Parks Associates Blog

Friday, October 31, 2008

GE Healthcare Invested in QuietCare

GE made an unspecified amount of investment in New York-based QuietCare Systems in early October, 2008. At the same time, the two companies announced a technology collaboration and co-marketing arrangement. During the last two weeks, I have managed to locate executives from the two companies and here is what I learned.

-GE Healthcare will help market Quietcare’s Living Independently product line and services under the brand “Quietcare by GE Healthcare.” David Stern, Quietcare’s Chief Professional Officer, told me that the backing by the GE brand could alleviate concerns from potential buyers about -Quietcare solution’s quality and the company’s longevity—two legitimate concerns for a start-up company like Quietcare.
-Quietcare will work with GE’s technology development center to refine existing technologies and bring out new innovations. GE has numerous patents in the healthcare technology field that are under developed. By combining the two companies’ expertise and fill each other’s knowledge gaps, both hope to translate such knowledge into commercialized products faster and more efficient.
-GE is serious about home care and senior independent living market and keen on behavioral tracking technologies, according to David.

Both parties are extremely close-lipped about the structure and value of the equity investment. But I would assume that the investment is contingent upon achieving several milestones down the road, tied to either sales goals or new solution launches.

By any measure, it is an extremely positive development for Quietcare and the senior care industry. An industry heavyweight’s support does not translate directly into faster market adoption, however, as marketing is still tricky and technology is still less recognized by its targeted audience yet. In other words, even for GE, the learning curve could be steep.

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Thursday, October 30, 2008

My Symposium Experience (Part Deux)

After my Monday morning panel at Partners Health Care’s Connected Care Symposium conference, I attended a few others. The PHR panel involved the three major ePHR vendors, Microsoft, Google, Dossia, and the fourth was the health information Web giant WebMD. The exchange between Grad Conn from HealthVault (the Microsoft initiative) and Jerry Lin, product manager of Google Health, was quite amusing when the moderator pushed for an answer to whether the two companies will allow users to switch between the two platforms easily and conveniently. Grad responded diplomatically by saying that Microsoft is ready to do so if Google allows. Jerry shot back by saying “Google is ready too.” Shall we expect some announcement soon? Perhaps not a chance. The two companies currently have no incentive or business reasons to pursue such collaboration.

Grad was once again under the spotlight when the operator asked him why HealthVault had not joined the Continua Alliance. Searching for a more diplomatic answer (which he did gracefully), Grad cited no Continua-certified devices on the market as a major reason that Microsoft so far has not considered Continua membership. My take is that Microsoft sees HealthVault as more application-driven and Continua as more device-driven. This difference has caused Microsoft’s wait-and-see attitude towards Continua.

A Tuesday afternoon panel on CMS reimbursement policy also provided good information. Joe Ternullo from Partners highlighted four paths to reimbursement for home health monitoring devices. The panel, consisting of Joseph Kvedar, the Director of the Center for Connected Care, Pat Gardner, Senior Reimbursement Manager from Medtronic, and Robert Mechanic, Senior Fellow and Director from Health Industry Forum and a Professor at Brandeis University, was asked to rate the probability and feasibility of the four financing models. The four pathways include:

-Direct reimbursement of home health monitoring technology
-Post-acute care payment system
-Reimbursement through the Medical Home model
-Reimbursement through the case management model

All agreed that direct reimbursement from Medicare is “dead on birth” as the agency is expected to cut budget across the board and such big-ticket reimbursement item is unlikely to pass the muster of the agency’s cost control goal. They also expressed doubt about the Medical Home model as recently published Medicare demonstration project guidelines showed that payment difference between certified tier-one medical home practices (which does not require IT investment) and tier-two practices (which require various degrees of IT integration) is only $10-12 ($40 vs. $52), which does not provide much incentive for physicians to invest in technologies. They have slight different views on the other two. I asked DR. Joseph Kvedar privately after the panel which one he favors. He said that the case management model is the one that Partners HealthCare is working on.

Overall the Symposium is a nicely packaged two-day event covering many areas that the Connected Care model is going to address. High-caliber speakers and well-rounded discussions make it a good experience overall.

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Mobile Broadband in North America and Europe: Change is Key to Continuing Profitability

On Wednesday, November 12th at 12 PM ET (11 AM CT), Parks Associates and Camiant will be hosting a webcast that addresses mobile broadband in North America and in Europe.

Since mobile broadband markets are blooming, mobile carriers in Europe and North America alike see strong growth in mobile subscribers and massive growth in non-messaging mobile data traffic. Yet there are troubles on the horizon. Many carriers use rudimentary network control and business models to monetize the service. These models leave money on the table in the short term and condition abusive consumer use cases in the long term.

This webinar will address the following key focus areas: 1). Mobile broadband adoption and data traffic; 2). Market forecasts and growth trends; 3). Regional differences in business models and traffic growth patterns (Eastern and Western Europe, U.S. and Canada); 4). Managing mobile broadband network use: drawbacks and challenges; and 5). Need for more refined network controls and business models.

To sign up for this free webcast, please complete this online form:

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Parks Associates adds value to TelcoTV with research workshop

Parks Associates will be hosting the workshop Business Cases for Emerging Video Services at TelcoTV 2008 on November 11. TelcoTV, November 11-13, the Anaheim Convention Center, is the premier event for the exploration of a comprehensive entertainment convergence strategy.

The workshop addresses the business case for emerging video services, including multichannel television and broadband video. Parks Associates forecasts that by 2012, almost 33 million U.S. households will have broadband services capable of streaming high-definition video. This finding adds new dimensions to the television services market, which grew to over 800 million households worldwide in 2007. Telco/IPTV services in particular jumped to more than 13 million households in 2007.

Jayant Dasari, Parks Associates
Kurt Scherf, Parks Associates

Building a Compelling Television Service
Broadband Video: To the TV and Beyond
How the Internet Meets the Television
The Business Case for Advanced Advertising Features
Building the Interactive Advertising Business Case

Nimrod Ben-Natan, Harmonic
Steve Borelli, Integra5
Jonathan Bokor, TANDBERG Television
Matt Cannard, Widevine Technologies
Brian Donnelly, Icron Technologies
Jason Harvey, ActiveVideo Networks
Leszek Izdebski, Cisco Systems
Howard Rubin, SeaChange International
Paula Suthern, Ensequence
Adam Tom, RGB Networks

Attendees receive information about the competitive environment for television services, insight into video trends and advertising business models, and consumer data on use cases and preferences.

During TelcoTV, Kurt Scherf is moderating the session Integrating the Social Network Experience: Fad or reality? on Wednesday, November 12, from 4:30-5:30 p.m.

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LogMeIn Rescue and Intel vPro tackle "out-of-band" issues

What LogMeIn and Intel announced back in September sounds incredibly helpful. I actually experienced a dreaded "blue screen of death" yesterday with my laptop. Fortunately, I was able to figure out that the anti-spyware/Windows Registry cleaner that I had installed the night before wasn't compatible with my Vista 64-bit laptop computer. I was able to pick a restore point on Windows prior to the anti-spyware software installation and get the system back up and running. However, if a remote technician could have gained access to my system while still under blue screen mode and fixed the problem at 6:15 a.m., would I have been willing to pay $20 or $50 to alleviate the problem? Yeah, I would have given that some serious consideration.

I had written the other day about a variety of remote desktop solutions that support providers can use (in addition to those that are organically created by the companies themselves). One of the companies providing these solutions is LogMeIn. They have a couple of solutions for remote desktop support - LogMeIn IT Reach looks to be a tool for IT professionals, and LogMeIn Rescue and LogMeIn Rescue+Mobile look to be remote support service delivery platforms that companies running help desks or Managed Service Provider offerings can license to implement their own remote desktop support. Now, it looks like Intel has a solution to greatly extend the capabilities of remote support providers.

Remote PC Support Providers: Their Business Today
I've spent quite a bit of time talking to a number of remote PC support companies offering direct support to consumers in the past few months, getting a better understanding of their businesses, revenue models, and how they provide support in general. For the types of services that they provide, they do a really good job of solving many of the common PC problems that tend to plague the average user.

We estimate that consumer-based remote PC support is a $650 million business in the U.S. at present. In the last few years, a number of third-party vendors, retailers, and broadband service providers have entered this space, employing agents and utilizing software clients and other remote tools to initiate remote support sessions. As opposed to blind telephone support, an agent is able – upon receiving permission from the customer – to take over control of a home computer and run diagnostic, maintenance, and break/fix services. In some cases, remote support agents perform regularly-scheduled PC maintenance without the customer’s intervention. The customer simply downloads the remote client tool, and the agent takes over (typically in the middle of the night for some overseas support), completes the tasks, and leaves the customer with a maintenance log.
The services rendered by these companies is far-ranging and include PC performance enhancement/“tune-up”, malware remediation, and applications support. In addition, we are seeing an interesting evolution of these companies and their offerings, which are expanding to include home networking configuration and troubleshooting, wireless network security, online backup services, data migration (from an old PC to a new one, for example), peripheral (printer) set-up, and even configuration and training for other consumer electronics products – cameras and MP3 players, for example. The figure below breaks out the major types of service issues to which remote support companies are responding.

  • Malware Removal: These services typically include a review of anti-virus and anti-spyware programs, the download and installation of internal or third-party tools (such as Ad-Aware), scanning and removal of spyware and viruses, and updating definitions for anti-spyware and anti-virus programs.
  • PC Maintenance and Tune-up Services: These can be performed under regularly-scheduled maintenance through a subscription service. They can also be ad hoc services that are used with a customer has issues with a computer running slow. These services are fairly standard from one vendor to another, and typically include disk defrag, updating virus settings, checking for and removing malware, updating security settings, etc.
  • Application Issues/Support: These center on problems that consumers have with PC applications. About half of these services relate to e-mail or Web browser issues, and the rest center on problems that consumers have with specific applications or programs.
  • Other Services: Some vendors offer significant amounts of support for home networks, whereas others focus on other areas, including data transfer, backup services, and hardware support.
The success rate for problem remediation for remote support services is impressive. We received data from a number of support providers which – taken as an average – result in a resolution rate of more than 80%. – these services average an 84% resolution rate.
Where these support companies cannot resolve certain issues, they are generally related to things such as specific hardware or firmware issues, where agents either cannot get specific visibility to the problem and/or where the problem requires an actual physical fix. One support vendor indicates that hardware and peripheral issues are some of the thorniest for them to solve, as they generate the most outbound calls on average 1.45 outbound calls when following up with the customer in comparison to 0.2 outbound calls for their most popular services. Other support vendors acknowledge that outdated operating systems and trying to walk customers through starting a computer in Safe Mode to begin at least a basic diagnosis and remediation of a technical problem tend to case them the most pain.

In sum, the remote support services today are quite successful at solving many problems related to home computers, home networks, peripherals, Internet security, and applications. However, is there room for not only greater efficiencies in the services that they are providing, and are their solutions that can not only lead to a higher rate of service resolution, but open up new lines of services for these companies?

Remote PC Support Providers: The Problem with Out-of-Band Issues
Obviously, there are going to be incidents where an agent simply isn't going to be able to solve a problem using the remote tools at hand. If an operating system is too unstable (due likely to a virus or other malware infection), there may not be much the agent can do to even begin to diagnose and begin solving the problem. I think this is where a solution like vPro comes into play.

Where an operating system lacks stability (or is simply too fried to work properly), this is noted as an "out-of-band" problem. For OEMs, warranty support companies, and today's remote support companies, these out-of-band issues can't be resolved without some extra steps, which would typically include either walking the customer through a full OS restore or sending an IT professional to the home to do it directly. Interestingly enough, LogMeIn Rescue does have a feature that can allow for a remote agent to reboot a customer's computer in Safe Mode, which can be helpful if the OS is stable enough to allow this. However, in some situations, even a Safe Mode reboot isn't going to be possible, and this is where some additional out-of-band capabilities are going to be useful.

Intel's vPro and Out-of-Band Capabilities
In the press release, LogMeIn indicates that the third-generation of vPro offers some significant benefits that complement its existing remote support capabilities. Specifically, vPro offers a way to create a secure connection to a PC even in instances where the operating system isn't functional. Hard drive failures can also be complicated for remote technicians, particularly in cases where an OS reboot is necessary (the rebooting requires the memory assets of the hard drive). Without the hard drive functional, there isn't much that the agent can do. Finally, the new vPro capabilities give a remote agent the ability to reboot a computer in BIOS, where the PC's inventory and performance information can be accessed. Intel's capabilities include interactive features that allow an agent to begin to not only diagnose but also begin to troubleshoot while in BIOS. Trying to talk the average PC user into booting up into BIOS and running diagnostics and troubleshooting themselves is not a favorable option, so this sounds like a greatly enhanced capability for remote agents.

Quantifying Out-of-Band Opportunities for Remote Support Providers
So, what could these enhanced remote support capabilities do for the remote support business? Our own estimates indicate that the consumer remote support market in the U.S. is a $650 million market today, and growing rapidly (as in 80-100% year-over-year growth). Those revenues are built on anywhere from 4-6 million remote sessions this year (and this may be a conservative number, but we'll use it to define what is really a highly fragmented space).

In our 2006 survey Managing the Digital Home: Installation and Support Services, we found some interesting data about consumer-reported PC maladies such as the dreaded blue screen and hard drive failures, among many maladies afflicting home computers.

For operating system and hard drive failures, we found the following information:

  • Eight percent of consumers reported hard drive failures and ten percent reported hard operating system failures within a year's span. At today's U.S. PC penetration rates, that would equate to between six and nine million households, respectively
  • From that same 2006 study, one-third of consumers experiencing hard drive failures and 22% of those experiencing an operating system failure reported taking the PC to a professional repair facility to resolve the problem. This equates to about 1.5 million households taking a PC to a repair facility every year for hard drive failure issues, and about 1.9 million taking their PCs to repair facilities for OS restores. If remote support vendors can begin to capture at least a portion of this potential business, this can be a significantly opportunity. Today, based on the data we received from remote support vendors, less than 2% of their support incidents are full-blown OS restores. We assume that these figures are low because they are choosing not to address these given today's lack of complete capabilities to solve these issues from a completely remote standpoint.
Will remote solutions solve every problem facing today's PC user? No, but they can certainly make instances of on-site support much more efficient. Take the example of a complete hard drive failure, where a technician is going to have to physically swap out the corrupted drive for a new one. Although that is certainly labor-intensive, this sort of resolution can be made more efficient through a complete remote diagnostics and inventory check on all of the PC's systems. For remote services that rely on truck-rolls for backup, this sort of diagnosis can be useful in ensuring that a techician comes equipped with the proper replacement hardware. We have heard that many on-site technicians do not actually carry replacement hardware with them during an initial service visit (carrying the amount of potential inventory that they might need is obviously not economical), meaning that even if they properly diagnose a hardware issue, they are required to return for at least a second visit with the correct hardware and perform an installation. If a complete inventory and diagnosis of the PC's hardware could be conducted remotely, a truck roll can be made much more economical. If the average truck roll costs $50, consider the savings of only having to deploy it once during a troubleshooting incident.

Finally, although the major benefits of the vPro solution are aimed at some of the more dire PC problems, there are certainly some additional diagnostic and troubleshooting elements of this solution will add some benefits in terms of quicker diagnostic and resolution times for a variety of the more common services already being performed today.

And speaking of DVRs: parlez vous Francais?

Did you know that a DVR in France is referred to as a "magnetoscope numerique"? Laissez les bon temps roulez!

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Netflix and TiVo

Chalk up yet one more connected CE platform for Netflix Watch Insantly Internet video content. The two companies have announced that they're teaming up to provide TiVo® Series3, TiVo HD, and TiVo HD XL subscribers the ability to stream 12,000 movies and TV episodes.

If you're keeping track at home, here are the announced devices that support Watch Instantly features at the TV:

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Tuesday, October 28, 2008

Most-watched Lists as Social Networking Features: FiOS TV

Our TV 2.0: The Consumer Perspective study found that certain social-networking-at-the-TV features have good appeal with consumers. Recall the post from earlier today, where I noted that sharing DVR content with and having "most-watched" lists available are two of the most-desired features.
Verizon's FiOS TV service has now implemented a most-watched feature with the FiOS TV 1.6 IMG upgrade. Their "What's Hot on FiOS" feature that shows the top-five shows being viewed at any given time. Since we got the upgrade at our house last weekend, I thought I'd share a couple of pictures. Here's what the "What's Hot" list looks like when you pull it up from the Menu (this was in the 7-8 p.m. primetime slot):
And here is how the "What's Hot" feature looks in the FiOS TV Widgets:

Pretty cool feature. Just think what will be possible when you can view a most-watched list from your inner circle of friends and family.


Bomgar's remote support solutions

It had been awhile since I talked to the folks at Bomgar, a company that specializes in "appliance-based software for virtual support." However, I got caught up with them on Monday and got an interesting update.

When you look at enterprise or consumer-based PC and other technology support services, companies such as iYogi and PlumChoice (I'm mentioning them because they use Bomgar's solution to establish remote desktop control of PCs), there are a number of options they have in initiating remote connections. They can develop the solution in-house or they can work with companies such as CA (SupportBridge), GoToAssist (Citrix), GoToMyPC, Kaseya, LogMeIn Rescue, SingleClick Systems (I had mentioned them in an earlier blog referencing the Dell Remote Access solution, TeamViewer, and WebEx Support Center (which is owned by Cisco).

It'll be interesting to evaluate these different solutions. In some early conversations, some remote support vendors have told us that their early evaluations of remote solutions providers focused on "attended" versus "unattended" support solutions. Attended solutions required an end-user to be present to download a remote connection client and be present during a remote support service. For providers of subscription-based PC tune-up services that use agents at scheduled times (sometimes in the middle of the night), an attended wasn't feasible, except for break/fix type of incidents.

Today, the key differentiators appear to be multi-OS support. Bomgar's remote solution can support Windows, Apple, Linux, and Windows Mobile. I think that mobile phone/smartphone support is going to be more interesting, too. The LogMeIn Remote service, for example, supports both Windows Mobile and Symbian.

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Hauppauge Buys Pinnacle PCTV Assets from Avid

After commenting on the TiVo and Nero partnership for PC TV tuners and recording capabilities, I thought it was worth mentioning that Hauppauge has purchased the Pinnacle PCTV tuner produts and related assets from Avid Technology. It looks like Avid is going to go more of the software route and leave the TV tuner hardware business to Hauppauge. Hauppauge has a big European presence, so this will likely strengthen that.

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Are Flash Gaming and Social Gaming the "New Casual?"

The casual gaming industry, already a billion dollar business, is still firing on all cylinders. Companies focusing on traditional business models such as try and download and subscription services are doing just fine. Big Fish Games recently got $83 million in new funding and Oberon Media got another $20 million to scale its business. As an industry, however, these business models are experiencing slower growth rates. The two high-growth areas are social gaming and flash gaming. These two phenomena are intertwined, since many social games are developed using Flash and many flash gaming sites are introducing social networking features. Most of these games are free to play, easy to access, and have multiplayer features. Sites and publishers monetize the games through advertising and sometimes virtual goods. The games are frequently very simple to play and can be served in small bites. If retail games are five-course Italian dinners and downloadable casual games are hamburger and fries, flash and social games are the Tapas. In a certain way, they are the new casual games.

Flash gaming sites, such as Miniclip and Addictinggames, have been around for quite a few years. They've attracted tens of millions of young Internet users and seen explosive revenue growth. Several new companies banking on the flash gaming phenomenon, including Mochi Media and Kongregate, are also having great success.

Social gaming is relatively new to the scene. Playfish is a great example. The company just received $17 million fresh funding, in addition to the $4 million VC investment it received at launch. Kristian Segerstråle, the CEO and Co-founder of the company, is an industry veteran and a smart guy. He served as the managing director of Glu Mobile before founding Playfish. In less than a year, Playfish has amassed more than 10 million monthly actives, including 1.5 million daily users, who spent more than two billion monthly minutes of play time. That equals 200 minutes a month per user. The secret sauce is easy but high-quality games and a highly-viral distribution channel that's literally free to use. Another interesting fact about social games is that players play the games with people in their network, instead of strangers. They play the games to keep in touch. In the meantime, they can avoid the frustrating problem of opponents quitting the game. Other highly visible social gaming companies include Zynga, Social Gaming Network, and Serious Business. Almost all of them have received significant VC funding in the last 12 months.

Partially because of the success of these flash and social gaming companies, a new crop of companies have recently emerged to leverage Flash/Java/lightweight proprietary technologies and social networks to take 3D virtual worlds mainstream. These companies include Vivaty, Metaplace, Electric Sheep, Small Worlds, Just Leap In, and Google.

The cost is rising for downloadable casual games. It's becoming increasingly challenging to bootstrap a downloadable casual game. Some of the latest games costs high six figures or even seven figures. The barrier to entry is also becoming higher for new players due to market consolidation. Inevitably many independent developers will shift their attention to flash and social gaming. With Flash 11 supporting full 3D capabilities, we'll also see much fancier games. Social games will soon find their ways to other platforms, especially mobile phones. Social games not only fit the play pattern of mobile players but also help solve the discovery problems. I won't be surprised if Kristian makes a triumphant return to the mobile gaming industry.

So are social and flash gaming the "new casual?" You bet. And all you game publishers and casual gaming companies need to pay attention!

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The Medical Home Debate--My Symposium Experience (1)

I am currently attending Partners Healthcare’s Symposium event held in Boston, MA. On Monday morning, I moderated a panel on the topic of the emerging medical home model. The four panelists are George Chadraoui from IBM, David Hom from David Hom LLC, Vince Kuraitis from Better Health Technologies, and Ediwna Rogers from the Patient Center Primary Care Collaborative (PCPCC). This is an extremely important topic as the medical home model could be a disruptive force in the healthcare ecosystem, and influence technology adoption and usage.

The panel from the beginning tried to define the medical home model. But as the discussion and interaction with the audience furthered, it became clear that primary care physicians may not be the only one that are driving it and therefore benefit from it. Vince Kuraitis challenged the notion that traditional disease management firms might be left out of the model, several members from the audience raised the concept of “virtual medical home” in which through the Internet and other technologies, consumers can choose the trusted parties, including specialists, nurses, pharmacists, and dieticians, to help coordinate their care needs and provide health coaching when necessary.

I polled the audience to gauge their perceptions of the medical home concept. About 40% of them raise their hands showing their confidence in this model. A dozen expressed deep doubt, and the rest, I assume, remained lukewarm or undecided. Among those with deep concerns, the center issue is about execution. One lady doubted physicians would have enough resources. Another raised the issue of the disruption on physicians’ workflow. In a word, “the devil is in the details” and perhaps “seeing is believing.”

The other three panelists had positive views about primary care physician’s role in driving the adoption of the medical model. George cited support from employers like his own company IBM, Edwina provided further details on trials supported by PCPCC to prove that the model had worked. She particularly mentioned the North Carolina Community trial in which each PCP receive a payment arrangement of $2.5 per patient per month to implement the medical home model. In the future, she said that the Medicare/Medicaid is willing to pay $40-$100 PMPM in their proposed trials. Vince’s view perhaps represented the majority in the room. The model has potential, but implementation will be the key to success as there are too many variations in this country’s physician practices and small factors could contribute to fallouts. Sounds familiar? It kind of reminds me of the early days of the disease management industry.

Blu-ray players at $230 and heading to $150

So, if retailers aren't willing to cut prices on flat-screen TVs, they're definitely dropping prices on Blu-ray players, according to today's Wall Street Journal. The article says that entry-level Blu-ray players have dropped below $230 at major retailers, including Target, Wal-Mart, and Best Buy. Some observers think that the price will fall below $150 in time for Black Friday.

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TV and Social Networking Article from The Wall Street Journal

In yesterday's Wall Street Journal, Christopher Lawton says that the television experience is about to take a cue from what's been happening with connected game consoles. Both Microsoft and Sony will be launching social networking features that can be accessed through their online gaming services.

We tested a number of social-networking-at-the-TV-features in our TV 2.0: The Consumer Perspective report and found that the ability by users to share recorded content with friends and see "Most Watched" lists (like what Verizon is doing with its "Whats Hot" feature) are the most appealing social networking features on the television screen.

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Digital Services and Systems Attract Renters and Buyers in an Ailing Economy

Resident demand, faster sales and rentals, and differentiation driving multifamily industry adoption of digital systems and services --

Parks Associates' new research indicates high-tech amenities like broadband, security, and energy controls positively influence the sale and rental of multifamily properties. Multifamily Residences: Opportunities for Digital Systems and Services, a new primary research project of executives managing multifamily properties in the U.S., found nearly 50% are seeking new electronic products and services that will differentiate their properties in an increasingly competitive market.

In particular, in-unit broadband service is becoming a “must-have” feature, with 60% of multifamily units offering some form of high-speed Internet. Security systems and monitoring services, electronic locks, and energy/utility management systems are also becoming more common in order to increase the speed of sale or rental of an MDU property.

For Multifamily Residences: Opportunities for Digital Systems and Services, Parks Associates surveyed 500 multifamily executives, representing an estimated 145,000 new starts and over 2.6 million units across all major markets in the U.S. The research firm also conducted in-depth interviews with 25 leading MDU executives on opportunities for service providers and manufacturers.

To view the full press release on this new report, please click here.

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Sonos news - Pandora and the iPhone

A couple of new announcements from Sonos, the developer of wireless multi-room music systems for the home:


Monday, October 27, 2008

DigiTV Received Funding for TV-based Telecare Application Development

DigiTV, a not-for-profit organization owned by U.K.’s Kirklees Council recently received funding from Europe’s T-Seniority Project to build interactive TV-based telecare solutions to serve the chronically ill and the elderly populations. Last month, it also secured funding from the U.K government to develop digital TV-based interactive care solutions. DigiTV is the major technology facilitator behind its Looking Local portal, which broad content from UK’s local authorities through TV channels or to mobile phones to promote local services and information. The portal currently offers health education, among many other types of local information. But with the latest round of grants, it will add virtual community features and reminder systems to assist old and fragile people to live a safe, independent, and connected life at home.

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If You Had To Choose…?

Ad Age ran an interesting article today, Public Might Cut Cord on Landlines, Cable TV. The article posed the hypothetical question, “If you could keep only one thing out of a list that included your phone (home or mobile), your TV, or your computer and Internet connection, what would it be?”

According to the article, the implications of the current economy and subsequent consumer cutbacks is on the minds of marketers, telecoms, ad agencies, and media companies. Verizon is currently seeing a trend of increased mobile phone and broadband penetration with decreases in the fixed line business. A research project conducted by WPP’s Ogilvy Mather and Mindshare profiled high tech females (aka digital divas) and found that most of the respondents would choose their laptop over TV and their mobile phone if given an ultimatum.

The article suggests that most people would choose their computer and Internet as the sole technology they could not live without. It’s not a surprising observation, as one can gather news and entertainment, watch movies as well as TV programs, and communicate by email and/or VoIP services via the Internet.

Premium cable TV packages, Blu-ray DVD players, Slingboxes, and high-end mobile phone packages were listed as services/devices that most individuals could do without if forced to make such a decision. Unfortunately, some individuals have had to go without a particular service or technology as a result of reorganized household budgets or a preemptive decision to control expenses. Even so, I’m optimistic that most people will not be faced with such a drastic decision - to keep only one thing. Not now or the immediate future. The question does make you think. What would you choose? - that is, if you had to.

By the way, Parks Associates has research on “cord cutting” households from our survey, TV 2.0: The Consumer Perspective. The answer is posted at this earlier blog by Kurt Scherf


Flat-panel TV predictions for the holiday shopping season

TWICE has a very comprehensive article today about flat-panel TV expectations for the last two months of the year. Sales appear to have been good for the year, leading many to assume that we won't see steep Black Friday or pre-Christmas discounts given on TVs. However, the pricing does look more and more attractive.

I did see an article last week in The Wall Street Journal predicting $350 32" LCDs on Black Friday. That would be a pretty darn good price.

A couple of interesting home networking announcements

I guess the 21st-Century workplace is defined by different success measures, so I'm hoping that my ability to take my Outlook Inbox down from 50+ messages this morning to about 15 is noted on any upcoming performance reviews. Sisyphus had his own way of spending eternity, and I have mine, apparently.

Out of the Inbox mess, however, did come a couple of announcements are are worth mentioning:

  • I've been wondering what the HD-PLC folks have been up to, because frankly it seems that the powerline space had come down to either HomePlug or the DS2 solution. However, an e-mail from Audiox/Acoustic Research today indicates that we can expect to hear some product news shortly. The company had announced plans to use HD-PLC in a press release from the 2008 Consumer Electronics Show.
  • ZeroG Wireless, which develops low-power Wi-Fi solutions, has received $17 million in funding, according to a release today. The company indicates that it is looking well beyond the laptop and router market to create a market for "an Internet of things."

Friday, October 24, 2008

The Consumer Electronics Sky is Not Falling

The NPD Group says that September retail consumer electronics sales were down 2% from last year, but not nearly the freefall that others had feared. Flat-panel TVs continue to sell well, as unit sales increased 20%.


Aetna Allows Members to Connect to Microsoft HealthVault

Microsoft’s relationship with Aetna, one of the nation’s largest private insurers, seems warming up. On Oct 21, 2008, the two companies announced a new collaboration that will allow six million Aetna members, or 16% of Aetna’s total insured lives, to transfer their personal health information from Aetna’s own PHR to Microsoft’s HealthVault. The long-term goal is to allow all members to do so.

Aetna’s PHR capability is built on its acquired assets from ActiveHealth Management back in 2005. ActiveHealth’s CareEngine system compiles member data from a variety of sources such as medical and pharmacy claims, lab results and information provided directly from the member, and create a personal health record for patients. Based on my own experience, Aetna’s PHR still lacks automated tools and applications that will make the medical information more meaningful for members. That’s what Microsoft’s HealthVault might come to help with. HealthVault is designed to be not only a record book but also an epicenter of new applications that can turn medical data into knowledge and action plans for consumers.

What will Aetna gain from the collaboration? Jumping to my mind first is the cost associated with continuous development of PHR system and tools that Aetna will save. Microsoft will absorb such costs and perhaps can do a much better job in application development than Aetna can by itself.

The second benefit is perhaps to increase the usage of PHRs among its members so as to benefit Aetna in reducing future claim costs. Since Aetna’s introduction of its PHR in late 2006, about six million members started to use it. It is an impressive adoption number, but perhaps not good enough. More importantly, I do not believe patient’s interaction level with Aetna’s PHR is meaningful enough to influence their behaviors at this point—one reason being the lack of useful tools that will enable patients to reap the benefits of owning a PHR. By allowing patients to access HealthVault’s applications, Aetna hopes that usage will improve.

Furthermore, using a third-party PHR could alleviate some consumers’ concern over insurer’s ownership of personal health data. They fear that if they add medical information other than from the claim records (like family history, smoking habits, etc.), insurers could use it against them (e.g. raise insurance premium sometime down the road). HealthVault’s security and privacy protection might alleviate such concerns, and encourage usage accordingly.

Finally, Aetna could leverage HealthVault to win more businesses with employers. Once PHR use proves to lower medical expenditure, Aetna can use it as a marketing tool to recruit more corporate clients.

What will Microsoft benefit from the deal? Obviously, the whole third-party PHR vendor space faces the issue of “when built, who will come?” Recruiting users can be expensive and scale is the key to PHR’s success. By courting Aetna, HealthVault has access to a big pool of potential users. I won’t be surprised if more such deals are announced in the next six months.

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Spain prefers Analog TV

One and a half years before the analogue switch-off, scheduled for April 2010, Spaniards seem to be not very keen on DTT as most of them, 61.4 percent, still prefer to watch analogue TV, according to the latest viewing figures.

DTT got an average share of 17.4 percent in September, a record figure in its history but still very low in comparison with the allegedly high DTT take-up, with 37.4 percent of Spanish homes already enjoying DTT (of which 32.4 percent have an IDTV), according to the National Institute of Statistics (INE).

According to INE, TV penetration reaches 99.7 percent, with 21.4 percent receiving TV through satellite, 15 percent through cable and 4.6 percent via IPTV. INE's latest report also reveals that 51 percent of Spanish homes have access to the Internet, of which 43.5 percent (almost 6.6 million homes) through broadband via ADSL (67.9 percent) or cable (14.8 percent).

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Thursday, October 23, 2008

More and Better Game Console Bundles This Holiday Season

I was telling a reporter the other day that although it's unlikely that the three console makers will reduce their prices to adapt to the poor economic environment, we'll definitely see more and better bundles this holiday season, especially from Microsoft and Sony. Guess what, we are still a month away from Thanksgiving, Black Friday style deals are already emerging. Here's one example from Dell's online store. Not a bad deal, really...

Courtesy of

Xbox 360 120GB HD Elite Holiday Bundle $330, Oct 23
Dell Home has Xbox 360 120GB HD Elite Holiday Bundle for $400 - $70 off coupon code "9VZC3829M7GXC9" (limit 400 uses) = $330 with free shipping.
Package includes:
Xbox 360 Elite Console System, 120GB detachable hard drive
Wireless Controller (black), Headset (black)
Network Cable, Component Cable, HDMI Cable
LIVE Gold Membership, Lego Indiana Jones and Kung Fu Panda


Continua Health Alliance Added Dossia and Google as New Members, Announced Public Demo

Continua Health Alliance, a consortium for advancing technology adoption in the healthcare industry, announced this past Tuesday that Dossia and Google are joining the organization. For those who are not familiar with Dossia, it is a consortium made of many large self-insured employers and devoted to create personal health records (PHR) for their employees. Its members include AT&T, Wal-Mart, Cardinal Health, Intel, BP, Applied Materials, etc. Google, as we all know, introduced its Google Health platform in May 2008, and its new-found connection with Continua aims to offer consumers the ability to upload health data from home monitoring devices to Google-powered online health data banks.

This is a positive development for the personal health care industry. Personal health data collected by home health monitoring devices do not provide much value to patients and doctors if they remain locked in the devices. With access to personal health records and an expanding list of tools to interact with the data, consumers, with the help of their doctors, can unlock the value of this information and make smart decisions on their health. Google Health and Dossia’s personal health record database and application tools can serve this purpose well. Both have made progress in the past several months. Wal-Mart has started to expand use of Dossia’s PHR from a trial group to all its employees. Other Dossia members are said to take similar steps soon. Google Health, on the other hand, has forged partnerships with major drug stores, pharmacy benefit management firms, healthcare provider groups, and lab testing companies since its debut. Working with Continua is another step to add value to their respective platforms. In this embryonic healthcare industry segment, this type of collaboration, instead of competition, is much needed.

The news also caused me to think of another active participant in the personal health record business: Microsoft’s HealthVault division. HealthVault in recent month has gained great momentum regarding expanding its influence and attracting endorsement. The latest move with Aetna, one of the nation’s largest health insurers, was also good indication of the traction it scored with the health payer groups. In public presentations, HealthVault stated the same vision of connecting home health monitoring devices with its platforms, but it hasn’t joined Continua yet. Rather, it is working with individual companies on specific applications, at least for now. Is Google and Dossia’s partnership with Continua a turn-on or turn-off for HealthVault? We will see whether Microsoft will mandate its applications’ compatibility with Continua’s technology standards.

Speaking of standards, Continua also announced that its members will demonstrate interoperability among pre-certified products and services based on Continua’s standards on Oct 27, 2008 at the Partners Healthcare’s Annual Symposium event. I will host a panel discussion at that event on the emerging Medical Home model. BTW, when will we see collaboration between the Continua and the Patient Centered Primary Care Collaborative (PCPCC)?

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Samsung and DivX

Samsung's been busy this month. I just caught this press release from October 15 where Samsung and DivX announced a multiyear agreement to add high-quality DivX® video playback to a number of Samsung digital television models. The DivX Certified Samsung devices are expected to be available in worldwide markets beginning in early 2009, and will be able to playback DivX media files directly via USB slots or via Ethernet connection certified by DLNA.

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Interesting numbers on the European cable space

I found a couple of interesting data points on the European cable TV and broadband markets today:
  • Cable Europe reports that digital cable subscribers in Europe grew 18% to 16.3 million in the first half of 2008. Germany leads the way with digital cable subscribers, at 3.4 million subscribers.
  • Numericable, the French cable operator that emerged in 2007 as the combination of assets from France Telecom and TDF and Noos (formerly UPC France), now has more than 100,000 subscribers to a 100 Mbps FTTH service that is comparable to what Verizon is doing here with FiOS. In comparison, France's heavyweight telecom operator - France Telecom - only has 14,000 subscribers to its FTTH broadband service.

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Premiere loses big and restructures

German pay-TV broadcaster Premiere’s shares fell 60 per cent as it announced losses, a subscriber number re-statement and revealed it is trying to restructure bank debt.

"As a result of the EBITDA outlook, Premiere has commenced discussions with its banks regarding a restructuring of debt facilities and is confident to reach an agreement," it said.

The company said it was satisfied with the way the talks were proceeding and did not plan a capital increase. "We are conducting a thorough review of operations and are confident that this will result in a new strategic direction supported by a financially sound business plan for the future growth and profitability of Premiere," said CEO Mark Williams.

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Internet Video at the TV: More News this Week

Bringing Internet video directly to the TV via network-connected consumer electronics devices is a big trend that we discussed in our report Internet Video: Direct-to-Consumer Services (Second Edition). I'll be discussing this and other Internet video trends in a Webcast this afternoon, as well. We now have a couple of new news items that reflect this trend.

First, you had to think that this announcement was coming. LG Electronics' BD300 Network Blu-ray Disc Player can connect to Netflix Watch Instantly content. Now, Samsung has announced that it has reached a deal with Netflix has to bring movies from the Internet to television sets through Samsung electronics devices, including new products that also play movies in the high-definition Blu-ray format. Samsung, the big Korean electronics manufacturer, will allow users of two new $400 products, the BD-P2500 and BD-P2550 Blu-ray disc players, to access video through a Netflix Internet video service that currently offers more than 12,000 movies, television shows and other titles. The companies also plan to work on integrating Netflix's Internet service into other electronics products they didn't name.

Also, Jaman, an online provider of international and independent films is now available through TiVo set-top boxes. TiVo will also give users the ability to download Disney films via CinemaNow. A CNET article today covers both announcements.


CBS Interactive Bringing Chat Features to Online Programming

This could be a hint of what TV-based social networking features could be coming to a screen near you soon.

CBS Interactive is creating "social viewing rooms," an online feature that allows groups of viewers to collectively watch and interact with streaming TV content. The service combines elements of a chat room, video conferencing and standard live streaming to give fans a more communal experience when watching the network's content online. On, a group of friends will be able to join a virtual room to watch a synchronized playback of popular programs while chatting, taking polls, quizzes and even throwing such animated objects as tomatoes and kisses at the screen.

Although what CBS is doing is obviously positioned for online TV viewing, could this sort of feature be coming to the TV soon? More importantly, will consumers like these services? I was actually skeptical of this feature, until CBS executives mentioned that reality shows, such as Big Brother or Survivor, would likely be the type of genre where this sort of interactivity would take place the most. I'm just not convinced that viewers are going to want the distractions of chatting or game playing during dramas or sitcoms, but reality TV could be a good fit for this sort of feature. It's the kind of programming genre that is well-suited for an interactive experience, with features for voting, gossip, etc.

In our recently-completed survey TV 2.0: The Consumer Perspective, we asked consumers to indicate their preferences for a wide variety of advanced TV applications, including a chat feature. We asked respondents to indicate the appeal of a feature that would allow them to chat while watching the same TV program. Overall, only 14% of respondents indicated that this would be a highly-appealing feature. However (and not surprisingly), 25% of those age 18-24 thought that the feature was highly appealing. Twelve percent of the 18-24-year-olds said that they would leave their current service provider if a new service provider offered this feature! So, given the rise of Facebook and MySpace among the younger consumer crowd, it's not surprising to see the appeal for this kind of interactive service.

I do think that there will be a finite line drawn between where entertainment ends and distractions begin. Maybe the youngest of TV viewers will simply get used to innumerable distractions being presented to them on the TV screen, but I'd be skeptical to think that we're going to retrain viewers in the near future to think of their TV viewing experience as 100% interactive. Some of the social networking features that I think make a lot of sense for the TV experience are actually a lot more subtle. Verizon, for example, now has a What's Hot feature that shows you what the most popular shows being viewed in your area are. I think that these sort of features will allow people to have more of a community interaction with their TV programming without being utterly distracted by what's happening on the screen.


Wednesday, October 22, 2008

Motorola announces remote device management for IPTV services

Today, Motorola launched its remote device management for its IPTV set-tops. Motorola’s NBBS device management system will now enable service providers to accelerate the delivery of personal media experiences with new services, improved customer satisfaction and lower operational costs with fewer truck rolls.

NBBS helps eliminate provisioning errors and customer frustration by automating the provisioning and management process for a wide range of devices with easy, zero-touch installation. NBBS then provides ongoing management and support for its IP customer premises equipment (CPE). This gives operators a high degree of network flexibility by enabling support teams to quickly resolve technical difficulties and providing tools to manage individual subscribers as well as system-wide campaigns.


Storage Visions Announces Agenda

Parks Associates is supporting the Storage Visions event again this year. For information on research on storage, please check out our new report: Home Servers and Consumer Storage: Analysis and Forecasts

Storage Visions is the two days before the International CES at the Flamingo Hotel. Storage Visions is where you can find out about the technologies that will lead to economic recovery. Storage Visions has speakers from leaders and analysts in the industry including Keynote Talks by experts from Universal NBC, Samsung, Panasonic and Warner Bros.


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Broadcast industry needs to improve the quality of video content and lower the cost per deliverable

AmberFin releases the results of a research survey conducted at this year's IBC conference in Amsterdam.

The results clearly demonstrate the use of multiple platforms such as broadband, IPTV and mobile handsets as key drivers for the industry moving forward. The quality of content was named as a key factor affecting take up of these newer delivery platforms.
For more information, visit:

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Newmark Homes Sells 230 Units With Wayne-Dalton Controls

Company says it's an effort to differentiate itself in the tough housing market.

Oct. 13, 2008 — by Jason Knott

In an attempt to differentiate itself during this tough housing market, Newmark Homes is now offering the Wayne-Dalton Z-wave Home Controls package as a standard feature in all new builds.And it might be working. In the eight months since the adoption, the Austin, Texas-based Newmark has sold 230 homes.“I’m always looking for that one thing that will make us different and stand out," says Don Cox, VP of sales and marketing for Newmark Homes. Article Link

This article in CEPro struck a cord with us in the Home Systems Group at Parks Associates. We just finished a report that focused on the subject of wireless controls — Opportunities for Wireless & Powerline Controls. In the report we explained how our research shows that home builders are turning to technology amenities to differentiate their homes. A broad-based survey we conducted in partnership with Hanley Wood’s Digital Home revealed that 40% of single family home builders are looking for electronic products and services to differentiate their homes; another 32% are installing amenities, e.g. wiring for home theaters, multi-room audio and home offices to speed the sale/rental of homes. Clearly Newmark Homes fits this profile.

In addition, another point made in Opportunities for Wireless & Powerline Controls is that systems incorporating home controls into everyday applications such as opening the garage door and initiating a sequence of events – lights turn on, thermostat resets, etc. – help build awareness for the capabilities of control systems. Wayne Dalton’s system is an excellent example of this phenomenon at work.

Single family home builders are not alone in their inclination to seek out technology amenities to differentiate their products. We just completed a major study of the multifamily industry, Multifamily Residences: Opportunities for Digital Systems & Services, in partnership with Multifamily Executive and Developer magazines. More than half of multifamily executives are looking to technology services and products to differentiate their properties. This strategy makes perfect sense for several reasons: in a slow economy differentiators such as technology are more important than ever, Gen Y renters and buyers want technology, and, there’s more money to be made by feeding resident demand (all ages) for certain services and systems.

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Perfect Storm for Success: Advanced Cable Advertising

Yesterday, I attended the Advanced Advertising for Cable: Winning Back the Ad Dollar webinar hosted by Light Reading’s Cable Digital News. The event was sponsored by technology providers, ARRIS and Cisco Systems Inc. with the discussion lead by Paul Delzio, Director of Product Strategy at ARRIS and Philip Jacobs, Senior Engineering Manager of Cisco Systems Inc.

The webinar was a call-to-action for the advancement of advanced cable advertising – addressability, interactivity, direct response, and targeted advertising via cable operators’ systems. With the creation of Canoe Ventures LLC, major U.S. MSOs have identified advanced advertising as a key, and essential, revenue opportunity for 2009 and beyond. Currently, cable television advertising is threatened by new and existing ad budget shifts to the Internet and emerging digital media platforms.

The webinar detailed the different types of advanced advertising models currently under development for the cable service provider industry. Advanced advertising categories, such as interactive TV (ITV), advanced linear advertising-network based and via set top box, DVR based, dynamic VOD advertising (Ad VOD), request for information (RFI), and interactive overlays were identified as strategic market opportunities for cable service providers nationwide. Delzio predicted such advanced ad types will be deployed within the next 12 months. The webinar also discussed the technical standards and specifications including SCTE 130, tru2way, and EBIF as emerging solutions for advanced CATV advertising.

The presentation was informative and timely. As standardization efforts and specifications emerge addressing advanced CATV advertising, new revenue opportunities are created for major cable television providers. Therefore, the cable industry must act now and without delay. As suggested in the presentation, “CATV advertising is under assault.” The question is: “Will MSOs embrace advanced cable advertising?” As Canoe Ventures LLC leads the way toward the development and employment of advanced CATV advertising and based on a poll conducted during the webinar (see results below), I would conclude that the answer to the question is an unequivocal, “Yes!” The investment in advanced advertising by cable service providers is an essential business strategy moving forward in the digital age.

Advanced Advertising for Cable: Winning Back the Ad Dollar Webinar Poll:
“For operators and vendors, how are advanced advertising budget line items expected to evolve from this year and into 2009?”

68.7% of respondents said advanced ad-related budgets are expected to increase
23.4% suggested that advanced ad-related budgets are expected to decrease
7.8% stated that no change is expected

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Cable TV Faces Customer Satisfaction Issues

Video-on-demand may be cable’s best bet for improving customer satisfaction with services --

Cable television could see a mass migration away from its services, according to Parks Associates' TV 2.0: The Consumer Perspective, if providers do not improve their consistently low satisfaction ratings among subscribers.

This new report reveals that subscribers to satellite television and telco/IPTV are significantly more likely to be satisfied with their services than both basic and digital cable subscribers. These market conditions leave cable carriers vulnerable to subscriber churn, and the survey recommends they quickly enhance advanced services like video-on-demand (VoD) to reverse this trend.

Cable operators have struggled in selling the value of their services and framing their services as an enhanced and convenient form of entertainment will be critical in reestablishing higher satisfaction. VoD initiatives, particularly those aimed at delivering a “Primetime, Anytime” experience, should be key elements in this effort.

TV 2.0: The Consumer Perspective is a survey of more than 2,700 U.S. and 1,000 Canadian adults in households with broadband Internet access. Key sections of this study:

  • Consumer electronics use habits, with a specific focus on how
  • Media Center PCs, TiVo set-top boxes, and game consoles are used to receive Internet video content
  • Consumer interest in new video-centric products, such as Apple TV, VUDU, and the Slingbox
  • Tracking changes in video consumption habits, focusing primarily on television and movie content
  • Internet video consumption, including popular genres, locations for Internet video viewing, and payment
  • Cable, satellite, and telco/IPTV pay-per-view and video-on-demand use and interest in video-on-demand features
  • Satisfaction with current television provider
  • Consumer interest in, willingness to pay, and potential churn trigger of 21 enhanced elevision features

To view the full press release on this report, please click here.

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Jeff Bezos a Gamer at Heart?

Jeff Bezos, founder and CEO of Amazon, apparently is a gamer at heart. I'm not sure which gamer segment he belongs to. Maybe dormant gamers?

Over the past several years, Jeff has invested in Second Life (a 3D virtual world company) and Kongregate (Youtube of games), and two days ago Amazon bought Reflexive for an undisclosed amount. Reflexive is a casual game developer, portal, and digital distribution platform. It is relatively unknown compared to some of the bigger casual game companies like Real Networks, Big Fish, Popcap, Wild Tangent, and Oberon Media. Amazon has been actively diversifying its business, recently introducing digital stores for music, videos, and books. Games are a natural extension of that strategy. Just another thing to sell through its massive server clouds and customer list, right? Don't be surprised if you see a list of recommended casual games like card and puzzle games when you purchase a box of diapers from Amazon. If you are a Kindle owner, now you can take a quick break between books!

The casual gaming industry has grown up to be a billion dollar business in the last couple of years. The space is becoming extremely crowded. Many large companies, including the ones mentioned earlier, have become vertically integrated. Big Fish and Oberon recently got a big pile of cash to further grow their business. Big Fish got $83 million and Oberon $20 million. In the meantime, large portals such as Yahoo, MSN, and AOL still maintain a presence in the space. The industry is also at a time of change. Many companies are trying out new business models, including ad-supported, session-based, and subscription-based models, instead of relying on the download to own model, which is likely Amazon's starting point. It will be interesting to see how Amazon's gaming strategy plays out. Keeping the Reflexive team intact will be a good first step.

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Tuesday, October 21, 2008

Apple’s Surging iPhone Sales Good News for the Smartphone Industry

Apple released its quarterly earnings after the bell today. The most prominent data is the iPhone 3G sales: 6.9 million units. That’s more than the total unit sales of the first-generation iPhones over five quarters. The performance also dwarfs Research-in-Motion’s. In its quarter ended in August 30, the Blackberry maker reported unit sales of 6.1 million units. But forget about competition for a while, it is good news for the smartphone industry. The whole category is exploding, reflecting consumers’ strong appetite for converged, yet easy-to-use multi-use mobile phones.

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Parks Associates Addresses Consumption in Digital Era at Digital Hollywood, Wednesday, Oct 29

Yuanzhe (Michael) Cai, Director, Digital Media & Gaming, Parks Associates, will present consumer data and market trends in interactive media at a special Parks Associates-sponsored session Consumers and Interactive Entertainment at Digital Hollywood, Santa Monica, Calif., on Wednesday, October 29 at 11 AM at The Loews Santa Monica Beach Hotel - Escondido Room 8th Floor.

This special session discusses consumption of interactive entertainment in the digital era. It examines industry and consumer trends in connected gaming, virtual worlds, social media, and Internet video; analyzes the role of consoles in content distribution; profiles media habits of the avatar generation; and discusses the implications for Hollywood. Additionally, it looks at new interactive technologies such as BD Live.

Parks Associates, in the report Virtual Worlds: the Internet of Avatars, recently released a comprehensive analysis of the value chain for 3D virtual worlds, which is growing into a sustainable industry with 33 million registered users by 2013. Also in 2013, online content and services for Internet-connected game consoles will generate over $8 billion in global revenue for the three console manufacturers, according to Parks Associates’ Connected Consoles: Games, Media, and Beyond.

**Registration for Digital Hollywood not required to attend this Parks Associates' Presentation.

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Virgin Media Television appoints new Execs

Virgin Media Television has confirmed two senior appointments to strengthen and develop its commercial strategy for the multi-screen digital future.

David Cuff joins VMtv as its new Commercial Director, responsible for commercial strategy across the full range of VMtv’s business. Cuff has previously held positions with Flextech Television and Initiative Media, and runs his own consultancy business, Cuff Media.

Ivan Ali-Khan also takes up the newly-created position of Head of Digital, reporting to Cuff. Ivan will be responsible for VMtv’s multiplatform commercial and creative strategies, and he is tasked with developing VMtv’s channel and programme brands across broadband, on-demand and mobile. Ali-Khan has been Head of Media Planning at VMtv since January 2006, and was previously Broadcast Director at the Media Planning Group.

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Monday, October 20, 2008

Cable Europe and Screen Digest release digital cable TV subscribers numbers

Customer subscriptions for digital cable TV jumped 18 percent to 16.3 million across Europe in the first half of this year, as subscribers migrate to enhanced services.

Figures published by Cable Europe, the cable industry association representing operators reaching more than 70m households, and compiled by Screen Digest, the media market analysts, revealed a record growth for the European cable industry in digital television.

Cable Europe, the cable industry association representing operators reaching more than 70 million households, welcomed the figures as evidence that cable platforms can attract new customers for digital TV, internet and telephony services.

Manuel Kohnstamm, President of Cable Europe, said: “Demand for digital services is showing that customers are upgrading their older analogue services faster than ever. The new digital services enable the industry to provide a richer audience experience.”

Of Europe’s largest pay-TV markets, Screen Digest reported 32 percent growth in Germany to 3.4 million customers; 12 percent in France and Spain to 1.6 million and 1.05 million customers respectively; a 15 percent increase in the Netherlands to 1.8 million; and 3 percent growth to 3.36 million customers in the highly competitive UK market.

The growth rates in digital TV services were broadly mirrored in cable internet and cable telephony, which rose 6.7 percent and 9.2 percent respectively for Europe as a whole between the end of 2007 and June 30, 2008.

Rising digital demand contrasted with a 5 percent decline in analogue cable TV services in the first half of the year, according to Screen Digest’s figures.

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CEA's Holiday Gadget Buying Projections

The Consumer Electronics Association (CEA) says that consumer spending for electronics goods will be half of what it was last year, according to a New York Times article. The organization says it found a drop in the percentage of consumers expressing an intention to buy video games, cameras, music players and laptops.

The association said it found that consumers expected to spend an average of $1,437 during the holidays on items including gifts, food and home purchases. That figure is down 14 percent from last year’s $1,671.

MasterCard said this month that consumers spent 13.8 percent less on electronics and home appliances in September than they did in the same month a year ago.


Apple's 200 Million TV Shows

Apple announced on Thursday that all four major TV networks are offering downloads in high-definition format. They also announced that more than 200 million TV episodes have been sold through the iTunes Store.

Our research (TV 2.0: The Consumer Perspective) finds that 2% of broadband users are paying monthly to download TV shows, averaging 3.4 downloads per month.


The Economy, Consumers, and Consumer Electronics

Here's a recap of the late-week and weekend economic news and the potential impact to consumer electronics spending:


Friday, October 17, 2008

Takeaways from Nokia and Sony Ericsson’s Earning Releases

A pair of handset makers made their earning announcements recently. Nokia, the world’s largest mobile phone maker, announced results on Thursday. Although revenue dipped 5% from a year ago, handset unit shipments increased 5%. More importantly, Nokia assured the industry and investors by affirming its outlook for handset unit volume for the industry in 2008: 1.26 billion. Even though Europe and North American markets suffered weakened demand, Nokia’s executive sounded confident that the company’s presence in many emerging markets will help it to achieve its 4th quarter shipment goal. In a tough economic environment, such confirmation is definitely assuring. The following is just some interesting tidbits from the company’s conference call with financial analysts:

* Nokia shipped 1 million units of E71 in 3Q08
* N96 started shipping in September and did well in its first month
* Seven million GPS-enabled devices sold in the quarter, up over 50% from Q2, and the bundled navigation service was on over 70% of those phones (BTW, Nokia completed Navteq acquisition in the quarter)
* Introducing Come With Music subscription Service on selected Nokia phones, including the latest touch-screen 5800 phone. (Nokia clearly benefited from its 2006 acquisition of Loudeye, a wholesale music service provider based in the U.S.) Unique about this new service is the feature that consumers will be able to keep all the music they download even after they discontinue the subscription. This may be the trick to jumpstart the slow adoption of music subscription service.
* Acquisition of OZ Communications, indicating Nokia’s continuous efforts into the consumer email and instant messaging service market.

And this morning, Sony Ericsson also released its earnings of 3Q08. Total unit shipments increase 1.3 million from 2Q08 to 25.7 million units, but are flat on a year-over-year basis. Revenues for the quarter, however, slipped 10% compared with a year ago. It kind of echoed Nokia’ view of the industry growth by pegging annual unit shipment growth at 10% for 2008. Highlights of the quarter include the following:

* Shipped the first product from the Xperia family X1 at the end of 3Q08, expect good response from the end users.
* Will ship C905 in 4Q08
* Shipped 12 million Walkman phones in Q3 and year-to-date close to 90 million Walkman phones

Both companies emphasized that competition in the high-end smartphone segment has intensified quite a bit recently. Nokia, in particular, holds the view that mobile applications and services will be the differentiators that carrier partners will leverage to better compete in the subscriber market. Given the current turmoil in the financial world and its impact on consumer spending, both companies are very cautious about the outlook for next year.

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CE and the Economy, Friday 10/17 update

USA TODAY examines what the economic turmoil is doing to the potential holiday sales of consumer electronics products in today's paper. If I had to guess anything (and guessing is all we've got right now in a period where there is a dearth of really solid data), what we're going to find when all is said and done is that January through August were okay to even really good in terms of consumer electronics sales. The first reports coming from organizations like The National Retail Federation indicate that September really showed the first indication of major consumer pullback from all purchases, including - it would appear - consumer electronics.

The analysis shared in today's article indicates that if it's too big to fit under your arm (i.e., bigger than a laptop computer), it's probably not going to sell well this holiday season.

Radialpoint Updates

I had the chance to get caught up with Radialpoint this week. As you may know, the company's offerings currently include a range of desktop security services, including anti-virus, anti-spyware, firewall, privacy manager, fraud protection, parental controls, backup and restore, PC optimizer and pop-up blocker. Radialpoint customers include leading broadband carriers such as Verizon in the U.S., Virgin Media in Europe, and Bell Canada and TELUS in Canada.

We've been following Radialpoint for some time now for its role in a couple of key areas. Michael Cai in particular has been following them as their work relates to value-added services creation for broadband service providers. His coverage included the report issued earlier this year titled Enabling Solutions for a Rich Broadband Experience. Jordan Socran, Senior Director, Business Development, was also a panelist on Michael's panel at our CONNECTIONS™ conference. He spoke on a panel called Carriers as "Experience Providers."

Although Radialpoint is commonly referred to as a provider of managed security services (provided by broadband operators), the company is really in the business of providing a full suite of value-added services as well as a delivery platform for them. In this sense, we're told that we should expect some announcements soon related to their service expansions. In the meantime, they are quite busy with their core managed security services. A couple of weeks ago, Verizon put out a release, using the start of Cyber Security Awareness Month to remind customers of their security offerings - which are provided by Radialpoint.

Radialpoint tells us that the uptake of their managed security offerings is changing as we had predicted with Managing the Digital Home: Installation and Support Services. We had found in that study that consumers who were later broadband adopters were more likely to be early customers to such broadband value-added services as managed security or customer care. After all, these are the later-adopters, for whom technology can be intimidating. Indeed, Radialpoint found that their early market was heavily reliant on these new broadband subscribers. However, they note that they've seen a shift in the last couple of years to existing customers. With more service providers engaged in care services (take Verizon's Expert Care or AT&T's Support 360 as just two examples), Radialpoint is seeing a natural harmony between these support offerings and what they're doing on the Internet security side.

Late in September, Radialpoint announced an investment of C$98 million from private equity group TA Associates. The press release indicates that Radialpoint will be using the investment to grow its business by investing in investing in new products and services.

Goodbye to the Linksys Name and Network Magic Update

A note from the folks at Linksys:

Effective immediately, Linksys, a Division of Cisco, has become the Cisco Consumer Business Group (CBG).

CGB will be the center of expertise for Cisco’s consumer business and go to market model. CBG will focus on developing products and solutions that target the consumer and small office/home office (SOHO) market and enable the connected life. CGB will focus on consumer channels such as retail, online and consumer reseller partners. The group will also help build awareness for the Cisco brand in the North America consumer market and add value to products and relationships outside US and Canada where the Cisco brand is predominantly stronger.

Earlier this year, the company announced that the Linksys product brand was transitioning to “Linksys by Cisco”. This transition has been completed and going forward Cisco consumer products will continue to be marketed under the Linksys by Cisco brand and co-exist in the market with Cisco branded products over the near term. We will continue to examine our branding strategy going forward (as we have to date) and make changes if and when these changes add value to our customers' decision making processes and our channel partners.

The overall consumer strategy of the Cisco Consumer Business Group is to capture the market transition from Home Networking 1.0, where home networks are largely designed to share a broadband connection between PCs and their peripherals, to Home Networking 2.0, where homes will become more multimedia enabled and experience a proliferation of networking devices and services. Ease-of-use, device discovery, and access to new services are becoming paramount to enhancing the consumer experience.

By enabling the consumer to be ready for these coming trends, Cisco is positioned to maintain and extend its leadership in this space. We believe Cisco is in a great position to educate the market and enable the consumer to be ready for a connected life.

Network Magic 5.0 Release
Cisco acquired Pure Networks in July, and now they have an update to their Network Magic home networking management software. Kids are going to hate this! They've introduced some enhanced parental controls features that will be combined with Trend Micro URL blocking to give parents even more oversight. Features include snapshotting and even access control. So, parents can adjust when the Internet can be used! Kids can't even steal the Wi-Fi signal from the neighbor.

Things are different now than when I was a kid, and we used to jimmy the lock to my parents' bedroom to get into the Christmas presents. A razor blade leaves very little mark on scotch tape, by the way!