I always thought that Apple got a pass from dazzled media over the closed nature of the iPhone. For all of Apple's talk of being consumer-centric and user-friendly, the basic design of the iPhone made it by far the most closed mobile environment of all. You couldn't even get a ringtone download until last month, and the selection of those tones on iTunes is truly pathetic. Steve Jobs trotted out a laundry list of excuses for the lack of third-party inclusion (viruses, bringing down the AT&T network, etc.) but none of it really explained why I could't download a decent game or ringtone.

Apple apparently is moving toward a greater spirit of inclusion and true user-friendliness today. Not only did the company announce that it was lowering the price of its DRM-free iTunes Plus tracks, but it also said that an SDK would be available to third party developers for both the iPhone and the iPod Touch.

According to Jobs, the kit will be available in February because Apple is trying to ensure two things at once. First, it wants a development kit that gives third parties a good experience and access to as much of the multi-touch interface as possible. Second, they are working to ensure that these third-party apps do not comprimise the security of the phone. Jobs seems a little touchy on this matter, as he goes out of his way to rationalize his rationalizations for keeping such a tight leash on his coveted new tech hit.

Sayeth the great and powerful Jobs: "Some claim that viruses and malware are not a problem on mobile phones—this is simply not true. There have been serious viruses on other mobile phones already, including some that silently spread from phone to phone over the cell network. As our phones become more powerful, these malicious programs will become more dangerous. And since the iPhone is the most advanced phone ever, it will be a highly visible target."

What does this mean for develoeprs and the mobile eco-system? Well, it is very good news for the two million or so of us who do own the phone, but I am not sure it has that big an immediate impact on the rest of the mobile world. As has often been the case with the iPhone, its infleunce seems indirect. By giving users and developers a lush and flexible interface and palette, the iPhone obliquely pressures the rest of the mobile community to follow suit.

Free has become the revenue model du jour. Of course, RadioHead made waves last week by offering its latest tracks for an optional donation. SpiralFrog has already been offering downloadable music and video for free, with ads. And just yesterday Sprint expanded its free mobile TV selection on the new Sprint Exclusive Entertainment (SEE) channel.

The Sprint offering is significant because it broadens the earlier Power Vision channel, which seemed like an experiment in ad-supported mobile video. Now, Sprint is all in. With SEE it is committing to a full bore mobile video channel of homegrown programming. The channels are populated with repurposed Web material but also hours of material from its own studios and talent. And all of it is free to subscribers.

Free is the new fee. Word is out recently that Wired editor and “Long Tail” author Chris Anderson is working on a new book on this very topic. In fact, he aims to offer the book itself in some form for free. His “Long Tail” blog is beginning to test out some of the ideas.  The argument goes that content makes its money on the back end rather than the front end, via consumer fees. The back end could entail advertising. It could entail merchandising. Last year’s OzzFest concert tour, for instance, was free to attendees because the bands themselves were not paid. Instead, they made back their money from advertising. New ad-supported record labels are rumored to be ramping up, offering bands the opportunity to leverage their music as promotion for profitable concerts.

But the model also raises questions. In a world where advertising supports content so substantially, then how much more clout will marketers demand and get from content providers? On the other hand, how will a free-for-all model  affect content production? After all this is a model Google has used in part to justify its endless beta releases of half-baked products. No one is paying for it anyway, so let the users help develop it. Is this a rationale that could permeate the content production chain if a free model tends to de-value content.

Business models are not just ways of making money. They also affect content production and consumption.

According to some measures, the October 5 weekend box office was the worst for this month since 1999. And Hollywood had come to bat with Ben Stiller, the Farrelly brothers and more advance buzz than Al Gore's Nobel Peace Prize. So what is to blame for this debacle? Some studio executives aimed their lasers at the recent release of Halo 3, the Xbox 360 game that scored boffo box office itself with over $170 million in its first day on sale.

Ad Age reports that conventional wisdom holds that movie audiences were home playing the addictive game. Microsoft says that 2.7 million players have logged into the Xbox Live service to play the multiplayer game. Apparently, the Xbox 360 beat Hollywood at its own game. "Halo 3 was marketed as an event film in terms of its partnerships, with beverage, automotive, fast feeders and mobile-phone companies all joining up," says Ad Age. 

Did Halo 3 keep us away from a film that had poor reviews along with an unimpressive menu of theater alternatives? Maybe, but I think TV networks and cable have a lot more to worry about than theatrical film. In my house, my darling daighter and her friends pretty much owned the TV for the last two weekends, all playing Halo 3 with one another, with opponents as far away as South Africa, and solo. I know I didn't see a minute of broadcast or cable all weekend. If anything I was more inclined to catch a movie just to escape the virtual bloodshed in my living room.

Perhaps we should be theorizing less about Halo 3 hurting box office and start counting the hours that game consoles are on and cable is off in most American homes. In this generation of consoles especially, there is a premium on HD playback. These consoles are most likely to occupy the main monitor in most homes. When gaming is on, everything else is off, at least in the living room.

There is a real issue of media mindshare lurking beneath this little dust up of speculation. There is only so much time in the day, even when you do figure in multi-tasking. The real effect of video gaming on the rest of the media eco-system is only beginning to be felt. Unfortunately, too few companies in the media and advertising value chain are measuring this effect and giving all of us a firm idea of how powerful gaming is in consuemr lives, if not in ad budgets and media coverage.