Post on 28-Dec-2015
Don Kennedy
Managing Director
IDG Communications
Obstacles&
OpportunitiesThe Whitebox Channel Goes Home
Don KennedyManaging Director
IDG Communications ANZ
The vision
Media Center PC Games Console
Appliances/Home Security Systems
Digital Mobile Devices
Digital Cameras/Camcorders
Wireless Connectivity
Home Theatres(Audio & Video)
Where we are – the pluses
• Consumer acceptance of many types of digital products– Cameras/camcorders– Multimedia mobile phones– DVD players– MP3– Micro-storage devices– LCD and plasma screens
Where we are – the pluses
• Consumer acceptance of many types of digital products– Cameras/camcorders
– Multimedia mobile phones
– DVD players
– MP3
– Micro-storage devices
– LCD and plasma screens
• The Digital Living Network Alliance
Where we are – the obstacles• Market
– Weak broadband uptake in Australia
August 31, 2004
Broadband hits the million subscriber mark in
Australia, but higher speeds – not lower prices – will
drive future growth A.T. Kearney report predicts a “quiet revolution” for 2005 in entertainment,
voice and data applications AROUND 15% of Australian households and 30% of small to medium enterprises will have broadband by year’s end, with subscriber numbers doubling to one million over the past 12
Broadband growth
Digital TV growth
The number of pay TV subscribers . . . rose 8.3% in 2003-4
1,000,000 broadband+ 825,000 cable (non-digital)+ 275,000 digital cable 2,100,000
The 10% (non)solution
Where we are – the obstacles• Market
– Weak home PC network uptake– Early adopters (only) for digital home networks
– Security issues– Legacy investments– Ease of use issues– Where’s .net?
• Technology– Standards and technologies are not all here yet
(802.11e, Ultrawideband, HomePlug, IPv6)
Even more issues in AustraliaAustralians are missing out on a TV program recording service that has cult status in the United States because of a lack of co-operation between broadcasters on technical standards
Where we are – the obstacles
• No compelling case for consumers at the mass market level
0% 10% 20% 30% 40% 50%
Digital Camera
TV
Stereo
Addtl Desktop
Addtl Laptop
Security System
Home Mgmt
PDA
Scanner
Printer
None of the Above
What Do Consumers Want to Connect?A survey of households with PC networks
Survey of 1,079 US Internet households
© 2003 CEA and Parkes Associates
n = 198
0% 10% 20% 30% 40% 50%
CD or MP3 tomultiple receivers
DVD to multipleTVs
Audio from PCs toCE
Video from PC toCE
Interest in Multimedia Networks
Survey of 1,079 US Internet households© 2003 CEA and Parkes Associates
What consumers want
• Digital home products should be easy to instal, provide obvious value and be affordable
• Products must interoperate with each other and with existing consumer electronic devices like TVs and stereos
• Device communication and collaboration with each other must be simple and seamless
Source: DHWG Working Paper
Consumer Value Propositions
• Greater convenience and ease of use
• More flexibility in selecting a range of products from different vendors
• Content in the home can go mobile (and mobile content can come home)
• Confidence purchases will work together and are future proof
Source: DHWG Working Paper
What the industry needs
• Adapters that bridge the CE, mobile and PC worlds and support consumer’s existing home devices
• CE, mobile and PC vendors must routinely deliver new and exciting digital home products that meet consumer needs for functionality, reliability, performance and simplicity
What the industry really, really, really needs
• The widespread adoption of multimedia networking components is contingent upon the availability of compelling entertainment content – the kind end users will want to access, download, store and stream
Should the Channel Go Fishing in the Home Pond?
Value Chain of Home Networks
• Digital Content– Audio/video (including interactive)– Games– User-created pictures, movies
• Access– ISPs, Cable/Satellite, Digital Free-to-Air, Multimedia
Phone Services
• Platforms– Products– Service, support, installation, help desk
DIGITAL CONTENT
DIGITALACCESS
Key drivers of digital home market
Broadband55%
Media Center PCs24%
Digital TV13%
Mobile Telephony
1%
Other7%
Source: ARN Reader Survey
DIGITAL PLATFORMS
Channel expectations for growth
Government5%
Small Business45%
Home Entertainment
43%
Other7%
Source: ARN Reader Survey
Channel expectations for growth
0%
20%
40%
60%
80%
100%
PlasmaScreen
LCDScreen
GamesConsole
A-V DigitalCamera
Camcorder MediaCenter PC
Source: ARN Reader Survey
Where the IT channel isn’t
0%
20%
40%
60%
80%
100%
PlasmaScreen
LCDScreen
GamesConsole
A-V DigitalCamera
Camcorder MediaCenter PC
Source: ARN Reader Survey
The changing landscape
• The new competition from white goods distributors
• New business models moving into mass market products
• New products and services to sell
Convergence diverges
• A-V VARs– Early adopters and gadget lovers pay premium
for new features and improvements– Sophisticated users require installation, service
and support
• Infrastructure specialists– Convergence technology a minor percentage of
total cost (e.g., of a home)– Price is king and brand loyalty unlikely
And some not so new threats
Another channel buster?
• YES– Proven model
– Same products at lower prices
– Spend money on marketing, not retailing
– Use storefronts for product review and comparison
• NO– Customers need detailed
information and advice
– Home networks require service and support
– Technology will continue to change and upgrades/updates will involve technical decision-making
The opportunities
• Begin selling digital convergence products NOW and expand to include traditional CE products
• Broaden your solution offerings to include integrated entertainment networks
• Develop expertise in-house to become an early player in the architecture and building space. This is a long-term investment
Action Items
• Educate your company about digital convergence
• Stay on top of new trends in digital home products– Interactive gaming– Tivo– Photo sharing
Obstacles&
OpportunitiesThe Whitebox Channel Goes Home
Don KennedyManaging Director
IDG Communications ANZ