Parks Associates Blog

Wednesday, December 31, 2008

Hot Topic for 2009: Web-enabled TVs

2008 was full of all kinds of Web TV and Web CE announcements, about which I dutifully blogged as I could. I think that 2009 will include some similar focus, where not only premium Web video is made available, but also stripped-down Internet applications (a.k.a. "widgets").

So, what's the outlook for the CE industry in 2009?

The Web TV Market
The challenge for HDTV manufacturers is how to differentiate and add value to their displays in a rapidly-maturing market. With HDTV display prices on the decline and manufacturer margins squeezed, the next stage of display competition will focus on connectivity and value-added applications. Although certain TV manufacturers (Panasonic/LG Electronics) have been attempting to work with tru2way for several years, there is frustration at the lack of carrier and retail support for their efforts. Their short-term move is more of an“over-the-top” route. At the 2008 Consumer Electronics Show, a wide variety of connected TVs on display each offered a slightly different content and feature offering. Panasonic is working with Google to bring some of its applications – including photos and YouTube – to the television. Samsung has developed an RSS “Widget” offering, focusing on personalized information from USA TODAY. Sharp’s benefits include remote customer support. Sony has Internet television offerings that provide not only video, but access to music via Slacker.

I would expect that we’ll see every major manufacturer implement at least some basic connectivity and provide some sort of Web or PC-linked application (such as allowing photo viewing). And, I think we’ll see aggregators like Netflix, CinemaNow, Amazon, and others begin to provide CE manufacturers – including the display companies – with turnkey content services. The Intel and Yahoo Widget announcement will be another defining characteristic of the Web-enabled TV market. I think you may see more TVs roll out that are capable of receiving third-party Web/widget applications, much like the iPhone. In this way, you’ll see consumers be able to customize their TV experience for just the type of information they want – weather, traffic, specific sports scores, etc. And, I think you’ll see television providers (cable, satellite, IPTV) follow suit, using their electronic program guides and advanced set-top boxes to provide a more customizable television experience.

If you Build Them, Will Consumers Come?
We received some interesting consumer data back from a study titled Digital Media Evolution, which was fielded in mid-November 2008. In this study, we asked consumers to rate their interest in a number of home network and Web-enabled applications on a variety of consumer electronics devices, including digital cameras, televisions, portable multimedia players, mobile phones, digital photo frames, and Blu-ray players.

For “Connected TVs,” we asked consumers about their interest in the following features:

  • Watch or listen to the video, photos, and music found on Internet sites like YouTube, CNN, Flickr, and Yahoo! Music.
  • Watch or listen to the video, photos, and music stored on home computer
  • Watch or listen to videos, photos, and music uploaded from your computer to websites like Snapfish, Kodak Gallery, PhotoBucket, or YouTube, on your TV.
  • Rent and watch movies obtained directly through the TV.
  • Access to a continually expanding library of over two million popular songs through your TV.
  • Access to a continually expanding library of over 5,000 popular movies & TV programs through your TV.
  • Customized news, traffic, weather, sports, stock, and other information displayed as text or video on non-intrusive portions of the screen and on your command.
There is certainly strong interest in some Web-connected features, particularly those that expand video-on-demand offerings, including TV shows and movies. What this means for consumer electronics companies – including manufacturers of displays, Blu-ray players, etc. – is that they will aggressively pursue streaming and downloadable content deals. I think it’s a step in the right direction and will support the consumer desire to have greater availability to a wider array of content, both user-paid and ad-supported, while not having to buy an additional black box to install in their entertainment console. It could certainly lead to some interesting developments, as consumer electronics companies move away from a pure “sell-it-and-forget-it” practice and actually build new business models that center on recurring revenues, subscriptions, and value-added content and services applications. While I don’t think you’ll see huge revenues flowing back to the device manufacturers, it could be a compelling business opportunity in the long-term and a key point of differentiation in the short-term.

Sizing the Market
Manufacturers and their partners in positioning for premium services, expect to generate only 200,000-300,000 unit sales in 2008. The play aims at future years with manufacturers anticipating millions of unit sales.

We did a forecast for Web-enabled TVs for a report earlier this year, focusing specifically on applications for watching Web video (CinemaNow, YouTube, etc.). Our forecast is pretty conservative, but it’s a much smaller forecast than for just HDTVs with an Ethernet jack on the back of them. As you look at total projected sales for HDTVs for the next few years (we think that sales will sit around 26-28 million units in the U.S. through 2012 as consumers start to replace second and third cathode ray tube sets with flat-panel HDTVs), the Web-enabled portion will remain relatively small – from 2% of total sales in 2009 to about 20% in 2013.

Labels: , ,

Hot Topic for 2009: Will Web Video Replace Your Cable Company?

Today's Wall Street Journal has a couple of articles about cable's power struggles with cable TV programmers. First, is the battle that is playing out between Viacom and Time Warner Cable. We posted this news item earlier today, noting that this is a classic example of the problem that cable providers have with their rather uneasy alliance with the programmers. The power lies with the programmers, who have enormous flexbility to charge not only carriage fees, but get the lion's share of the ad revenues. And, they can also put their video online and raise ad revenues that way. I heard one Time Warner exec quoted earlier today as indicating that Viacom "wants their cake and to eat it, too."

Then, there's the contention between the FCC and Comcast about carrying channels like the NFL Network. The FCC accuses Comcast of discriminatory policies regarding these channels (offering them only as a special tier at an extra cost); Comcast argues that not all of their subscribers want the NFL Network, saying it's not fair to pass on a high fee for everyone who doesn't want it. For the cable channel that allowed Bryant Gumbel to ruin football broadcasts for two years, you have to give the NFL Networks for its moxie in providing an inferior product at a high price.

Then, of course, there is the issue of Web video and whether it will cannibilize cable subscribers. I had written an earlier blog about this, but wanted to follow up with some additional information on the phenomenon.

The past two years have witnessed tremendous growth in online video viewing, particularly for premium content such as television shows. In a study conducted in mid-2008, we found that more than 26 million U.S. adults with home broadband access report watching TV shows on the Internet, using services such as Hulu, Joost, Veoh Networks, or the portals established by major broadcast networks. A key question that we are being asked today is whether consumers will begin to view their pay TV services as expendable, since so much television content is available free of charge (and with many fewer advertisements) via online sites. Today, the number of “cable cutters” is negligible, according to our TV 2.0: The Consumer Perspective study. This study found that found 0.6% of the respondents don't pay for TV service but are watching or downloading TV shows over the Internet. Translated into households, that would be around 400,000.

Despite the popularity of Internet video, cable VoD services still retain a tremendous advantage in terms of quality-of-service and the quantity of high-definition offerings. As we size the potential market for both broadband video and pay TV VoD services for the next five years, we see significant revenues coming to the operators for these transactional services. These numbers do not take into account revenues from ad-supported free VoD content. How effectively cable operators can fine tune their content management systems and advertising relationships in the free VoD space will be an important measure of how well they can capitalize on non-linear advertising revenues, such as free VoD. We also anticipate that cable operators will follow a model similar to the Comcast Fancast development, in providing a broadband video-on-demand service that not only has the potential to spur advertising sales, but ties back to the existing digital cable service by providing applications for remote DVR programming through the portal and allowing users to set up folders for online content to then be viewed on the TV. Cable operators that can develop seamless user experiences between the broadband and cable TV world for their subscribers will have an edge on their competition.

Finally, it’s important to note that our data indicates that even among active Internet video users, their likelihood of cancelling pay TV services is no higher than for all respondents. We would guess that access to live news, sports, and other exclusive programming, as well as more content in on-demand and high-definition formats, will continue to be draws for consumers to pay TV services. Obviously, we’ll be tracking this data for trending analysis to see how these figures might change over time.

Labels: , , , , ,

Reshaping the Broadband Market

The incoming administration has made clear their intentions to put the U.S. back in the top 10 for broadband penetration. While the U.S. ranks number one in terms of the number of subscriptions, it comes in at number 15 behind France and Germany in terms of penetration per 100 inhabitants. In that regard, the legislative activities in Washington are setting the stage for another move in the chess game between the cable operators and the Telcos. The cable operators have been offering relatively higher broadband download speeds than the Telcos who thus far have relied on their ADSL infrastructure for broadband offerings. The MSOs would like the minimum download speed for broadband connectivity to be set at 5Mbps which would automatically disqualify the bulk of DSL connections which average at 2Mbps or less as broadband connections. It will be interesting to follow this tussle as the outcome bears significant implications for network infrastructure providers who could really use some good news heading into 09.

Labels: , ,

Time Warner and Viacom dispute to cost consumers more

Viacom and Time Warner Cable are in a dispute over carriage fees, as Viacom wants an increase in fees for their channels. In response, Time Warner has threatened to no longer show programming on any of Viacom's cable channels, starting at 12:01 a.m. January 1'st.

Unfortunately for many Time Warner Cable subscribers, Viacom carries some of their favorite programming. No more Viacom channels on Time Warner Cable means no more Nickelodeon, no more Comedy Central, no more MTV, and no more programs on 16 other channels like Spike TV, Logo and CMT.

If the standoff continues, Time Warner Cable subscribers will not get to see Spongebob Squarepants, Dora the Explorer, The Daily Show, The Colbert Report, South Park, MTV videos and programs, and many other favorite shows.

To Viacom, Time Warner Cable has undervalued their shows, even though 20% of Americans' TV time is spent watching Viacom shows. Viacom wants a fee increase of about 23 more cents a month per subscriber, which would average out to a total of $36more million made.


Tuesday, December 30, 2008

Introducing the Internet Media Device Alliance

From the EE Times, some of the major players in streaming media, including device and receiver makers, radio broadcasters and music service providers, have joined forces to launch an industry forum dubbed the Internet Media Device Alliance to develop and promote a set of open, interoperable standards and device profiles to drive the market for Internet-connected media devices.

Initial member companies and organizations include Frontier Silicon, Audiovox, France Telecom, Reciva, Global Radio, PURE, vTuner, TerraTec, AwoX and the BBC.

The IMDA will hold an inaugural assembly meeting during the CES in Las Vegas on January 9th, and hopes many others will join the effort.

Labels: ,

LG Expanding Web Video Relationships beyond Netflix

CNET is reporting that LG Electronics will expand online video content relationships in 2009 to include CinemaNow and YouTube. This video will be available at the TV through their connected Blu-ray players.

Labels: , , , , ,

HP MediaSmart Server - playing nice with Macs, centralizing content, and pushing media

HP announced some updates to the MediaSmart Servers on Monday (the ex485/ex487). I can't find the official release on their Website to provide a link, but did a nice write-up. The big stuff is the support of Mac back-ups and iTunes streaming, but I got to see the MediaSmart Server in action at a special workshop in November, and I liked some of the media centralization capabilities it brings, as well as the ability to publish photos to sharing sites straight from the Server interface.

Labels: , , ,

Monitoring Energy Use with Agilewaves System

Interested in savings? Of course you are...who isnt? Wouldn't you like to monitor your energy consumption (including electric, gas, water, wind, solar panels, etc.)? An Angilewaves System could be your answer!

With a usage readout including details with by hour, day, month or year, you can monitor your energy consumption and review any savings from alternative energy systems (solar, wind and/or geothermal heating). You can even go back several years to view savings if you change appliances. Can't wait to see those pie charts!

How is it done? "Agilewaves uses sensors at the gas and water mains and electrical panel to measure your energy use. This data is sent over Ethernet cabling to an Agilewaves Data Acquisition System, a small web server the size of Mac Mini and that draws under 20 watts of power. The computations are done there, based on local utility rates, and sent a computer or control system."

What about installation? "A home installation can run anywhere from $5,000 to $85,000, depending on the size and scope and the number of sensors." In addition to the installation, the basic system begins at $5k which includes sensors at the gas main, water main, five individual electrical circuits, and all software and all hardware. Additional sensors can also be added to individual electrical outlets.

Source: and Steven Castle's article "Agilewaves Monitors Your Energy Use" posted on Electric House.

Labels: , ,

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 for information. During CES, visit Parks Associates at Booth #25556, South Hall 2, Ground Floor.

Labels: , , , , ,

Monday, December 29, 2008

Hot CE Products in 2009? Ask Retrevo

I guess it's obligatory that we in the analyst and press community need to come up with our "Top-Whatever" lists of the key trends, key products, etc. from either the year just ending or for 2009. It definitely does help to distill the main news and hot items for the year into some easily digestible deliverables ahead of the Consumer Electronics Show next week. In fact, the Parks Associates' analysts got together a couple of weeks ago to deliver a Webcast titled 2008: A Digital Lifestyles Year in Review, and I'll be delivering a Webcast on January 22 titled Key Trends in Consumer Electronics that will focus on the big things we saw and heard at CES.
It's easier of course to make some well-educated guesses about what's about to happen with good data available. That's why we're so active in our consumer research. And, when you look at a company like Retrevo, they've got a wealth of information available to them about what consumers are looking for in consumer electronics. The company does a lot for the buying public, but basically, they distill the tons of information, reviews, prices, etc. about a host of CE products and deliver the information to likely buyers in a much more manageable way. I think highly of what Retrevo does, and blogged about them in 2007 as I discussed how I think customer support for the digital home will evolve beyond just fixing broken products and services after they are purchased/installed and become a much more holistic offering that includes things like pre-purchase advice and suggestions for upgrades to existing products. In this way, retailers, service providers, and product manufactuers can play a much more proactive role in providing solutions to their customers at all stages of the buying and support process. It's an addition to a Customer Support Lifecyle notion that is pictured at the beginning of this blog.
Retrevo has some cool features that leverage the data it's able to collect about the CE buying public. In October, they announced Retrevo Pulse™. This consists of the CE Price Index™, CE Demand Index™ and a real-time product buzz ticker. The indices track daily price and demand trends for consumer electronics by product category and in aggregate based on data for more than 4,000 products across 40 categories, such as HDTV’s, digital cameras and laptop computers.
In yesterday's San Francisco Chronicle, Retrevo is noted as using its data to name the most sought-after consumer electronics products of 2008 and predicting the winners and losers in 2009. Retrevo put out their own press release on their Retrevo Pulse Awards. These commendations go to products "that have been recognized for high quality, generating a high level of demand among consumers, rich feature sets, and most importantly, high value."
Best products for 2008 - based on quality, value and consumer demand - include specific models of Samsung and Panasonic LCD TVs, Canon and Nikon digital cameras, a Garmin Nuvi Global Positioning System device and an Asus Eee PC.
Hot products for 2009 will be home theater systems, netbooks, digital cameras, high-definition televisions and Blu-ray DVD players, Jain said, partly because people are buying them over the holidays despite the bad economy and partly because these products will continue to technically advance.

Labels: , ,

HiWired is now Radialpoint ... and maybe PlumChoice?

I've been trying to keep up-to-date on developments in the home tech support space in 2008, and when I wrote awhile back that the remote support space in particular is very dynamic, I wasn't kidding! Not only are industry giants like Cisco, Dell, and Intel all making moves, but we're seeing consolidation. I had heard about possible goings-on with HiWired, but it was difficult to pinpoint exactly what was happening. A former HiWired employee has kept a blog, however, and noted the company's demise. Apparently, some assets have gone to Radialpoint (as did Singu Srinivas, the company's co-founder), and PlumChoice may have gotten ctrlcenter, the remote support element that HiWired was delivering via OfficeMax.

Labels: , , , ,

Cisco taking on Sonos?

I had mentioned Cisco's emphasis on the consumer market at the C-Scape event. I will say that one disappointment from the event was a lack of news regarding what the Scientific-Atlanta side of the business is doing. It seemed like Cisco talked headend, edge, and consumer retail products more than anything else and left out any real discussion on service provider CPE trends. Maybe they'll rectify that at CES.

According to a couple of news articles today, the first iteration of Cisco's consumer entertainment strategy will be a multi-room wireless music system. I had the chance to see this at C-Scape, and it is a nicely-designed system. Obviously, Cisco's goals are to get more bits and bytes of data and video through networks, so this is definitely a foundational solution for some future efforts aimed at getting more products network-connected and accessing content stored locally inside the home and distributed over a variety of access networks.

Labels: ,

Some additional notes regarding P1901 and ITU 9960

I followed up with some of the principals involved in the IEEE P1901 and ITU-T G.9960 ( work last week to clarify a few points. These requests followed a briefing with the folks with MoCA, who have grievances about the ITU process and the decision that was reached in December to approve the foundation document. Here are some of the primary issues that the MoCA folks wanted to air:
1. They note that this is still an uncompleted specification, noting that no MAC agreement has been reached (and contesting the notion that the PHY is 100% solid). For the record, the ITU and the HomeGrid Forum have made note of the need to finalize the MAC specification. This could be accomplished with a companion spec for a media access controller that could be implemented in firmware is expected to be complete as early as September 2009. Thanks to Rick Merritt at The EE Times for that good explanation.
2. The MoCA folks feel that they were largely shut out of negotations in the ITU process, arguing that they had put forth a recommendation to make the ITU backward-compatible to MoCA. Contacts at DS2 and CopperGate note that the ITU specification is not backward-compatible with any current "no-new-wires" standard, and trying to achieve this and please everyone would have resulted in a much slower process. They indicate that it will be up to individual semiconductor companies to build in backwards compatibility.

Were their politics involved in this process? Undoubtedly. I do understand the sense of urgency under which both the IEEE and ITU have been working. It would appear that standardizing on a single powerline solution was really the critical component of the standards process, as this standards mess has held up market development for far too many years. Although MoCA supporters may not like feeling shut out of the development process, one explanation I got from someone privy to the ITU process was simple but probably a critical factor. He indicates that - for the European market in particular - coax solutions will not have the same critical role to play as powerline. Therefore, a solution like MoCA - which is well suited to the U.S. cable industry - simply wasn't going to be considered in the final process.

Labels: , , , , , , , ,

Monday, December 22, 2008

Roku does HD content from Netflix

News today that the Netflix Player now supports high-definition streams. A software update will be sent to the $99 boxes already in homes in the next few weeks. Roku says that more high-definition content providers will be added in the first quarter of 2009.

I've got to think that this box is going to be under a few Christmas trees on Thursday morning.

Labels: , , ,

P1901 to ITU: "We got home network standard game, too!"

Why can I not get "Dueling Banjos" out of my head right now?

Following up the news that the ITU has approved PHY specs for the ITU-T G.9960 (formerly known as the work), the IEEE (and HomePlug/Intellon in particular) are touting their own success in establishing a single powerline specification. Are we there yet? We'll see - I've tapped some contacts at DS2 to see if they have some comment.

Labels: , , , ,

Friday, December 19, 2008

Finally, some public news about Prodea Systems

We've been making trips up the Dallas North Tollway to visit the folks at Prodea Systems for more than two years. We've been waiting for the company to come out from under the radar, because up until now, they are most well-known for having been founded by Anousheh, Hamid and Amir Ansari, the founders of Telecom Technologies, which was sold to Sonus Networks. Anousheh was a "space tourist" on the International Space Station in late 2006.

Prodea looks to make a splash at CES with a "digital lifestyle command center." Although the piece of customer premise equipment looks suspiciously like another VUDU box, what Prodea has done is to supply an end-to-end solution for the service provider community to deploy a range of services. Prodea notes that likely applications will revolve around home network management, aggregation and backup of personal and internet media, remote access to all networked devices in the home, delivery of interactive entertainment such as VoD and digital broadband radio, carrier-grade VoIP, home monitoring, energy management, e-Health services and additional easy-to-use applications to be provided in the future.

It's an interesting strategy, and one that might certainly fit with a "better/best" approach that I'm hearing as a desire from the telecom industry in particular. Yes, telecom operators are deploying FTTx networks and advanced triple-play and IPTV services using the standard systems integrators, back-end solutions, and CPE partners. However, where I see Prodea finding a position is in helping perhaps smaller carriers with a turnkey solution that can provide very well managed core services (voice, video, data), but then also add the value-added features that we know carriers will need to create sticky services, keep customers happy (and retained), and drive new revenue streams.

Prodea says that they have five service provider partners that they'll announce soon. I'll look forward to hearing more.

Labels: , ,

Thursday, December 18, 2008

ActiveVideo Networks - From IPTV to Connected CE

CED Magazine covers ActiveVideo Networks' moves to "Web infuse" not only TV services, but also consumer electronics products. I am hearing a lot more activity occuring in the space of encoding, hardware, software, and silicon solutions that are aimed at bridging premium Web services to the TV. I had written about a couple of initiatives while back - Oregan Networks and Intel's Widget Channel approach. ActiveVideo Networks is also addressing this space, and will demonstrate examples at the Consumer Electronics Show in January.

Labels: , , , ,

Sigma Designs buys Zensys

The Sigma Designs purchase of Zensys, the company that originated the Z-Wave wireless networking protocol, is an interesting move. There are definitely some entertainment and remote controller applications that are enabled using Z-Wave, and Sigma also has a strong reputation in customer premise equipment like set-top boxes. So, might we see some home control features integrated with traditional entertainment experiences?

Labels: , , , ,

AT&T hits a milestone & Tax What??

AT&T announced yesterday that it has hit one million subscriptions for U-verse. U-verse definitely seems to be picking up steam. However, the growth in subscriptions has slowed slightly for AT&T 46% in Q2 vs. 44% in Q3 and softening consumer spending could potentially impact the Q4 numbers a little more than anticipated.

Tack on digital download tax to the tobacco tax in New York. Governor Paterson is exploring the possibility of taxing digital downloads in an effort to tackle the prevailing budget deficit. Will the New Yorkers now download content out of state while they are shopping for other household items?

Wednesday, December 17, 2008

Intel is ready to prototype the Widget Channel at CES

Following up their Widget Channel announcement at the Intel Developer Forum in August, Intel says that it will show prototype devices at CES. Intel also expects to announce new partnerships with content and service providers for The Widget Channel. The company also will introduce services "moving beyond just leisure and entertainment and television," said Genevieve Bell, an Intel fellow who specializes in studying user interaction with technology.

I'd expect to see lots of demos of Internet-on-TV devices in Las Vegas in January.

Labels: , , , ,

MoCA is now part of DLNA Device Interoperability Standards

The Multimedia over Coax Alliance (MoCA) announced today that it will be incorporated into the Digital Living Network Alliance's (DLNA) next version of its Networked Device Interoperability Guidelines, scheduled to be released in early 2009. MoCA joins Wi-Fi and Ethernet as the only LAN technology standards approved for inclusion in the DLNA Interoperability Guidelines. With all of the hubub about and the ITU's approval of the PHY and architecture portions of the ITU-T specification, I wonder if DLNA will look at this spec anytime soon?

Labels: , , , , ,

Tuesday, December 16, 2008

VUDU's New Angle - Web TV

Despite putting together a nice product with a great interface, VUDU has struggled to define itself. Is it the consumate video-on-demand box? The adult content box? The high-end installer box? A Blu-ray challenger?

With today's release, it looks like VUDU wants to take on the cable company. It launched VUDU RIA (Rich Internet Application) platform, a standards-based platform that brings Web-hosted rich applications and services to consumer appliances.

VUDU has created an initial set of applications and services in a new area of the VUDU home page, called VUDU Labs. Available today to all VUDU owners, these applications include casual games, implementations of Flickr, Picasa and the entire YouTube library, as well as a new "On Demand TV" area with more than 120 channels.

Today, VUDU customers can access a broad selection of free on-demand shows provided by major network television and on-line specialty sites spanning news, food, music, sports, and more. Programs include daily highlights from shows such as "Today", "The Rachel Maddow Show", "Anderson Cooper 360", "Fantasy Focus NFL", "MTV News", as well as full programs, some in HD, from Nova, National Geographic, PBS and others.

Labels: , ,

Home Gateway Initiative (HGI) Going Green

Obviously, a byproduct of the growing number of consumer electronics devices in the digital home will be increased power consumption. We've heard about some initiatives in Europe regarding standby power requirements for devices such as appliances and televisions, but this is the first I've heard of efforts aimed at CE equipment such as routers, modems, adn residential gateways.

According to a press release from the Home Gateway Initiative, they played an important role in developing the latest European Commission (EU) Code of Conduct on energy consumption of broadband equipment. This work has involved defining the operation states of customer premise equipment (CPE), as well as providing targets for the power consumption values of each functional component of the home gateway.

In line with the recommendations made, the HGI is now working on specifying low power mechanisms that allow the home gateway to consume the minimum power corresponding to its current level of activity, by looking at the individual subcomponents and assessing the existing power modes, and evaluating the implementation of additional low power modes. The work of the HGI on energy efficiency also extends deeper into the home network, involving the home gateway’s unique role as an always on device, orchestrating home automation.

Labels: , , ,

Parks Associates research indicates growing consumer demand for remote access to stored media content

One-third (33%) of U.S. broadband households are looking for ways to access their stored media content from outside the home, according to international research firm Parks Associates. The firm reports 35% of these households consider remote viewing a highly appealing ability.

This demand for remote access will guide future networking plans among service providers, Parks Associates reports. The firm forecasts that over 50 million households worldwide will be using place-shifting solutions outside the home by 2012.

The research firm notes that the sphere of content access will continue to expand and currently there is no coherent strategy to facilitate remote viewing of content stored in the home. As a result, third-party vendors have moved into this space, hoping to establish themselves within this developing market.

For more information, click here.

Labels: ,

Monday, December 15, 2008

FiOS TV Remote DVR - Amazing when Technology Works as Advertised!

Verizon's FiOS TV service has a couple of new features, one of which I tried over the weekend with good success. The Remote DVR feature allows users to manage and schedule DVR recordings from any Internet-connected computer. This feature was slick! Subscribers must have the Home Media DVR feature (allowing multi-room DVR functionality and access to music and photos from home computers at any TV with a set-top box). To initiate the feature, I just had to go to FiOS TV Central Website, enter in my username and password and activate the Remote DVR service. In no time, I was viewing a program guide on my laptop and selecting all of the shows I wanted to record over the weekend. Verizon was running an HBO and Cinemax promotion this past weekend, so I selected 5-6 movies to record. The record commands are sent immediately (I authorized a recording mere minutes before the start of the program and the set-top box responded immediately).

Verizon also offers Mobile Remote DVR functionality, allowing Verizon Wireless customers to view TV listings and mange DVR recordings while on-the-go.

After many frustrating attempts to hook up and configure a variety of consumer electronics products, it's nice to get access to a feature, try it, and have it work perfectly the first time. I was impressed with this feature.

Labels: , , , ,

Thursday, December 11, 2008

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.

Labels: , , ,

Newsletters from Parks Associates Inform on Home Systems, Digital Health, Value-added Services, and Digital Entertainment

International research firm Parks Associates announced four free newsletters, distributed online to inform industry executives on developments in home networking, digital health, digital entertainment, consumer electronics, broadband services, wireless connectivity, and home systems.

Parks Associates’ industry analysts, with over 20 years experience studying advanced technology markets, produce these newsletters on a monthly basis to provide analysis on industry topics and developments. Newsletters frequently cite worldwide trends and important areas of growth. According to Parks Associates, the number of households worldwide with a data network will grow to 240 million by 2012, while more than 50 million will be using place-shifting solutions outside the home.

Parks Points covers a variety of topics, including Web video, customer support, virtual worlds, storage, and mobile video.

Home Systems Newsletter provides updates and analysis on home systems, including wireless and powerline controls, universal remotes, and home theatre systems.

European Research Update examines the European market for digital living products and services, informed by market-leading industry research projects including Entertainment 2.0 in Europe.

Digital Health Newsletter provides information on technological advances as they impact modern healthcare solutions. Past topics include connected medical device monitoring, retail clinics, and universal health coverage.

To subscribe to these newsletters, visit .

Labels: , , , , ,

Wednesday, December 10, 2008

Wall Street Journal Review of Netflix-at-the-TV Devices

Last week, the Journal had a review of some of the consumer electronics products that can access Netflix Internet video content at the TV. They looked at the Roku player, the Xbox 360, and the LG Blu-ray player. Looks like the Roku player came out on top. The Xbox's loud fan annoyed the reviewer (and the game controller was not the optimal control) and the LG Blu-ray player apparently had issues with dropped home network connections.

Labels: , , , , ,

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.

Labels: , , , ,

Disney is Bullish on BD-Live

Art Hair, Disney Studios CTO, is speaking now at C-Scape. Disney has released a Blu-ray version of Sleeping Beauty that includes the interactive features of BD-Live. There's actually a good video demonstration of the functionality on YouTube. Disney has launched the BD-Live Network that offers chat, gaming, and other interactive features.

Our Digital Media Evolution study, the results of which will be available soon, reveals that consumers are more likely to view such BD-Live features as access to expanded VoD content and trailers are more valuable than other features like chatting or attending virtual watching parties. I talked to Art about this yesterday at lunch, and he acknowledged that for "old people" like he and I, these may not make much sense. However, when you make Hannah Montana a virtual experience (Art mentioned virtual pajama parties), one can only imagine how the younger generation may respond to a feature like this.

Labels: , , , , ,

Cisco Pushing Resources on the Consumer Market

Cisco's CEO John Chambers made some interesting comments in his remarks to the C-Scape event yesterday. He talked about building operational excellence and efficiencies internally, using tools such as WebEx, TelePresence, and a Facebook-like application where Cisco employees can connect to company experts, read materials, and connect to teams for collaboration.

One interesting comment that Chambers made was the company's push to the consumer market. He talked about freeing up resources that can then be used by groups at Cisco focusing on service providers, media companies, and consumer electronics manufacturers. I would expect that we'll see much more from Cisco at CES in January that lays out these specific strategies.

Labels: , , , , , ,

Tuesday, December 09, 2008

Consumers and the Recession: Crisis or Opportunity?

The Recession
On December 1, 2008, the National Bureau of Economic Research declared that the U.S. economy was in a recession that began in December 2007. While it took these experts a year to make this official determination, consumers have most certainly had a cloud of economic uncertainty hanging above them. The economic news in 2008 has come in constant waves of news, with increasing severity. From talk early in the year about plummeting home values and mortgage defaults, gas prices that peaked to record highs in July, the collapse or financial bailout of major banking and insurance institutions, to trillions of dollars of lost investments, and the potential for major bankruptcies in the U.S. auto industry, consumers have been buffeted by bad news. No wonder, therefore, that consumer confidence, as measured by the Conference Board Consumer Confidence Index™ hit an all-time low in October 2008, with only a slight rebound in November.

Parks Associates Consumer Research in 2008: Understanding Consumer Buying Changes
Our consumer research in 2008 has understandably had more of a focus in understanding potential changes to consumer spending and entertainment habits because of economic conditions. One nice thing about running many surveys throughout the year is the consumer sentiment tracking that we're able to pull together. For example, we included consumer sentiment and behavioral tracking questions in a number of studies this year, including:

How is the Economy Impacting Consumer Spending?

I'll give you an example of where the tracking has been useful as we've asked some consistent questions in each survey. When we ran the National Technology Scan in January 2008, economic concerns were already quite prevalent. In this study, we asked consumers about whether they had already changed their spending habits as a result of economic uncertainty. At that time, about one-half of those surveyed indicated that they had not yet made any changes. However, about a quarter of respondents – in response to the higher gas prices – were indicating that they were driving less. In categories that would most directly impact the cable industry, smaller percentages of consumers indicated that they had cut back for outside entertainment.

By April, our Consumer Electronics Purchases: Quarterly Monitor indicated a significant shift in consumer mindset regarding the economy and the impact on consumer spending. Nearly two-thirds of consumers surveyed indicated that they had changed spending habits. It is notable that expenditures for outside-the-home entertainment (such as going out to the movies) was taking a bit hit at this time. In terms of spending that was likely threatened, the top three categories were dining out, travel, and out-of-home entertainment.By the time our Digital Media Evolution survey was fielded (late November 2008), the full effects of the economic situation were being felt fully by businesses and consumers alike. Nearly 50% of consumers surveyed indicate that they will be spending less on consumer electronics because of the economic conditions. And, although Black Friday and Cyber Monday both showed growth over 2007, there is no guarantee that spending for the rest of the holiday season will remain as healthy. For household services (such as Internet and pay TV), recessionary concerns appear to have less impact. Consumers are far more likely to cut back on travel, dining out, and outside entertainment expenses before trimming household services such as home telephone, pay TV, and Internet. Only 4% of consumers with home phone service and pay TV service, respectively, plan to cancel their services because of the economy. More recession-proof are services such as Internet and mobile phone.

Where are the Opportunities?

Although all companies should rightfully be concerned about the impact of the economic slowdown on their businesses, can there be opportunities, particularly among service providers? Interestingly enough, there are dynamics within the industry that point to potential gains among broadband, communications, and entertainment providers.

One key data point that comes out of our surveys (and the surveys of industry players) is the continued growth of entertainment-at-home (at the expense of outside-the-home entertainment). One interesting finding from our TV 2.0: The Consumer Perspective study is the self-reported changes in video habits. As was indicated earlier, consumers are far more likely to reduce expenditures for outside entertainment like movies in a recessionary period. Video-on-demand leads the way in increased video consumption, while DVRs and on-demand programming appear to have taken a significant bite out of renting or buying television series on DVDs.

Verizon recently reported some research that confirms this finding, noting a rise in what they call "Home Enterstayment." In a December 1 press release, the company reported that a majority (57 percent) plan to spend more time at home turning to their television instead of events outside the home.

Focus on Cost Savings: Customer Support in the Digital Home

In these uncertain economic times, revenue-growth strategies may take a back-seat to more of a back-to-the-basics approach of cost savings. Chief among OPEX reductions should be strategies that work on streamlining customer support, which could be a huge cost liability for service providers. Our own research, for example, finds that service provider costs for supporting home networks alone could run in the hundreds of millions of dollars annually. By implementing self-diagnostic and troubleshooting solutions and building remote support capabilities, service providers can actually turn customer support from a liability to an opportunity, reducing OPEX costs initially and perhaps growing revenue-generating customer support businesses in the long-term.

I'm actually at the Cisco C-Scape analyst event right now, and the customer support enhancements are a key strategy that is being communicated by the company's executives as they look at their roadmap from 2009 and beyond. It's clear that they will be taking the Pure Networks assets and tying them more closely with both their customer premise equipment and their service provider solutions. OPEX cost reductions, their executives argue, will be a critical factor in service provider strategies.

Concluding Thoughts

Although there is no such thing as a truly recession-proof business, we are encouraged by what the data we've collected this year indicates how companies can take advantage of opportunities to solidify and plan for future growth. For service providers in particular, two key opportunities are bringing a high-quality and convenient entertainment experience to the home and improving customer support. If you look at the key service provider strategies today - customer retention, customer acquisition, and revenue growth per subscriber - these two areas alone will drive significant long-term benefit.

Labels: , , ,

CEA recalculates consumer electronics growth in Q4

Here's a follow-up to last week's blog regarding CEA's take on Black Friday and the fourth quarter outlook for consumer electronics sales. Given the "seismic" changes to consumer buying habits in late Q3 and early Q4, it's no surprise that CEA has now revised its wholesale shipment revenues for Q4 from 3.5% to 0.1% growth. New data, CEA notes, "shows the economy and consumer sentiment remain muted and CEA surveys show overall spending is down this holiday season."

We have our own interesting data about CE spending intentions from our new study Digital Media Evolution. The data is back from the field, and we'll be sharing results soon.

Labels: , , ,

Friday, December 05, 2008

3D TV – Coming to a Living Room Near You

Last night’s trial run of an NFL broadcast in 3D was not without hiccups, but nonetheless an exciting experience, so we are told. Four experiences over the past year have convinced me that 3D will land in our living rooms within the next two years.

First, while at last year’s CES, TI was demonstrating 3D programming on two DLP TV models. The experience was very impressive, but more amazing was to hear all 16 people in the demo area say “wow” at the same time. This spring I spent some time with representatives of 3ality Digital LLC, the L.A. company that not only enhanced 3D display technology for the TV, but elevated the filming of 3D content to a true art form. They are the talent behind National Geographic’s amazing U2 3D IMAX production – a visual experience so stunning that you can count the fillings in Bono’s back teeth while he belts out Pride. In a pre-release sneak peak of U2 3D, the room quickly filled with curious onlookers whose only words were again, “wow.”

This fall at the IFA conference in Berlin, the German national think tank and technology lab Fraunhofer Institut demonstrated 3D technology on TV which did not require stereoscopic glasses and which displayed 2D content which had been enhanced to add 3D effects. While not as rich as previously mentioned examples, the demonstration was evidence that 3D will soon be offered without glasses and costly 3D videography.

Lastly, as we carefully watch consumer purchasing habits while the economy collapses around us, we see that TVs and TV services are holding up fairly well. Today’s news in TV Week states that over half of adults surveyed for Verizon plan to beat the recession by spending more time at home with TV-based entertainment. Parks Associates’ consumer surveys confirm that CE products and services are low on the consumer cut list.

Greater emphasis on the home entertainment experience suggests that the very powerful Wow! factor of 3D will find fertile ground in the home. After all, for those that have owned 3D capable TVs for more than a handful of years, isn’t it time to find a reason to upgrade? 3D will be your answer.

Labels: , , , , , , , ,

Thursday, December 04, 2008

CEA and Sony say Blu-ray is Doing Well

I had the chance to attend CEA's Webcast this afternoon Holiday Update and Post Black Friday Analysis. They indicated that 54% of Black Friday buyers purchased consumer electronics products.

CEA says that 2.2 million Blu-ray players have been shipped (purchased) so far this year, and that we're on track to hit 2.75 million units before year-end. I've been more conservative on Blu-ray players, forecasting 2.35 million sales for all of North America for 2008, but it would be nice to be pleasantly surprised here.

Sony offered some good news regarding its own Black Friday experience. On a corporate blog, they noted that sales of their BRAVIA LCD televisions, Blu-ray Disc players and Reader electronic book devices all exceeded expectations.

Labels: , , ,

Wednesday, December 03, 2008

Smartphone Market Competition Ratcheted Up

There were several news headlines regarding the mobile phone industry in the past couple of days. First, Nokia launched its N97 touch-screen smartphone yesterday and touted as the most revolutionary mobile internet device. Indeed, the specs are quite impressive: 5-megapixel camera, 32GB internal memory, tri-band HSDPA 3G, flash in the browser, and a 3.5-inch touch screen, etc. The price tag is eye-popping too—around $700. Separately, news from the U.K said that T-Mobile UK started to slash the price of the first Android phone G1. It is now not only free to customers who sign up for an 18-month contract with the carrier, but also costing less to a user on a monthly basis: the contract term is reduced from £40 to £30 per month. Consider the fact that G1 was only launched a month ago, the price cutting speed is unprecedented for a hotly pursued model. Then late yesterday afternoon, Research In Motion issued an earning warning for the 3rd quarter ending in November. The company will fall short on both subscriber numbers and the revenue goal, even its CEO described the new Blackberry Storm sales as “exceptional.”

All signs indicate that mobile handset makers have significantly boosted their efforts in the smartphone market. As a result, consumers will see not only more capable/enticing models out this year and the next, but also strong motivation from handset makers and carriers to push inventory through the channels. The hope is on the smartphone category to raise overall mobile handset sales volume, and all the sweeteners might come at the expense of margins from carriers and handset makers. RIM’s miss is a strong indication of the intensity of competition. Not that the Blackberry is no longer cool, but consumers today and in the future will have a lot more choices with an attractive service plan than in the past. This new reality clearly benefits consumers and will help shorten the replacement cycle for those who are in the mood for an upgrade.

Labels: , , , ,

Tuesday, December 02, 2008

New Term: TiVo Guilt

Great - now our consumer electronics products are giving us a complex. CNN reports today on "TiVo Guilt," where TV viewers who record shows on their DVRs feel an obligation to watch every single episode recorded and suffer guilt when cleaning out unwatched shows.

It got me thinking about the state of my TiVo and TV watching for the past few months. If I had to count the number of shows that we watch pretty regularly on a weekly basis, I'd say it's probably 5-6. There are another 3-4 that we'll watch with less regularity, but I don't get heartbroken if I miss a few weeks.

I do relate to actress Amanda Peet's comment about having "TiVo OCD." I'm the same way - I feel the need to get in there and clean out the old shows about every week.

I'll offer some free therapy to those who feel the TiVo guilt. The summer rerun season is long. There's plenty of time to catch up on those shows.

Labels: , , ,

Black Friday Consumer Electronics Shopping

Here's a follow-up to the post from last week regarding consumers' purchase intentions for electronics products this holiday season. I saw a few articles yesterday that quantified what Black Friday meant for consumer electronics sales:

What Did Consumers Buy?
  • 39% of shoppers bought DVDs, CDs, video games and books; and
  • Nearly 36% of consumers purchased consumer electronics

How Did Apple Products Do?

From CNET:

  • Mac sales were better than expected" and iPhone sales were about in line with expectations, [Gene Munster of Piper Jaffray] wrote in a research note Monday

What were the Top Products?

From CNET:

According to PriceGrabber, the following were the most popular products on Black Friday - nine of the 10 are gadgets, with the odd product out being one styling of the popular Ugg boots:·

  • Nintendo Wii console
  • Ugg Australia "classic short" boot
  • Sony BDP-S350 1080p Blu-ray disc player
  • Samsung LN52A650 52" LCD TV
  • Nintendo Wii Fit
  • Panasonic TH-42PX80U 42" plasma TV
  • Sennheiser HD 555 headphones
  • Canon EOS Rebel XSi Black SLR digital camera kit
  • Acer Aspire One AOA110-1295 notebook PC
  • Canon PowerShot A590 IS black digital camera

The consumer electronics category that saw the largest gains from Black Friday 2007 was Blu-ray/HD-DVD players, up 147 percent, according to PriceGrabber. Headphones were up 103 percent. (By comparison, women's sleep and lounge wear was up 415 percent, women's boots were up 203 percent, and watches were up 202 percent.)

How did Game Consoles Do?

From PC World:

  • The Xbox 360 outsold Sony's PlayStation 3 by three-to-one, says Microsoft, but the 360 managed its best Black Friday sales ever, including a 25 percent lift over 2007 figures.

Labels: ,

Is the iPhone a market creator? Sonos seems to think so.

I had mentioned in previous blog about the iPhone app that allows the phone to become a Sonos controller. The folks at Sonos seem to think that this was a feature that allowed a number of iPhone owners to buy an entry-level single-room Sonos system ($349) and using the iPhone as the single controller for the system. They point to a Sonos forum where some new converts discuss the role of the iPhone app in convincing them to purchase the system.

Sonos' takeaway from this: "We believe there is a positive trend pointing towards the iPhone as a way for ‘niche’ companies/products/services to introduce themselves to a mass audience – the iPhone lover."

Labels: ,

SiBEAM Receives CE Investments

The market for "wireless HD" solutions has been one of the hotter topics in 2008, and I've been trying to keep up on the announcements. I would imagine that CES will be a showcase for a great many products using wireless systems to distribute high-quality video around the home. SiBEAM received some cash from both Panasonic and Samsung, as noted by the company yesterday. We'll have to see if this turns into any real products early in 2009.


Parks Associates research shows U.K. the Leading European Nation for DVRs

Over 35% of U.K. broadband households own a DVR --

The United Kingdom is the first European nation to adopt digital video recorders (DVRs) in significant numbers, according to international research firm Parks Associates’ new study Entertainment 2.0 in Europe.

This five-country study examined entertainment trends across Europe and found over one-third of U.K. broadband households own a DVR. British households are also more likely than other European DVR households to record programs and skip commercials. At the same time, DVR use has not completely replaced use of broadcast TV. Even young U.K. consumers with a DVR continue to watch broadcast TV more often than recorded programs, part of the overall trend in Europe where households are less receptive than their American counterparts to television services.

A number of factors explain this gap between the U.S. and Europe. For example, strong public broadcasting has left less room in Europe for private, pay-TV services. In the U.S., poor free-to-air reception and a weaker public broadcaster have created a market for premium services.

For more information, click here.

Labels: , , ,

Monday, December 01, 2008

Pace develops +Le Cube, next generation satellite / IP hybrid set-top box

Leading independent developer of digital TV technologies for the global payTV industry, Pace develops Europe’s first Satellite / IP hybrid set-top box to use the Ethernet port for VOD services, +Le Cube for the French leading pay-TV operator CANAL+ Group.

+Le Cube’s hard disk has been optimised by Pace Engineering for very low audibility, to be less intrusive for the user. This is also the first HD PVR for CANAL+ Group with an internal hard disk drive, with a 320 GB capacity providing the ability to record up to 100 hours of HD programming.

In addition to Ethernet port, this product supports USB and HDMI and has Dolby Digital audio outputs. The IP connection allows progressive download of VOD whereby content is buffered onto the HDD. +Le Cube has a striking new black and white rectangular design which can be placed horizontally or vertically to allow maximum versatility for the consumer.

+Le Cube has been designed to support and enable new services to CANAL+ and CANALSAT subscribers, including access to the latest US series, in high definition, less than one week after they have been shown to US audiences. Further features are catch up services, broadband access for interactive services and a recommendation service for viewers.

To read more about this new development, click here.

For more information on Pace, please visit

Labels: , , ,

How Cable Might Fare in the Recession

Cable operators such as Comcast and Time Warner Cable might be hurt during this economic downturn by fewer revenues from DVRs, high-definition channels, and premium channel subscriptions (such as HBO), but they should fare okay, according to Saturday's Wall Street Journal. There are some interesting factoids in the article worth noting:
  • Comcast reported average monthly revenue per subscriber of $110.71 for the third quarter, 8.8% higher than the year-earlier number. Video accounts for about $64 of the number, up $3.20 from a year earlier, with $35 coming from Internet access and phone combined, up nearly $6.
  • Only about $4 of per-subscriber monthly revenue at Comcast comes from DVR and HD revenue, estimates Sanford C. Bernstein analyst Craig Moffett, while pay per view contributes less.

Broadband and voice services are the real profit centers for cable right now, and we don't necessarily see consumers cutting the cord for these services right now.


Nokia introduces Home Control Center

When I joined Parks Associates ten years ago, the "smart home" concept was all the rage. Pretty much every company in our market had some kind of concept center or display house that showed the functionality of the digital home. I remember a visit to GTE's offices in nearby Irving for a tour of a very elaborate set-up.

These digital home mock-ups and very broad digital home strategies fell mostly out of favor after the dot-com crash early in this decade, as companies tended to focus more on tactical solutions rather than the full-blown smart home. However, some of the demonstrations live on - Microsoft has had a digital home in the parking lot of the Las Vegas Convention Center for the past few years. HP has had a mock-up in the parking lot of its Cupertino campus for some time. However, most companies have tended to focus more on one or a select group of connected products (DLNA type of connectivity) instead of the holistic smart home type of concept.

Now, mobile giant Nokia seems to be revitalizing the smart home concept. On November 27, 2008, the company announced that it is developing a smart home platform, the Nokia Home Control Center. The platform, the company notes, will be the "basis for next generation security, smart home solutions and household energy management systems."

The Control Center will focus on electricity usage control, device control, and monitoring for temperature, cameras, and motion. Nokia envisions whole-home systems - such as security and HVAC - being integrated with the Control Center in the future. All devices and systems can be controlled with smartphones and PCs.

Nokia has started working with a number of companies to define and create a solid basis for building the next generation of products that will introduce a new kind of mobile access to intelligent systems at the home. These collaboration partners include Danfoss, Delta Dore, Ensto, and Meishar Immediate Community (MIC) and Zensys. Information about Nokia's smart home initiatives and partners is available at this link.


Coming Soon: Long-form Online Ads from Hulu?

In making a case for long-form online ad formats, Hulu released data showing that 88% of current Hulu viewers would opt-in to a long-form two-minute advertisement in order to avoid ads during the rest of the program. The study suggests that consumers don’t mind ads. They do however prefer being given a choice of ad content that is personally relevant. The findings also suggest that high opt-in rates are directly correlated to increased ad engagement.

While reflecting on Hulu’s findings, I question whether or not targeted long-form ads are a viable online ad format. Here are a few initial considerations:
1. One must consider the issue of audience engagement. True audience engagement is impossible to measure. The viewer could say they’d be willing to watch a two-minute relevant commercial. But what’s the likelihood that they will disengage from the commercial break in order to send an email or multi-task on a separate project? Especially when ad avoidance exists during a much shorter (30 second) ad format.
2. Long-form online ads are not a good fit for some advertisers. Imagine a two-minute ad for Wal-Mart. Now imagine this same commercial placed in the FOX drama House, which skews adults 18-34. (*Note analysis below.) Additionally, producing a long-form commercial that is creative and attention-grabbing is difficult to accomplish. With that said, it is possible. I immediately think of the Nike Football: Fate commercial. Great spot. While this is a one-minute advertisement, I think it would be difficult to extend the spot to two-minutes and retain meaning.

As I explore the idea of the long-form online ad, I decide to conduct an experiment on I do so because I do not watch TV programs on Hulu and I want to familiarize myself with Hulu’s ad structure. Call me old fashioned, but I prefer to watch TV programs on a TV set. I analyze four programs based on Hulu’s most viewed list for the month of November 2008. The ad structure of these programs represents what a majority of the viewers experience.

Based on the analysis, I discover that the traditional 30 minute program (21-22 minutes online) typically does not contain two-minutes worth of commercials. So why would one choose to watch a two-minute ad even if they could choose the specific ad content? However, I believe it is feasible that one would prefer to watch a one-minute ad that is personally relevant in lieu of 4 random 30 second commercials (within a half hour program). Of course, it is important to note that Hulu’s commercial load varies with total commercial time accounting for 3 – 6% of total program time (based on my analysis). It seems acceptable that most online TV viewers would agree to watch 2 one-minute personally relevant ads in an hour long program.

Based on the analysis and initial considerations, extending ads beyond one-minute is asking too much of the viewer even if the program is free to view. I would also suggest that a two-minute ad (even if personally relevant and paired with the right advertiser and good production value) would inevitably cause audience avoidance. Even so, I do not make the assumption that Hulu plans to push long-form two-minutes ads in all of their online programs. In any case, Hulu is on track in seeking a better understanding of consumer advertising preferences in order to circumvent traditional advertising models.

Ad Structure of Hulu’s Most Popular Programs – November 2008

The Office/NBC Season 5/Episode 8 21:29
:05 pre-roll Nissan
:30 Wal-Mart
:30 McDonald’s sponsored The Reality House Show
:30 McDonald’s sponsored The Reality House Show
Total ad time: 1:35 (represents 6% of total program time)

Family Guy/FOX Season 7/Episode 4 21:49
:05 pre-roll Nissan
:30 McDonald’s sponsored The Reality House Show
:33 Airforce
Total ad time: 1:05 (represents 5% of total program time)

*House/FOX Season 5/Episode 5 44:04
:05 pre-roll Sprint
:30 Wal-Mart
:30 Wal-Mart
:15 Wal-Mart
:30 Wal-Mart
:30 Wal-Mart
Total ad time: 2:20 (represents 5% of total program time)

Heroes/NBC Season 3/Episode 7 41:37
:05 pre-roll Nissan
:15 Nissan
:33 Airforce
:15 Blu-ray disk
:15 Blu-ray disk Total ad time: 1:20 (represents 3% of total program time)

Labels: , ,

Blockbuster and Microsoft Live Mesh - content to go

The Dallas Morning News has an interesting article this morning about Blockbuster and Microsoft working together on mobile movie options. Using Microsoft's Live Mesh solution, the speculation is that we may see movie kiosks in airports that will allow for the download of Blockbuster movies to mobile and portable devices.