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(Via johnaugust.com.)

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For one, a bunch of companies have broken the $500 billion market cap level and none have lasted long. In fact, no company have been number 1 for more than a few years in modern history.

Apple is a remarkable innovative company, but two things are likely to happen:

1. Investors are used to the company doubling in value every 18 months. Is AAPL really going to have a market cap of $2 trillion in early 2015? Investors are dummies. They are greedy and they will demand unreasonable things. And now that Jobs is gone, once the inevitable slow down of growth happens, some messiah figure will promise he can return the company to the prosperity of the Jobs era. Then he will destroy everything.
2. Even if Apple defends itself from dummy investors, the government will step in. Being the biggest corporation makes it a target of the left. We’ve seen it already from Mike Daisey and others. Eventually the people will demand that Apple is returned to a reasonable size. How long before regulators the world over step in every time Apple releases something new?

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I’m not a devicemaker. But I am an avid media consumer. So I thought I’d create this outsider’s perspective of how a company might build the best Set-Top Box and win control of the living room.

Solve Another Problem for the User

There are lots and lots of boxes available that put Netflix, iTunes, Amazon, Hulu and even HBO GO on my TV. But it’s a bit of an issue of the cart leading the horse.

Most consumers over 30 don’t yet know that they want Netflix or Hulu. For living room dominance, you need to solve a problem they do know they have. After all, the iPod kept consumers from having to burn their illegally downloaded mp3′s to CD, long before the iTunes music store gave them the option to buy music easily.

I truly believe that the winning Set-Top Box will infiltrate living rooms by solving a bigger problem than just how do I get Netflix on my TV. With AirPlay, Apple has already taken a big step in that direction.

Here are some problem’s a winning Set-Top Box could solve:

Too Complicated Current set-top boxes from cable companies just suck. Imagine what Apple or TiVo could do if allowed to redesign the STB. The problem is that Set-Top Boxes use propreitary standard to enable features like on-demand. And they’ve dragged their feet on 2-way CableCard to a point that it’ll never happen. So what? Imagine an AppleTV with a CableCard slot and a tv tuner. Users could get live TV by using the easy Apple interface. Instead of clicking on the Netflix square, you click on “cable” and the easy to use Apple Cable app opens. Add a second tuner and a hard drive and you have a DVR. But you lose onDemand without a two-way CableCard So what? You have Netflix and iTunes and YouTube. And hopefully someday HBO GO and Hulu. Why do you need the cable companies crappy, never-works-right, tiny-selection, too-expensive, on-demand anyway? Price it under $100 and everyone in America will rush out to get it.

Too Complicated Part II My mother doesn’t have a VCR anymore. Or a DVD player. And she certainly doesn’t have an AppleTV. She owns all these things, but they’re not hooked up to her TV…because she doesn’t know how to switch between devices. Once she leaves the input her cable box is hooked up to, she’s done. Don’t even get her started on which remote does she have to use. I imagine One STB, One (simple) remote. And somewhere away in a closet somewhere, a breakout box hooked up to the DVD, the XBox, the VCR, etc. After I set it up, my mother would use her simple Apple Remote to navigate to the VCR square, or DVD, etc, just as she would use it to navigate to Netflix or Pandora. When opened, the breakout box next the devices could act as an IR remote for them, and the simple remote can now control the other devices. Complicated to set up, but simple to use. Hell, a company with an AirPlay like technology could even sell a cheap box to attach to each device you want to connect to the TV. Imagine the revenue: $60 for the VCR, $60 for the bluray, $60 for the XBox. Plus $99 for the box in the firstplace.

Search Some commentators believe that Siri will soon be coming to the Apple TV. I’m skeptical. There are lots of reasons a remote is better than voice command for TV sets. But there is one place where a remote falls down on the job: searching for what you want. The Google TV solution of including a small keyboard on the remote is cumbersome. Apple’s solution of using an iPhone as a remote works great, but only if you already have the $300 device, and it’s charged, and it’s right there… Voice recognition could be used to solve the keyboard input problem It’s a lot easier to say “Pirates of the Caribbean” or even spells “P-I-R-A-T-E-S…” out loud than it is to enter it with a remote. Voice control is perfect as a once in a while thing on a set top box.

Search once, Search everywhere

Currently, when I want to watch something, I go to my AppleTV and head to Netflix. Is it there? No. Okay, let’s go to iTunes store. Is it there? Why isn’t there just one search box on the main screen where I can search all of the boxes content providers?

One idea just for Apple

I don’t know that any other company could do this right now and have it be a success, but Apple really should open an app store on the AppleTV. It’s not for games, it’s for content. AppleTV’s biggest problem right now is the small amount of content it offers. No Hulu. No HBO GO. Let individual content makers create apps for the AppleTV. Soon you’ll have Hulu and HBO GO. And NBC, ABC, and the others not yet represented. But more importantly, independent producers will create apps. Louis CK could create an app as a platform to sell his standup video…and he could also offer other comics to sell their videos there. Second City will create an app and try to create comedy to sell to the audience at home. TED will have a great app, they already have a great one on the iPad. But it sucks that I have to use AirPlay to get those videos onto my TV. Open an App Store just for people to sell video content. You can curate it, just like the iOS App Store. It will get you all those content providers you don’t have already.

Three Ideas for Netflix

Netflix seems like it should be the obvious winner in the online video game, after all, it’s already installed on the most devices.

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The problem is that all these devices only have the Netflix all-you-can-eat streaming content. What if Netflix made itself into more of a platform? It would still try to license as much streaming content as possible, a la HBO, but it could also sell new releases straight to the user. Would it be so hard to add this functionality to all the AppleTV’s, bluray players, and Wii’s that have Netflix installed already. With one swift blow, Netflix could become the undisputed leader of the digital video market.

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Other innovations could follow: Why couldn’t netflix create movie channels that you could flip through. They’re just playlists but users can jump in anytime, the way they can flip channels on cable. But unlike cable, if you catch a movie you like at the end, you can hit a button and go back to the start This would also help improve Netflix’s curation and content discovery problem. And seeing how long users remained on each movie on each channel is another metric Netflix could use in determining recommendations.

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It would be tougher, but Netflix could also become the video equivalent of the app store. Let independent producers serve their video content through Netflix’s website and device apps. If adding for sale content on their own scares the big media companies Netflix has to negotiate with, they could simply create an API to serve your media through their apps, and charge a small fee to Amazon to serve their On-Demand paid video library through Netflix to users. And it would be even easier with smaller producers, because like Amazon and Apple, Netflix already has everyone’s credit card on file. Netflix could, like Apple, serve as the transaction processor and bandwith server for other people’s content. Let independent producer’s like TED, Second City, UCB, MLB, and Louis CK worry about creating great content and let Netflix serve as the marketplace for them.

Whatever happens, let’s not let terrible cable company boxes control our future

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I suspect in five years our $3k cameras will be as good as our best cameras today.

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• The iPod and iTunes revolutionized music. We now buy the majority of our music online. Bands like OK Go are becoming famous without even signing a record deal. In the eighties kids stopped discovering music on FM radio and started discovering it on MTV. In the Aughts, kids stopped discovering it on MTV and started discovering it on YouTube.
• Journalism has become or is becoming a primarily online outlet. Blogs have made huge in roads to compete with major players like the The New York Times. We discover news at it happens via twitter and contribute to the story. Even the old players have been forced to embrace the new paradigm or die.
• The Kindle and the iPad are changing books forever. Authors like John Locke have created and profited from best-selling books…despite not having a publishing contract!
• Software and Video Games have been revolutionized by the iPhone and the App Store model. Small developers like Andreas Illiger can create best-selling software…all by themselves.

All of these technologies represent disruptive, more efficient markets for content.

Most importantly, each them represents a relaxing of the barriers to entry: content creators no longer have to ask permission from the establishment to create hits.

Some despise the change. The establishment provides safety. In the 90′s, large corporations could spend pre-determined amounts on development and marketing and almost guarantee themselves a return. Increased market efficiency is the result of increased competition: No matter how much or how little you spend, there’s no guarantee of success. The game is fundamentally changed forever. You no longer have to wait until the gatekeepers give you permission to create–you only have to give yourself permission.

Hollywood is next. It has to be.

This blog is a place to witness, develop and explore the ways in which disruption will come to the movie and TV industry and it’s newest sibling, web video. My hope is that it will be a place of discussion on the subject between people with three types of knowledge:

1. People who understand financing and marketing small and medium-sized creative projects.
2. People capable of creating new technology for the creation and distribution of video, more quickly, more cheaply, and with fewer middle men.
3. People who understand the creation and production of video content: screenwriters, actors, directors, cinematographers, sound designers, etc.

My hope is that these three groups will come together and have a conversation about the direction movie making is going. Perhaps they can even ban together and create a new platform, business model, or technique, one that cuts media moguls and hollywood executives out of the picture and allows consumers to more directly interface with filmmakers.

Everyone loves movies. Now let’s figure out how to make them even better.