Annual set-top shipments worldwide to exceed 200 million by 2013 as service providers seek competitive edge

Demand for high-definition content, time-shifting, and interactive applications will drive growth in the set-top market

The demand for interactive and personalized television services will push annual worldwide set-top box shipments over 200 million by 2013, as providers overhaul their current base with next-generation models.

The research firm’s latest report Set-Top Boxes: Outlook says the global digital transition and new distribution channels like DTT, IPTV, and over-the-top video services will intensify competition in the television service market. Carriers and manufacturers looking for a competitive advantage will replace their current installed base of set-tops with advanced models capable of supporting applications such as time- and place-shifting and Internet-based offerings.

Consumers are attracted to the concept of connected CE, with one-third of U.S. broadband households very interested in a set-top box that connects to their PC and Internet service as well as their TV. While less than ten percent are willing to pay a monthly fee, demand is still on an upward trend, especially as the set-top connects to more and more services.

Growing demand is good news for service providers, especially cable and telco/IPTV operators, who are leveraging the set-top box platform to support their multiplay strategies. With the box connected to a variety of sources, it will expand the battle in the television services market to the entire digital home, affecting every service sector from energy management and security to voice and video.

For the full press release, click here.

4 Steps to Residential Energy Management

From most news sources this week we hear progress, or lack thereof, of our government’s work on a comprehensive health plan. The most credible voices of opposition hammer on the notion that loss of choice and control will reduce the ability for consumers to reduce the costs of their care. Apply that same thinking to energy consumption. Today I have the choice, on a balmy Texas-in-July afternoon, to reduce my energy consumption by changing the thermostat. But aside from choosing to be uncomfortable, do I know how to improve my energy efficiency? As green technology proponents frequently remind us, if we don’t know what our home systems cost to run, we certainly are not equipped to fine tune them to more efficiently fit our lifestyles.

The four elements required to put the consumer in charge of his or her energy costs are:
1. Sufficient motivation for the consumer to make changes in current consumption behavior (this is implied).
2. An understanding of the energy used by each home system, measured in kilowatt hours and dollars.
3. The ability to program and control at least the major home systems, using common and easy to understand intelligent user interfaces.
4. A feedback loop which confirms which systems are responding to which programs and to what extent they are impacting consumption of kilowatts and dollars.

It is interesting to watch the development of these four elements. Parks Associates will, in the next thirty days, complete a survey of consumers which will quantify how strongly consumers desire the ability to impact their energy costs. Are they willing to purchase devices and technologies that will enable elements of control and monitoring? Are they (we) willing to replace costly home systems with ones that can be controlled and programmed? Are we willing to pay service companies, perhaps including our electric utility, our broadband and phone providers, or local tradesmen to install devices with a potential payback of a year or more? These answers are critical to the growth potential of a number of emerging industries.

The market is awash with the promise of new devices from companies as diverse as Black & Decker, Google, GE and Control4 – all with the technology to monitor or control some number of home systems. Network infrastructures inside the home are rapidly maturing. Unlikely partners ZigBee and HomePlug have joined forces to develop the Smart Energy market requirements – a roadmap of sorts to suggest how wireless and wired technologies may be used to develop an in-home control network. The table is being set and the silverware polished for arrival of the Big Guests – that is, energy utilities with their Advanced Metering Infrastructure (AMI) or Smart Grids. Analysts Bill Ablondi and Farhan Abid report that nearly 9 million AMI meters are currently installed on U.S. homes, and that Obama’s Stimulus Bill fuels the rapid deployment of Smart Grids with $11 billion in federal funding.

The Big Guests are coming to the table and will be showcasing solutions, as currently in Colorado Springs and Austin, Texas, which provide consumers with frequent feedback on energy consumption. Here is how the party will unfold; as the Smart Grid is in place, we will see first a growing number of technologies that provide in home monitoring of our home’s usage. This will be followed by introduction of smart appliances – refrigerators and water heaters which, like existing programmable thermostats for HVAC systems, can be programmed. This development will create demand for simple unified interfaces – applications that bring the control of several appliances together under an orchestrated master plan. Finally, we will see our Internet, mobile phone and even TV service providers cautiously join the party – seeking to provide control applications as extensions of the mobile phone service, or as a widget on TV, with the assumption that simpler controls will garner a few extra dollars on the monthly bill.

Unlike the current health care policy quagmire, our stimulus dollars at work combined with private enterprise will empower consumers with a growing variety of technologies to tailor energy costs to meet particular lifestyle needs.

Broadband Forum to announce midyear IPTV and broadband Stats

The Broadband Forum, a global consortium of approximately 200 member companies dedicated to the development of global broadband network specifications, will be unveiling the Q209 global broadband figures and IPTV statistics at this month’s Broadband World Forum Europe event in Paris.

The research will be made public by Robin Mersh, Broadband Forum’s Chief Operating Officer on September 8, 2009. He will also provide a brief update on BBFs latest work, and new developments around the areas of broadband network energy efficiency, fiber integration and new quality measure.

Parks Associates is an analyst sponsor of the Broadband World Forum Europe event. In addition, Kurt Scherf is speaking in the session Bringing the Network into the Home: From Connected Home to Real Digital Home, Tuesday, 8 September, 14:00 – 15:30.

Internet Video and My Video Services now Available to FiOS TV Customers

Web video is available to FiOS TV subscribers that have the Home Media DVR feature ($19.99 per month). I received a note from Verizon this morning noting that the implementation of Internet video and My Video (personal/home video) for the Home Media DVR service across the FiOS TV service footprint has been completed.

Now, all new and existing Home Media DVR subscribers have the ability to view Internet video content and personal/home video on their FiOS TV screen.

New Home Media DVR subscribers simply have to download the latest version of the bundled Media Manager software application and install it on a PC connected to their FIOS in-home LAN. Once that’s done, they’ll be able to stream Internet video, My Video, digital images and music files stored on the PC to their Home Media DVR set-top box. Current Home Media DVR subscribers who have previously downloaded/installed the bundled Media Manager software are receiving messages to upgrade the application to enable the additional new Internet video and My Video capabilities.

Interview with David Friend at Carbonite

Note: I am a paying Carbonite user (since April), upon the recommendation of my older brother, whose hard drive crashed, resulting in the loss of many digital photos.

I had the opportunity to brief with David Friend, the chairman and CEO (and co-founder) of Carbonite, the online backup provider. The Carbonite folks reached out to me following my quote in an article in PCWorld regarding the recent shuttering of a number of once highly-touted online backup services: AOL (Xdrive and AOL Pictures), Hewlett-Packard (Upline), Sony (Image Station), and Yahoo (Briefcase), Digital Railroad and Streamload MediaMax, which turned into The Linkup.

Despite the failures, Carbonite is sitting in a market that is ripe with opportunity. Our consumer data shows that people are starting to respond to the messaging that they've got to take some sort of action in protecting their data and digital media content. While I understand that some of the marketing messaging from the consumer storage industry players is inevitably going to move from pure backup and safekeeping of content to sharing, networking, and remote this-and-that, the key message to continue to put in front of consumers is that they have robust solutions available today that will help them safeguard their data and digital media collections.

The data below compares the results of two studies - Managing the Digital Home: Installation and Support Services and Customer Support in the Digital Home - both of which focused on consumer needs and interest in a variety of home technical support services and offerings, includign premium technical support, managed security, and backup and safekeeping services. The good news is that consumers are starting to get in the habit of backing up their data in more consistent ways (instead of just burning a CD or a DVD every once in awhile). Even more interesting is the big jump in demand for online backup services.

Carbonite's focus today is on expanding their market presence through partnerships (such as those recently announced with Sun Micrososystems, LaCie, Lenovo, TDS Telecom. Friend indicates that a "keep it simple" mantra really explains the company's focus, particularly as it relates to the ease-of-use of the product. Although users won't find any content sharing or remote PC features in Carbonite (and don't expect them anytime soon), Friend says that the focus on an unlimited and simple storage at a flat rate makes the most sense. Instead of providing a limited amount of free storage and then requiring users to specifically select with files and folder to backup, Carbonite allows everything to be backed up in a minimal number of steps.

This same philosophy applies to the company's relatively new secure remote access feature. Although it was made available in March, Friend says that recent focus groups that they conducted reveal that most people (including yours truly) wasn't aware of it! I tried it out while Friend was talking to me, and I found it not only easy to access, but also very easy to find all of the files from the home computer, laid out in the same logical file structure that I'm used to seeing on the PC. Having this kind of logical arrangement of backed-up content shouldn't be understated. I've been frustrated with some of the consumer storage products that I've tested that all want to stick a new user interface in front of me. Although there was clearly a lot of development and planning around the creation of these UIs, they really have done little to make the experience of actually backing up and seeing my content any easier. In fact, I would have preferred it if the UI would just default into the standard Windows file format that I use to access documents, photos, and other files at home. So, give Carbonite some credit for the simplicity of its acccess.

Roxio CinemaNow Widget

Big week for connected TV news, with announcements made regarding Blockbuster OnDemand and Samsung and the introductions of the Rovi Liquid media guide aimed at integrating broadcast/cable, online, and personal content into one user interface. Now, Sonic Solutions has announced a Roxio CinemaNow® Widget that will be available on connected TVs running the Yahoo! TV Widgets.

Macrovision is now Rovi, and they've got a new media guide for the CE Industry

Macrovision officially changed its name to Rovi, and they announced a new media guide for the CE industry. Called "Liquid," the new media guide solution is comprised of three distinct, but integrated solutions: a Television Content Guide, a Broadband Content Guide and a Personal Content Guide.

The Television Content Guide is a linear broadcast television discovery solution that CE manufacturers can embed into their devices. The Broadband Content Guide connects users to their favorite full length television and movie content for both free and paid services, as well as additional content including Internet video, popular music, social networking and other Internet destinations. The Personal Content Guide not only helps consumers navigate their media collections, but it also gives them the ability to share their content from the ease and comfort of their television screens.

Liquid integrates Blockbuster OnDemand, so this is definitely being positioned squarely at the connected TV market.

The Liquid guide is planned to be available for CE manufacturers in early 2010 as an entire package or individual modules.

Instead of a connected TV, how about a VUDU box instead?

TWICE is reporting an interesting promotion between Mitsubishi and over-the-top video box provider VUDU. Starting tomorrow, Mitsubishi will offer a VUDU HD set-top box free along with $50 worth of movie credits for the purchase of most Mitsubishi TV models. The VUDU box and movie credit offer (a $200 value) will be available through all authorized Mitsubishi retailers, and will run through Aug. 10.

FiOS TV gets social networking and Web video

As someone who gets paid to write well (I hope), I think that Twitter is the beginning of the end of Western civilization. The Verizon folks decided to ignore my opinion, however, and they're integrating tweets and Facebook into an updated Widgets Bazaar. The social networking feeds add more content to the Widgets that already included ESPN Fantasy Football, customized news, traffic, and weather, and horoscopes.

The Widgets Bazaar is being launched as an open development platform. In the coming months, Verizon will add to the FiOS TV Widget Bazaar dozens of additional free and transactional applications developed by the company and others.

Verizon soon will publish its Software Development Kit (SDK) to enable open development. The open development platform will enable developers to publish applications to FiOS TV's growing base of more than 7 million interactive set-top devices in FiOS TV homes. The company expects open development to unleash a plethora of innovative, television centered applications. The SDK will use Lua, a robust and efficient programming language.

Verizon is also adding Web video sites to its Widgets. Later this month, customers who subscribe to the Home Media DVR service will have access a new Internet Video feature that will allow them to search and view on FiOS TV user generated online videos from video-sharing sites blip.tv, Dailymotion and Veoh. In addition, a new My Videos feature will let these subscribers view via FiOS TV personal videos stored on their PCs. Both new features will be available free of charge to FiOS Home Media DVR customers and require no additional equipment.

Veoh's content is pretty decent, and includes both catalog and recent television programming (CSI, NCIS, Family Guy, The Daily Show, etc.). I'm particularly excited about The A-Team!

Over Eight Million Smart Meters Deployed in U.S., with Millions More to Come

Report profiles key players in Residential Energy Management, analyzes new opportunities for companies in the Smart Grid value chain--

With over eight million smart meters already deployed in the U.S., the market for residential energy management (REM) has taken the first significant steps in deploying Smart Grid technologies and advanced meter infrastructure (AMI) on a broad scale.

The recently completed report, Residential Energy Management: Company, Alliance & Technology Profiles, says these deployments will open up significant opportunities for companies in the REM value chain. Public, private, and consumer factors are all driving this growth, and the Federal stimulus bill, with the support of the Obama Administration, allocates $11 billion for smart grid initiatives through 2010.

Residential Energy Management: Company, Alliance & Technology Profiles provides coverage of more than 60 companies and ten alliances, including Home Area Network (HAN) solutions and component suppliers; metering solutions manufacturers; Smart Grid enablers; and technology enablers.

This report is the first deliverable in Parks Associates’ comprehensive industry and consumer research service called Residential Energy Management: Opportunities for Digital Systems and Services.

For the full press release, visit click here.

Blockbuster is now in the Connected TV Game

Blockbuster and Samsung have announced that Blockbuster OnDemand will be available on select connected HDTVs, Blu-ray players, and home theater systems starting this fall. I talked to a Los Angeles Times reporter yesterday about the deal, and was told that Samsung does plan to offer connected Blu-ray players and home theater systems with both the Netflix and the Blockbuster online services. However, today's release from Blockbuster indicates that Blockbuster OnDemand will have "preferred positioning" on the Blu-ray devices.

My quote in the LA Times article compared the novelty of a connected TVs to that of a kid's Christmas present. My concern for the industry is that - lacking really compelling lineups of content (day-and-date availability, high-definition, ad-supported current television episodes, etc.) - consumers may play around with a Widget feature or download a movie in the first couple of weeks of use, but quickly grow tired of the device. It's happened to me. I get a new device, unwrap it, get it to work (sometimes), and play with it for a couple of weeks before its novelty wears off. Will the same thing happen to connected devices?

Now, if you're one of the ten million avid Netflix subscribers out there, then a connected device that streams older titles to the TV may be a nice complement to your Blu-ray and DVD rentals. However, given Netflix, Redbox, and your cable operator's growing collections of timely and high-definition content, how will connected devices provide a real utility and not just fade as short-lived novelties?

Are Current Titles Available? I'd like to better understand the title availability for both Blockbuster and Amazon's online content. How well do the rental and download options match those of the most-current DVD or Blu-ray releases that I can find at Blockbuster or Redbox? If there is a relatively close match, then there's definitely a convenience factor in not waiting for the Netflix envelope or trekking to the rental store or the kiosk. And, I know that the kiosks are everywhere, but c'mon...it's 105 degrees today in Dallas, and I don't care how close the Walgreens or the McDonald's is. It's too hot to go anywhere! So, title availability and convenience may be a factor, but...

Is High-Definition Content Convenient to Access? I'd argue no, based on my experience with the VUDU box. Even with a very high-speed FiOS broadband service, a download of an HDX movie takes several hours. At that rate, it's more convenient to make the drive (even in the Texas heat) to the video store or rental kiosk.

When will We See Highly-Desired TV Episodes Available? Your cable, satellite, and IPTV provider aren't going to sit still and let their bread-and-butter TV revenues get lost to online sources. So, the game today is to leverage a big catalog of free on-demand content to complement their many cable offerings. They're also ramping up their offerings of on-demand primetime shows to provide even more access to this programming. The connected CE folks are at a disadvantage here, because there is no model yet for streamed and ad-supported current television programming to the TV. They can certainly go the download route (although this is not going to be a big market at all ... why download to the TV when 80%+ of U.S. homes have pay TV and have more access to DVR and VoD primetime programming? They can also provide a great deal of older content, which is nothing to sneeze at. Look at Veoh Network's lineup of classic TV programs. Hey, even if it's not high-definition, The A-Team is pretty cool!

I challenged the panelists on the Connected TV Strategies session at the June CONNECTIONS 2009 event with the question of what it will take to get agreements in place to allow connected TVs and other devices to receive streams of current ad-supported television programming. I think we're all in agreement that providing consistent measurement and analytics to programmers will be an important step to convincing content owners to release more of their content in an ad-supported format to the television. Without this data, there are still plenty of questions about the true audience size for any given episode, which has implications for how ad dollars are then allocated. The panelists (representing AnySource, IBM, VIZIO, Yahoo!) all acknowledged that this is a difficult problem to solve, and we're still some time away from seeing consistent measurement applied to online video usage. So, the connected TV folks are still largely relegated to transactional downloads, older streams, and not-so-current TV offerings, all of which give them a disadvantage to the current options of disc sales and rentals, and whatever you can get from your cable provider.

As I'm watching the connected TV market take shape, these three areas - content availability, high-definition support, and metrics and reporting - will be among the most-important factors I'll be watching to determine success or failure. With Blockbuster in the game, we at least have some more data points to be tracking.

Watching Amazon Video On Demand on a Connected CE Device

Since I updated the Netflix connected CE devices, here's a list of the devices where the Amazon Video On Demand Service is available:

• Xbox 360 (content must be downloaded to the PC first)
• TiVo
• Roku Digital Video Player
• Sony BRAVIA TV
• Panasonic VIERA CAST TV

More Connected CE Devices Doing Netflix Streaming

Now that Sony BRAVIA Internet Video Link TVs can show Netflix streaming content, it's a good opportunity to revisit the connected CE devices playing Netflix content.

Connected TVs

• LG HDTVs with NetCast Broadband (55LH50, 47LH50, 42LH50, 60PS80, and 50PS80)
• Sony BRAVIA Internet Video Link

Connected Blu-ray Players

• LG LG BD370 and LG BD390
• Samsung BD-P1600, BD-2500, BD-P3600, and BD-P4600

Connected Game Consoles

• Xbox 360

"Cloud Media" Set-top Boxes

• Roku Digital Video Player
• TiVo HD DVR

Connected Home Theater Systems

• LG Network Blu-ray Home Theater Systems (LHB953, LHB977)
• Samsung Blu-ray Home Theater Systems (HT-BD1250 or HT-BD7200)

Latin America's Version of Hulu

Brightcove has announced that Fox Latin American Channels has chosen to build its online VOD service on the Brightcove platform. Brightcove is enabling Fox Latin American Channels to deliver more than 800 hours of premium, advertising-supported, long-form video content in Spanish and Portuguese from some of the network's most popular shows through its Mundo Fox portal (http://www.mundofox.com and http://www.mundofox.com.br). In the short time since launching the new online VOD initiative on June 16th, Fox Latin American Channels has already generated 1.5 million unique users and 2.5 million page views for Mundo Fox.

A North American Cable Home Networking Effort

We've been watching for any cable moves into the home networking space, and it appears that we have a North American first. Rogers Cable is about to deploy DOCSIS 3.0 N gateways.

Rick Cotton, EVP, NBC to Keynote at SuperComm - Parks Supported Event

Rick Cotton, EVP and general counsel of NBC Universal, will share his insights on digital media and broadband business developments in a keynote address at SUPERCOMM 2009, a Parks Associates supported event.

Cotton’s keynote presentation on Friday, Oct. 23 will address the critical need for cooperative efforts and dialog between technology companies, content developers and media distributors to build sound business models to ensure the market's continued innovation and fiscal viability in the face of rapidly evolving technology and the current regulatory environment.

For more information about SUPERCOMM, click here.

CardioNet Received Rate Cut Call

This morning CardioNet announced that effective on September 1, 2009, Medicare will cut payment rate for mobile cardiac monitoring service (code 93229) from $1,123 to $754, a 33% reduction. The rate cut has been in the rumor mill for some time, but CardioNet’s management only recently reduced its guidance for 2009 revenues and earnings. It appears that the rate cut is deeper than management’s expectation as the company’s stock tanked 30% after a 40% drop just a week and half ago. Although CardioNet vows to appeal the decision, but chances are slim given the current environment. CardioNet’s situation once again highlights the risks in the home medical diagnostic market. The reimbursement environment for medical devices in general might get worse as the call for healthcare savings paying for reform gets louder.

Parks Associates supports SUPERCOMM 2009

Parks Associates is supporting SUPERCOMM 2009 on October 21-23, 2009 in Chicago, Illinois.

SUPERCOMM showcases the business and technology solutions you need to maximize your network and offers the applications and services your customers demand.

It's the international showcase for a new industry, a new economy and a new world of broadband communications. In just four days, you'll meet and talk with the visionaries, executives and engineers transforming an industry and changing the way we live our lives.

SUPERCOMM draws on a tradition started over 20 years ago, bringing service providers, network owners, manufacturers, suppliers and related professionals together to exchange ideas and innovations.

For more information, click here.

Best Buy and TiVo Form Alliance

TiVo, the Silicon Valley company that popularized the digital video recorder, and Best Buy, the national electronics chain, are forging a broad partnership.

On Thursday, the companies plan to announce that Best Buy will heavily promote TiVo products in its 1,100 stores in the United States. TiVo will develop a version of its set-top box, to be sold in Best Buy stores, that will let the retailer advertise its products and services to TiVo subscribers on their home televisions


Read More: NY TIMES

Parks Associates forecasts over 640 million broadband households worldwide by 2013

Value-added services, stimulus funds will help increase subscriber numbers --

The demand for high-bandwidth applications will jump in the next few years as the number of households worldwide with broadband will reach close to 650 million by 2013, according to international research firm Parks Associates. The firm’s new report Broadband Services: Global Outlook warns that service providers will have to continue investing in network technologies to accommodate multiple services such as video-on-demand and converging social-networking applications.

Parks Associates reports the number of broadband households worldwide grew by over 18% in 2008 to exceed 400 million. Asia-Pacific is the largest market, accounting for over 160 million subscribers, and it will have over 49% of the global market share by 2013.

In the U.S., the federal government, at the request of the Obama Administration, will soon release billions of dollars from the stimulus package to promote expansion of affordable high-speed Internet services in rural areas, which will open new areas in this country to advanced online services.

Bandwidth will continue to be a focus as the operators re-architect their networks to deliver multiple services over the same infrastructure; however, in such a competitive field, bandwidth alone is not enough to win subscribers. Blended applications, combining services such as online video and customer support, offer operators an opportunity to increase ARPU. In addition, innovative new services will help differentiate service providers, which can then compete on factors beyond pricing or raw bandwidth.

For the full press release, click here.

Parks Associates supports IPTV World Forum North America

Parks Associates is supporting the IPTV World Forum North America from July 20-21, 2009 at the Millennium Broadway Hotel, New York.

The IPTV World Forum was developed as a direct response to the rapid growth in the marketplace, bringing together operators, technology partners and content providers to explore and define the IPTV evolution. More Info