Digital Lifescapes

While data backup has long been the traditional reason for an individual to purchase a network drive, more consumers today are looking to Network Attached Storage (NAS) as a way to manage the exploding volume of digital media they are acquiring, according to ABI Research. From personal digital photos and video to content purchased online, consumers are looking not only to more traditional storage solutions such as USB hard drives, but to the more evolved NAS solutions that are becoming available at attractive price points. "There are a number of competing alternatives for centralized storage and management of content," says ABI Research director Michael Wolf. "ABI believes game consoles and Media Center PCs will outnumber NAS devices for media management by a large margin, but for those looking for low-cost content storage and management solutions, NAS will continue to grow as a viable option." Part of the reason for the growing interest in NAS devices is the techno...

Strategy Analytics has some good news for SprintNextel, which has had a challenging year. The Boston-based analyst firm recently published a report which analyzed SprintNextel's plans to tame the 'churn albatross' and roll out ultra high-speed mobile services, and concluded that the 2007 outlook is positive. SprintNextel's inability to hold onto its subscribers, as evinced by its terrible churn rate compared to other U.S. carriers, may finally be at an end. At its recent analyst event, Sprint gave details of plans to retain its best customers and make the experience of being a Sprint customer much more appealing. "SprintNextel has taken a very can-do attitude toward resolving its problems," commented Sara Harris, Senior Industry Analyst at Strategy Analytics and author of the report. "Although no-one should expect overnight results, the combination of targeted capex to address network quality issues (notably in IDEN hotspots), the rollout of hybrid IDEN/C...

The Associated Press reports that the Netherlands ended transmission of 'free to air' broadcast analog television on December 11, 2006 -- thereby becoming the first nation to switch completely to all digital TV signals. Few Dutch consumers noticed, because the overwhelming majority receive TV via a cable service provider. Only around 74,000 households relied primarily on TV antennas in this country of 16 million people, although 220,000 consumers had an 'occasional use' TV set somewhere such as in a vacation house, camper or boat, according to the Dutch government figures. The bandwidth formerly used by analog has been licensed through 2017 by former telecommunications company Royal KPN NV, which will use it to broadcast digital television. Under its agreement with the government, KPN bore the cost of building digital broadcasting masts and must continue to broadcast three state-supported channels and several regional public broadcasters free of charge. In return, it ca...

A new ABI Research survey of Internet users in North America found that only 5 percent of those who watch video on the Internet have 'rented or purchased' a digital movie download, a lower overall number than indicate they have downloaded a movie free from a peer to peer sharing site. Movie downloads, both legal and illegal, remain the least watched genre of online video on the Internet, where short-form content such as sports and news clips is watched by nearly 7 in 10 of those that watch Internet video. "The vast majority of those watching content online are watching short-form content such as news and sports clips," said research director Michael Wolf. "Older users in particular watch primarily news and sports, while younger users are watching more entertainment content, including viral media provided by sites such as YouTube." When ABI Research asked consumers why they chose not to watch movies downloaded or streamed from the Internet, the biggest reason...

The way in which Europeans interact with the internet is constantly changing as the medium evolves and matures, according to research announced by the European Interactive Advertising Association (EIAA). The 2006 Mediascope research reveals that social networking and establishing personal connections via internet phone calls, instant messaging and online forums will continue to drive internet growth as the medium becomes a more ingrained part of the consumer's lifestyle. The research also demonstrates that increased broadband penetration across Europe has positively impacted the numbers of hours Europeans spend online and has contributed to the increased use of price comparison, news and local information websites, blogging, online radio and music downloads. The EIAA study finds that 45 percent of internet users in Europe now go online every day of the week, which demonstrates the increasing importance of the internet in our everyday lives and its growing role as an engagement med...

You might know that the software cost of upgrading from Windows XP to Windows Vista Business is $199. But you might not know is that the Vista upgrade carries a hardware cost as well, with about $100 in new or additional PC components required to make the conversion, according to data from iSuppli Corp. Based on an analysis using CSCA, an average desktop PC running Windows XP contains components that collectively cost PC OEMs slightly more than $500. For an average PC running Vista, the cost will jump to slightly more than $600, a 20 percent increase. Because this figure represents the cost of the components and not the actual price of the PC, users will pay significantly more than $600 to buy a Vista-ready machine due to the PC maker's added profit margins. Much of the additional cost for Vista-capable PCs is in the memory area. Although Microsoft has stated that 512Mbytes of DRAM will be sufficient to run Vista, iSuppli believes at least 1Gbyte will be required for optimal perfor...

Annual U.S. revenues from Internet video services -- spanning user-generated content to television shows and movies -- will exceed $7 billion by 2010, according to Parks Associates. Their research report also notes this growth will accompany an ongoing shift toward greater parity between the revenue sources. In 2007, approximately 85 percent of revenue will be from advertisements attached to user-generated content and television and news streams. By 2010, services for renting and downloading TV shows and movies will account for nearly 40 percent of total revenues. "Major broadcasters, movie studios, retailers, and content aggregators are all experimenting with new ways to distribute video content online and attach advertising to their offerings," said Kurt Scherf, vice president and principal analyst, Parks Associates. "The early results are quite promising." According to Parks, online distribution has boosted viewership and advertising revenues for current prime-ti...

According to Kagan Research, U.S. households that have lacked broadband availability comprise a last frontier in telecom, but are now being corralled. Terrestrial wireless WiMAX network installations are scheduled to start next year. "Because of the costs to deploy DSL and cable modem service, the big carriers have mostly focused on densely populated areas, but that's overlooking the 5,000 towns with fewer than 70,000 people in the U.S.," says Kelley Dunne, CEO of Digital Bridge Communications, which provides WiMAX broadband services and support services to other WiMAX providers. It's estimated that over 14 million U.S. households lack affordable broadband connectivity and, Dunne adds, millions more are poorly served. Some of those towns may be nominally serviced by some broadband service. But usually coverage is patchy, prices high and capabilities limited, says Dunne, who apparently witnessed these issues while he was an executive with Verizon. WiMAX standardization...

Bambi Francisco's MarketWatch commentary entitled " Yahoo dispels first-mover myth " is a valid assessment of the path that brought the company to its recent reorganization announcement, however, I disagree with her conclusion that the solution requires utilizing the mind of a 'technical' person. In contrast, I believe that Yahoo is in desperate need of a credible Chief Marketing Officer that can federate the operations of an acquired collection of disjointed web assets that currently receive little benefit from being a part of the larger corporate entity. Furthermore, they need a business leader that can see beyond 'leveraging eyeballs' and 'aggregating users' in their 'captive audience' -- and, certainly beyond tweaking their search algorithms. FYI, I was an early-adopter and user of the GeoCities platform, one of Yahoo's first big acquisitions, and I've been disappointed by the way that they have mismanaged the raw potential of t...

A new study from ABI Research finds that the semi-ruggedized notebook computer category is forecast to grow at a compound annual rate of over 16 percent between 2006 and 2011. It is expected to be one of the major drivers for the overall growth in the ruggedized mobile device market -- alongside traditional product categories such as mobile phones, PDAs, tablet PCs, and fully ruggedized notebook PCs. Principal analyst Stuart Carlaw says, "The combination of rugged features in more consumer-grade mobile devices is at the very core of product differentiation and the growing need to cater for field force enablement." He goes on to add that, "Although this move to semi-ruggedized products is very profound, it must be recognized that the market for fully ruggedized products in traditional vertical markets such as oil and gas, mining, and the military will continue to be strong. Moreover, there will growth for these products in not so traditional markets in the emergency servi...

A large number of pay-TV 'headends' have been built in 2005 and 2006 to support the increasing investment in telco TV deployments, and the wide availability of H.264 compression equipment in 2006 has prompted telcos that were waiting, to move forward with deployment plans, reports In-Stat. In-Stat believes that growth in telco TV deployments and subscribers will result in the building of more than 800 new headends between 2005 and 2010. Upgrades to take advantage of technology advances will further fuel the telco TV headend infrastructure investment boom. However, I would add caution to these upside estimates. It's still not apparent that telcos are choosing a viable and sustainable business model for their late entry into the video entertainment delivery business. Moreover, past experience with the telco's ISDN investment strategy demonstrates that they will 'eventually' abandon any decision that's proven to be out-of-sync with customer needs. IPTV is alrea...

According to a Forrester Research market survey, U.S. consumers apparently love to hate marketer's advertising. Although anti-advertising sentiment may have stabilized, marketers cannot afford to ignore consumer distaste for irrelevant advertising. Only 13 percent of consumers admit that they buy products because of their ads, and a paltry 6 percent believe that companies generally tell the truth in ads. Today, a majority of consumers use technologies and services that enable them to block ad content. Forrester's study uncovered the following: Telemarketing 'cold calls' have been silenced -- More than 107 million U.S. consumers have signed up for the National 'Do Not Call' Registry, which is both highly visible and free, making it the most widely adopted ad-blocking tactic. Marketers have no choice but to comply with the legislation. At one business services firm, the change in operating environment drove a strategic shift of direct marketing dollars, shutting d...

comScore Networks released data on consumer online non-travel (retail) spending at U.S. sites during the first 31 days of the 2006 holiday season to date, which began on November 1. Total online retail spending reached $11.7 billion through December 1, representing a 24 percent increase versus the corresponding days in 2005. "Online consumer spending during the holiday season continues to surge, growing 24 percent versus a year ago," said Gian Fulgoni, chairman of comScore Networks. "Buoyed by strong consumer spending during recent days like Cyber Monday (November 27th, 2006) and Tuesday November 28th -- which each saw $608 million in spending -- online sales have been strong throughout the holiday season." comScore also reported traffic growth to retail sites for November 2006 versus a year ago. Although retail e-commerce spending has risen at a rate of 24 percent versus last year, retail site visitation is growing at about half that rate. Specifically, the numb...

The Digital Terrestrial TV (DTT) Set Top Box (STB) market is poised to surpass $1 billion due to the analog signal cutoff date of Feb. 17, 2009 in the U.S., and prospects of a large Chinese market, reports In-Stat. As DTT markets mature, the growth in uptake of DTT tuners will continue, aided primarily by increased consumption for second and third TVs. "The prospects of turning off analog terrestrial broadcasts, coupled with ongoing marketing campaigns, are powerful motivating factors for consumers to adopt the digital platform," says Michael Inouye, In-Stat analyst. In-Stat's study found the following: - Europe continues to lead DTT, and could see significant digital penetration as analog cutoffs continue and commence. - While HD TV, in the near term, will likely remain a niche market in most countries, events like the 2008 Olympics and a larger HD TV installed base could help spur its adoption. - In North America, a residual market will likely exist in 2010 and 2011, bu...

In 2005, only 4 percent of the world's homes that made their broadband connection over fiber-to-the-home received video services. By the end of 2011, according to a new study from ABI Research, that figure could be 55 percent. According to ABI Research principal analyst Michael Arden, this increase will primarily be the result of a business model argument for operators. The cost of installing video equipment, though not insignificant, is only a relatively small addition to the basic cost of installing fiber-to-the-home access equipment. Arden says, "Companies are going to considerable expense to deploy fiber-to-the-home; spending a little more to establish a video network helps them to pay off the access network investment. That's why wherever you see a fiber-to-the-home deployment today, the service providers are talking about offering triple play services." However, this growth will not play out in the same way in all parts of the world. Although Japan and South Kor...

According to iSuppli, overall third quarter PC shipments rose at a healthy year-over-year rate of 9.5 percent, coming in at 59.9 million units, up from 54.7 million during the same period in 2005. "The PC industry had been holding its breath regarding unit shipments in the third quarter, following disappointing results in some segments in the second quarter," said Matthew Wilkins, principal analyst with iSuppli. "However,the accelerated year-over growth of the third quarter has allayed those fears." The performance of the desktop segment in the third quarter improved markedly compared to the previous quarter, generating growth of 2.7 percent. "Clearly, the dust has settled from the second quarter hiccup from the imminent arrival of Intel Corp.’s new desktop microprocessor chips and the expected price cuts," Wilkins said. Meanwhile, the notebook PC segment continued its strong momentum with unit shipments rising 24 percent compared to the third quarter of20...

Some suggest that video-on-demand (VOD) will eclipse the packaged media DVD in the foreseeable future, but Kagan Research forecasts that U.S. consumer spend on VOD by 2016 will still be smaller by a wide margin. Kagan forecasts that U.S consumer spending on VOD and pay-per-view (PPV) will be one-quarter the consumer spend on U.S. home video in a decade. For years, VOD has been held out as the 'Next Great Thing' and it is steadily fulfilling that promise, but not as fast as some might expect. Kagan attributes the measured pace to competition from digital video recorders, film distributors enforcing stringent digital rights management of their titles, cable TV's emphasis on free or flat-rate subscription VOD (SVOD), and technical constraints related to limited bandwidth. Regardless, U.S. on-demand programming is forecast to grow at a hefty 12 percent compound annual growth rate (CAGR) over the next decade, reaching $8.7 billion by 2016. The CAGR for U.S. home video software a...

By the end of 2006, advertising delivered via mobile phones will generate revenue of $1.9 billion worldwide. Compared to the $60 to $70 billion spent annually on broadcast television advertising in the United States alone, it is insignificant. However the clear benefits of well-executed mobile advertising are so compelling that over the next five years this market is set to enjoy double-digit growth rates, according to a new study from ABI Research. "There are very good reasons to use the mobile phone to reach consumers," says senior analyst Ken Hyers. "Unlike a TV or a PC, a mobile device is truly unique to the end-user. That allows a more customized relationship with the recipient of the advertisement. Advertisers can obtain a lot of information about end-users, through the websites they visit and the purchases they make, helping them construct tightly targeted campaigns." There is another reason advertisers love the mobile format: the typical click-through rate f...

According to IMRG, UK internet shopping reached a new all-time high in October. The IMRG Index reached 2675, eclipsing the previous high of 2602 recorded for December 2005. Sales for October were estimated to be worth 2.73 billion pounds. E-retail has grown at its fastest ever rate in 2006, increasing by an average of 50 million pounds per month during the first ten months of the year. During the same period two years ago, in 2004, the average growth rate was just 16 million pounds per month. The IMRG Index is expected to climb at least a further 30 percent between October and the peak month of December, in line with IMRG's earlier estimate of 7 billion pounds for the 10-week run-up to Christmas, which therefore remains unchanged. Ian Tansley, Head of Web Selling at John Lewis Direct, commented "October has been another fantastic month for johnlewis.com with sales 70 percent ahead of the same period last year. There has been particularly strong growth in sales of TVs, electric...

In an interview with Tim McElligott of Telephony magazine, Keith Willetts of the TeleManagement Forum (TMF) shares his thoughts about common challenges of the incumbent big telecom and media companies -- as they face the realities of managing the 'graceful decline' of their traditional revenue streams. I have always respected Mr. Willetts for his candor in tackling the apparent and systematic denial that often handicaps the communications service provider's leadership -- as he frequently dares to address the obvious elephant in the room that everyone else clearly sees, but simply chooses to ignore. "Well, we've had times in the TMF when every operator on the planet thought they were competitors with each other. Then it settled down when they realized they could collaborate. We've had times when software suppliers were intensely competitive over certain things and in the end they too realized there were places they could collaborate. I fully expect to see that h...