How Services Make Hardware More Valuable

So I'm using my Netflix disc in my Wii and am pretty impressed with it.  Great picture, runs smooth.  Controls are a bit weird, because it's a mix of standard metaphor and Wii control.  Overall it's pretty good.

I'm also using the Wii for the first time since I got tired of No More Heroes II.  This makes me think about some of the upcoming games for the Wii, and how now the Wii has this service and others, and . . .

Then I realize that I'm viewing my Wii differently because of one release.  This is something you, the progeek, will be facing: services change the value of media devices, and there's a lot of people out there offering services.

Twitter and Facebook on XBox.  Netflix everywhere.  In this age of so many services, suddenly I'm seeing a lot of our closed or semi-closed media and computing hardware much differently – their value is not just in their technical power or initial media (such as games), but the services one can access from them.

The Wii is a decent game system with some great games, but has honestly been suffering as of late, even though it's a nice family-friendly, easy, cheap device.  But now Netflix with one release has changed its value, especially to those preferring convenient, easy technology.  Now your family game machine for casual gamers is also a media device.

Service providers obviously want people to use their services, and people are getting used to these various technically-delivered services, from text messaging to, well, Netflix.  This tells me two things.

SERVICE PROVIDERS HAVE POWER: Service providers have power – they have things people want and multiple options of how to deliver them.  Technology that can access these services is something people will want more, and thus the service providers are companies that people providing media technology want to cultivate business with.

SERVICE PROVIDERS ARE SEPARATE: The Twitters, Facebooks, Netflix, Gamefly, etc. evolved in separate cultures and industries than the device companies.  They're not Microsofts, Apples, Sonys, etc.  They have different experiences, needs, and goals.  I expect there to be culture clashes over time as tech companies jockey for deals with service providers.

SERVICE PROVIDERS ARE NOT FUSSY: I think in a year I'll be able to run Netflix on my toaster.  Service providers want to be omnipresent.  Tech companies making various media and computer devices may or may not have similar interests – they have to debate between more exclusive deals and having the services everyone wants.  Much as we see Apple trying to do its own thing, other technical companies will need to decide what to do.

SERVICE PROVIDERS CAN SHIFT VALUE: A service provider adding or subtracting its service from devices can influence their value.

For those of us involved in the media, tech, and geek pro scenes, this is important.  Powers are shifting to service providers, service providers have different interests than device makers, and shifts can happen fast.  Depending on where you are professionally, you can be affected in a number of ways.

– Steven Savage