Consumption of PC video is increasing, but TV still main video source

More U.S. households are watching online video and on a wider variety of devices now than two years ago, but they are not sacrificing their TV viewing to do so. Digital Media Evolution II found 40% of all U.S. broadband homes now regularly watch long-form video on a computer. However, service providers can allay their fears of cord cutting for now as high use of PC video does not yet correlate with decreased TV viewing.

People are using online video to fill in the gaps. When it comes to watching TV shows and movies, nobody’s first choice is the computer. People will watch this content on a computer when it is not convenient or feasible to watch on a TV.

Households with a high incidence for viewing PC video are also heavy DVD users. Both DVDs and the Internet are non-linear video sources. That makes them somewhat similar from the consumer’s perspective. They don’t care about the distribution method so much as the experience, which will be enhanced through the ability to view premium content on a variety of devices. Service providers and other video retailers that offer high-quality, consistent multiplatform viewing experiences will come out ahead in the battle for consumers’ eyeballs.

Digital Media Evolution II quantifies and analyzes the market demand for emerging media platforms, features, and services.

What content will matter on the connected TV?

The obvious answer is premium video, including movies and TV shows.

Parks Associates' Digital Media Evolution II survey indicates that the basics (customized weather and traffic widgets) along with music and games will also be of interest. In fact, it is interesting to see the growth of consumer interest in gaming applications at the set-top box or connected TV.

This space is starting to heat up, and companies such as Accedo Broadband and OnLive could be significant players. Of course, as Michael Lantz from Accedo Broadband reminded us at the CONNECTIONS US Conference, it's difficult to get consumers to pay for the games. So how will these services be monetized?

Keep an eye on remote UIs. The concept of the "remote UI," which would provide a more consistent experience in search and discovery of content across different platforms, will be of significant interest to service providers and content owners.

At CONNECTIONS 2010, we learned about different technologies to facilitate this UI:
• HTML5
• AJAX CE
• The RVU Alliance

Securing the connected experience should go beyond the PC. At this year's CONNECTIONS Conference in Santa Clara, companies like Mocana remind us that security concerns will grow more prevalent as huge numbers of devices (including those aimed at M2M applications like smart meters) become more interconnected.

Please join us for our upcoming CONNECTIONS Conference in Europe this November. Visit www.connectionseurope.com for more information.

Parks Associates announces CONNECTIONS™ Europe Summit Series for 2010

International research firm Parks Associates will host two CONNECTIONS™ Europe Summits in 2010. The first CONNECTIONS™ Europe of 2010 will be April 27 in Amsterdam, Netherlands. This executive summit will focus on connected consumer electronics and digital media, including analysis of new monetization models and the impact of technologies such as 3D TV and smartphones.

The second CONNECTIONS™ Europe of 2010 will take place in November in Paris, France. Both events will feature Parks Associates’ expert consumer and industry research, with the company’s analysts presenting data from consumer research projects including All Eyes on Video, Consumer Decision Process, Residential Energy Management, and Digital Media Evolution.

Parks Associates projects that by year-end 2013, revenues in major Western European markets from video-on-demand (VOD) – including traditional pay-TV services and online video services – will approach 12 billion Euros.

Early sponsors for CONNECTIONS™ Europe, also members of Parks Associates’ Premier Program, include ActiveVideo Networks and PacketVideo. Visit www.parkspremier.com for more information on the Premier Program.

Parks Associates will start accepting speaker submissions for the April 2010 Summit on January 18, 2010.

2.5 Million U.S. and Canadian Households ready to buy an Internet-connected TV

Personalized and Web-based content driving consumer demand --

Parks Associates reports that approximately 2.5 million broadband households in the U.S. and Canada are ready to purchase an Internet-connected TV if priced at a $100 premium over regular TVs. This figure translates into $250 million in additional revenues for the consumer electronics industry.

Parks Associates’ latest consumer study, Digital Media Evolution, gauges market demand for Internet-connected devices and the applications consumers want to use in conjunction with this new capability. The study covers digital cameras, TVs, digital photo frames, and Blu-ray players and finds TVs have the strongest market potential.



The top application consumers want through a connected TV is access to video-on-demand content. At the same time, roughly one-third of broadband households in the U.S. and Canada want on-screen widgets, and 27% want to access content stored on their home computers.

Access to additional content is the key demand driver. Most people can get popular video titles through their pay-TV providers, but if they want to watch niche or personal content on their TV, they have to burn or buy DVDs. With a connected TV, they suddenly have lots more options.

U.S. consumer interest in home networking migrates to mobile and portable devices

Parks Associates survey identifies features driving demand for new digital cameras and mobile phones...

A new study from international research firm Parks Associates finds consumer demand for networking features will drive the next wave of consumer electronics purchasing, particularly for imaging and mobile devices such as digital cameras, photo frames, and mobile phones. Digital Media Evolution, a new survey from Parks Associates, finds nearly 50% of U.S. broadband households want a digital camera with networking capabilities, with nearly 40% similarly interested in a networked digital photo frame.

Digital Media Evolution is a nationwide survey of U.S. consumers in broadband households and focuses on 2008 consumer electronics purchases, including planned and completed holiday purchases. It also examines consumer interest in networked consumer electronics and willingness to pay a premium for connected devices.

Parks Associates will present research from this and other projects at CONNECTIONS™ Summit at CES, January 8-9, 2009. Visit http://www.connectionssummit.com/ for information. During CES, visit Parks Associates at Booth #25556, South Hall 2, Ground Floor.

Research indicates expansion of entertainment-at-home services despite poor economic conditions

Parks Associates announced that almost 66% of U.S. consumers have altered their spending habits in 2008 as a result of the country’s deteriorating economic conditions. These changes have had the greatest impact on entertainment spending outside of the home, according to Digital Media Evolution, a new consumer survey, but also open new areas for growth in customer support services.

Parks Associates reports consumers have cut spending in 2008 primarily on outside entertainment sources, creating greater dependence on at-home entertainment services and new opportunities for broadband, communications, and entertainment providers in offering customer support, self-diagnostic, and troubleshooting solutions.

In 2008, U.S. consumers are most likely to cut their spending on dining out, travel, and out-of-home entertainment. Additionally, Digital Media Evolution found that nearly 50% indicate that they will be spending less on consumer electronics because of economic conditions in the fourth quarter of 2008.

Parks Associates advises providers to take back-to-the-basics approaches to revenue growth and cost savings. Service provider costs for supporting home networks alone could total hundreds of millions of dollars annually. By implementing self-diagnostic and troubleshooting solutions and building remote support capabilities, service providers can turn customer support from a liability into an opportunity, reducing OPEX costs initially and growing revenue-generating customer support businesses in the long term.

Blu-ray Buyers in 2008

The one consumer electronics product about which I'm being asked the most this year is Blu-ray. Hollywood, the retailers, and of course the consumer electronics manufacturers are trying to figure out how sales are doing, particularly in this challenging economic environment. We got some clues from the industry last week that indicate that the aggressive price promotions for Blu-ray players seems to have paid some dividends.

Our own Digital Media Evolution study also offers some interesting insight. I had the chance to review the first findings from our team last night, and the data looks solid. Reported purchases of Blu-ray players (this would have been through the end of November) was north of two million units. It's really interesting to see how intended purchases for 2008 (from our Changing Consumer Electronics Purchase Process research from late 2007) have diverged in 2008. To our surprise, many consumer electronics categories did better in 2008 than the consumer intentions from last year would have indicated. Most pronounced were mobile and portable device sales, including digital cameras and mobile phones. It looks like smaller consumer electronics products are certainly out-performing the bigger-ticket items right now, and our new research indicates some interesting results about gifting intentions for these smaller items.