European Research Update: EU Developments in Digital Living

Parks Associates attended multiple conferences in the latter half of 2010, and we were encouraged by the industry developments throughout the continent. Here is a summary of some of our recent observations, which culminated with the recent CONNECTIONS™ Europe Summit, which Parks Associates hosted on November 15-16, 2010. Visit www.connectionseurope.com for more information on this and future Europe events.

European Service Providers Embracing the Connected Home

The operators in attendance at the Connected Home World Summit in London were from many different European markets - from Greenland, Estonia, Italy, Germany, France, and Russia to countries in between. We came away with the following takeaways from the panels and keynotes:

There are very different takes on the economics of deploying the "God Box"/über-box, which would bring in the functionality of the residential gateway (modem, routing, remote manageability, etc.) along with multiple set-top boxes (tuners, transcoding, server capability, etc.). For reasons related to cost, lifecyle differences in CPE, and the risk of one point of failure, many operators are taking a conservative approach in deploying fully integrated customer premise equipment hardware. At the same time, Intel (which was represented at the event by Brendan Traw) has had early success with some service providers, including Telecom Italia and Liberty Global, in delivering a high-powered gateway that takes on much of the functionality of the über-box.

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Parks Associates Supports Connected Home Global Summit

Parks Associates is supporting Connected Home Global Summit. The event is taking place on October 5th-6th in London, UK.

With increasing digital connectivity and intelligent devices in and around the home, the time is right to examine the key trends and influences within the Connected Home proposition.

The Connected Home Global Summit will explore whether the evolution of Broadband Access, the emergence of Converged Digital Devices and advances within Home Entertainment is ripe to explode into a full blown Connected Home revolution.

For more information, please click here.

European Service Providers Embracing the Connected Home

We're in London for the Connected Home World Summit, and I chaired yesterday's sessions. The operators in attendance are from a wide spread of European markets - everywhere from Greenland, Estonia, Italy, Germany, France, Russia, and countries in between. I was furiously writing notes during the keynotes and the panels, and came away with the following takeaways:

• There are very different takes on the economics of deploying the "God Box"/über-box, which would bring in the functionality of the residential gateway (modem, routing, remote manageability, etc.) along with multiple set-top boxes (tuners, transcoding, server capability, etc.). For reasons related to cost, lifecyle differences in CPE, and the risk of one point of failure, many operators are taking a very conservative approach in deploying a fully integrated customer premise equipment hardware. At the same time, Intel (which was represented at the event by Brendan Traw) has had early success with some service providers, including Telecom Italia and Liberty Global, to deliver a high-powered gateway that takes on much of the functionality of the über-box.
• The effort formerly known as Project Canvas (now known as YouView is making progress, and we can expect to see set-top boxes and then connected televisions with the implementation in 2011.
• There are some interesting thoughts about whether the concept of TV Everywhere is simply a nice-to-add feature or a true revenue generator. Our own research finds a good percentage of consumers willing to pay a $5 premium per month for access to their cable channels on different IP-connected devices, and Irdeto - which delivers content protection solutions - indicates that one of its European service provider customers is getting a good take rate on a TV Everywhere service at a €5-6 premium.
• Irdeto's representative also spoke of the evolution of digital rights management, indicating the the renewability DRM - that is, its ability to be updated as new threats emerge - will be a critical trend. It's one of the key reasons that Irdeto acquired Cloakware.
• A speaker from Vodafone shared the company's key connected home strategies, which includes the deployment of both residential gateways (with a port for a 3G modem) and femtocells in the U.K., French, and Spanish markets. In terms of value-added services, they have found good success with delivering an online backup service, which is one of the key value-added services that Parks Associates identified in our Customer Support in the Digital Home: Europe study in major Western European markets. Finally, they have embraced at least some basic home control applications with remote home monitoring through the mobile phone. This is an area that we're watching closely, as we expect that energy, home control, and health applications as value-added services will be important for operators to investigate in the next few years.
• Operators are mainly very pleased with the capabilities that DLNA provides to them, particularly in applications such as media servers and multi-device entertainment servers.
• Several service providers spoke of their concern about the high number of video formats that will need to be supported.
• A speaker from A1 Telekom Austria also spoke of the importance of its online backup service as a value-added service (as did a speaker from Telefónica). A1 Telekom Austria offers 1 GB of storage for free, but also will upsell tiers. The company developed their own UI and Media Manager software so different devices (TV, PC, mobile, etc.) could access and share content. The sharing of content is a critical element as well. You can push things like photos to your parents by simply entering in their telephone number into the interface on the TV or the PC, so sharing digital photos with non-tech savvy people becomes much easier.

I'm off to Budapest to speak at the CTAM EuroSummit'10 tomorrow. It will be interesting to hear the perspectives of the cable operators in Europe regarding the connected home, and what similarities and differences exist with technology, strategy, and business models.

Research Workshop features Broadband Services, 3D TV, Video Services, Connected CE

Parks Associates is hosting the special one-day research workshop Monetizing the Digital Lifestyle on September 20 to address operator strategies, value-added services, and new technologies such as 3D TV, connected CE, and multiscreen solutions. This interactive workshop takes place at the Connected Home World Summit in London.

Kurt Scherf, Vice President & Principal Analyst and Pietro Macchiarella, Research Analyst will present insight, analysis, and forecasts of the digital living markets in the following sessions:

-- Enhancing Broadband Services: Connected Home and Customer Support
-- Providing Depth on 3D TV Opportunities
-- Operator-provided Video Services: Coming into Focus
-- Connected Consumer Electronics: Platforms, Online Content, and the Consumer

Kurt Scherf will also chair and present on "Examining recent and forecast deployments of connected home services by operators and service providers" on September 21 at 9:30 a.m. In addition to hosting the research workshop and speaking at the event, Parks Associates is a supporting partner of the 2010 Connected Home World Summit. The Connected Home World Summit, part of the IPTV World Series, brings together key players in the connected home value chain to evaluate the commercial potential of connected home services and to clearly understand the technical and financial challenges of supporting them.

Tvinci and PeerTV - Web-connected set-top box announcement

We can expect to hear about a number of announcements related to online video, Web applications, and connected consumer electronics, particularly in Europe. We are entering several weeks in a row of major European consumer electronics and media events, highlighted by IFA in Berlin, IBC in Amsterdam, and Connected Home World Summit in London, where Parks Associates will be presenting a one-day workshop on Monday, 20 September.

In last week's Webcast - Connected TV Outlook - I covered the market for Web-connected consumer electronics, including televisions, Blu-ray players, digital video players, and game consoles. At the same time, the the venerable set-top box is going to be another device to watch. After all, whether it's the large digital terrestrial market (particularly in Europe, Asia, and other global regions) or pay-TV services (cable, telco/IPTV, satellite), getting Web content and applications to the viewer is going to be a significant theme over the next few years.

One of the pre-IBC announcements comes from Tvinci, a company specializing in online content management, and PeerTV, a set-top box and software company. Tvinci's media management solutions will allow PeerTV to deploy an end-to-end solution for operators wanting to deploy a paid online video service.

The Web-enabled set-top box market will be growing rapidly in the next five years, as shipments are expected to grow nearly 5x, reaching nearly 100 million units by year-end 2014.