Which Direction will the Digital Living Room Revolution take?

When we compare the vision of the Digital Living Room Revolution, and the current implementations right now, we see that there is potential here today. However, which direction will industry take?

As my previous post on the Current Contenders shows, there are many different ways companies are playing the current Digital Living Room. There does not seem to be any convergence, and each company is creating a proprietary system. Tivo has a proprietary system (so they can earn monthly subscription fees). Comcast DVR set-top boxes have a proprietary system. According to a CNET article, Gartner analyst Van Baker says that electronic companies are trying to lock consumers into using their proprietary technologies so they can charge a premium for their products.

Is this the wave of the future, where many companies are pushing proprietary systems competing for their share of the pie? Will there be a true winner in the end and will consumers adopt the technology in large numbers? Or will there be a move towards open standards, interoperability and convergence?

If there are open standards and interoperability, I can imagine the equivalent of a Computer sitting between the service provider, and the HDTV set, while being part of a home network. This computer-like device should be very easy to use and install, have an easy to user interface, and have all the computer like components such as internal hard drives, USB connections, wireless connection, wireless keyboard and remote device, an operating system, and the ability to run third party applications. This device should be able to interoperate will different service providers (Cable, Fiber, DSL companies), different HDTV sets, interact with different types of PCs in the Home Network (Apple or Microsoft PC), and be able to run third party applications. The system should be modular and accept external hard drives and other devices, much like the current PC.

But what direction will industry take? Apple (AAPL) seems to have been very successful with making their system a closed system with iTunes and iPods. Why would a company with a very dominant position using the closed system model want to adopt the open model?

We are in the very early stages of the Digital Living Room. These are exciting times, and I am very interested which direction industry will take. What will industry do next?