Technology | Media | Telecommunications

Saturday, February 27, 2010

U.S. Market Internet User Segmentation Mix


The demographic mix of Americans capable of using the Internet continues to evolve. With 71 percent of Americans using the Internet (from any location) at least once per month in 2010 -- U.S. Internet users now better resemble the general population.

Overall, eMarketer forecasts the number of monthly Internet users in the U.S. will rise to 250.7 million in 2014, up from 221 million in 2010.

More than one-half of new (novice) users will be ages 45 and up, as many of the remaining laggards join the mainstream. Among younger groups, the Internet is nearly ubiquitous, and most who are able to access it already do so -- leaving limited potential for new growth.

eMarketer expects significant increases in usage applications among children ages 3 to 11, as technology becomes a part of people's lives at increasingly younger ages.

Currently, the 12- to 24-year-old segment represents a major bloc of users at 51.7 million -- or 23.4 percent of the total. By 2014, though, their total share will decline to 21.3 percent, even as their numbers increase to 53.5 million people.

Meanwhile, the 45 and older segment will grow from 35 to 38.3 percent of total users -- aligning with their relative share in the overall U.S. population. However, eMarketer says that while older groups will occupy a larger share of monthly Internet users, that simplistic metric is becoming antiquated.

Younger groups have already entered a new phase of always-on Internet use, where the Web never leaves their side and is accessible 24/7 through their phone or other devices. Those 34 and under will continue to be the most engaged and most active producers of content online.

Moreover, the widdening "experience gap" between older late-adopters and younger early-adopters will be significant. Therefore, I'm wondering, how will America compete in the Global Networked Economy if a sizable portion of the population lacks the skills for 21st Century business needs?

How will U.S. commercial innovation be impacted, as a result of the ICT skills deficit?

Friday, February 26, 2010

Hospitality TV Operators Embracing IPTV

Over 11 million hotel rooms and 1 million airline seats are potential new IPTV entertainment applications, according to the latest market study by MRG, Inc.

Hotels and Airlines alone will account for a $1.9 billion global market in 2012, indicating that for most hospitality applications, analog video use is likely to quickly become extinct.

MRG says that both In-Room Entertainment (IRE) and In-Flight Entertainment (IFE) markets show a sharp shift in user expectations.

"While respondents indicated that IPTV may be too expensive for the low-end market, the study finds that there is a substantial and growing need for IPTV to serve the mid- and high-end of the hospitality market. This has gone from a nice-to-have to a must-have situation," says Mike Galli, IPTV Analyst at MRG.

While many in the IPTV industry may consider the hospitality opportunity to be insignificant, MRG found that it is very important -- with some IPTV suppliers reporting that it now represents 25 percent of their total revenue.

There are specific opportunities in a variety of hospitality segments including hotels, dormitories, hospitals and aircraft, and this report helps to clearly identify where they are in each segment.

One key benefit of IPTV is superior remote operation and diagnosis -- meaning double- or triple-play systems can be monitored from off-site, resulting in huge OpEx savings for the Hospitality Operator.

For example, one hospital IPTV system frees nurses from explaining to patients how to use the system. Other examples show how hotels using both VOD systems and e-com are able to generate far more revenue from e-com and advertising than from Pay-per-View.

"Simplicity also is key to improving user enjoyment," states Mr. Galli. "Since guests are there for only a short period, they don't have time to learn a complex system, but want to get interactive services like those at home."

As consumers receive improved video services at home, Hospitality Operators are finding there is a need to upgrade hospitality systems, much of it resulting from HD and VOD improvements in 2008-2009.

Thursday, February 25, 2010

Decline of "Passive" Entertainment Consumer

Attracting early-adopters is critical for vendors of new consumer electronics devices, and the profile of the informed progressive user is changing, according to the latest market study by In-Stat.

Early technology adoption is no longer constrained by income, education, ethnicity, or social status. As a result, a larger percentage of young adults than in the past consider themselves to be early-adopters.

"Whether it is TV Everywhere initiatives, over-the-top video services, Web-to-TV devices, or 3D digital televisions, the market success of each new innovation will be dependent on attracting early-adopters," says Keith Nissen, In-Stat analyst. "Yet, many of the characteristics that defined early technology adopters in a pre-Internet world no longer apply."

In-Stat's research identifies that U.S. early-adopters are much more likely to: Subscribe to premium pay-TV channels; Two-thirds get at least one premium channel; Over 50 percent receive HBO; Subscribe to a DVR service; View VoD content; View fee-based on-demand movies; Purchase pay-per-view content; Subscribe to fee-based sports content; Spend more than 5 hrs per day viewing video content.

I would add one key evolutionary characteristic to In-Stat's list -- early-adopters believe that the traditional pay-TV offering is becoming obsolete and prohibitively expensive, that's why they've embraced a Neflix subscription service.

Netflix subscribers manage their personalized content Queue based on trusted adaptive recommendations, and consider the traditional one-size-fits-all linear TV channel model to be archaic, by comparison. Therefore, the "passive consumer" era is doomed to a rapid decline.

In-Stat's market study found the following:

- By 2013, nearly half of total U.S. households will have an adult that considers themselves to be a leading-edge or early-adopter of technology.

- In-Stat recently developed new end-user segmentation that identifies Power, Social, and Passive consumers. Segmentation is based on the number of different Internet activities and the frequency that they are performed.

- Over the next five years, Internet power-user households will double in number, and nearly two-thirds of U.S. broadband households will be power or social users.

Wednesday, February 24, 2010

Evolution of Broadband Traffic Characteristics

Infonetics Research released the routing and switching systems vendor market share results for the fourth quarter of 2009, based upon their latest global market study. These are the essential infrastructure building-block elements that enable the Global Networked Economy to flourish.

The top two vendors in the service provider router space, Cisco and Juniper, together went from attaining 69 percent of the worldwide router market in 2008 to 59 percent in 2009 -- while Alcatel-Lucent, Huawei, and others gained share.

Tellabs pushed past Ericsson in 2009, putting them in the top five for the first time. Infonetics says that Tellabs had an especially strong year, based upon their focus on the mobile sector.

"All six of the top router vendors posted strong double-digit revenue increases in the fourth quarter, and we expect modest growth in the router segment to continue in 2010 as carriers carry out fixed-mobile convergence strategies for their router networks," notes Michael Howard, co-founder and principal analyst for carrier and data center networks at Infonetics Research.

I believe that the routing and switching sector segmentation may evolve in the coming year, as service providers evaluate the innovation pros and cons of best-of-breed platform solutions relative to the "integrated end-to-end" alternatives.

Service providers will increasingly look for routing intelligence that's built-in to platforms, as broadband network traffic characteristics continue to shift towards a marked increase in rich-media applications and other usage-related phenomena.

The Infonetics market study found the following:

- Worldwide revenue from service provider IP edge routers, IP core routers, carrier Ethernet switches, and multi-service ATM switches jumped 17 percent in 4Q09, led by strong IP edge router sales.

- While the combined market was buoyed in the fourth quarter, it was not enough to offset losses for the year, bringing the overall market down 12 percent from 2008 to 2009, to $11.1 billion.

- Multi-service ATM switches led the downward trend, as expected (this segment has been in decline for many quarters now).

- Asia Pacific is the only region to post year-over-year growth in IP edge and core router revenue, up 19 percent in 2009 from 2008, pushed in no small part by the Chinese government telecom stimulus and the competitiveness of the newly re-organized Chinese network operators.

Tuesday, February 23, 2010

Consumers Shift to Connected TV Scenarios

U.S. video content producers say they're determined not to follow in the footsteps of the music recording industry, and for good reason. When consumers send you a signal that demand is shifting, you need to be ready and willing to adapt -- with an open mind.

Nearly 37 percent of broadband households in North America are extremely or very interested in viewing Over-the-Top (OTT) video content on the Connected TV, according to the latest market study by In-Stat.

Yes, this is a significant shift in consumer behavior.

While DVD media demand is in decline, the online demand is growing as companies such as Amazon, Hulu, Netflix, and Apple, offer streamed or downloadable TV episodes and movie content.

Similarly, a growing set of web-enabled TV devices are now proliferating across device categories that include digital TV sets, Blu-ray Players, Digital Media Adapters (DMAs), network attached storage, and set-top boxes (STBs).

"By 2013, In-Stat predicts that nearly 40 percent of all digital TV shipments will be web-enabled devices," says Norm Bogen, In-Stat analyst.

Across all categories, there will be over one-half billion web-enabled consumer electronics (CE) devices in operation worldwide by 2013. Shipments of such web-enabled devices will see a compound annual grow rate (CAGR) of nearly 64 percent between 2008 and 2013.

At this point in time, the online consumption trend seems to be very apparent to all but those who still remain stuck in denial. Meanwhile, even the traditional movie rental business model is being disrupted, as Redbox continues to gain market momentum renting DVDs for $1 per day.

In-Stat's market study found the following:

- In 2009, there were five broadband households worldwide for every web-enabled CE device. By 2013, this ratio will be 2:1 or possibly higher.

- In-Stat's consumer survey indicates that over half of U.S. consumers with network-connected Blu-ray players or recorders use Wi-Fi, while 30 percent use Ethernet for connectivity.

Monday, February 22, 2010

USB Still Leads Digital Interface Technologies

The market for digital interface technologies continues to grow. According to the latest market study by In-Stat, USB is still the most common interface on both work and home personal computer (PC) platforms.

Other common device interfaces include DisplayPort, DVI, HDMI, Bluetooth, eSATA, and 1394 (FireWire).

USB Flash cards are still the most commonly connected peripherals. I'm now using a variety of USB storage devices for my multimedia file transportation needs -- I'll share more about my own application scenarios in an upcoming post.

"Just because an interface is common, does not mean it is widely used," says Brian O’Rourke, In-Stat analyst. "For example, 1394 was the second most common interface, but is rarely used."

HDMI is a less common home PC interface. However, among those few consumers with an HDMI port, a large percentage use it to connect their portable or desktop PC HDMI port to their digital television set HDMI input.

HDMI connectivity is the preferred method for people who have actively embraced IP TV Video consumption. It requires only one cable connection for digital video and audio signals.

In-Stat's market study found the following:

- DisplayPort, one of the newer PC interface technologies, has achieved surprising popularity since its release.

- DisplayPort was on 27 percent of survey respondent's work PCs and 24 percent of their home PCs.

- Over three billion USB-equipped consumer, computing and peripherals devices shipped in 2008 alone making USB the most successful interface ever.

Saturday, February 20, 2010

Less Advertising for Social Media Companies


In the few short years that social media marketing has been prevalent, it has already had an enormous effect on the way companies do business online and off-line.

In the coming years there will be even more changes, as social media marketing extends from the marketing department to nearly every aspect of a company's business operations.

eMarketer senior analyst Debra Aho Williamson outlines several trends to watch in the coming years. "Advertising -- which some might say has already failed as a business model -- will not be the primary revenue driver for social media companies," said Ms. Williamson.

Instead, the strongest business models in the future will incorporate analytics, as social media becomes truly integrated into all marketing efforts. In addition, TV will become more social, as will online search.

Location will become more important to social media, and brand monitoring will increase in sophistication so that companies can begin to understand the "why" of consumer chatter as well as the who, what and when.

What will not change is the source of social media transformation today -- the people that actively use it.

"The voice of the consumer is only going to get louder and stronger," said Ms. Williamson. "It will shape what social media is and what it will become."

Not too long ago, a company might have made major changes to its products or services based on a few focus groups, some financial planning and a degree of gut instinct.

Social media has already changed all that. And more changes will come.

Friday, February 19, 2010

How Abundant Content Changes User Behavior

Will consumers pay for online news and entertainment they now receive at no cost? In its latest market study, Nielsen asked more than 27,000 consumers across 52 countries, and the answer is maybe they will, maybe they won't.

As expected, the vast majority (85 percent) prefer that free (advertiser or sponsor supported) content remain that way.

Online content for which consumers are most likely to pay -- or have already paid -- are those they normally pay for offline, including theatrical movies, music, games and select videos such as current television shows.

Consumers are least likely to pay for content that is essentially homegrown online, often by other consumers. These include social communities, podcasts, consumer-generated videos and blogs.

In between are an array of news formats -- newspapers, magazines, Internet-only news sources and radio news and talk shows -- created by professionals, relatively expensive to produce and, in the case of newspapers and magazines, commonly sold offline.

Yet much of their "professionally produced" content has become a commodity, readily available elsewhere online for free. Clearly, the transition from content scarcity to free and open abundance has changed online user behavior.

The Nielsen market study found the following:

- Better than three out of every four survey participants (78%) believe if they already subscribe to a newspaper, magazine, radio or television service they should be able to use its online content for free.

- At the same time, 71% of global consumers say online content of any kind will have to be considerably better than what is currently free before they will pay for it.

- Nearly eight out of every ten (79%) would no longer use a web site that charges them, presuming they can find the same information at no cost.

- As a group, consumers are ambivalent about whether the quality of online content would suffer if companies could not charge for it -- 34% think so while 30% do not; and the remaining 36% have no firm opinion.

- But they are far more united (62%) in their conviction that once they purchase content, it should be theirs to copy or share with whomever they want.

Thursday, February 18, 2010

Disruptive User-Centric OTT Video Services

According to the latest market study by TDG Research, almost two-thirds of Netflix customers that subscribe to a home broadband service are now viewing the 'Watch Instantly' online streaming video service.

One-third of broadband-enabled Netflix subscribers view this streaming video exclusively only on their PCs, 8 percent view the content exclusively on their TVs, and 24 percent use both their PCs and TVs.

"Netflix is now the archetype for over-the-top (OTT) streaming video services," notes Michael Greeson, TDG founding partner and director of research. "Not only has Netflix eclipsed its immediate competitors in terms of online DVD rental, but it has quickly become the 'gold standard' for new OTT streaming services."

The implication is significant: one-half of broadband-enabled 'Watch Instantly' users now view streaming video on their TVs -- a phenomenon unimaginable just a few years ago.

Several factors are critical to this early success:

- Netflix built a sizeable base of loyal service subscribers prior to launching its streaming service.

- These subscribers had already demonstrated an ability to think beyond traditional content distribution schemes -- renting a DVD at the local video store. They were predisposed to try novel, unproven methods of video delivery -- in this case, online DVD rental.

- Netflix was able to establish proof of concept by delivering streaming video to the PC before it tackled the more costly and uncertain issue of TV delivery.

- Though initially dependent upon a dedicated set-top box (Roku), Netflix moved aggressively to embed its streaming solution in a wide array of traditional CE platforms, thus reducing the consumer risk associated with trying an unfamiliar and unproven delivery method.

As Greeson explains, "In combination, these factors laid the groundwork upon which Netflix could build a successful OTT video distribution business. And that's precisely what it has done."

We have moved beyond the early-adopter stage of OTT market development. I believe that the freedom to view any video content on-demand, combined with a TV remote-control that's designed to simplify the content selection and viewing experience will be the key to continued momentum.

Traditional pay-TV service providers have unintentionally opened this window of opportunity for emerging OTT services, such as Netflix. While their online user experience is not perfect, it's apparent that Netflix placed the customer at the center of their design process.

In contrast, legacy pay-TV service providers are inherently content-owner centric -- that's why we continue to see inflexible channel tiers that force-bundle unwanted content and the total refusal to embrace a-la-carte channel selection.

Wednesday, February 17, 2010

Digital Home Entertainment Worth $233 Billion

Three sectors of the digital entertainment ecosystem -- device manufacturers and retailers, content producers, and service providers -- have much different visions of the home entertainment future, according to the latest market study by In-Stat.

Each industry sector will continue to try to mold the future to its advantage.

"In the TV and video ecosystem, operators and media companies want to avoid what happened in digital music, where Apple dominates the digital music ecosystem," says Keith Nissen, In-Stat analyst.

As Web-to-TV initiatives accelerate, pay TV operators TV-Everywhere concepts must deliver more than just TV content on a PC screen. It must deliver a complimentary web-based video experience to any screen. Meanwhile, media companies must balance existing distribution channels with new over-the-top (OTT) opportunities.

In-Stat's market study found the following:

- Exclusive live sports and TV events are a key competitive advantage for pay-TV operators.

- Device manufacturers and retailers have bet heavily on the adoption of Blu-ray technology, which has been slow to take hold.

- High value content will migrate to premium channels, benefiting pay-TV subscription revenue.

- Video content on the Internet, or Over-the-Top Video (OTT) video services, will be a net positive for content producers that correctly navigate the rapidly changing distribution channels and business models.

- The value of the home digital entertainment market in the U.S. will total $233 billion by 2013.

Tuesday, February 16, 2010

Fastest Growing Video Site is Disney Online

The number of U.S. unique viewers of online video increased 5.2 percent year-over-year, from 137.4 million unique viewers in January 2009 to 142.7 million in January 2010, according to the latest market study by The Nielsen Company.

Among the top Web brands ranked by unique viewers in January, Disney Online was the fastest growing month-over-month, increasing 23.3 percent.

Facebook and MSN/WindowsLive/Bing were the second and third fastest growing, increasing 18.6 percent and 15.6 percent month-over-month, respectively.

Once again, the top ranking position overall went to YouTube -- with over 112 million unique viewers and more than 6.6 billion total video streams for the month of January. However, Hulu was the top ranked site, based upon the "time per viewer" (234.6 minutes) for the month of January.

Note: effective with June 2009 data reporting, Nielsen has made several enhancements to the VideoCensus service, including a panel that is 8 times larger, more granular reporting and improved accuracy and representativeness.

For some sites, trending of previously-reported data with current results may show percentage differences attributable to these product enhancements and should only be compared directionally.

Nielsen VideoCensus combines panel and census research methodologies to provide an accurate count of viewing activity and engagement along with in-depth demographic reporting. Online video viewing is tracked according to video player, which can be used on site or embedded elsewhere on the Web.

A unique viewer is anyone who viewed a full episode, part of an episode or a program clip during the month. A stream is a program segment. VideoCensus measurement includes progressive downloads and does not include video advertising.

Monday, February 15, 2010

Market Opportunities for IP TV Video Offerings

The latest market study from IMS Research reveals that demand for connected consumer electronics (CE) devices are being driven by increased availability of broadband services, the evolution of content delivery methods and the convergence of the Technology, Media and Telecommunications industries.

According to their assessment of the marketplace, these market drivers are resulting in new retail delivery models, new sources of video content and evident changes in consumer behavior. Given their current view, it appears that the European market is leading, and the North America market is trailing by comparison.

They believe that adoption of over-the-top (OTT) content will become an "extension" of both pay-TV and stand-alone device subscription packages -- but OTT on the TV will not become a "ubiquitous solution" until at least 2015.

Apparently, IMS Research doesn't anticipate that the major CE manufacturers will move quickly to grasp the nascent OTT IP TV video market opportunity. It makes me wonder, which companies did they interview in their study. Did they discount the related big CE vendor announcements at CES in January?

They say, many companies are making the OTT connection. Accedo Broadband is an example of a vendor that offers interactive and long tail VOD content for both IPTV services and connected television sets. Broadband service providers such as BT, PCCW, CHT, and OTE are all examples of tier-one telcos that are experimenting with offerings.

According to IMS, pay-TV operators garnered 57 percent of global TV households at the end of 2009. Regardless, they are changing their strategies, given the changing consumer viewing habits. Therefore, operators intend to future-proof their set-top boxes (STBs) with internet connectivity to enable future IP video streaming services.

The IMS analysis reveals that nearly 13 percent of global IP set-top box (STB) shipments in 2008 were operator-deployed "hybrid" (broadcast and broadband) boxes -- with the ability to receive content via IP or digital terrestrial broadcasts.

Of these 1.6 million hybrid STBs deployed, 87 percent were shipped to Western European TV households. Uptake of operator-deployed IP+DTT STBs has been popular in both the UK and France, but it is anticipated that Italy, Germany, Spain and the Netherlands will see an increase through 2014.

IP Vision, Fetch TV, Netgem and Video Futur are a few examples of direct-to-consumer IP TV video business models and associated services available in Western Europe. The hybrid boxes supply à la carte VOD offerings, DVR functionality and digital multichannel TV capabilities -- utilizing free-to-air (FTA) DTT broadcast channels.

Saturday, February 13, 2010

Online Video Viewers Continue to Ignore Ads


eMarketer reports that online video viewers became even "less likely" to click on pre-roll ads, or watch them to completion over the course of 2009, according to the analysis of video ad network YuMe.

Between 2009 Q1 and Q4, click-through rates trended steadily downward -- from 1.88 to 0.74 percent. Completion rates dropped as well, to 66.3 percent in Q4.

Broken down by length of pre-roll, there was a trade-off. While completion rates were higher for 15-second videos than for 30-second spots, the longer ads received more click-throughs.

Additionally, view-to-completion rates fell throughout 2009 for both types of video advertising, but rates for the shorter ads dropped more dramatically over the period. Average click-through rates for the year were almost doubled on longer videos, at 1.5 percent for 30-second ads -- versus 0.8 percent for 15-second pre-rolls.

YuMe found that video ads targeted to children and teens ages 6 to 14 had the highest video ad click-through rate, at 3.5 percent -- but the lowest rate of viewing to completion. It was the ads targeted at the oldest users (over 35) that were most likely to be watched to the end, at a rate of 77.4 percent.

Online video analytics and distribution company TubeMogul reported somewhat higher completion rates for 10- to 30-second pre-roll ads appearing before short-form video clips. Nearly 16 percent of viewers clicked away rather than watch the ad to completion.

Rates were worse at magazine and newspaper sites, with nearly one-quarter of viewers abandoning the video, while just 10.9 percent clicked away from pre-rolls in front of video from large broadcasters.

Earlier research has shown that in addition to location and industry, video ad size and creative have a significant effect on success metrics -- relatively speaking, that is.

Meaning, the most "significant effect" of online video advertising is the apparent confirmation that shifting a poorly performing approach to marketing from one medium (Television) to a new medium (Online) doesn't change the response rate -- the vast majority of people tend to ignore the interruptions.

Friday, February 12, 2010

TV & Film Industry Awaiting 3D and Ultra-HD

As High-Definition (HD) video reached its stride worldwide, the TV and film industry are now looking ahead to the next new digital video innovation. 3D TV and Ultra-HD (UHD) are on the horizon, according to the latest market study by In-Stat.

3D video is already out of the gate, with growing proliferation of 3D films in movie theaters. Pay-TV operators are in the early stages of deploying 3D TV capability. Early 3D TV sets and 3D Blu-Ray players will ship in 2010.

In-Stat projects worldwide 3D TV shipments will reach 41 million in 2014. 3D Blu-ray player shipments will track closely with 3D TV sets.

UHD will take considerably longer to roll out, but has started to garner interest and discussion among long-term planners in the TV, film and technology industries.

In-Stat believes the first UHD broadcasts will start around 2017. UHD TVs will reach about 5 percent household penetration in some regional markets in the early 2020s.

Technology companies, broadcast systems vendors and consumer electronics manufacturers will need to have solutions available ahead of time to support the long-term high-definition digital media market opportunity.

In-Stat's market study includes the following topics:

- Market and industry drivers for UHD service subscribers and viewers.

- Analysis of how the development of different technologies and business models is impacting the market for UHD services.

- An in-depth look at potential UHD service providers. Analysis of the emerging Digital Cinema and 3D technologies. Assessment of the UHD value chain, including UHD content creation, cinema distribution, broadcast and in-home technologies.

- Long-term (15-year) forecasts for worldwide UHDTV households by geographic region.

Thursday, February 11, 2010

Digital Marketing Trends and the Implications

comScore released their 2009 U.S. Digital Year in Review report. It recaps key trends in the U.S. digital media landscape -- including e-commerce, search, online video, online advertising and mobile, with an emphasis on how digital marketers can capitalize on these trends in 2010.

2009 proved to be a critical year in digital marketing as the economic environment brought unprecedented challenges to the industry. After years of strong growth across the digital economy, the recession introduced softness to many digital business sectors.

But, despite these economic headwinds, consumer's use of digital media climbed to new heights in 2009 as the Internet continued to evolve as an integral component of American's personal and professional lives.

The report provides a comprehensive view across the fixed and mobile digital sectors to uncover this past year's important consumer trends.

Key highlights of the comScore report include:

- The U.S. core search market grew 16 percent in 2009, driven by a 6 percent gain in unique searchers and a 10 percent gain in search queries per searcher. Google and Bing led among the core search engines in terms of increases in market share.

- Social networking continued to gain momentum in 2009 with nearly 4 out of 5 Internet users visiting a social networking site on a monthly basis and Facebook and Twitter propelling much of the growth in the category.

- Display ad impressions grew 21 percent in 2009 as the online advertising sector increased its share of media spending. Growth was driven by an 8 percent increase in ad reach and a 12 percent increase in average frequency.

- Total (retail and travel) U.S. e-commerce spending reached $209.6 billion in 2009, down 2 percent versus the previous year and the first year on record with negative growth rates. Nonetheless, e-commerce retail spending continued to increase its share of consumer spending in a challenging economic environment.

- Six out of seven U.S. Internet users now view online video content in a month, with YouTube and Hulu continuing to experience rapid increase in viewership.

- In the past year, the mobile industry witnessed smartphone ownership increase from 11 percent to 17 percent of mobile users, while 3G phone ownership increased from 32 percent to 43 percent.

Wednesday, February 10, 2010

3GPP is Key to Mobile Broadband Innovation

3G Americas announced that it has published its resource report on 3rd Generation Partnership Project (3GPP) standards and their evolution to IMT-Advanced, or 4G services. The white paper provides in-depth examination of 3GPP technology standards from a technical, business and applications standpoint.

"The 3GPP technology standards deliver mobile connectivity to more than 4 billion users worldwide today and have been developed to continue evolving to higher levels of performance with mobile broadband innovation," said Chris Pearson, president of 3G Americas.

GSM operators can choose to evolve their networks in ways that best suit their assets and business environments with benefits that offer flexibility, scalability and economic advantages, whether they choose HSPA+ or LTE.

The global demand for wireless data services continues to drive the rapid growth of HSPA technology with 303 commercial HSPA networks and over 454 million UMTS-HSPA subscriptions reported at the end of 2009 by Informa Telecoms & Media.

Informa has further forecast that by year-end 2012, worldwide subscriptions to UMTS-HSPA will reach nearly 1.4 billion; by year-end 2013, global UMTS-HSPA subscriptions are expected to exceed 2 billion, rising to 2.8 billion by the end of 2014.

GSM-UMTS-HSPA subscriptions provide the foundation for future evolutions to 3GPP Release 9, Release 10 and beyond with HSPA+, LTE and LTE-Advanced.

"Wireless data consumption is increasing faster now than ever before," said Adrian Scrase, 3GPP Head of Mobile Competence Center. "Smartphone usage is experiencing higher volumes and the superior user experience offered by such devices is resulting in quickly rising demand and escalating use of wireless data applications."

This is consequently driving the need for continued innovations that are supported by the efficient and successful 3GPP technology path.

LTE will serve to unify the fixed and mobile broadband worlds. As an all IP-based mobile communication technology, LTE will allow expansion of the Internet experience on mobile devices and deliver multimedia content to the screen of choice.

The vast majority of leading operators, device and infrastructure manufacturers support LTE as the mobile broadband technology of the future and, according to Informa Telecoms & Media, 130 global operators have announced trials or intentions to evolve their networks to LTE.

Tuesday, February 09, 2010

U.S. Mobile Subscriber Usage Characteristics

comScore ranked the leading mobile phone manufacturers and smartphone operating system (OS) platforms in the U.S. -- according to their share of current mobile subscribers age 13 and older, as well as the most popular forms of content and activity accessed via mobile device.

The report found Motorola to be the top handset manufacturer with 23.5 percent market share, while RIM (BlackBerry) led among smartphone platforms with 41.6 percent market share.

A total of 234 million people age 13 and older in the U.S. used mobile devices in December 2009. Device manufacturer Motorola was the top ranked with 23.5 percent of U.S. mobile devices. LG ranked second with 21.9 percent share, followed by Samsung (21.2 percent share), Nokia (9.2 percent share) and RIM (7.0 percent share).

RIM was the leading mobile smartphone operating system in the U.S. in December 2009 with 41.6 percent share of U.S. smartphone devices. Apple (iPhone) ranked second with 25.3 percent share (up 1.2 percentage points), followed by Microsoft with 18.0 percent share, Palm with 6.1 percent share, and Google with 5.2 percent share (up 2.7 percentage points).

In December 2009, 63.1 percent of U.S. mobile subscribers used text messaging (SMS) on their mobile device, up 2.1 percentage points from three months prior.

Browsers were used by 27.5 percent of U.S. mobile subscribers (up 1.5 percentage points), while subscribers who played games made up 21.6 percent (up 0.2 percentage points).

Monday, February 08, 2010

Business Voice-over-IP Gains Traction in U.S.

Voice-over-IP (VoIP) penetration among U.S. businesses will increase rapidly over the next few years, reaching 79 percent by 2013, compared to 42 percent at the end of 2009, according to the latest market study by In-Stat.

This market penetration reflects companies having a VoIP solution deployed in at least one location.

"VoIP adopters have a good understanding of the cost savings associated with VoIP, and have oriented their limited budgets to optimizing efficiency and savings by replacing legacy TDM voice solutions," says David Lemelin, In-Stat analyst.

With businesses opening up fewer new locations than we have seen in recent years, much of this current investment is occurring at headquarters locations where efficiencies and savings can be maximized.

In-Stat's market study found the following:

- Hosted IP Centrex has now surpassed Broadband IP Telephony as the leading revenue-generating, carrier-based business VoIP solution.

- 33 percent of businesses that have already deployed VoIP solutions report that recent economic conditions have caused them to slow additional deployment plans, compared to 30 percent reporting no change in plans.

- Broadband IP Telephony revenues continue to grow and will more than double by 2013, compared to 2008. This growth will be fueled by single-user applications among increasingly distributed and mobile workforces.

Saturday, February 06, 2010

Digital Marketing Practitioners Walk the Walk


Marketers continue to shift their budgets from traditional to digital media, but simply including online ad campaigns and social media efforts is not enough for an effective marketing mix, reports eMarketer.

According to Alterian's assessment, the maturity of digital and social media requires integration of marketing strategies. Marketers must move from a focus on isolated campaigns to an emphasis on listening to and communicating across channels.

In this study, more than one-half of marketers worldwide reported directing their efforts toward integrating their communication strategies to emphasize multichannel engagement.

The majority of marketers surveyed recognized social media as increasingly important to the marketing mix, while only 14 percent said it's "critical" for their success.

Most marketers say they're "prepared enough" to take advantage of new techniques in digital and social media, but more than one-third felt "minimally prepared" at best.

The largest group of respondents said some of their marketing staff "had the skills" to implement new customer engagement strategies, but that knowledge was generally restricted to personnel in digital roles.

Only 17 percent said most, or all, of their staff was adequately prepared.

"Engaging with customers is becoming paramount and the yardstick by which we measure those brands that survive and those that don't," said David Eldridge, CEO of Alterian. "Marketers now need to appeal to the individual and engage with customers on a one-to-one basis."

So, who is qualified to lead digital marketing strategy? Those who have proven they participate in engagement will leave a substantive impression of their online activities. In contrast, those who are appointed as managers by their company, but have minimal experience, can do little more than merely talk the talk.

Friday, February 05, 2010

Mobile Internet Media Usage Analytics Tool

The GSMA and comScore announced the launch of Mobile Media Metrics (MMM), a solution to the challenges of mobile media usage measurement and reporting. Taking anonymous mobile Internet usage data from all five UK mobile operators, the service provides insights into market-specific mobile media consumption.

MMM was designed to deliver actionable reporting tools to the media industry, while respecting the privacy of individual mobile service subscribers. According to comScore, access to transparent measurement is essential in establishing Mobile as a legitimate marketing and advertising medium.

The service is based on anonymized census-level data for mobile Internet usage across all mobile networks, which is then augmented with demographic data that has been collected with the consent of a representative sample of mobile Internet users.

The service provides an aggregated view of mobile Internet usage behavior, enabling market-level analysis of site visitation and engagement metrics -- such as page views, time spent on specific sites, and mobile device types and features.

Based on pre-production data, 16 million people in the UK accessed the Internet from their mobile phones in December 2009, viewing a combined total of 6.7 billion pages and spending an aggregate of 4.8 billion minutes online during the month.

The top 10 sites accounted for 70 percent of both total pages viewed and total time spent online on mobiles during the month.

Mobile Internet usage is accelerating, driven largely by the adoption of smartphones, which are now used by one fifth of the total UK mobile phone service subscriber base, according to comScore.

While smartphone users represent just 29 percent of the UK total mobile Internet audience, they accounted for 47 percent of total page views, and 51 percent of the total time spent online in December 2009.

The service will also be expanded to include Wi-Fi traffic through site-centric measurement of publisher and ad network sites -- using comScore's Media Metrix 360 solution, for a de-duplicated view of the online and mobile Internet.

Thursday, February 04, 2010

Europe is Primed for Mobile Social Networking

Mobile Internet apps are beginning to play a role in shaping the future of social network service usage. Both social networking site operators and mobile phone service providers are very aware of the mutual benefits, according to the latest market study by Pyramid Research.

The ability of members to access their social network from anywhere enhances the utility of the sites, while mobile social networking greatly increases mobile service provider's data network usage and creates the potential for new revenue streams from subscription fees or advertising.

Pyramid believes that Europe, with more than one billion mobile phone service subscribers and roughly 130 million mobile Internet users in 2009, is a fertile growth market for mobile social networking applications.

Accelerating adoption of mobile social networking in Europe will be critical to local wireless service providers, handset vendors, software developers and the most popular social networking web site operators.

Technical and business development issues, such as the deployment of 3G network infrastructure and the penetration of smartphones -- that are of paramount importance to many other markets -- are with few exceptions, non-issues in most European markets.

In fact, Pyramid reports that the total number of mobile social networking users in Europe already reached approximately 52 million in 2009 and is forecast to reach 112 million in 2010.

The continued uptake of mobile social networking in Europe will be driven by an enhanced user experience, mobile service provider efforts to promote mobile social networking and co-marketing by social network operators that's aimed at increasing mobile access among their existing members.

Wednesday, February 03, 2010

How the 4G Mobile Network Standards Coexist

Consumers now seem eager to adopt affordable Mobile Internet access services. Long Term Evolution (LTE), the next-generation 4G mobile broadband standard, is going to be the clear choice for the next leap in wireless technology, according to the latest market study by In-Stat.

While WiMax appeared to be a competitor for 4G network deployments early on, that battle is now largely resolved. LTE's deployment will primarily be impeded by the success of 3G networks and HSPA and HSPA+ networks as mobile operators seek to leverage the existing investment in their installed infrastructure.

"LTE still has several glaring issues," says Allen Nogee, In-Stat analyst. "These include lack of spectrum, signal-to-noise ratio, and non-established patent and royalty pool. It's clear that the shift toward 4G LTE will be gradual and protracted."

No, that assessment doesn't sound like it's a foregone conclusion that LTE is on the path to 4G standard domination. In fact, given the history of mobile technology standards, a form of coexistence tends to be the ultimate scenario. Why should 4G be any different -- particularly when one standard hasn't been deployed on a commercial network?

In-Stat's market study found the following:

- LTE deployments will effectively begin in 2010. North America and Asia-Pacific will be the first regions to deploy. WiMAX is already deployed on several networks around the globe.

- While LTE will ultimately become the 4G standard of choice, Mobile Wi-Max is much more mature in deployment and has a distinct niche. Even by 2013, Mobile Wi-Max will have more than 5 times as many global subscribers as LTE.

- External connectivity clients, such as network cards and USB dongles, will be the first LTE subscriber devices sold. LTE mobile handsets will not start shipping in major volumes until 2H12.

- WiMAX deployments have given chipset manufacturers, device manufacturers, and infrastructure suppliers real-world experience.

Tuesday, February 02, 2010

Why Subscribers Downgrade Pay-TV Service

Pay-TV service providers have reached a crossroad -- either way, business as usual is not an option. Over two-thirds of American pay television subscribers would be willing to switch providers if offered a price discount of 20 percent, according to the latest market study by Strategy Analytics.

While Cable TV customers were the most likely to churn, only half as many (33 percent) of Telco IPTV subscribers are eager to change providers. Their report, "Digital TV Customer Satisfaction: U.S. Survey Results 2H'09," is the result of polling 856 digital pay television subscribers within the U.S. marketplace.

Overall, respondents reported satisfaction with their current digital television provider, with 71 percent claiming to be "somewhat" or "very" satisfied. There was a marked difference, however, among access platforms. Telco IPTV customers reported 95 percent overall satisfaction, compared to 78 percent for Satellite, and 67 percent for Cable.

Highly Volatile Market Dynamics
That said, fewer than 22 percent of subscribers -- irrespective of the pay-TV platform -- believe they were receiving "value for money". Meaning, the vast majority believe they're paying too much for what they receive -- with the price typically rising, as the experience continues to decline (due mostly to the frequency and irrelevance of TV advertising).

"The value-for-money result was perhaps the most important finding of this study," noted Ben Piper, Director of the Strategy Analytics Multiplay Market Dynamics service. "It underscores a trend we have been seeing for the past 18 months -- a growing number of customers are beginning to question the value of a traditional pay-TV subscription in light of expanded over-the-top offerings, such as Hulu and Netflix."

While Telco IPTV is expected to make strides in the upcoming years, the platform's success is certainly not a foregone conclusion, according to Piper's assessment. In a highly penetrated market such as the United States, growth will not be organic. In fact, the market is destined for a major shift, once consumers discover the low-cost alternatives .

Moving Beyond Myopic Market Segmentation
Meanwhile, I believe that industry analysts now must move beyond measuring the cord-cutting phenomenon -- where traditional pay-TV subscribers totally terminate services -- and instead start to acknowledge the growing market segment(s) of service down-graders.

A growing number of traditional pay-TV subscribers are dropping premium channels and downgrading to basic service tiers. They do this after subscribing to alternative sources of movies and premium TV series (Netflix in particular), then they discover the free over-the-top (OTT) "Instant Play" video streaming offerings, and the ease of creating a personalized video play-list (Netflix queue).

Granted, some Netflix subscribers will quickly evolve to unsubscribing from pay-TV basic service tiers, after they install an external or attic-mounted antenna to receive high-quality digital broadcast TV signals for local programming. But, this segment is currently at the extreme end of the spectrum.

We need a comprehensive segmentation study that will uncover why subscribers downgrade pay-TV service, and the various stages of their progression to abandon traditional pay-TV. Then, we'll have a full understanding of this disruptive transition to OTT service offerings.

Monday, February 01, 2010

MPEG Digital Video Compression Usage

As more people access digital video on consumer electronics (CE) devices, applications for MPEG digital video compression technology are expanding -- particularly in portable CE devices, according to the latest market study by In-Stat.

As a result, shipments of MPEG Integrated Circuits (ICs), which support hardware compression and decompression of digital video, will reach 2 billion units by 2013.

"Compression technology continues to improve, offering lower bit rates and higher quality, as well as lower cost and power," says Michelle Abraham, In-Stat analyst.

H.264 compression is finding a home in most new MPEG ICs targeting both line-powered and mobile devices.

In-Stat's latest study found the following:

- Qualcomm was the leader in the mobile MPEG codec IC market for mobile handsets, while Zoran leads among “Other Mobile Applications”, followed closely by Samsung.

- MPEG IC market share differs among the various types of line-powered consumer electronics, such as set top boxes, TVs, and DVD equipment. The leaders include Broadcom, MediaTek, NXP, Sigma Designs and STMicroelectronics.

The key technology trends include:

- H.264 compression has superseded MPEG-2 in many line-powered applications.

- The Scalable Video Codec (SVC) extension to the H.264 is a major enhancement coming to the MPEG digital video system.

- With the standardization of 3D Blu-ray, multiview video coding (MVC), another extension of H.264, gains in importance.