Mass Market Home Controls … Can Best Buy Make it Happen?

On December 20, 2006, the Associated Press reported that Best Buy will launch a "ConnectedLife.Home" product that is basically an all-in-one kit allowing consumers better control over their digital entertainment and home controls applications (lighting, HVAC, etc.). An HP PC is the central controller of this $15,000 system, which will enable distributed media as well as control and remote monitoring functions. For $19.95 a month, consumers can set up the system for such applications as remote Web camera monitoring and thermostat set-back. (The remote Web camera monitoring application is one that interests us, and we've commented on the role of such players at AT&T in delivering these solutions to end-users in more meaningful and useful ways.)

With the launch of Best Buy's solution, we asked our Director of Home Systems Research - Bill Ablondi - to provide some perspective on this, with an eye on whether this particular initiative helps to drive greater middle-market growth for home controls overall. Bill's comments are below.

Best Buy's ConnectedLife.Home Rings in a New Year for Home Controls
Bill Ablondi, Director of Home Systems Research, Parks Associates

The ability to connect selected systems in the home in control networks has been available for years, but adoption has lagged behind expectations … including ours. So, with the announcement yesterday of Best Buy's ConnectedLife.Home package, does this mean 2007 will be the year of mass-market home controls? Probably not. However, Best Buy's announcement does mean is that the stage is being set for broad-based adoption of connected home systems. The home control market has lacked consumer awareness, not technical capability. Best Buy will help raise awareness among consumers of what intelligent systems can do in a networked environment in the home.

We're preparing to release in January 2007 the results of an in-depth market analysis and competitive assessment of the home controls market: Home Systems: Home Controls Update. The report is based on surveys of home systems installation channels (custom electronic systems designers/integrators and security systems integrators/installers), as well as home builders and consumers. In addition, the research team interviewed principals at the major systems providers, start-ups, OEMs and distributors to compile a holistic view of current market dynamics. This analysis provided the basis for our updated forecasts of the home controls opportunity, broken out by key segments including application, single-family vs. multi-family unit, and new vs. existing homes.

Our research shows that the U.S. market for home controllers reached $3 billion in 2005 and will grow to $3.2 billion in 2006 in the face of a very difficult new home market. Historically, home control systems have been sold into the new home market. This is still the case, but will change dramatically over the next few years as power line and wireless technologies eliminate the need to rewire existing homes in order to provide control and audio/video distribution capabilities. By 2010, we project that more than 30 million households will have a network that bridges numerous products and extends the entertainment experience to multiple rooms in the home. Entertainment applications along with energy management and security systems will drive adoption of home controls. We see multiple "Trojan Horses" for control systems to ride into the home.

Best Buy's $15,000 package is not an impulse buy at the check-out counter. They're targeting home builders, remodelers, and electronic systems installers. Builders have told us that they're on the lookout for new electronic entertainment and control systems to differentiate their homes from competitors. Best Buy's package is a solid offering based on industry-standard products from Microsoft, Intel and, HP and wrapped with a clever software package, LifeWare, from Exceptional Innovation.

At the upcoming 2007 International Consumer Electronics Show, Bill Ablondi will be moderating a panel discussion titled Mass-market Home Controls? Products, Protocols and … the Players! We invite you to attend this session, along with the other sessions on which Parks Associates' analysts are participating. For more information about these sessions, please visit the Parks Associates' Website for a specific schedule.

Do Digital Downloads Kill the Next-gen DVD Formats?

We received this interesting inquiry from a reporter working on this particular angle. We figured that we'd blog our entire response for you to read. Hollywood is facing a tough challenge in deploying its next-gen disc formats at a time in which box office receipts are growign anemically and the DVD cash cow is showing signs of reaching its peak. We covered Hollywood's challenges and offered our own analysis and suggestions in our recently-completed report Internet Video: Direct-to-Consumer Services.

Our Response
We really don’t see digital downloads hurting Blu-Ray/HD-DVD sales, at least in the short term. There are numerous reasons for this. First, we don’t anticipate that the studios are going to release much of their first-run content (particularly the high-value films) to the download market, instead preferring to see if they can add margin to this content by releasing it on the next-gen formats. We anticipate that you’ll actually see more catalogue/library content move to digital downloads, where 1) the economics make more sense (studios aren’t looking to necessarily sell thousands of copies of their older content); and 2) resistance from their retail partners will be nil (Wal-Mart and Target would still like to move the first-run content on DVD at a decent margin).

Some of the other challenges with the downloads are the long time that it takes for the consumer to get a movie. A consumer who will be seeking all of the benefits and extra features that the larger-capacity next-gen DVDs will offer won’t find the director’s commentary or outtakes on a download. Although the extra features may not be a primary driver for the vast majority of consumers to run out and buy a DVD, they’ll be important, particularly if the studios get smart with their creative development and perhaps offer (where appropriate) complementary content and applications on the discs, including (but not limited to) games, other trailers, perhaps some shorter clips of content, etc. Consider the tie-ins that could be done with the six Star Wars movies and the game content that has been created based of George Lucas’ franchise.

Finally, one of the biggest variables that may hinder the widespread growth of the next-gen formats may simply be consumer resistance to the idea of upgrading their large movie collections to a new format. The music industry did a great job of moving listeners from vinyl to the 8-track (although who wants to admit that they owned one now?), to cassettes, and finally CDs. The movie industry got us all to change out our VHS tapes to DVDs. So, now there’s a substantial challenge ahead of the industry to convince consumers that the next-gen discs offer so much additional value that a consumer not only will make the actual Blu-Ray/HD-DVD choice when buying a new movie, but also may consider replacing his or her existing collection of movies with the upgraded versions. That’s going to be one tough row to hoe.

Preventive Content Protection Solutions Key for Video Sharing

Philips launched its MediaHedge service on Thursday to help content owners gain better control over their IP rights. The technology is based on its fingerprinting solutions. According to an article from Associated Press,
"The MediaHedge system works by checking the digital "fingerprint" or unique characteristics of video files and looking for a match in Philips' database of video content.
The service can spot a match even if the video file is degraded, altered or amounts to a small slice of the original video, according to Philips Content Identification, a unit of the Netherlands' Philips Electronics NV.
Copyright holders can specify in advance whether they want to allow videos containing their footage to be posted on sites running MediaHedge, or whether they should be blocked or otherwise restricted."

This is definitely an important announcement for the Internet video industry. The current way of manually checking user uploaded materials is very backward, inefficient, and ineffective. For Youtube to truly become a viable business model, preventive content protection solutions are a must. In a report Parks Associates published last week, "Internet Video, Direct-to-Consumer Services", we identified such solutions as important technologies to watch in 2007.


" Through our research, we have identified the following interesting technology solutions:

• Preventive solutions for content protection. With the growing popularity of video sharing Web sites, technologies such as digital fingerprinting that can block illegal content from being uploaded to the Internet in a preemptive fashion will generate tremendous interest from content owners."

Other important technology solutions we identified include:

• P2P content delivery (both downloading and streaming) with enhanced content protection and DRM solutions.
• Turnkey online video solution providers who can offer content owners, social networking sites, and other interested parties a suite of solutions for video distribution and monetization.
• Innovative Internet video advertisement solutions that can fully leverage the interactive nature of the Internet and the rich video media formats to increase the effectiveness of online video advertisements.
• Video Search that leverage face, image, and voice recognition technologies.

The Internet and the Airlines - More in Common than You'd Think?

Hello from C-Scape, Cisco's annual analyst conference. Yesterday's opening sessions gave a great deal of insight to Cisco's strategy in the "Network as the Platform" age. As top executives such as Chairman and CEO John Chambers and Chief Development Officer Charlie Giancarlo stated, Cisco's big bets in the next five years will be in emerging markets (they are moving a number of top execs there and working closely with policymakers on such issues as healthcare and education), video (professional, user-generated, communications, and security), and a continued effort to give service providers a truly end-to-end solution for the quad-play.

Mike Volpi Cisco's Senior Vice President/GM Routing and Service Provider Technology Group gave a really interesting talk in the afternoon titled "Service Provider - Consolidation, Trends and the Future View.

Volpi centered his discussion on the argument that service providers can actually reshape the Internet and leverage next-generation networks (NGN) to provide value-added and differentiated services. Referring to the September 15, 2006 edition of The Economist, in which the front-page headline declared, "How the Internet Killed the Phone Business," Volpi said that he hoped a future headline would read "How the Phone Companies Reshaped the Internet." Clearly, the traditional service providers are facing many threats from Web service companies that are using high-speed connections to deploy "over-the-top" services (Vonage and Skype with voice; Google, Yahoo, AOL, Apple, YouTube, MySpace, Revver, etc. with video). However, Cisco anticipates that the service providers may be able to retake some of the momentum. He laid out some strategies:

1. Much like an airline charging passengers different rates for different classes of services (First, Business, Coach), Cisco anticipates that service providers will be able to charge certain premium subscribers extra for QoS and for smarter content policy management. Our data backs up this premise. In our Managing the Digital Home: Installation and Support Services study from 2006, we found that a small but enthusiastic group of consumers are willing to consider paying extra for an optimized Internet experience for such applications as entertainment and sharing personal content. We content that upstream bandwidth - and specifically a service provider's ability to offer faster uploading for sharing home videos and photos, as well as for uploading digital content to secure storage services - will start becoming a key differentiator from one provider to another.

2. Cisco is very much anti-Net Neutrality. Volpi says that it would reduce service providers' incentives to differentiate and innovate.

3. Cisco thinks that mobile broadband will take a huge leap in its marginal value as consumers experience speeds beyond 256 kbps.

4. Finally, IMS isn't a panacea for solving a lot of policy issues. Smarter networks are needed because there are lots of applications that are not IMS or SIP-based. Cisco's smarter networks are needed.

Cisco has much at stake in convincing service providers that smarter and more managed networks are a key to growing their business. However, some of the early bets that they've made in such applications as Telepresence are gaining traction (Cisco believes that this could be their fastest-growing business since switching). With the acquisitions the company has made and the continued strive to innovate, they will certainly be among a key class of equipment and solutions providers working with the service provider community in the next few years.

Get Ready for UMB

Ok, here's a new acronym for you-Ultra Mobile Broadband (UMB). Qualcomm has provided more information about its next-gen mobile strategy. Ultra Mobile Broadband will become the marketing term for CDMA EVDO Rev. C. Maybe having an acronym will help Qualcomm compete with WiMAX and LTE in the next-gen battle. Qualcomm said UMB can theoretically support mobile data speeds up to 280Mbps, when using MIMO and scalable bandwidths up to 20 MHz. Similar to claims we hear from WiMAX citing 75Mbps, nobody is sure what the real throughput will be until large scale commercial networks get deployed. Qualcomm said it will begin running demos of the technology in its labs in the spring. It seems UMB will leverage both Qualcomm's heritages in wireless communications and its recently acquired FLASH-OFDM portfolio from Flarion. Be it UMB, 4M, or WWAN/WLAN/WPAN integration onto a SOC, Qualcomm's next-gen ambition is clear-Qualcomm will never be an afterthought in the mobile/wireless industry, never.

Internet Video Revenues: Some Questions and Answers

Our press release from December 7 ("Annual U.S. revenues from Internet video services will exceed $7 billion by 2010") has resulted in some interesting questions coming to us from the press and our clients. We appreciate the feedback and the interest in the findings from Internet Video: Direct-to-Consumer Services.

We've had some insightful questions about the direction of the Internet video advertising revenues. Since it's a subject that many of you probably have strong interest, we'll share our thoughts in the blog. By the way, this report was a big team effort from us - thanks to Michael Cai and Harry Wang for their perspectives!

Question: What's the revenue forecast for Internet video advertising?
Answer: Annual revenues for Internet video advertising in the U.S. market will grow threefold between 2006 and 2010 to approximately $4.4 billion in 2010.

Most of these early advertising dollars will be generated from non-embedded display ads on different video streaming Websites. Later, as the inventory of high-quality embedded advertising increases, we’ll see that ad revenue grow to surpass the non-embedded ad dollars.

Question: Who are the major advertisers?
Answer: The advertisers have been a mix of many of the companies who traditionally have spent much on primetime spots in the past. For example, ABC now has a group of 36 companies who are supporters of their ABC.com streams (in November, ABC reported that it has streamed 19 million episodes of delayed primetime shows since it began its experiment in May). ABC’s advertisers have included AT&T, Century 21, Cingular, Disney Pictures, Ford, Honda, Johnson & Johnson, JP Morgan Chase, Masterfoods, Nissan, Procter & Gamble, Red Lobster, Remax, Royal Caribbean, Sears, Sony, Sprint, Subway, Toyota, Unilever, Verizon Wireless, Verizon DSL, and Visa.

Question: Who are the major publishers?
Answer: All of the major Web portals and media companies are considered major publishers. Google, MSN, and Yahoo! are all enhancing their ad networks and ad serving technologies. Other incumbents include AOL with Advertising.com (AOL acquired Lightningcast.com in May 2006), Doubleclick (June 2006 acquisition of Klipmart), Valueclick (announced a partnership with EyeWonder in August 2006), Vitalstream (acquired Eonstreams in May 2006), and Comcast and Turner Broadcasting (which announced a strategic investment in ViTrue, Inc.) These incumbents are making acquisitions or strategic investments in order to become one-stop shops for rich media advertising solutions. Other rich media ads solution providers worth noting include United Virtualities, Eyeblaster, Viewpoint, Tremor Media, Postroller, Zedo, and ViewStart.

Question: What kind of advertising is running?
Answer: The increasing interest in broadband video advertising is encouraging industry players to introduce innovative business models and technology solutions. YouTube, the leader in user-generated content, is planning its online ad strategy around sponsored channels, which allow advertisers to participate in the online community instead of being viewed as intrusive annoyances. VideoEgg, an online video solution provider for social networks, is leveraging opt-in tickers and banners embedded in video streams to invite viewers to click through (a model proven by TiVo with DVRs). In addition, Vidavee is introducing a hot mapping technology, which identifies the most popular segment within a video for advertisers to insert their messages.

There are primarily three kinds of Internet video advertising, including pre-roll (also known as in-stream), in-banner, and transitional (which includes both interstitial and post-roll). Currently, the majority of online video advertising revenue is generated from in-banner video ads. Most online Web sites and publishers support in-banner video ads, but such ads produce the lowest response rate since viewers do not have to watch them in order to access content on the Web site. In-stream and transitional video ads are more effective at generating click-throughs. However, these two formats need to attach to videos, and the providers are just now building up their inventory of high-quality ads.


Question: How has online distribution of primetime TV offerings boosted ad revenue for the networks?
Answer: Right now, we can point directly to what the network executives are saying in their earnings releases. For example, Robert Iger, President and Chief Executive Officer for the Walt Disney Co., indicates that the CPM for adults age 18-49 on the ABC.com ads is 4x what they’re getting for primetime advertising. Ad retention rates for the ABC.com services are incredibly high (upwards of 85%), and ABC indicates that revenues from their Internet programming and downloads could total approximately $700 million in fiscal 2007.

Also, Scripps Networks, which operates such broadcast channels at The Food Network, HGTV, Fine Living, and DIY, announced that 10% of its revenue is coming from online sources, most of it advertising.

Yahoo Experiments with MP3 Format, Again

The Wall Street Journal reported Wednesday that Yahoo! Music is experimenting for the third time this year with the new music strategy: releasing Norah Jone’s single “Thinking About You” in the DRM-free MP3 format. The previous experiments were also associated with big-name artists like Jessica Simpson and Jesse McCartney.

In the digital music industry where Apple’s clout becomes increasingly threatening to other music distributors’ long-term viability, Yahoo’s move is widely regarded as an unconventional strategy to battle for an outbreak from Apple’s siege. Can MP3, used to be the equivalent term for music piracy, become the solution to the music industry’s current dilemma? I doubt it.

Unlike a few years ago when the music industry only has to worry about Napster-like file sharing pirates, it now has a more thorny issue: to deal with an uncooperative friend/partner Apple. How to treat a friend who helps you enormously but also stubbornly insists on doing things in his own way? The music industry is still struggling to find the best approach. Now the idea of using the universal MP3 format is being floated by Yahoo as a means to counter Apple’s influence. But this approach is hardly novel or effective. One reason: consumers are far more concerned about content and cost than format. Different formats, like different content protection schemes, are restrictions applied to the content and consumers ought not to care about them.

Yahoo points to eMusic as a success story to justify its theory and practice. I don’t think MP3 is the secret source for eMusic’s success. iTunes, like eMusic, has a large collection of tracks from independent labels. If Yahoo argues that iPod owners go to eMusic because its catalog tracks can be played on the iPod, then there is no reason for them not to look for them on iTunes in the first place. My theory reasonably argues that only when they cannot find the music they want on iTunes will they turn to other sources, or for other more practical reasons, like…hem… cheaper price?

In other words, iPod owners are indifferent to MP3 format, but more drawn to unique content and better deals than they get from iTunes. I don’t know how much catalog overlap there is between eMusic’s and iTunes’, but I know under eMusic’s current pricing model (basic service costs $10 for 30 tracks per month or less than 34 cents per track), consumers definitely get a better deal than iTunes’ 99 cents universal pricing.

So if Yahoo Music cannot compete with iTunes on content uniqueness and price, MP3 format will not do any good for it to counter against Apple’s influence in the music distribution business. And don’t blame DRM for restricting consumers’ choice and unsuccessful business venture. In my opinion mobile service providers’ “walled-garden” approach, and printer manufacturers’ printer + proprietary ink cartridge model are much more restrictive that current music DRM terms, but I didn’t hear any far-cry about them. The content industry is working on interoperability technology, like Coral’s solution. They are far ahead than the other two industries for being considerate to consumers’ needs.

My departing words are for the music labels. Yahoo and other “non-Apple” distributors’ woes are partly attributed to their fixation on old business models benchmarked against CD sales, pricing and distribution terms. While Norah Jones is singing “Thinking about You,” music labels need to think really hard about themselves for a much needed change.

Why MySpace is Natural Monopoly

Economics teaches that the market for some goods and services are ‘natural’ monopolies. Take telephone service, for example. A telephone service is only really valuable if any person with a phone can be connected to any other person with a phone. For this reason the market with ‘naturally’ coalesce around a single, monopoly provider unless the government intervenes.

The Internet is another good example. I could (hypothetically) go out and create a new system for connecting computers together and maybe even convince a few friends of mine to use it but, unless it would interoperate with the system we refer to as the ‘Internet’ it would be of little value.

There are other examples, of course, electricity service, subway systems, roads, railway transportation, etc. etc. etc. I’m sure you get the general idea. My point is to highlight the (sometimes) overlooked fact that all of these have one thing in common: they are networks.

We are used to thinking of ‘natural’ monopolies as those requiring physical infrastructure but the same principles apply to cyber networks. One is ‘naturally’ better than two or more. Instant messaging, for example, would be improved if all of the software packages interoperated with each other. This would increase the level of competition, however, and so the major providers generally keep their IM programs closed to outsiders. The recently established interoperability agreement between Microsoft and Yahoo is merely a strategic move designed to give them an edge over AOL and Google.

Now in the case of instant messaging, multiple players have survived because the monopolistic ‘gain’ is relatively small. It is inconvenient to alternate between multiple IM programs but not terribly so. They are all available for ‘free’ and use little drive space. Users will therefore tolerate the inconvenience of multiple providers. But what about a peer-to-peer communication network that demanded a higher level of consumer ‘investment’?

Social networking, after all, is simply a peer-to-peer communication network. Users put information about themselves onto a webpage and then link it to pages made by acquaintances. The resulting online network replicates offline social connections and facilitates communication between the parties. The end result is simply a hyper-efficient enhancement to traditional word-of-mouth exchanges. Instead of getting together with friends and asking, “Has anybody heard how so-and-so is doing?”, social networkers can simply trace the online connections until (hopefully) they find the person in question and learn the latest.

MySpace is obviously the largest social network and its value, like any other network, grows as the number of users increases. It also grows as the amount of information it holds increases. (Finding your long lost friend’s page is pointless if it says nothing about them.) In other words social networks, unlike instant messaging, require a higher level of ‘investment’ from users. They must not only create a list of ‘friends’ but also spend time and energy providing information about themselves. Alternating between multiple social networking sites entails a greater cost than switching between instant messaging programs. Is the economic ‘gain’ of a single social network great enough to for the market to naturally eliminate all other rivals? Evidence suggests a rosy future for MySpace.

In August of 2006, Parks Associates fielded an online survey which found that among all of the key social networking services, only MySpace has a substantial base of unique users. Seventy percent of Yahoo! 360 users, for example, also use other social networking sites; MySpace in particular. Ditto for Facebook, MSN Spaces and Friendster. In other words, the people using MySpace’s competitors are generally MySpace users that have the time and energy to maintain a presence on multiple social networks. This presents an obvious, long-term business challenge to the competitors. If they cannot build up a large base of unique users, they will always be on MySpace’s periphery.

Social networks, like many other kinds of networks, are showing a tendency towards a monopolistic market equilibrium which almost by definition makes social networking a ‘natural’ monopoly. The implications of this conclusion are intriguing. Setting the side speculation of government intervention, the success of MySpace has produced a bumper crop of ‘me too’ sites backed by various venture capital firms. Yet economics suggests that even if the cost of having multiple networks is small, there will just a few major players in the end. Other sites will be condemned to niche markets and subsets while MySpace becomes the only site of significance similar to how Ebay (another good example of a cyber network) dominates the online auction space.

As the old adage goes, if it looks like a duck, walks like a duck and quacks like a duck, then you probably have a duck. MySpace is unquestionably a communication and information network which, like any other kind of network, grows in value with each additional user. Conversely the consumer ‘cost’ of using multiple social networks, while not as astronomical as having disparate telephone networks, is still higher than alternating between multiple instant messaging programs. All of this is to say MySpace looks like a natural monopoly and, judging from usage patterns, certainly appears to be behaving like a natural monopoly. I’m not a biologist but offhand, I’d say we’ve got a duck.

Value Chain Consolidation and Digital Lifestyle Opportunities

With NDS’ announcement on December 4, 2006, that it is acquiring Jungo, we’re continuing witness consolidation in the market to deliver complete end-to-end access/service provider solutions. Today’s announcement also reaffirms they key roles that both home connectivity and enhanced WAN and LAN management tools will play in the competition between and among a number of service providers in television, broadband, and communications services delivery.

Recently, we’ve already witnessed significant acquisition and investment news from such companies as Alcatel (the Lucent merger took effect on December 1, 2006); Cisco Systems (Arroyo, Ashley-Laurent, KiSS, and Scientific-Atlanta, plus a significant investment in Widevine) and Motorola (Broadbus, Kreatel, and Netopia were all added to the fold recently).

A recently-released report from Parks Associates – Digital Living Forecasts – details the market opportunities available to the service provider community in the provisioning of advanced home connectivity products and services. Our numbers indicate strong growth (at year-end 2010 for U.S. households) in access-related services, including:

- More than 80 million broadband households;
- Sixty-five million bundled services subscribers;
- Thirty million bundled VoIP subscribers;
- More than 6.5 million residential Telco TV subscribers; and
- Nearly $3 billion in cable VoD revenue.

As households with advanced digital services grow, we’ll see residential customer premise equipment (CPE) similarly scale. The same Digital Living Forecasts through 2010 show solid growth in these specific categories:

- Nearly 20 million households using whole-house DVR solutions;
- Sales of networked-attached storage devices to exceed three million units; and
- Connected entertainment households (with multimedia and/or entertainment networked solutions) will exceed 30 million households.

What sort of trends will we see going forward? Whereas 2005 and 2006 have been mainly about building the end-to-end network and infrastructure solutions, we’re anticipating that residual products and services (both stand-alone and incorporated into service provider bundles) will begin to leverage the infrastructure for a host of new services and product solutions. Some key examples of these add-on solutions include:

- Sales of portable multimedia players, which will extend the entertainment experience to on-the-go environments, will reach revenues of $1.6 billion;
- Mobile phone revenues, which will incorporate many additional services beyond voice, will reach $181 billion;
- Online gaming subscriptions, fees, and derivative revenues will reach $4.4 billion;
- Digital music services will exceed $3 billion in revenue; and
- Internet video services (subscriptions, fees, and advertising) will reach more than $7 billion in revenue.

What remains exciting about the digital lifestyle space is the continuing trend toward innovation, which will not be contained to the large and highly-integrated companies. Some very interesting areas of opportunity that we will watch closely in 2007 include:

- Building smarter content delivery networks that allow service and content providers to better scale their existing infrastructure to deploy an even richer user experience;
- Continued work on the WAN and LAN management side. As service providers’ products and applications reach farther inside the digital home, they will need to build smarter and more dynamic management and reporting systems to help them solve customer issues with connectivity and customer service more dynamically;
- More advanced customer premise equipment (including set-top boxes, residential gateways, and other equipment) that help manage services and support inside the home;
- Greater storage capacity for mobile and portable platforms;
- The release of more robust home networking solutions (both wired and wireless) that enable the in-home connectivity environment to receive and distribute very robust content, including HD, from the service provider;
- Trends in alternative broadband delivery networks. As ownership of the network may become an even more critical piece of owning the customer, we may see alternative players invest heavily in broadband solutions beyond cable, DSL, and fiber;
- Enhancements to software that improve on the user experience for creating and sharing their own content; and
- Dramatic improvements to user interfaces, both physical and graphic. Service providers, end-user equipment manufacturers, and other players will need to invest both time and money in developing next-generation interfaces and search technologies to help end-users better find and organize their digital content libraries.