Parks Associates Blog

Wednesday, June 30, 2010

Energy management, entertainment systems control, and remote home monitoring to drive adoption of home controls

Three applications will drive adoption of control systems over the next five years: energy management, entertainment systems and content control, and remote home self-monitoring. Consumers see the value in these areas, which, once established, can serve as the base for expanded control systems in the home.

Parks Associates new report Home Systems: Home Controls – Analysis and Forecasts finds low consumer awareness and a shortage of affordable installation services currently hinder widespread adoption. The entry of well-known players, including ADT, Best Buy, Radio Shack, and Schlage, will help grow this market, but players should focus their value proposition on specific, easily understood applications in order to build consumer awareness and lay the foundation for future expansion.

For example, as entertainment controls for home theater and audio systems become more affordable, penetration will expand from 5% of U.S. households to 17% by 2014. These systems can then be expanded to integrate lighting, window treatments, and security controls, a strategy that will help push penetration of control systems overall to almost 20% of households by 2014.

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Parks Associates supports 7th Healthcare Unbound Conference

Parks Associates is supporting Seventh Annual Healthcare Unbound Conference & Exhibition.

Harry Wang, Director, Health & Mobile Product Research, Parks Associates will be moderating the panel, "Innovations in Wireless Technologies" on Monday, July 19th at 4:15 PM.

Wireless technology has a number of distinctive characteristics that make it an attractive platform for delivering healthcare anytime, anyplace. Though a number of real barriers remain to be overcome, perhaps no technology has a greater potential for transforming healthcare than wireless. This panel will explore this potential and describe what his happening now.

The program will have a strong focus on use of remote monitoring / home telehealth technologies for wellness promotion and chronic care management, with a special emphasis on Baby Boomers and the elderly population. The agenda will also cover topics such as the emerging role of mobile/wireless technologies, legal/regulatory developments and reimbursement issues, strategies for success for Healthcare Unbound vendors and much more. The program will also feature leading-edge case studies as well as keynote presentations from some of the nation’s thought leaders in the area of Healthcare Unbound.

Seventh Annual Healthcare Unbound Conference & Exhibition is a nationally recognized event that focuses on networks, platforms and applications for technology-enabled participatory medicine. Key topics to be covered include innovative applications of remote monitoring, home telehealth, mhealth, ehealth and social media to manage diseases and promote wellness.

If you are interested in digital health, please visit:

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Thursday, June 24, 2010

Roku and Clearleap - Paving the way for premium content on low-cost CE devices

My first summer at Parks Associates (twelve years agao this month) was characterized by a monthlong heatwave and zero rain for several weeks in a row. It was also my first introduction to consumer-oriented home networking technologies - it seemed that there was a new announcement regarding powerline, wireless, coax, twisted-pair or other types of home networking technology. It was quite an introduction into the dynamic consumer technology space.

I'm reminded of the milestones of 1998 this week, where we've seen some major announcements between online video content management companies and consumer electronics manufacturers. Plus, it's been hot and dry ... again!

Today, Clearleap announced a partnership with Roku to bring premium television content to the Roku box. The arrangement will leverage Clearleap's cloud-based universal video platform for content management and service delivery, giving pay TV operators and premium programmers a seamless opportunity to offer content and generate additional revenues with a branded Channel on the Roku player.

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Revenues from Network-Attached Storage to Exceed $4.4 Billion in 2014

DVRs and video downloads will push the storage needs of U.S. broadband households to almost one terabyte by 2014, creating a parallel rise in the market for file backup and storage solutions, according to international research firm Parks Associates.

Parks Associates’s new report Consumer Storage Opportunities finds almost 50% of households are performing regular backups, including external storage, flash drives, and online backup, up from only 35% in 2006.

This is a classic example where growth in one area is spurring another industry. As people accumulate more digital content, the prospect of losing that data becomes more ominous. Companies marketing network-attached storage (NAS) and home server devices should target high-use consumers such as videophiles and music enthusiasts and demonstrate the ease with which these products protect against loss of critical data.

The majority of consumers still use less-reliable media such as CDs, DVDs, and flash drives, but in the past four years, portable hard drives and direct- and networked-attached storage have become more popular. This trend will accelerate, fueled by growth in digital media and dropping storage costs. In particular, product revenues from NAS devices will nearly quadruple between 2010 and 2014.

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Wednesday, June 23, 2010

Major Connected CE Announcements this Week

In a CONNECTIONS™ wrap-up post last week, I had predicted that we would see many more announcements regarding the linkages between premium video services (from pay-TV providers) and the connected CE world. Widevine's announcement this week with Samsung speaks to the technology relationships being formed to enable just these types of features on connected TVs and Blu-ray players.

With the agreement, Widevine will provide Samsung with live and on-demand adaptive streaming, virtual DVD-like “trick play” and digital rights management (DRM) on Samsung connected devices. These technologies from Widevine will enable Samsung to support TV Everywhere and over-the-top delivery initiatives from Internet content providers and large cable, satellite and telecommunication companies. Widevine's CEO - Brian Baker - made sure that I noted the "live" part of the announcement when I briefed with him on Monday. The same kind of adaptive streaming technology that Widevine is providing for DISH Networks's TV Everywhere initiative is in play in this case. So, it's not unimaginable that service providers can use this technology to bring pay-TV channels directly to a consumer electronics platform other than the set-top box.

Yesterday, thePlatform unveiled publishing profiles for connected consumer electronics devices such as as IP-connected set-top boxes, TVs, and Blu-ray Players, and indicated its readiness to support publishing profiles for Google TV when that service launches.

Next, we knew that Best Buy and Walmart were getting serious about creating online video storefronts for the consumer electronics they sell, but now you can add Sears and Kmart into the mix. Sonic Solutions will provide the retailer with the RoxioNow™ platform, which will power digital entertainment delivery services for both Sears and Kmart. The new services are expected to launch later this year and be broadly promoted at retail stores nationwide.

Moving premium video services to non-set-top box equipment will be a critical measure of success for both content and service providers. Already, we are predicting that sales of connected TVs, game consoles, Blu-ray players, and digital media player set-top boxes will exceed the worldwide shipment of set-top boxes in 2011. Service providers are going to have a great many more touchpoints for their premium video services, so getting the connections right today will be critical.

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Monday, June 21, 2010

What a Day for e-Book Reader Market

In a matter of hours, consumers gained at the expenses of e-book reader makers' profit margin. I am talking about the price war initiated by Barnes and Noble this morning on its Nook e-book reader device and the swift action taken by to lower the price of its low-end Kindle. by the end of the day, the entry-level Kindle is $70 lower, from $259 to $189, while a new Wi-Fi only Nook costs $149. Even the price of the 3G Nook was lowered to $199.

I have tracked the portabl CE market for years but the past six months are also an eye-opener for me when it comes to the young mobile Internet device market. First we got a string of CES news of more than half a dozen new e-book reader brands to hit the market this summer. Then came the iPad debut and a new e-book distribution model that changes the game rules set by The subsequent iPad success sent a clear message to standalone e-book reader makers that they have to adjust their products' market positioning and pricing in order to square off competition from multimedia Internet tablets. The precipitous price cuts by and Barnes & Noble are so far the clearest evidence that the standalone, monochrome e-ink panel-based e-book reading device market is in great danger of being marginized.

Will other device makers follow suit? Irex is already struggling; Plastic Logic's Que is nowhere to be seen; Copia's devices are still just Web descriptions; and Spring Design's $399 Alex reader looks expensive given today's news. Even Sony may have to re-design its e-book reader product line to survive the new competitive environment.

As an analyst, I am already revising my mobile Internet device forecasts in light of the latest developments after publishing a report on this topic in early April. And wait, iPhone 4 is coming up this Thursday, and don't forget that iOS4 now supports e-book reading function on iPhone and iPod Touch. Great! Bookmark and Share

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Friday, June 18, 2010

CONNECTIONS™ Summary Thoughts

Last week's CONNECTIONS™ conference was the best that I can remember in terms of the lineup of speakers and the discussions that we had. Last Thursday, the Parks Associates analyst team provided some closing thoughts on the conference, and I wanted to share my thoughts.

Multi-platform solutions are real: Whether we are talking about third-party solutions providers such as Vuze linking the PC to the consumer electronics device, or Verizon’s vision of “flicking” photos from a smartphone to the TV screen, products are available today to allow consumers to experience content and applications that were once locked into a one-screen experience on many other devices. The question that we have is whether this is good news for open development. After all, companies like Verizon typically take development in-house. So, although we see all kinds of media server and embedded solutions on the market – Allegro, BridgeCo, PacketVideo/Twonky, ACCESS, AwoX, TVersity, etc. – we wonder if these will continue to be relegated to retail-oriented products, or will have a fit in the service provider world. I would imagine that mobile-to-fixed applications may involve service providers opening up their APIs to third-party companies to accommodate these media experiences.

How will Web services and content get to the TV? There are three major lines of thought on how to bring the Web to the TV:

  • The “Intel Vision”: Put a heavy-duty processor in the end-user device to transcode and facilitate the media functionality;
  • The “Verizon Vision”: Use the PC to transcode content and send it to the set-top box in a standard MPEG format; and
  • The “ActiveVideo Networks/Clearleap Vision”: Transcode at the headend and send all content and services as MPEG streams.

We are evaluating all of these possibilities. However, I like the notion that a company can develop one technology and it can provide benefit to both the managed service provider community and the retail/over-the-top devices. I think that ActiveVideo Networks’ transcoding solution is one of these, and I think that Intel has gotten smarter in realizing that a product like the Atom processor can be used to help service providers (the Telecom Italia CuboVision device or the Liberty Global gateway product) and device manufacturers (Google, Sony, Logitech) bring new interactive experiences to viewers.

What content will matter at the connected TV? The obvious answer is premium video - movies and TV shows. Our Digital Media Evolution II survey indicates that the basics (customized weather and traffic widgets) along with music and games will likely to be of interest. In fact, it is interesting to see the growth of interest in gaming applications at the set-top box or connected TV. We believe that this is a space that is just heating up. Companies such as Accedo Broadband and OnLive could be significant players. Of course, as Michael Lantz from Accedo Broadband reminds us, it’s difficult to get consumers to pay for the games! So, how will these services be monetized?

Keep an eye on remote UIs. The concept of the “remote UI,” which would provide a more consistent experience in search and discovery of content across different platforms, will be of significant interest to service providers and content owners. This week, we learned about different technologies to facilitate this:

  • HTML5
  • The RVU Alliance

Securing the connected experience should go beyond the PC. Companies like Mocana remind us that security concerns will grow more prevalent as huge numbers of devices (including those aimed at M2M applications like smart meters) become more interconnected. In fact, this week's Wall Street Journal had a good article about why this is an important space to watch.

Increasing fixed-to-mobile interaction. During the user interface panel, there was discussion about how the mobile phone could be used as an identifier/or token for individual users. What would happen if the smartphone could interact with the set-top box and establish personalized settings and programming lineups for each user?

The number of connected music devices will grow significantly. BridgeCo is an example of how networked music systems may move from the realm of proprietary to mainstream. They are working with major vendors in home audio to bring streaming music experiences to new devices. Could this lead to a resurgence in the music industry actually making money?

TV Everywhere: where does it go from here? It’s been established that TV Everywhere – the replication of a cable TV experience online – is popular. Parks Associates own research indicates that the interest in such an application is strongest among the youngest consumers, where the risk of churning is strongest. Where does TV Everywhere go from here? We think that it will involve moving the experience beyond mere channel replication online and serve as a starting point for service providers to house and sell a variety of content. It will likely start as service providers build out storefronts, where VoD content can be purchased, stored, and then made available on a growing number of devices. We also wonder if TV Everywhere might be the start of experimentation in offering reduced tiers of content – dare we say a la carte channels – to viewers willing to pay a lower monthly fee for just specific channels.

VoD is a key interactive service: The service providers are just beginning to aggressively tout their VoD content as a key differentiator. Expect to see the service providers grow both free and paid VoD content, and learn how to better market it.

Prediction: We imagine that TV Everywhere will lead to a concept whereby service providers work in larger numbers with connected CE manufacturers. So, the partnerships between LG Electronics and Orange and Philips and TeliaSonera in Europe – where service providers are supplying premium content to connected TVs – could be similar here in the U.S. The service providers have the advantage of reduced CAPEX spending on set-top boxes and attracting subscribers/paying users to their premium services.

Is the “Digital Locker” a Reality? Mitch Singer from Sony provided an interesting argument for the digital locker concept. It could reduce the costs of content delivery and management by reducing the number of formats that a service provider or retail entity would have to deliver. However, we heard concerns from service providers during CONNECTIONS™ that the limitation of formats would limit their ability to compete on higher and higher quality content. If a service provider is going to spend billions of dollars to upgrade their network to fiber or DOCSIS 3.0, shouldn’t they have the option of providing a very high-quality format that cannot be easily replicated by an over-the-top provider? Scott Smyers did tell me that although the number of formats would be reduced, there can be different bitrates applied, so a provider with a deep fiber network could choose the highest bitrate encoding and still differentiate on quality.

The premium technical support market is real…now what? It was interesting to have support providers from Korea (RSUPPORT) and Iowa (SecurityCoverage) and tech industry giants such as Accenture promoting their work in providing premium technical care services. We also heard from AT&T and Verizon that they view this market as a revenue creator and not just a cost reducer. We also have the pioneers such as PlumChoice,, and Affinegy, and the market is constantly welcoming new participants such as iTOK. Now, where does the market go from here? It would seem that reaching out to new distribution channels – service providers, retailers, and OEMs – will provide significant growth. Attaching tech support (like PC tune-ups subscriptions) at the time of a new home computer sale will be critical. Also, we should see some major movement into how support is wrapped around mobile services and devices. And, we will continue to see support providers focus on the lifecyle of support – how to be a part of enhancing how consumers interact with technology from the point of new product purchase or service subscription, to product and service installation and training, and then the upgrade and replacement cycle. Finally, I wonder how soon we’ll see support providers get aggressive about the user data they’re collecting and whether this will used in targeting marketing and upsell campaigns?

Is Google TV for real? I see some interesting value for Google’s solution (the ability to initiate content searches across all kinds of content, including your pay-TV provider’s channel line-up), I do see a couple of drawbacks. First, will users really actively use a keyboard in their TV search experience? Logitech says that the Harmony software can be downloaded as an app to Android smartphones, so that would be another option. Second, without the blessing of the pay-TV providers (DISH Network is the only service provider to work with Google TV), Google’s search capabilities will be limited to the provider’s program guide information (Rovi is a partner) and NOT assets like VoD titles. As the VoD libraries of the service providers grow, search and discovery is going to be more and more important – reference Joe Ambeault’s comments about how Verizon constantly changes VoD title art and positioning of its VoD assets to encourage purchases). So, although useful, Google’s search has limitations. I don’t discount the Verizon experience in bringing advanced features to the TV screen, which is to go ahead and undertake the development themselves. So, although Google TV is touted as an open platform, one has to wonder if the pay-TV providers even care? Let’s assume that we start to see more provider-device relationships emerge such as the LG Electronics/Orange deal or Philips Net TVs and TeliaSonera VoD. In this case, could Google TV be useful? Sure, but the question is who controls the user interface and search functionality? I would think that the operator would still want that control.

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Wednesday, June 16, 2010

Parks Associates hosts 'Trends in 3D TV' webcast, June 24

Join Parks Associates on June 24th at 1 pm CENTRAL for the Trends in 3D TV webcast. This will be a great opportunity to learn more about latest 3D TV consumer research and the business opportunities and implications for CE manufacturers, content creators, and service providers.

Pietro Macchiarella, Research Analyst will present analysis and forecasts from Parks Associates examining the following questions:

-- What challenges will 3D TV present within the digital content and CE ecosystem?
-- What opportunities will it offer?
-- What is the consumer mindset regarding 3D?

3D TV advocates are moving quickly to bring this technology to market, despite lingering skepticism of its mainstream viability. Several 3D services have launched in Europe and the U.S. (from industry heavyweights such as Sky, DirecTV, Comcast, and ESPN), and CE manufacturers are starting to deploy 3D-ready models at retail.

Click here for registration information.

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Has Boxee gone to work for "The Man"?

It's interesting that in the same week Boxee indicated that their "Boxee Box" (the D-Link product) would not ship until November (after being unveiled with great fanfare at CES), Sonic Solutions announced an alliance to provide premium video services through the Boxee interface, and presumably the Boxee Box.

It's good timing to hold off on this box. Frankly, the description of the Boxee Box provided by D-Link at CES is a real yawner: "It includes a huge library that spans the Internet, such as university courses, panel discussions, academic lectures, presentations, web-only videos and more from TED, Stanford,, Kid Mango, Next New Networks and others. Boxee also makes it easy for users to add their own favorite entertainment sources with simple RSS or XML feeds available for most online video."

Not to be too harsh here, but hasn't the industry learned anything from the history of failure in attaching niche video and Web content to new set-top boxes? Akimbo ring a bell?

That's why I think that the new partnership with Sonic gives Boxee some legitimacy and at least some hope that somebody will buy the D-Link box. Consumers want movies and TV shows on the TV ... YouTube and are fun distractions, but you're not going to sell enough stand-alone set-top boxes playing solely that content. Now, maybe instead of getting hammered by the folks at Hulu, Boxee will take its unique social networking angle to online content and figure out how to help content providers create a much richer user experience. Then, maybe they'll throw some sportscoats over those t-shirts.

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Wednesday, June 02, 2010

New White Paper, Google TV - Searching for Success

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