said. How do you think things like this factor into the equation, though?
They don't. That's piracy. Piracy will always be a factor whenever the cost of legitimate purchase is too high. OTA broadcast is free, though, and most of the content you want to see on cable is timeshiftable. This is a haxie to get around the current structure, and it's always been available - you can do the same thing with a Slingbox and have been able to since 2004.
Well, sure, but you don't think that such a haxie might play a much bigger role in all of this in the future? Particularly given its quasi-legality and ease of arrangement? In twenty minutes, I went from never having seen XBMC before, to watching a legitimate (but overseas) stream of HBO2. And I'm out of the age demographic being discussed (though, to be fair, I consider myself part of that group, as I haven't paid for cable in over a decade, and absolutely never will again).
So... do you know legos? Know how they come in a whole bunch of qualities, from Mindstorms to Technic to the themed stuff down to Duplo? You and I, we can pick up a Lego Technic set, follow the instructions and end up with a race car with moving pistons. The steering works. The tires are rubber. it's dope. All we had to do was follow the instructions and we figured it out. In fact, we could probably put something together that wouldn't exactly be a race car, but it would have moving parts and be awesome. On the other hand, your aunt Mary isn't particularly interested in building race cars. In fact, she isn't much in the mood to build anything. If she wants a dollhouse, she'll buy a dollhouse. No need to build or customize one, thanks. She's not particularly interested in Duplo... but if it'll save her some money, she'll build a house out of Duplo. Check out the instructions for making a Roku work. Or an Apple TV. It's a little bit above Duplo-grade. They know that nerds will figure the shit out immediately, but they're not interested in selling to nerds. They're interested in selling to people willing to build a dollhouse out of Duplo. Now check out the instructions for getting XBMC up and running. It's closer to Lego Technic. Yeah, any fool can do it (I have, and I hit it with my Roku) but they don't. It's a level of technical tweaking that nobody but nerds are interested in. Keep in mind - the overwhelming majority of the internet-browsing audience doesn't know how to leave a youtube comment, let alone configure XBMC. It's not that they can't - it's that they don't want to. For them, they'd rather pay Netflix $7 a month and stream on their phones. It takes not a lot to set up and they're good to go. So "ease of arrangement" is one thing, but "bone-stupid and simple" is where it needs to be for mass adoption. Like I said, Slingboxes have allowed people to do this for pushing eight years now, and it just hasn't mattered. Their marketshare remains teensy. I've got friends that program arduino to make their jobs easier and I know one person who has bothered with Sling. She gave it up in 2008.
Thanks for this conversation kb and WorLord. KB, I think you have a good understanding of the consumer, I really do. It's not an easy distinction to be able to look at a buying block and say, "they are not all me." I've seen CEO's make the mistake of doing otherwise. There is an opportunity cost to complex products, they take time. The payoff may be greater in the end, but there is an investment in learning the product. Most people, myself included, will pay $ to not have to "figure a product out" if it's not in their desired specialty/hobby bucket. If it is music related, Ill read the manuel and figure that sucker out, otherwise I'll pay my $7. Heck, this is the same reason people hire plumbers. I know that if I took the time to learn about plumbing, I could fix the leak I just don't have the time. The best products make things easy and at the same time make you feel like you are using a "cutting edge" product. Roku is a good examples of this. While people want ease of use, nobody wants to feel like they're using the "idiot" version of something. When people stop saying "what's Roku?" it may lose some of it's appeal to this demographic.
It really comes down to how you spend your leisure time. The early adopters of television were those who were interested in spending their leisure time tuning a television so that the rest of the family could watch programming. The early adopters of computers were those who were interested in spending their leisure time coding a program so that they could demonstrate its tricks. That's why the Aibo failed - there just aren't that many nerds walking the earth who would rather program a dog than play fetch with a dog. iPods were not better MP3 players than the rest of the market. They were more expensive, they didn't play a lot of files, they had limited battery life, they had no removable media. But they had a UI that anybody could figure out. Same with iPhones. Same with iPads. i-anything is basically someone else's product stripped down to the bare essentials and made useful for people who hate tech. This is why the original Apple TV was loved by nerds and hated by everyone else - it was a castrated Mac Mini running a slimmed version of OS X. The new Apple TV, on the other hand, is loved by everyone else and hated by nerds - the shit you can't do with that thing is offensive. But you take it out of the box and it works.