May

The Future Of Pc/tv Convergence: Opportunities And Challenges In Online Video-Aarkstore Enterprise

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Challenges, Convergence, Enterprise, Future, Online, Opportunities, Pc/tv, VideoAarkstore

As a result, the online and broadcast markets are colliding, with video services making the move to the PC environment and web-based services becoming a core element of the TV viewing experience. There are an ever-expanding number of channels available for content to be distributed over and an ever-increasing range of technologies to aid the transmission.

Online video delivery is emerging as a true competitive threat to existing content service providers, offering the potential to extend reach to new consumer groups. Broadcasters and content owners are delivering services direct to consumers, regaining some of the control they had lost to other players across the value chain, while pay-TV providers and video rental firms are adding online video to their service mix to boost their appeal. On the flipside, consumer electronics manufacturers and pay-TV operators are adding web-based elements to their products and services. Increasing integration of web browsers into home devices, the emergence of TV widgets, and further deployment of enhanced interactive services aim to add greater value to offerings, and could act to divert consumer attention away from the PC for some basic tasks.

Scope of this report

Overview of the market trends, technological evolution and changing business models that have driven PC/TV convergence.

Market projections to 2012 for key communications and entertainment services including consumer broadband and mobile broadband.

Identification of the key challenges facing the key participants targeting PC/TV-related opportunities, including actionable insight into how to best approach this rapidly evolving opportunity.

Examination of the evolving competitive environment and the ways in which various protagonists are targeting PC/TV convergence opportunities.

In-depth analysis of the strategies being employed by a number of leading content providers and device manufacturers with regards to their involvement in the online video and/or connected device markets.

Insight into the future trends that will impact on the development with regards to PC/TV convergence, including identification of best-practice and emerging opportunities.

Reasons to purchase this report

-Gain a comprehensive understanding of how market trends are prompting convergence of PC- and TV-based services, and the impact such developments will have on traditional business models and strategies.-Understand how the competitive environment is changing, and how content owners, broadcasters and device manufacturers will seek to gain a share of the spoils in the PC/TV convergence arena.-Compare how different content providers and device vendors are positioning and developing their services and products in order to differentiate from the competition, gain market share and drive revenue growth beyond their core/traditional offerings.-Appreciate the challenges faced by companies targeting PC/TV convergence opportunities, and understand why radically new market strategies will be required to make a significant impact.-Identify future trends that will impact on the potential of PC/TV convergence, and gain insight into how to best approach this rapidly evolving opportunity.

Key market issues examined

In many countries, broadband is the fastest growing consumer technology of all time and is developing into a utility that already has almost ubiquitous coverage in advanced markets. The rise of broadband networks and consumer connections is a key driver for online video services, enabling consumers to connect to a broader range of rich media content and applications without the delays that were evident with narrowband dial-up services.

Increased internet usage is also having a profound effect on traditional TV viewing in almost all country markets. Up to a third of consumers in major developed markets are watching less TV as a result of their increased internet use; a significant proportion, and a trend which is challenging existing business models, especially those that rely on advertising as a primary revenue source. Many broadcasters are seeking new opportunities by pushing content via online channels to exploit the huge growth of online advertising.

Content owners are still not providing full support for new distribution channels. Movie studios have watched on as the music industry has been ravaged by piracy, and understandably want to restrict the impact it has on their businesses in whatever ways they can. As a result, content owners will continue to be both selective and cautious when seeking online distribution partners, and will demand that DRM is applied to high-value content such as new-release movies for the foreseeable future at least.

Portable PC-based video boosted by netbooks and mobile broadband. Until relatively recently, PCs were bulky devices tethered to fixed-line connections for internet connectivity. But the situation has changed considerably over the past year, with ultra-portable netbooks hitting retail shelves and mobile broadband starting to emerge as a mainstream proposition. Expect to see mobile broadband functionality to increasingly be integrated into netbooks over the next year, enabling streamed online services to be accessed on the move and opening up new audiences for content providers and device manufacturers alike.

Direct TV connection is essential if online video is to become mainstream. The vast majority of online video content is currently watched via a PC. But while PC-based services will remain attractive, offering the ability to watch content directly on a TV set is crucial if online video services are to appeal to the mainstream. Delivering this functionality is now a key focus of both device manufacturers and content providers.

Key findings from this report

Online video delivery is emerging as a true competitive threat to existing content service providers, offering the potential to extend reach to new consumer groups.Exploiting opportunities across the connected home environment is seen by many PC and CE device manufacturers as a key way to boost average selling points. With online video now becoming available via a wider range of providers, the previous inertia in the CE market with regards to delivering connected devices is slowly being overcome.To maximize likely returns, content owners will need to fully support their online partners; a half-hearted approach, where only low-value or archive content is made available, could dilute service potential.Connected TVs are likely to become the norm within the next five years. By this time, it may not be economically viable for manufacturers to offers sets without connectivity.

Key questions answered by this report

What are the major trends shaping and driving PC/TV convergence? Why are broadcasters and rival content providers investing so heavily in the deployment of online video services? Which factors are likely to inhibit the pace of PC/TV convergence market development and why?How are different market protagonists targeting the opportunities afforded by PC/TV convergence? To what extent will emerging online services threaten the current status quo across the video distribution market?What are the forecast market growth rates to 2012 across underlying technologies including residential broadband services and mobile broadband?How will the market for converged video services evolve, and which future trends will impact on developments over the course of the next 2-3 years? Table of Contents : The Future of PC/TV ConvergenceExecutive summary 10Market context 10PC-based video services hit the mainstream 11Delivering internet-based services to the TV 12Content provider and device manufacturer profiles 13The future of PC/TV convergence 14Chapter 1 Introduction 18Introduction 18Who is this report for? 18Definitions 19Convergence 19Digital pay-TV (DTV) 19Digital terrestrial TV (DTT) 19Internet Protocol TV (IPTV) 19Internet TV 19Mobile broadband 20Mobile internet 20Mobile TV 20Video on demand (VOD) 20WiMAX 20Chapter 2 Market context 22Summary 22Introduction 23PC/TV convergence market trends 24Broadband changes the rules of the game 25Higher speeds bring new content-related opportunities 28Consumers exploit broadband potential 29Changing the face of media consumption 31Broadband challenges remain 31Entertainment market in flux 32TV market in transition 33Changing content consumption patterns 34Traditional media hit 36Traditional advertising market under pressure 41Physical media is not (yet) dead 45Significant obstacles exist for online video distribution 47Move to high definition places greater demand on connectivity 47Piracy concerns restrict progress 49DRM restricts consumer uptake 51Content rights issues restrict geographic expansion 52Business model uncertainty reigns 53Content owners are still not providing full support for new distribution channels 53Chapter 3 PC-based video services hit the mainstream 56Summary 56Introduction 57Online video delivery reaches the mass market 57Online video is no longer synonymous with low quality content 58Online video is a disruptive force in the video delivery arena 61IPTV may lose its competitive advantages 63Broadcasters take a more direct approach 65Broadcasters and content producers make strong investment to new channels 65BBC iPlayer provides numerous learning points 67One-stop online shops for broadcasters’ content emerge 68Consumer uptake on the rise 69The demographic divide 72Maximizing online potential 75TV on the move 78Mobile TV starts to gain some momentum 78Not yet a mainstream proposition 79Alternative portable solutions are gaining more traction 82Significant challenges remain for mobile TV deployment 84Portable PC-based video boosted by netbooks and mobile broadband 85Netbook market growth will boost demand for portable video 85Mobile broadband offers new possibilities 87Chapter 4 Delivering internet-based services to the TV 92Summary 92Introduction 93Digital entertainment devices get connected 93The death of the ‘living room PC’ concept? 94No one-size-fits-all home content hub exists 95In-home content sharing takes center stage 95Direct TV connection is essential if online video is to become mainstream 96Media extender market makes slow progress 98Consumer electronics devices get in on the act 100Major TV manufacturers launch Ethernet-connected models 101Widget-based services emerge 101Yahoo and Intel drive a widget-based approach 103Does consumer demand for connected TVs exist? 104Does delivering internet services to the TV make sense? 105Internet connectivity takes DVR-based services to the next level 107Satellite pay-TV operators look to gain a foothold in the VOD market 108Online video: complement or substitute? 110Games console manufacturers push online video services 112Sony and Microsoft battle for the living room 114Sony playing catch-up 116Consoles already well regarded as multimedia hubs 116Consoles add to the video disruption 117Connecting the PC and TV environments is a difficult task 119Chapter 5 Content provider and device manufacturer profiles 122Summary 122Introduction 123Amazon 124Apple 126BBC iPlayer 129Comcast 133Google / YouTube 135HP 138Microsoft Xbox 360 141NBC/Fox Hulu 143Netflix 145Sony 148Chapter 6 The future of PC/TV convergence 152Summary 152Introduction 153The future of PC/TV convergence 153Online video will be a mainstream alternative to traditional distribution 153Content owners must fully embrace new distribution channels 155DRM will remain a stumbling block 156Business model uncertainty will continue 157Internet-connected, networked consumer electronics devices will become the norm 159Leveraging content across multiple distribution platforms will be essential 161Broadband providers must be fairly recompensed for their role in content delivery 163Chapter 7 Index 166List of FiguresFigure 2.1: Global consumer broadband subscribers, by platform, 2007-2012 26Figure 2.2: Global consumer broadband subscribers (000s), by region, 2007-2012 27Figure 2.3: Broadband uptake boosts multimedia usage (% users by activity), UK 30Figure 2.4: Use of traditional communications services on the decline in the UK (minutes per person per day), 2002 and 2007 35Figure 2.5: Increasing internet usage hits TV viewing 37Figure 2.6: Uptake of new media platforms lower among older consumers 38Figure 2.7: New video distribution platforms are gaining traction 40Figure 2.8: Proportion of advertising spend attributable to TV and internet, by country (% proportion), 2007 43Figure 2.9: The importance of internet advertising (% of advertising spend), by country, 2006-7 44Figure 3.10: Short-form content still rules in the online world (% users accessing content by type and country) 58Figure 3.11: User-generated content is highly valued by younger consumers 60Figure 3.12: Proportion of broadcasters’ IT budget being invested in new distribution channels 66Figure 3.13: Proportion of online population streaming online video, December 2008 70Figure 3.14: Online video reaches 80% of US consumers 71Figure 3.15: US online video viewing declines with age 72Figure 3.16: Online video usage declines with age 74Figure 3.17: Factors that would encourage greater use of online video services 75Figure 3.18: Mobile multimedia usage remains relatively low 81Figure 3.19: Portable video usage remains relatively low 83Figure 3.20: The rise of mobile broadband 88Figure 4.21: Watching TV and surfing the web concurrently is commonplace 106Figure 4.22: Worldwide console shipments, 2005-2007 113Figure 4.23: Consumers show some interest in console-based multimedia applications 117Figure 5.24: The rise of legitimate online TV services in the UK 131Figure 5.25: Content provider and device manufacturer summary 150List of TablesTable 2.1: Global consumer broadband subscribers (000s), by platform, 2007-2012 26Table 2.2: Global consumer broadband subscribers (000s), by region, 2007-2012 28Table 2.3: Proportion of UK internet subscribers participating in multimedia usage by type (% users) 30Table 2.4: Time spent using communications services (minutes per person per day, UK), 2002 and 2007 36Table 2.5: TV viewing habits in comparison to internet usage (respondents), France, Germany, Italy, UK, US and Japan 37Table 2.6: Uptake of communications services, by age (proportion of UK households) 39Table 2.7: Time spent watching movies/TV programmes (% of viewers watching at least one hour per week, UK) 40Table 2.8: Proportion of advertising spend attributable to TV and internet, by country (% proportion), 2007 43Table 2.9: The importance of internet advertising (% of advertising spend), by country, 2006-7 45Table 3.10: UK online video usage (% users accessing content), 2008 59Table 3.11: Types of online content most valued by different age groups (% users), UK, 2007 60Table 3.12: % of online population streaming online video, December 2008 70Table 3.13: US consumer TV and video viewing patterns (% users), 2008-09 71Table 3.14: Average time spent watching online video (hours per week, US) 73Table 3.15: Proportion of households using the internet for multimedia applications (by age, UK) 74Table 3.16: Proportion of adult internet users using mobile phones to watch video content (% users) 81Table 3.17: Portable device usage for multimedia (% users by frequency), UK, 2008 83Table 3.18: Notebook mobile broadband users (000s, global), 2008-2014 88Table 4.19: Users watching TV and surfing the internet concurrently (% user by frequency), 2008 106Table 4.20: Global console hardware shipments (000s), 2005-2008 113

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