A big part of our business is working with companies to understand the changes that technology – and specifically broadband – can bring to their business. There is probably no better example of this than the coming wave of “Connected TV” in which consumers will be able to connect their high speed broadband connection (via wire or wireless) directly to their HDTV set. The net result is the ability to watch any Internet video on a big, crisp screen from the comfort of your couch or favorite easy chair.

There is a lot of great content on the Web that will just never make it onto a cable channel. Whether it’s big-idea speakers from the TED conferences, or “how to” videos from Instructables, or independent films from Atom, I want to watch this long-form content on my TV, not my PC.

While this has huge impact for consumers, it will fundamentally change the relationship that HDTV manufacturers have with their customers. To date, the consumer’s “relationship” is with their cable provider. Historically, the TV manufacturer simply sold a big piece of glass, diodes and plastic and that was it. Less than 5 percent of consumers even sent in the warranty card.

But with the advent of connected-TV, the consumer electronics companies now find themselves in need of service design. Because now they have a very tight connection with the consumer and the revenues from services over the life span of the product will far exceed the revenues from the hardware. After all, there’s got to be some way of organizing and navigating the ever-growing mass of video content that is out there which in turn will lead to a wide variety of other value added service.

This is why we’re excited to be working with AnySource Media. They essentially empower the HDTV manufacturers with a four-pillar platform that brings Internet video to HDTV. These pillars include the embedded software that resides in the HDTV, pre-negotiated video content deals, an advertising platform that dynamicaly matches viewers and contextual ads, and a backend data center that ties this all together.

Connected TV is a “tipping point” technology. You’re already seeing the first few models come with many more to follow in 2010. I predict that by 2012, we’ll all be reminiscing about the “old days” when you couldn’t access your favorite show from the cloud, on demand.

This is not about watching more TV – this is about watching better TV, which means content you want, when you want it.

Pricing levels and methods are an important part of service design. Especially when you are changing them for a pre-existing service. That’s why it was interesting to see the awkward way in which Ryanair, the Irish discount airline, is handling their most recent announcement.

In a move to further automate their service, Ryanair, the Dublin-based budget airline announced it would introduce a $7.50 USD on-line check-in fee per passenger, per flight on new bookings. In addition, they plan to fine customers $60 USD if they do not print out their boarding passes prior to arriving at the airport. The airline hopes to shut down al of its traditional check-in desks at 146 airports by October 1st.

The move will eliminate about 100 jobs at Irish airports and Ryanair is set to save millions of pounds by ending its contracts with check-in services at European airports. Ryanair says the proposal will help passengers avoid “time wasting queues and delays.”

We’re all for that, but why charge a customer to check-in online if a) you are realizing dramatic cost-savings in the process and b) it’s the only way they can use your service?

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I’ve long said that other industries – particularly print, television and film – can learn a lot from the brutal upheavals that the music industry has gone through related to digital conversion. So here is a very specific example of how a band is adding value to the "analog" live-concert experience by adding "digital" perks. These types of pricing/value strategies are in integral part of the service design process.

The pop band No Doubt is giving away a free download of its entire digital audio catalogue, comprising more than 80 songs from the band’s seven studio albums, when a consumer buys one of their top-tiered concert tickets. Tickets for the No Doubt tour, which kicked off May 2 in Atlantic City, has a variable pricing model based on venue. The free download offer applies only to top-ticket price levels, typically priced at $42.50 USD or higher. (Of course, this is before additional ticketing-related fees kick in.) In addition to the band’s past songs, the download will also include "Stand and Deliver," a brand-new song that will be performed for the first time in May.

There are a number of these types of bundling deals happening in the music industry, and clients in other industries would be well served to carefully watch the music industry as the "canary in the coal mine." What opportunities exist for you to add value value to your service by bundling in digital assets?

An interesting experiment in service design is unfolding this week as Starbucks and McDonalds aim their marketing cannons at each other. Starbucks is taking out full color, full page ads to tout their entire product/service/experience. The initial ad, launched today, covers quality (they only use the top 3% of available beans), Fair Trade (good karma), employee training, and health benefits to all employees who work over 20 hours. The last paragraph covers the user experience side: "Oh, and a little bit of the price of a cup of Starbucks coffee helps furnish the place with comfy chairs, good music, and the right atmosphere to dream, work and chat in. We all need places like that these days."

And in the other corner we have McDonalds, launching their "McCafe" brand on TV, radio, the Internet and in print. (Is it me, or do those billboards make the product look like plastic?) But watch out Starbucks: McDonalds is on a tear, particularly in this economy. They are a massive marketing machine, not to be trifled with. But the real questions is: Should Starbucks really be all that concerned with McDonalds? How many people do you know that are loyal to both those brands? Is Ralph Lauren concerned about Old Navy?
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