Consumers not ready to embrace cloud-based digital locker solution for music and video

The industry is rapidly moving content solutions to the cloud, but consumer interest is not keeping pace, as less than 30% of U.S. broadband households find the digital locker an attractive alternative for music or video.

Cloud Media and the Digital Locker, a new report from Parks Associates highlights the challenges within the industry, including device and format interoperability, consumer awareness, and security and delivery issues. Market fragmentation is also a major inhibitor, and efforts including Digital Entertainment Content Ecosystem's (DECE) UltraViolet initiative and Disney’s Studio All Access aim to overcome these barriers.

The benefits of cloud services are popular with consumers, indicating significant market potential. Access via mobile devices is important, and over 50% of U.S. consumers consider multiroom access to music and video content and guaranteed replacement of lost or damaged media to be equally important features of the digital locker.

Cloud Media and the Digital Locker examines how key players from content owners and distributors to platform and technology solution providers are tailoring their cloud-based solutions to include secure delivery, high quality, and ubiquitous access models.

Defining Consumer Cloud Products and Services

"Cloud" is such a buzz phrase today that it's easy to be overwhelmed by what's really happening on the consumer side. There are some very real developments today, and we are organizing our thoughts in a report titled Cloud Media and the Digital Locker. A press release today from Western Digital and a New York Times article describing offerings such as SugarSync got me thinking about how I'd organize the consumer-oriented cloud solutions. As to the requirements for a product or solution to fit in the "personal cloud" category, I'd say that there are several:

• For hardware, appliance, and online, and solutions, the ability to upload all desired content to remote storage (not just a single-purpose photo-sharing site, for example);
• Again for the hardware, appliance, and online applications, the ability to "push" - or share - only specific folders or files with friends or family);
• Remote and ubiquitous access to content from multiple IP-connected devices; and
• For premium content service cloud offerings, the ability to either offer multiple formats or work with hardware with the necessary transcoding capabilities to play in particular video on a wide number of devices.

Here's my best shot at categorizing the consumer cloud solutions:

• Hardware, Software, and Appliances: Products in this category are it network-attached storage appliances/media servers and applications developers that provide for remote access via smartphones and other IP-connected devices (companies such as Buffalo, Data Robotics, Iomega, QNAP, Seagate, and Western Digital. Also, appliances such as Pogoplug don't necessarily require a NAS drive, but allow all local drives and files to be accessed.
• Online Storage and Backup: The aforementioned SugarSync is a good example, and others include Box.net, DropBox, Egnyte, Humyo, Microsoft Live Mesh, SpiderOak, and ZumoDrive. Also, service providers are in the mix - Deutsche Telekom offers a service called Connected Life Experiences at Home. Companies such as NewBay Software and viacube are two to watch as white-label providers of synching and backup services.
• Cloud Music Services: There are many streaming music services from which to choose, but Cloud Music services will store your personally-owned content and have it ubiquitously accessible. Speculation was that Apple would launch this as a feature of iTunes following its purchase of Lala. Others in the mix are MOG All Access, Sony Qriocity, and Thumbplay.
• Online Video Transitions to the Cloud: Sony's Qriocity is a good example of this kind of service. RoxioNow is a technology to watch in this space.
• Video-on-Demand as a Cloud Service: Verizon FiOS Flex View is the first known intiative of which I'm aware, but we'll see other. Whether or not they adhere to the UltraViolet brand from the Digital Entertainment Content Ecosystem (DECE) or Disney KeyChest is another matter.

There is consumer demand for cloud media. From our Digital Media Evolution II survey, remote and mobile access to photos and music are among the top cloud features desired.

DECE unveils the UltraViolet consumer brand

The Digital Entertainment Content Ecosystem (DECE) consortium has announced its UltraViolet consumer brand. The goal of UltraViolet is to allow consumers to watch their digital entertainment across multiple platforms, such as connected TVs, PCs, game consoles, smartphones and tablet PCs, in an easy, consistent way. Since all UltraViolet offerings will work together, consumers will be able to select which products and devices they prefer from a spectrum of familiar companies – ranging from major studios to consumer electronics companies to cable, web and other service providers. In addition, the UltraViolet name and logo will help identify entertainment products and services designed to work together seamlessly.

In yesterday's Webcast on "TV Everywhere," I hypothesized that a "digital locker" solution such as UltraViolet (or perhaps something proprietary to the operator) would be a key in extending the concept of TV Everywhere from mere cable channel repllication to what I've termed "VoD 2.0," where operators create storefronts and are selling VoD downloads that can then be accessed on a variety of consumer electronics platforms. Eventually, I would expect that the concept of TV Everywhere then morphs into "Content Everywhere," where we see cloud-based solutions hosting a variety of content - from user-generated to professional (including games, e-books, music, etc.). But are the service providers on board with DECE? Although there are operators and service provider-related entities on DECE (CableLabs, Comcast, Cox, and Liberty Global), the comments I've read in news reports about the UltraViolet announcement are pretty noncommital about its use.

In a post that I wrote after our CONNECTIONS™ 2010 event, where we had Mitch Singer (CTO of Sony Pictures and president of DECE) speak, I had expressed some concern about whether DECE would get traction with the service provider community. We heard concerns from service providers during CONNECTIONS™ that DECE's goal of limiting the number of video formats available would limit their ability to compete on higher and higher quality content. If a service provider is going to spend billions of dollars to upgrade their network to fiber or DOCSIS 3.0, shouldn’t they have the option of providing a very high-quality format that cannot be easily replicated by an over-the-top provider?

Digital Living Conference & Showcase features keynotes from Sony Pictures, Samsung, Sony Electronics

Parks Associates announced the preliminary agenda for CONNECTIONS™: The Digital Living Conference and Showcase, which will address the future of digital entertainment and connected CE with keynotes from Sony and Samsung. In addition to the focus on digital content and new service offerings for consumers, the three-day event will feature research presentations and speaker panels on support services, DRM, energy management and controls, advertising, and mobile applications and services.

CONNECTIONS™, in its 14th year, will take place June 8-10 at the Santa Clara Convention Center and is the premier event for research and analysis on connected home technologies and digital living solutions. CONNECTIONS™ attracts over 600 executives in the connected home industries and is the only event that addresses developments within each industry sector while also focusing on the impact and opportunities for convergence across industries.

Keynotes include:

· Scott Birnbaum, Vice President, Samsung LCD Group

· Mitch Singer, CTO, Sony Pictures Entertainment; President, DECE

For more information, visit www.connectionsus.com.

Who's going to control the "Digital Locker"?

We've been pleased to have Mitch Singer from Sony Pictures and the Digital Entertainment Content Ecosystem (DECE) coalition speak at our recent CONNECTIONS events and speak about the potential of "digital locker" services. Roughly defined, these would be services that could authenticate and manage a wide variety of user-owned content in a virtual environment. One key element of the digital locker is widely agreed-upon digital rights management protocols, where multiple connected devices across a wide array of platforms can connect to content coming from multiple sources. The other key is the virtual storage and management of content that will become more important as the number of Web-connected media players (smartphones, tablets, TVs, Blu-ray players, etc.) proliferate.

The DECE is not alone in pursuing the development of digital locker solutions. The Walt Disney Company is promoting Keychest, which Disney CEO Robert Iger describes as a way to allow a consumer to purchase content and play it back on multiple platforms without having to worry about interoperability.

Now, there is the report from CNET that Apple is in discussions with the studios to enable iTunes users to store their content on the company's servers. Apple has told the studios that under the plan, iTunes users will access video from various Internet-connected devices.

We've taken an early look at consumer acceptance of a digital locker type of service, and have found that 30% find the idea highly appealing. I think that the trust issue is going to be more of a problem with the studios than the consumer!