Friday, August 22, 2014

Global Digital Music Revenues will Reach $13.9B by 2019

Across a variety of formats, digital music is undoubtedly the most mature segment of mobile entertainment. Mobile devices are uniquely positioned to become a key platform in the music industry, given their ubiquity, connectivity and continual presence with the end-user.

That being said, the music industry itself continues to be plagued with difficulties, particularly as far as recorded music is concerned. Juniper Research found that the digital music industry will experience slow growth in revenue over the next 5 years, growing from $12.3 billion this year to $13.9 billion in 2019.

The latest global market study also found that a strong performance in the robust streamed music sector will largely be offset by decline in revenues from legacy services -- such as mobile ringtones and ringback tones.

Streaming Music in the Mobile Cloud 

According to the market study findings, the worldwide digital music market will be characterized by consumer migration to cloud based services.

Juniper observed that offerings from pure-play music providers -- such as Spotify and Pandora -- will increasingly find themselves competing with personalized services from the leading OTT (over-the-top) players, including Apple and Google.


However, the report cautioned that piracy was still responsible for major revenue leakage, particularly in emerging markets, such as China, where only a small percentage of content is legally acquired.

Nevertheless, it pointed to instances where the industry had successfully reined in such activity, such as the government policy in Singapore that allows for the blocking of sites that contain infringed content.

Why Music Discovery Remains a Challenge

Looking to the future, Juniper argues that music consumption is likely to become a highly sociable activity -- with features such as music discovery and social media integration that connects music fans online.

However, finding ways to expand the pool of their subscribers and increase the ease of discovery remains a key challenge for all streaming music service providers.

Moreover, Juniper believes that smartphones and tablets will be the main platforms of growth, although digital music revenues on PCs will remain robust over the forecast period.

Additionally, emerging markets are expected to strengthen in terms of digital music consumption, as disposable income levels continue to rise and streaming music services expand into these regions.

Thursday, August 21, 2014

Wireless Technologies Enable the Internet of Everything

Imagine a world where all manner of electrical and electronic devices are connected together via a wireless link -- that's the Internet of Everything. The installed base of active wireless connected devices will exceed 16 billion in 2014, that's about 20 percent more than in 2013, according to the latest market study by ABI Research.

Moreover, the number of devices will more than double from the current level, with 40.9 billion forecast for 2020.

"The driving force behind the surge in connections is that usual buzzword suspect, the Internet of Things (IoT)," said Aapo Markkanen, principal analyst at ABI Research.

If we look at this year’s installed base, smartphones, tablets, PCs, and other hub devices still represent 44 percent of the active total, but by the end of 2020 their share is likely to drop to 32 percent.

In other words, 75 percent of the growth between today and the end of the decade will come from non-hub devices -- such as wireless sensor nodes and accessories.

From every technology supplier's strategic point of view, the critical question is how this plethora of IoT devices will ultimately be connected to each other and the Internet.

Until recently, the choices that product OEMs have faced have been fairly straightforward, with cellular, Wi-Fi, Bluetooth, and others all generally addressing their relative comfort zones.

Going forward, they will be in an increasing competition with each other, so for the suppliers the strategic stakes are getting much higher.

ABI says that the recently introduced Thread protocol, spearheaded by Nest Labs, is the clearest example of this convergence. It is not only setting the bar higher for ZigBee in the 802.15.4 space, but also piling up pressure on Bluetooth suppliers to enable mesh networking.

In the meantime, the LTE-MTC and LTE-M initiatives may well expand the market for cellular M2M, while start-ups like Electric Imp and Spark could do the same for Wi-Fi.

And finally, we also shouldn't ignore what’s going on with passive, proximity-based connectivity offered by RFID and NFC. For example, Thinfilm's plans with printed electronics warrant attention.

Wednesday, August 20, 2014

Worldwide TV Ad Spend will Reach $236 Billion in 2020

The transition to digital marketing is still a huge challenge for many legacy marketers, so when they gain access to additional budget they choose to spend it on media that's within their comfort-zone. For those with a traditional media buyer mind-set, that often translates into spending more on television advertising.

Global TV advertising expenditure will reach $236 billion in 2020, up by 38 percent ($64 billion) from 2013 and up by 54 percent ($82 billion) on 2010, according to the latest market study by Digital TV Research.

Regardless of the relatively poor ROI performance, TV ad spend is expected to grow by 4.0 percent in 2014 for the 55 countries covered in the study -- and that's better than the 2.2 percent recorded in 2013.

"Positives for TV advertising in 2014 include World Cup soccer in Brazil and economic improvement in much of Europe. However, not all countries have fully recovered economically. Devaluation is a factor in some markets, such as Venezuela. In addition, internal conflicts in countries such as Israel, Thailand and the Ukraine have damaged the advertising industry," said Simon Murray, principal analyst at Digital TV Research.

TV advertising expenditure will double in Latin America and the Middle East & Africa between 2010 and 2020. Excluding deflation-hit Japan, net TV advertising in Asia Pacific is forecast to more than double between 2010 and 2020.

However, TV advertising spend in Western Europe will only be 26 percent higher in 2020 than in 2010. TV advertising in Western Europe fell in both 2012 and 2013, with 2.7 percent growth expected in 2014.

The 2010 total will not be bettered until 2015. Excluding the booming Russian market, TV advertising in Eastern Europe will fall in 2012, 2013 and 2014. The 2011 total will only be surpassed in 2018.

From the $64.4 billion TV ad spend to be added between 2013 and 2020, $22.6 billion (35 percent) will come from the U.S. market, followed by an extra $7.9 billion from China, $3.7 billion from Brazil and $3.1 billion from Japan.

The U.S. will remain the global TV advertising market leader by some way. China overtook Japan to take second place in 2013. TV ad spend will more than double in Brazil between 2010 and 2020, with Russia also nearly doubling. However, Italy, hit even harder by the recession, has dropped dramatically and will not recover to the 2010 total by 2020.

According to the DTV Research assessment, multi-channel TV advertising expenditure will nearly double to $67.5 billion between 2010 and 2020. The U.S. market will contribute $35.2 billion to the 2020 total, followed someway behind by the Pan-Arab channels with $5.5 billion.

Moreover, free-to-air TV advertising expenditure will increase by 34 percent between 2010 and 2020 to $168 billion.

Tuesday, August 19, 2014

Why the Smartphone Growth Outlook Belongs to Android

As the worldwide marketplace absorbed more low-cost smartphones for mobile internet access, a new era gained momentum in the Global Networked Economy. The worldwide smartphone market reached a new milestone in the second quarter of 2014 (2Q14), moving past the 300 million unit mark for the first time in its history.

According to the latest study by International Data Corporation (IDC), vendors shipped a total of 301.3 million smartphones worldwide in 2Q14, that's up by 25.3 percent from the 240.5 million units shipped in the second quarter of 2013.

The dominant smartphone operating systems (OS), Google Android and Apple iOS, saw their combined market share swell to 96.4 percent for the quarter, leaving little space for competitors.

Android was the primary driver with its vendor partners shipping a total of 255.3 million Android-based smartphones in 2Q14 -- that's up by an impressive 33.3 percent year-over-year.

Meanwhile, iOS saw its market share decline despite posting 12.7 percent year-over-year shipment growth. While Android and iOS both realized gains from a year ago, the rest of the market recorded losses.


"With many of its OEM partners focusing on the sub-$200 segments, Android has been reaping huge gains within emerging markets," says Ramon Llamas, research manager at IDC.

During the second quarter, 58.6 percent of all Android smartphone shipments worldwide cost less than $200 off contract, making them very attractive compared to other devices.

With the recent introduction of Android One, in which Google offers reference designs below $100 to Android OEMs, the proportion of sub-$200 volumes will climb even higher.

Meanwhile, Windows Phone has been around since 2010 but has yet to break the 5 percent share mark, while the backing of the world's largest smartphone player, Samsung, has not boosted Tizen into the spotlight.

IDC says that the biggest stumbling block is around getting enough partnerships in play -- not just phone manufacturers but also app developers, many of which are smaller outfits looking to minimize software development efforts by sticking to the two big smartphone OS ecosystems.

Monday, August 18, 2014

Demand for Mobile Devices with UltraHD Technology

People who view long-form video content on their mobile devices appreciate the new higher resolution displays. Quad HD (2K) screens currently occupy the premium end of the smartphone market. According to the latest market study by ABI Research, by 2015 we will likely see Ultra HD (4K) capable mobile devices.

Mobile devices with 4K screens are forecast to reach 478 million units by 2019. This resolution race, however, is more about marketing and differentiation than user experience, given current video content that's availability.

Considering the relatively close proximity of the screen to the user it is possible for some consumers to see and benefit from these higher resolutions, but differences are incremental and not dramatic for most consumers.

"While some content owners and broadcasters have or are preparing to launch 4K programming, video resolution delivered to mobile devices will continue to lag behind screen pixel densities," said Michael Inouye, senior analyst at ABI Research.

While mobile device components -- such as processor, memory and in some cases batteries -- are gearing up to handle 4K video, network and infrastructure elements remain challenging.

Key video services like several under the UltraViolet umbrella, for instance, still largely distribute video content to mobile devices in standard definition (SD) resolution.

Content protection and data utilization concerns are part of the issue, but consumers also have not demanded higher resolution video in adequate numbers for services to respond.

User-generated content (UGC) and productivity, however, could offer consumers additional ways to benefit from high resolution screens. The popularity of GoPro broadcasting, for example, shows the demand for high resolution UGC.

Mobile device manufacturers are also considering LTE Broadcast as an outlet for next generation video broadcasting. These rely on HEVC, but are initially unlikely to push broadcast resolution.

OTT video services will carefully weigh the costs of 4K delivery, the impact on viewing on mobile devices, and the brand halo high resolution services can bring. OTT services will focus first on 4K delivery to Smart TVs, with HD to mobile devices.

New connections like wired MHL 3.0 and wireless 802.11ad can help position mobile devices as a hub for streaming high quality video and gaming to TVs.

The Qualcomm acquisition of Wilocity and push of 802.11ad could further encourage OTT companies and TV manufacturers to embrace the technology and bring high resolution video to TVs via mobile devices.