iPhone in Europe

iPhone Comments in Europe

The iPhone launch in Europe was not as successful as in the U.S.

O2 reportedly activated 8,000 iPhones on the launch day, and T-Mobile claims it sold 10,000 by the afternoon on the launch day. Germany and the UK have a combined population of approximately 143 million, meaning 0.01% of people bought an iPhone on the opening day, a percentage significantly lower than that in the U.S. Some of the reasons for the lackluster performance include the following:

High price tag: iPhone prices have been slashed by 1/3 since launch in the U.S. whereas it’s still sold at more than $500 in Europe.
Lack of 3G support
A more competitive handset market
Lower iPod market share in the MP3 market

In the long term, we expect iPhone’s sales in Europe to continuously under-perform that in the U.S.

CONNECTIONS™ Europe Sessions - Day 2

Wednesday 5 December
0905-0915
Communications and Value-added Services
Trends in Telecommunications from a Researcher's View - Networks, Devices, Services, Solutions

Speaker:

Prof. Dr. Hans-Joachim Grallert, Managing Director, Fraunhofer Institute for Telecommunications, HHI

CONNECTIONS™ Europe Agenda

Home Networks Heating Up

Today, the HomePlug Alliance announced that a joint proposal from the Alliance and Panasonic is the sole MAC/PHY proposal remaining in the IEEE P1901 work group process for creating an international standard for in-home and access powerline communication technologies. This is significant, because Panasonic was pursuing its own proprietary powerline solution (HD-PLC) after its submission to HomePlug for the HomePlug AV specification was not selected. For awhile, we had three competing solutions - HomePlug, Panasonic, and the solutions from Spanish chip developer Design of Systems of Silicon S.A. (DS2).

Although DS2's underlying technology was not selected by the IEEE P1901 work group, the company isn't sitting still. It indicates that it will have a 400 Mbps solution out soon. And, DS2 has an impressive list of European service providers that it says are taking a look at its solution. Europe may be where this market is won or lost. Given the strong emphasis on solutions such as bridges for IPTV and multi-service residential gateways, Europe is likely to be the leading market for powerline solutions. We're waiting to see which service providers and CPE vendors are willing to go public with their support for either the HomePlug or the DS2 solution. One suspects that many are waiting for a standards resolution in the IEEE before making a public affirmation of either technology.

In the meantime, both Entropic/MoCA and CopperGate/HomePNA were quite visible at last week's TelcoTV conference. CopperGate has announced 2 million HomePNA 3.1 chipsets shipped, and indications are that it is receiving favorable attention from the smaller telco community. As in the case of the powerline solutions, we're evaluating based on real deployments. So far, Verizon with MoCA is the only public deployment of which we're aware to date.

~Kurt Scherf, Vice President, Principal Analyst, Parks Associates

CONNECTIONS™ Europe Sessions - Day 2

Wednesday 5 December
0845-0905
Opening Comments and Welcome
The Consumer Across All Four Pillars

Technological advances are key to driving the digital lifestyle markets forward, but is consumer demand keeping pace with innovation? Parks Associates opens Day 2 with insight and analysis of the global consumer across our four Digital Home Pillars. This presentation includes data from Parks Associates’ groundbreaking worldwide research Global Digital Living I and II.

Speakers:
John Barrett, Director of Research, Parks Associates
Stuart Sikes, President, Parks Associates

CONNECTIONS™ Europe Agenda

CONNECTIONS™ Europe Sessions - Day 2

Wednesday 5 December
0730-0830
Breakfast
Sponsored by Macrovision
CONNECTIONS™ Europe Agenda

CONNECTIONS™ Europe Sessions - Day 1

Tuesday 4 December
1745-1910
Wine and Cheese Reception

Please join CONNECTIONS™ Europe for a Wine and Cheese Reception.

CONNECTIONS™ Europe Agenda

CONNECTIONS™ Europe Sessions - Day 1

Tuesday 4 December
1610-1710
What’s Next with Television?

Europe has now taken the lead in IPTV deployments, and the market for television on the European continent is highly dynamic. With cable, satellite, and digital terrestrial joining IPTV as options for digital TV, how do video services differentiate in order to grow and retain their customer bases? This panel examines the trends, technologies, and the “next big thing” that will characterize television in Europe.

Moderator:
Kurt Scherf, Vice President and Principal Analyst, Parks Associates

SPEAKERS
Jonathan Beavon, Director, Segment Marketing, NDS Limited
David Keeley, Chief Technology Officer, Europe, Middle East, and Africa, Motorola, Inc.
Nora Maene, Multimedia Solution Marketing Manager, Alcatel-Lucent
Dr. Fee Steinhoff, Project Field Manager MASF, Deutsche Telekom AG, Laboratories
More speakers TBA

CONNECTIONS™ Europe Agenda

CONNECTIONS™ Europe Sessions - Day 1

Tuesday 4 December
1525-1600
Opening Keynote: Embracing IPTV Services and Deployment

IPTV services are helping to provide differentiation in a hyper-competitive European telecom environment. This keynote presentation focuses on the role of IPTV in the context of converged communications and entertainment services and provides insight into the evolution of IPTV services including interactive features, new services, and different entertainment experiences.

Speaker:
Andreas Mueller-Schubert
General Manager, Global Solutions
Microsoft TV
Microsoft

CONNECTIONS™ Europe Agenda

CONNECTIONS™ Europe Sessions - Day 1

Tuesday 4 December
1515-1525
IPTV and Interactive TV
From the Chair: Video Services in the Context of the Digital Home

Pillar 1 of The Digital Home is IPTV and Interactive TV, which lays the foundation for entertainment services, home networking, communications, and value-added applications. The Analyst Chair opens this session with an examination and key predictions of the current IPTV and interactive television landscape.

Speaker
Kurt Scherf, Vice President and Principal Analyst, Parks Associates

CONNECTIONS™ Europe Agenda

CONNECTIONS™ Europe Sessions - Day 1

Tuesday 4 December
1500-1515
Welcome to CONNECTIONS™ Europe
Trends and Outlook for Digital Lifestyles Markets

We begin CONNECTIONS™ Europe with an overview of key global trends for the digital lifestyles market, with Europe as a special focus.

This session also introduces the Four Pillars of the Digital Home, the theme for CONNECTIONS™ Europe and the foundation for the next two days of highly interactive and informative sessions with lead analysts and their peers.

Speaker
Stuart Sikes, President, Parks Associates

CONNECTIONS™ Europe Agenda

CONNECTIONS™ Europe Sessions - Day 1

CONNECTIONS™ Europe: Strategies for Digital Living Markets
4-6 December

Tuesday 4 December
0900-1500
Parks Associates Workshop
Four Pillars of Global Digital Lifestyles Growth

Communications and Value-added Services
· Broadband Update: Changing Dynamics in a Maturing Market
· Home Networking: A Focus on Communications and Entertainment

IPTV and Interactive TV
· Television 2.0: IPTV, Mobile TV, and Interactive Television

Digital Media and Entertainment
· Consumers and Digital Media: A Global Perspective
· Broadband Video: A Fourth Alternative for Entertainment?
· Online, Console, and Mobile Gaming Trends

Home Networks and Controls
· Home and Health Management: 2007 and Beyond

SPEAKERS / MODERATORS
coming soon
CONNECTIONS™ Europe Agenda

CONNECTIONS™ Europe Keynote Topics

CONNECTIONS™ Europe
December 4-6, 2007
Hotel Adlon Kempinski Berlin
CONNECTIONS™ Europe

Opening Keynote: Embracing IPTV Services and Deployment
Andreas Mueller-Schubert
Microsoft TV

Description: Europe has now taken the lead in IPTV deployments, and the market for television on the European continent is highly dynamic. With cable, satellite, and digital terrestrial joining IPTV as options for digital TV, how do video services differentiate in order to grow and retain their customer bases? This panel examines the trends, technologies, and the “next big thing” that will characterize television in Europe.

Lunch and Keynote: Smart Pipes, Smart Devices, Smart Players
Sponsored by Zensys Inc.
Saul J Berman
IBM Global Business Services
and
Paul R. Brody
IBM Global Business Services

Description: The challenge for all players in the ecosystem is the degree to which they will capture or lose to others the future growth and economic value opportunities in IPTV. Changing consumer behavior, an evolving regulatory environment, the advancement of technology and innovation of new solutions all combine to create potential business models for IPTV. This presentation, based on IBM’s experience with IPTV technology development and working with the world’s leading CE companies, will address the impact of these different forces and provide suggestions for future development as well as new business modes and strategies.

Keynote: Changing Entertainment Options
Didier Zwierski
PHILIPS Consumer Electronics - BU Home Networks

Description: Entertainment options for consumers have grown tremendously as broadband and digital services mesh with technology advances and convergence. This Keynote addresses how consumer electronics devices such as set-top boxes and televisions are bridging the gaps between the traditional entertainment world and the online services. In addition, Philips will share perspectives on how interactive features and new value-added and revenue-generating services are bringing further enhancement to consumers’ entertainment options, and allowing CE vendors, together with their partners from the digital entertainment ecosystem, to play a role in driving new revenue streams.

CONNECTIONS™ Europe Keynote

Please welcome keynote speaker at CONNECTIONS™ Europe, Didier Zwierski, Vice-President, Americas General Manager & Technology and Development Manager, PHILIPS Consumer Electronics - BU Home Networks.

Biography coming soon.

CONNECTIONS™ Europe

Richer Digital Media Offerings Needed to Spur German Home Networking Offerings

Parks Associates’ research indicates companies need to develop and market richer digital media offerings in order to spur the German home networking market. “While home network penetration has grown in Germany, there has not been an upsurge comparable to France or the U.K.,” said John Barrett, director of research, Parks Associates. “More competition combined with digital media offerings such as video-on-demand, IPTV, and multiroom DVR are required to promote greater adoption of home networks.”

Parks Associates’ Global Digital Living (GDL), which surveyed households worldwide on their technology use and attitudes, finds:

• Among the surveyed countries, Germany has one of the lowest percentages of households who download or upload videos to P2P websites on a monthly basis. Germans are also less likely to watch videos via video sharing sites.
• Among the European countries surveyed, Germany has the lowest percentage of households who watch purchased DVDs on a monthly basis. Conversely, among all the surveyed countries, Germany has the highest percentage of households who watch movies on broadcast TV.

These and other GDL findings map consumer patterns and areas of opportunity, essential factors for companies looking to advance the markets for digital products and media. To this end, several CONNECTIONS™ Europe sessions will focus on the role of TV-centric devices and examine the evolution of interactive services, the role of Web content, and the features and applications that will move television from a one-to-many to a one-to-one experience.

CONNECTIONS™ Europe provides thorough examination and understanding of advanced technologies and services for residential and mobile environments, including digital entertainment, IPTV, telco TV, set-top boxes, advanced communications across mobile and landline platforms, and home management and its corollary services.

iPhone price cut

Welcome to the mobile phone business, Apple! A mere ten weeks after introducing the iPhone, Apple has made some big adjustments. The company is slashing the price of its 8 GB iPhone from $599 to $399 in time for the holiday shopping season. The company is also phasing out the 4 GB version, which had sold for $499.

Handset price decreases are nothing new to the mobile space, but such drastic price reductions at such an early stage are a rude wake-up to Apple as it enters a market where it faces stiff competition. There's no question that the iconic iPhone is as slick as a device as the mobile phone industry has seen in sometime, and Apple is already transferring features such as the touchscreen to its new iPod devices.

However, after such a hyped introduction, it would appear that Apple hasn't overcome the resistance that we predicted in our June white paper - The iPhone: A Consumer Perspective. Granted, we know that Steve Jobs is definitely not referring to the iPhone as a "hobby" (as he did with the underperforming AppleTV). However, even with Apple's great history of developing intuitive and in-demand products, pricing is a big hurdle to overcome as consumers consider the purchase of an advanced mobile phone handset.

In Parks Associates' white paper we noted that only 3% of consumers surveyed in a recent study (Mobile Entertainment Platforms and Services: Second Edition) expressed a strong willigness to pay $499 or more for an iPhone. We're still not convinced that a $399 price point is going to spur significant dividends, either. At this price point, the needle only bumps to 4% of consumers.

Apple has enjoyed some great gains in the last few years, but it's got major challenges ahead of it if growth is going to continue. Recent defections from content providers away from the iTunes service and the company's need to convince millions of users to replace their existing iPods are among two key issues. Perhaps this is only a moment where Apple simply catches its breath before charging ahead, or it's a sign that even the great Apple has its limits. We're watching closely.

CONNECTIONS EUROPE: Strategies for Digital Living Markets

CONNECTIONS™ Europe will host 220-250 managers, strategists, and executives marketing digital products and services in Europe. http://www.connectionseurope.com/

Key Topics Addressed:

• Key trends for European/Global digital lifestyles markets
• Interactive sessions with Parks Associates' analysts
• Controls and health management
• The hyper-competitive European telecom environment
• The evolution of IPTV services
• The “next big thing” in European TV
• Service providers: competing on service and innovation
• Value-added services and features
• Fixed/mobile, home network, and multimedia features
• Digital entertainment: downloads, social media, Web 2.0
• Connectivity beyond application-specific platforms
• Communications and entertainment

CONNECTIONS™ SUMMIT at CES Focuses on Strategies for Converging Media, Entertainment, and Controls

CONNECTIONS™ Summit, a one-day executive summit, precedes 2008 International CES and features expert insight and debate on market strategies for home systems, new media and social networking, home networking, and digital entertainment.

Preliminary Speakers:
Ralph Ackerman, Founder and Director, International Short Film Association
Ade Bamigboye, CTO, Intamac Systems Ltd
Marc Canter, CEO, Broadband Mechanics
Brian Caskey, VP, Worldwide Marketing, UTStarcom
Jonathan Cobb, Founder, CTO, Kiptronic, Inc.
Joe Dada, CEO, SmartLabs, Inc.
Paul Palmieri, President & CEO, Millennial Media, Inc.
Kate Purmal, GM and SVP, Digital Content Solutions Division, SanDisk
John Reister, Chief Architect, IPTV, BigBand Networks, Inc.
William T. Schafer, Director, Product & Channel Development, Crestron Electronics
Dan Scheinman, SVP and GM, Cisco Media Solutions Group, Cisco Systems Inc.
Singu Srinivas, President, HiWired, Inc.
Chris Wagner, EVP, Marketplace Strategy, NeuLion, Inc.
Ben Weinberger, CEO, Digitalsmiths Corporation
Michael Wexler, President, HiWired, Inc.
TBD, Superna

CONNECTIONS™ designed the summit as the ideal preparatory event for 2008 International CES. The summit sessions feature panels of leading executives, moderated by Parks Associates analysts. In addition, Parks Associates will provide consumer and industry data on various product and service categories of 2007, with forecasts for growth in 2008 and beyond.

“The convergence of controls, broadband, and digital content will promote growth in many advanced industries serving consumers,” said Kurt Scherf, principal analyst, Parks Associates. “We will be discussing these and other opportunities at the CONNECTIONS™ Summit.”

For more information, visit http://www.connectionsconference.com/ or http://www.cesweb.org/.

CONNECTIONS™ Europe Keynotes

Please welcome keynote speaker at CONNECTIONS™ Europe, Paul R. Brody from IBM Electronics Industry Strategy Practice.

Paul R. Brody, Partner, IBM Global Business Services, Global Lead, IBM Electronics Industry Strategy Practice

Paul Brody is a Partner with IBM Global Business Services. He brings a decade of consulting experience to the position as the global leader of the electronics industry strategy practice. Mr. Brody has worked extensively with business strategy, supply chain management and product life cycle management, including planning & scheduling, logistics, and procurement solutions.

His experience includes the full range of activities from value assessment/business case development through business process change, software implementation, and joint software development. Paul’s main industry experience includes discrete manufacturing, high tech electronics, semiconductors, and logistics and healthcare.

CONNECTIONS™ Europe

CONNECTIONS™ Europe Keynotes

Please welcome Saul J. Berman from IBM Global Business Services, as a keynote speaker at CONNECTIONS™ Europe

Saul J. Berman, Global Lead Strategy Partner, IBM Media and Entertainment Practice
Global Strategy & Change Services Leader, IBM Global Business Services

Saul J. Berman is the Global Lead Strategy Partner for the Media and Entertainment Practice as well as a Global Strategy & Change Services Leader at IBM Global Business Services (GBS). Prior to joining IBM, Saul was the Global Strategic Change Leader at PwC Consulting. He was also previously with The Boston Consulting Group, and a divisional Vice President with Broadway Department Stores and an Assistant Professor of Management at the University of Southern California.

Dr. Berman has more than 25 years of consulting experience advising senior management of large corporate and start-up organizations. He has directed engagements addressing issues of strategy, organization, and operations. He has worked extensively on issues of competitive positioning, differentiation, new business plans & strategies, new business models, growth, operational & cost improvement, operations/manufacturing strategy, organizational design and enterprise transformation. His clients have included most of the major media companies as well as internet companies, telecommunication companies, consumer goods manufacturers, retailers and automotive companies in the United States, Japan, Europe and Australia.

Dr. Berman holds a Ph.D. in Management and Information Systems and a MBA in Production Systems and Operations Research from the Graduate School of Business at Columbia University in New York. He obtained a Bachelor of Science in Economics at The Wharton School, University of Pennsylvania, Philadelphia.
CONNECTIONS™ Europe

CONNECTIONS™ Europe Keynotes

CONNECTIONS™ Europe is proud to introduce Andreas Mueller-Schubert from Microsoft TV, as a keynote speaker at CONNECTIONS™ Europe.

Andreas Mueller-Schubert, General Manager, Global Solutions, Microsoft TV, Microsoft Corporation

Andreas Mueller-Schubert brings more than 12 years of telecommunications experience to his current role as General Manager of Global Solutions at Microsoft Corporation’s Microsoft TV division. In this position, Mr. Mueller-Schubert is responsible for the deployment of all worldwide customer projects using Microsoft’s TV solutions platform. He is responsible for directing approximately 170 solution experts worldwide and for managing Microsoft TV’s internal and external system integrator partners within their customer deployment sector.

Prior to joining Microsoft TV at the end of 2006, Mr. Mueller-Schubert served in several senior management positions within Siemens’ telecommunications division in Germany and Canada. He is most notably recognized for initiating the Siemens’ telecommunication business in Canada.

Andreas Mueller-Schubert holds a bachelor of science degree in electrical engineering as well as a bachelor of business degree in business administration. He is an active member of VDI Germany, VDE Germany, and the Society of Industry Leaders for Vista Research in New York.
CONNECTIONS™ Europe

CONNECTIONS™ Europe Supporting Organization

The Wireless Industry Partnership (WIP) is a supporting organization for CONNECTIONS™ Europe.

The Wireless Industry Partnership (WIP) is the ‘connector’ for the wireless and mobile industry. We give emerging wireless companies an extra edge in getting products and services to market with our information portal, Go2Market programs and partnerships with wireless organizations and developer programs around the world.
WIP

CONNECTIONS™ Europe Supporting Organization

Wi-Fi Alliance is a supporting organization for CONNECTIONS™ Europe.

The Wi-Fi Alliance is a global, non-profit industry association of more than 300 member companies devoted to promoting the growth of wireless Local Area Networks (WLANs). With the aim of enhancing the user experience for mobile wireless devices, the Wi-Fi Alliance’s testing and certification programs ensure the interoperability of WLAN products based on the IEEE 802.11 specification. Since the introduction of the Wi-Fi Alliance’s certification program in March 2000, more than 3,000 products have been designated as Wi-Fi CERTIFIED®, encouraging the expanded use of Wi-Fi products and services across the consumer and enterprise markets.
Wi-Fi Alliance

CONNECTIONS™ Europe Supporting Organization

OSGi Alliance is a returning supporting organization for CONNECTIONS™ Europe.

The OSGi Alliance is an independent non-profit corporation comprised of technology innovators and developers and focused on the interoperability of applications and services based on its component integration platform. The OSGi Alliance is a worldwide consortium of technology innovators that advances a proven and mature process to assure interoperability of applications and services based on its component integration platform. The OSGi Service Platform is delivered in many Fortune Global 100 company products and services and in diverse markets including enterprise, mobile, home, telematics and consumer. The OSGi Alliance was founded in March 1999.
OSGi Alliance

CONNECTIONS™ Europe Supporting Organization

Please welcome Mobile Monday as a supporting organization for CONNECTIONS™ Europe.

Mobile Monday is a global community of mobile industry visionaries, developers and influentials fostering cooperation and cross-border business development through virtual and live networking events to share ideas, best practices and trends from global markets. Mobile Monday chapters in Germany are established in Dusseldorf and Munich.
Mobile Monday

CONNECTIONS™ Europe Supporting Organization

KeystoneTech Group is a supporting organization for CONNECTIONS™ Europe.

KeystoneTech Group, is a Marketplace Maker for high technology commercialization, serving companies from start-up to Fortune 50 - a nexus linking novel technologies to funding sources, commercial industry and government marketplaces. Target technology sectors include Digital Media, Voice and Data Communications [including IPv6, Mobile and Wireless], Internet, and Data Management.
KeystoneTech Group

CONNECTIONS™ Europe Supporting Organization

The Hong Kong Wireless Development Centre is supporting CONNECTIONS™ Europe.

HKWDC has acquired financial assistance from HKSAR and sponsorship from quasi – government organizations and wireless industry players. HKWDC provides a full range of wireless connectivity services, facilities, information, testing services and business networks to wireless parties, especially for application developers. This can greatly assist them in growing and developing in an increasingly competitive wireless market.
HKWDC

CONNECTIONS™ Europe Supporting Organization

Please welcome the Home Gateway Initiative (HGI) as a supporting organization for CONNECTIONS™ Europe.

The Home Gateway Initiative (HGI) was officially launched in March 2005 and with its worldwide key players in the Home Gateway and broadband home domain is driving the development of specifications of broadband and SOHO access gateways supporting the delivery of multi-play services. Release 1.0 specification was published on July 2006; Release 2.0 is going to be finalized in 2007; Release 3.0 activities have been officially opened in 2Q07.
HGI

CONNECTIONS™ Europe Supporting Organization

CABA is a supporting organization for CONNECTIONS™ Europe

CABA is the only industry association to offer industry intelligence to stakeholders in all areas of home & building automation. CABA's resources cover areas such as HVAC, lighting, security, A/V, communications technologies, energy management and controls. A number of resources are available through the association including iHomes & Buildings magazine, research, CABA's forums, CABA's monthly eBulletin, Information Series reports, Event Reports and the CABA web site.
CABA

CONNECTIONS™ Europe Supporting Organization

Please welcome Broadband Services Forum as a supporting organization for CONNECTIONS™ Europe

The Broadband Services Forum is an international industry resource that provides a forum for dialogue and development, along with the tools and information to address the fundamental business and technology issues vital to the growth and health of the broadband industry. The Broadband Services Forum fosters collaboration across the broadband value chain including content, service and technology providers.

Broadband Services Forum

CONNECTIONS™ Europe Supporting Organization

ADMIN Ltd. is a new supporting organzation for CONNECTIONS™ Europe.

ADMIN Ltd. is a St. Petersburg based consultancy focused on mobile content & Internet industry development, electronic commerce, high-tech investments, business consulting and international cooperation. ADMIN Ltd. is an organizer of annual Mobile VAS Conference (www.vasforum.ru), Mobile Monday St. Petersburg (www.mobilemonday.ru) and other IT events. The Russian Mobile Content Market Report is also available.
ADMIN Ltd.

Using technology to liberate not enslave our children

These are strange times for parents. We live in a world where a child is mysteriously snatched from a room whilst her holidaying parents eat dinner a few metres away whilst teenagers shoot each other in the inner cities. We know rationally that there isn't a child snatcher or gun-toting `hoodie` hiding round every corner. But we increasingly behave as if serious threats to our children are all around us, just waiting to catch us unawares.

The everyday stuff of our own youth such as walking to school alone, playing in the streets, crossing the town unaccompanied or just going off to play with friends now seems to pose huge dangers.

A recent report from the UK Children's Society warns that parents' fears about safety are stopping children from playing outdoors unsupervised. And, unsurprisingly it shows how today's parents are not giving their children the freedom to roam that they enjoyed in their own childhoods in the 1970s.

Why are we such paranoid parents? Why do we worry at the idea of our confident, outwardly worldy mobile using, Powerpoint presenting, technology-savvy kids even walking on their own to school - when we were making my own way at even younger ages?

Maybe it's because we live in a society where it’s difficult to gets things in proportion and where insecurity is pushed at us from all directions.

With a background of car alarms, police sirens and the continual media diet of bad news and sensationalism we are driven to form a particular view of reality – that seldom accords actually with our own experience. What we know rationally to be the exception feels more like the norm producing an unrealistic view of the potential threats that may surround us.

But because we care most about our children, we worry most about them. And in the UK the amount of time we spend worrying about them is increased by a vigorous nanny state foisting ever more intrusive health and safety legislation upon us, fear of litigation and a growing compensation culture.

This means that parents and teachers alike are less and less likely to take the responsibility for supervising sports days, school trips or even neighbourhood activities. It’s this that further isolates children from the sort of life experiences we enjoyed. Climb a tree? You can’t be serious - just think of the potential consequences!

Of course there are real worries - like danger inherent in the vast increase in traffic in the last 30 years. It’s true that scores of people are injured by hit and run drivers every single week in our major cities. But then of course our offspring aren’t being conscripted to be slaughtered in vast numbers in world wars or dying en masse of childhood diseases either.

What’s the root cause that makes our generation of parents seemingly too fearful to let our children play out of our sight? Maybe it's because we might know a lot about the security situation in Afganistan and the current vagaries of the financial markets but do we don’t know who lives in our street. We’re isolated and isolation breeds suspicion. And so much of our isolation has been made possible by the technology that we surround ourselves with – cars, radio, television, video games and so on – that put up barriers to real communication.

We see this effect even in our traditional attitude to the systems choose to monitor our own homes. Such systems certainly serve to isolate us further, so it’s a moot point as to how effective they are. Sirens so loud that they are designed to attract the attention of patrolling police vehicles heighten anxiety and systems link directly to remote control centres by passing those around us. That is until the latest false alarm causes the police to refuse to attend and further activations further increasing our fear.

The last thing we think of these days is involving our neighbours in the protection of our property and, by implication, our families. Yet by using the right technology we can start to reestablish the sense of trust and mutual dependency that underpins the strongest of communities. Indeed it can give us structure and information that will keep the worst of our anxieties at bay.

We can’t return to past but we can take advantage of what’s available now to try and restore some balance in our lives. For instance, the same technology that often serves to divide us can be a platform to unite us. If an automated internet-based system can send you or your neighbour a simple text or drop you and email when a family member returns home and knowing this or you or your neighbour can call round or even have a quick check in a web cam to see what they are up to when they return, we might start worrying a whole lot less and begin to convince ourselves that we shouldn’t become prisoners of our own paranoia. Then we might be more ready to take the risks that will enable our children to be released from being enslaved by a sedentary existence that extends little beyond the confines of the car, computer and television.

Time for us to work together so our children to get out and about again. Just don’t get me started about the threat from virtual worlds…

Remote Home Monitoring

Summary information from Day 2: CONNECTIONS™ May 2007, hosted in Santa Clara, CA

Is the market for remote home monitoring real, or is it just niche play? This panel discusses go-to-market strategies that are working, who is buying, why, and what's next.

Brad Bridges, Assistant Vice President-Business Development, AT&T
Bill Diamond, President, Xanboo, Inc.
Andrew Hartsfield, CEO, WiLife, Inc.
Kevin Meagher, CEO, Intamac Systems Ltd
Duane Paulson, President, Sequel Technologies, LLC
Reza Raji, Founder and CEO, iControl Networks, Inc.
Moderator: Bill Ablondi, Director, Channel Research, Parks Associates


Specific Questions to Address:

• Will this market gain traction with mainstream Internet users?
• How critical is video surveillance to the service offering?
• What are the applications that motivate consumers to buy self-monitoring systems today
• Is security the main application, or is it pet watching or monitoring elderly family members?
• Is monitoring the elderly the looming "killer app”? What will be the most popular applications?
• What has been the experience of service providers in this market? With revenue possibilities seemingly low to moderate, how do providers view monitoring services?
• Will self-monitoring services complement or displace professional security monitoring services?
• The big security monitoring firms are not going to sit still and watch their revenue erode.
• What will be their reaction to the activity in self-monitoring?
• What is the best way to penetrate the vacation and second-home market?

The panelists in this session had a wide-ranging discussion on the market opportunities for remote home monitoring and control. Not all were addressing the market in the same manner. Intamac is working with service providers, e.g., British Telecom and Bell Canada, to turn the business of security monitoring on its head. Duane Paulson a seasoned security systems executive, explained how Sequel Technologies will work with security systems installers to provide monitoring capabilities rather than forcing end users into a monthly service contract. Andrew Hartsfield said that most people are motivated by security concerns to buy a WiLife system, but once installed, the camera(s) are used for everything from watching pets while at work to keeping an eye on potential parking spaces in front of a city apartment.

Xanboo has been pursuing the home monitoring market for many years and has tweaked its systems so they can be sold on a stand-alone basis or as part of a service package, as AT&T is doing. Brad Bridges of AT&T said he was pleased with the adoption of their Home Monitor package and thought that Parks Associates’ forecast was too conservative. Reza Raji of iControl agreed, stating that his firm was on the verge of announcing several partnerships with service providers that will build consumer awareness and expand the market.

Social Video and User-generated Content

Summary information from Day 2: CONNECTIONS™ May 2007, hosted in Santa Clara, CA

What will be the ultimate impact of the social video movement? This panel shares views and analysis of what Web 2.0 will really mean to the video space once the hype subsides.

Huan C. Le, Vice President, Business Development, Break.com
Fred McIntyre, Senior Vice President, AOL Video, AOL LLC
Matt Sanchez, CEO & Co-founder, VideoEgg, Inc.
Garrick Schmitt, Vice President and National Lead, User Experience, Avenue A Razorfish
Michelle Wu, CEO, MediaZone
Moderator: John Barrett, Director, Research, Parks Associates

Specific Questions to Address:

• How important is the consumers’ role in social video? Do they provide more than just a way for sites to by-pass copyright laws?
• Will advertisers pay top dollar for cheaply produced, user-generated content?
• Will advertising on user-generated content always be discounted against commercially produced content?
• How blurry will the line be between commercial and user-generated video?
• What will be the long-term impact of social video on the entertainment business?

The rise of video sharing has surpassed even the growth of social networking sites. Panelists discussed the role of the consumer in social video, the opportunities and challenges in monetizing social video, and the future evolutionary path of social video. John Barrett introduced the topic by discussing the types of content that users are viewing on video-sharing sites. There is a misconception that the bulk of videos being viewed on video-sharing sites are user generated. According to Parks Associates’ research, the most popular forms of content being viewed on video-sharing sites are professionally created — 76% of consumers surveyed watch Movie Previews, 75% watch TV Clips, and 72% watch Music Videos.

The panelists felt user-generated content will play a key role in consumer services moving forward. The current emphasis on content, however, will gradually transition to an emphasis on community. Moreover, the revenue potential of the space will eventually push players to resolve the digital rights management issues surrounding the use of commercial content in user-generated content.

Next-steps for Video: The Consumer’s in Charge!

Summary information from Day 2: CONNECTIONS™ May 2007, hosted in Santa Clara, CA

The role of video providers is evolving rapidly. This panel discusses emerging technologies and business models for video delivery through a variety of networks.

Mary Coller Albert, CMO, Movielink, Inc.
Mark Bowles, VP, Business Development and Corporate Marketing, Staccato Communications
Patrick Harr, President, Streamload
Keith Kocho, Founder, ExtendMedia, Inc.
Ed Lee, Vice President of Business Development, Akimbo
Jim Taylor, Chief of DVD Technology and General Manager, Advanced Technology Group, Sonic Solutions
Moderator: Kurt Scherf, Vice President, Principal Analyst, Parks Associates

Summary of this session:
Hollywood studios, television networks, and aggregators of user-generated video content have made significant strides (and news) in experimenting with Web-delivered video content. Kurt Scherf discussed these trends in his opening remarks, stressing the following points:

• The television networks have realized that the Web is a friend – and not a foe – in their efforts to build and retain primetime audiences. They have not experienced cannibalization from their regular audiences, and online content can supplement their ad revenues.
• Download-to-burn will be a key area to watch as Hollywood considers whether to take a full-fledged leap into digital distribution. This distribution method still keeps content on tangible and copy-protected DVDs but is more efficient for retailers and the studios.
• Parks Associates is watching key trends in this space, including convergence between Web video and social networking, mobile content as a complement to both traditional and Web video content, and the role of aggregators, including such TV-on-Internet companies as Brightcove and Joost.

The panel represented a broad spectrum of actors in the online video and value-added services space. Mary Coller Albert from Movielink discussed the continued push by the studios to embrace online distribution. Mark Bowles from Staccato Communications indicated that wireless personal-area networking solutions such as ultra-wideband will increase consumption of mobile video content. Patrick Harr at Streamload predicted that 70% of all data kept by consumers will be user-generated content, making storage an important issue. Keith Kocho from ExtendMedia indicated that the costs to deliver video over the Internet have dropped tremendously, fueling the growth of online distribution. Ed Lee at Akimbo said that they have been surprised by the lure of niche content, including anime and other culturally specific programming. Tim Hogan from Sonic Solutions stressed the importance of secure delivery of content. The panelists agreed that user interfaces will change radically as content and service providers deploy a wider array of video offerings.

Gaming Gets Connected

Summary information from Day 2: CONNECTIONS™ May 2007, hosted in Santa Clara, CA

This panel discusses new online gaming trends such as social/casual gaming, virtual worlds, game advertising, connected consoles, and their potential impact on the digital living industry.

Dr. Lars Buttler, CEO, Trion World Network, Inc.
Rick Howe, Executive VP, Sales & Marketing, Zodiac Interactive
Romain Nouzareth, Founder and CEO, Boonty
Julie Shumaker, Vice President, Worldwide Sales, Double Fusion, Inc.
John Welch, CEO, PlayFirst, Inc.
Moderator: Yuanzhe (Michael) Cai, Director, Broadband & Gaming, Parks Associates

Specific Questions to Address:

• What are some of the key trends in the connected gaming industry? How can we unleash the real potential of broadband gaming?
• What justifies the tremendous interest in game advertising? What are the remaining roadblocks?
• What lessons have we learnt from the launch of this new generation of consoles? What are the impacts of connected consoles? Will consoles aggregate even more wealth, or will gaming revenue begin to shift away to other platforms?
• Have the entry barriers to gaming industry been lowered? What are the indications to content providers, service providers, and device makers?
• What are the promises of avatar/virtual-world types of games? Are they just a fad?
• What’s Game 3.0? What keeps the industry excited?

Michael Cai began the panel by introducing some key industry trends and figures.

• Many new business models have emerged on the PC platform and now are migrating to other platforms, including microtransactions, in-game advertising, multiplayer gaming, and casual games.
• Middle-market gamers are becoming increasingly important because they will account for the near-future growth of the market.
• Social gaming is becoming the norm, and gamers are looking for community, not just content.
• Consoles are becoming connected consumer electronics, threatening STB and CE manufacturers.
• There are 60 million households with set-top boxes, yet the platform has not received much attention in the mainstream gaming industry.

Panelists added their own observations of the industry.

• Internet connectivity is empowering the gamer audience and game developers — there wouldn’t be a Diner Dash success if not for the Internet.
• Advertising is very important as “0” is the best consumer price point
• Dedicated consoles are going away, and this current cycle may as well be the last.
• Innovations first happen on the PC because the PC platform is an open garden.
• Gaming needs to fit in with the consumer lifestyle. Wii is teaching the industry an important lesson.
• Although game advertising is promising, there are several hurdles.

In terms of STB gaming, Zodiac believes the industry will become stronger as the platforms become more robust and industry standards such as OCAP takes shape. STBs can support games like Wii Sports, and unique and currently popular add-ons like guitars and dance mats are possible. Zodiac is also introducing free ad-supported games to the STB platform.

Game advertising, although promising, still faces a few challenges, according to Julie Shumaker from Double Fusion.

• Advertising needs an open economy to thrive. The current state of industry is unhealthy. Platforms are fragmented and advertisers are forced to negotiate with multiple ad-serving companies for the same game. The process of buying ads is not simple enough.
• There’s a lack of standards in ad formats and impression accounting.
• There’s also a lack of games that allow the advertisers to not intrude the gaming experience that gamers already paid $50 for.

Advertising with casual games is a different story. For instance, Zodiac has games with natural break points for advertisers. Double Fusion believes casual games are important for advertising, but advertisers can get those eyeballs elsewhere, such as Reader’s Digest and Oprah. Video games reach the hard-to-get 18-34 male audience and are where big CPMs come from.

Casual gaming is big business according to the panelists. Playfirst has sold more than 1.5 million units of Diner Dash online, with 70% of sales to female adult gamers and another 1.2 million units on mobile phones. QQ from Tencent in China has more than 28 million peak simultaneous users.

For the future, gaming will be a combination of pre-programmed content and always-on, on-demand, and live events. There are already live events in virtual worlds such as Second Life, and as the audience grows, it could be viable advertising platform. Madden NFL already set the record with more than 1 million guys playing online together, and that’s bigger than some cable TV networks.

Many new companies are coming to the gaming industry, such as service providers, PC companies, and media companies. TV companies are coming to Trion World to check out their technologies. One of HP’s top five server customer is a big online gaming company. Service providers also want to stay competitive with gaming service offerings.

Success Stories in the Connected Home

Summary information from Day 2: CONNECTIONS™ May 2007, hosted in Santa Clara, CA

Are we there yet? We've been talking about the connected home for more than two decades. It's evident from our research that there are few connected homes, but the landscape is changing. Widespread use broadband Internet access, familiarity with digital technologies, and technology market movers looking for the NEXT "next big thing" all add up to a market on the move. This panel will discuss what's working, why, and when the market will catch up with the technology.

Ken Fairbanks, VP Sales & Business Development, SmartLabs, Inc.
Doug Hartman, VP Global Sales, Corinex Communications Corp.
Kumu Puri, Global Managing Director, Consumer Electronics, Accenture
Robert Rodenbucher, Business Development Director, AwoX
Eric Smith, Chief Technical Officer, Control4
Moderator: Bill Ablondi, Director, Channel Research, Parks Associates

Specific Questions to Address:

• Which vendors have been successful in building sales of connected systems?
• Which manufacturers are the market movers that can spur adoption of control systems to the next level — GE, Honeywell, Cooper Electric, SquareD (Schneider), Leviton, Intel, Cisco, Microsoft?
• Have multiroom, distributed entertainment systems stimulated adoption of other control and management systems?
• What surprises have occurred as new solutions have made their way to market? What applications for the original solution were not considered?
• Where was success in the last 12 months, and where will new opportunities be in the next year?
• Most people are unaware of current capabilities of low-cost control systems. What are the most effective ways to build awareness?
• Luxury homes typically have a wide array of control and management systems installed. What lessons, if any, have been learned in the high-end market that translate into broader markets?
• Will higher energy costs drive adoption of home management systems?

This session began with a review of Accenture's research to understand what factors drive high performance in business. Three building blocks were discussed: 1) Market Focus and Position – deciding where and how to compete, 2) Distinctive Capabilities – doing business in a way that creates value, and 3) Performance Anatomy – developing a "winning mindset.” Ken Fairbanks explained how SmartLabs is organized into three groups to focus on product development, online sales, and technology licensing. Each group has a clear mission, yet all three work together synergistically. Eric Smith pointed to the seasoned executives in Control4 that have guided it to become one of the most popular control suites among electronic systems contractors.

The discussion moved to the importance of reliable technology as a key to success in these early stages of the connected home market. Doug Hartman pointed out how Best Buy chose its power line technology for the ConnectLife.Home package introduced at 2007 CES. Robert Rodenbucher explained that his company's modular architecture and internationalized user interface are the keys to its success in developing software and electronic products for license to consumer electronics manufacturers.

Triple-play Support: The View from the Home Network

Summary information from Day 2: CONNECTIONS™ May 2007, hosted in Santa Clara, CA

This panel addresses the role of residential gateways, advanced CPE, and service provisioning and networking maintenance tools in reducing support costs for the service provider and enhancing the bottom line.

Duncan Bees, Deputy Chairman of the HGI Quality of Service Working Group, PMC-Sierra, Inc. Wayne Davis, Technical Advisory Board, Peak8 Solutions
Richard Nesin, Vice President, Marketing, CopperGate Communications
Tushar Saxena, Director, Home Networking Technologies, Verizon Communications
Michael Stich, Director, Service Provider Strategic Marketing, Texas Instruments
Ofer Vilenski, CEO, Jungo Software Technologies
Moderator: Kurt Scherf, Vice President, Principal Analyst, Parks Associates


Panelists discussed the required features of an end-to-end broadband and in-home network ecosystem as managed by a service provider. Kurt Scherf introduced the topic by indicating Parks Associates’ research predicts service providers will manage upwards of 30% of the home networks, via smart residential gateways, deployed by year-end 2010. Scherf further indicated that if the industry is to provide sufficient support for advanced services, it must build solutions to address the following issues:

• CPE installation and configuration;
• Service provisioning;
• Diagnostics and monitoring;
• Remote support;
• Telephone support; and
• On-site support.

The panelists represented a diverse spectrum of companies involved in the end-to-end management of broadband and home network services. Wayne Davis, representing Peak8 Solutions, indicated that they are focused on solutions for both the customer as well as the help-desk agent. Rich Nesin at CopperGate discussed QoS monitoring that is made possible through home networking chipsets. Michael Stich at Texas Instruments discussed the company’s DSP-based monitoring and measurement solutions, notably PIQUA™. Ofer Vilenski from Jungo discussed the role of residential gateway software in monitoring, management, and easing service provisioning. Duncan Bees from PMC-Sierra discussed the Home Gateway Initiative (HGi) and its goal of helping service providers deploy more standardized management and provisioning solutions. Tushar Saxena from Verizon said that the service provider’s biggest challenges today are installing broadband and home networking services and platforms with minimal expense; ensuring interoperability between different customer premise equipment; and making troubleshooting more efficient.

Clearly, service providers face growing challenges as they take on the responsibility for deploying a growing number of converged services. Ofer Vilenski mentioned that customer support costs in the first year of a subscriber’s service to a triple-play service can often exceed the dollars spent on the home networking equipment. The panelists believe that there is no firm business model for monetizing support at present, fearing that a fee-based business model may alienate customers today. Instead, enhanced customer support could actually be a good differentiator for service providers to set themselves apart from their competitors.

LG and Samsung Phones Lead in Advanced Mobile Entertainment Features

LG and Samsung are the top mobile-phone brands in the U.S. for advanced entertainment features, leading competitors Motorola and Nokia in adoption of phones with support for mobile TV, music, and games, according to Parks Associates recent research.

Among owners of LG and Samsung phones, 12% and 11% reported having mobile TV features, respectively, compared with 8% of Motorola owners and 0% for Nokia owners. Among the four leading brands, Motorola ranks third overall, and Nokia lags significantly in advanced entertainment features. Only 6% of Nokia phones support purchase of music tracks, compared with 22% and 20% of LG and Samsung phones, respectively.

Primary Research of U.S. Home Builders Quantifies Value of Electronic Amenities in New Home Construction

Parks Associates and Hanley Wood’s DIGITAL HOME announce the 2007 edition of their highly successful Builder Insights, an ongoing project featuring an annual primary research study of U.S. home builders.

In Builder Insights 2006, Parks Associates and Hanley Wood determined that many U.S. home builders are currently offering electronic amenities in their homes. Further, despite a soft home building market, the market value of these systems reached $8.9 billion in 2005 and was on target to grow 5-6% in 2006.

Connection Research Announces Cooperation with Parks Associates

US-based market research firm Connection Research and Parks Associates today announced a cooperative agreement where Connection Research will sell Parks Associates’ research reports and studies in Australia.

Connection Research will be a reseller of all of Parks Associates’ products and services, including the full range of the company’s digital lifestyles, digital media habits, digital health and electronic gaming reports. The two companies have also agreed to cooperate on research activities and provide assistance to each other in developing cross-regional products.

For more information on Connection Research, please visit http://www.connectionresearch.com.au

Sprint Disconnecting Customers Because of Excessive Customer Service Calls

Sprint is choosing to disconnect a group of wireless customers for excessive calls to the customer service, citing that Sprint is unable to serve them adequately. To view the letter sent to customers, click here: http://news.com.com/2300-1036_3-6195014-1.html

Game Advertising Spending to exceed more than $2 Billion in 2012

Game advertising spending in the U.S. will grow from $370 million in 2006 to more than $2 billion in 2012, according to Electronic Gaming in the Digital Home: Game Advertising, a new report from Parks Associates. Over that time, game advertising will achieve a compound annual growth rate (CAGR) of 33%, much higher than that of other major advertising media, including TV, radio, print, and the Internet.


“Advertising in electronic games had an average monthly household expenditure of less than 50 cents in 2006, while broadcast TV was at $37, meaning advertisers are not using the gaming medium to its full potential,” said Yuanzhe (Michael) Cai, director of broadband and gaming, Parks Associates. “If executed correctly, game advertising can provide a win-win solution for advertisers, developers and publishers, console manufacturers, game portals, and gamers.”

Electronic Gaming in the Digital Home: Game Advertising paints a complete picture of the fledging game advertising industry. The report includes analysis and forecasts for different game advertising models and provides profiles of 26 key players in the game advertising industry and comprehensive consumer perspectives.

Carriers as "Experience Providers"

Summary information from Day 2: CONNECTIONS™ May 2007, hosted in Santa Clara, CA.

Carriers as "Experience Providers"

This panel addresses the new focus on consumer experiences with an examination of changing business models, enabling solutions for service providers, and fixed-mobile convergence trends.

Jay Deen, Vice President of Technology, Casero, Inc.
Kai Hackbarth, Requirements Chair, OSGi Alliance
Keith Higgins, VP, Marketing, Stoke, Inc.
Ellis Lindsay, Home Networking and Digital Lifestyle SME, Alcatel-Lucent
Kirk Munroe, Director, Product Management, Radialpoint
John Ulm, Fellow of the Technical Staff, Connected Home Solutions, Motorola, Inc.
Moderator: Yuanzhe (Michael) Cai, Director, Broadband & Gaming, Parks Associates

In 2006, U.S. broadband penetration reached 50% while bandwidth costs year over year have been plummeting. The next step is for service providers to move beyond selling raw bandwidth and start focusing on smart bandwidth and smart-home applications. They need to leverage the multiple screens they own and deliver cross-platform experiences based on convergence networks. The panel discussed this transition, including what’s happening and what’s to come. The panel also addressed the opportunities for hardware and software solution providers. For instance, a residential gateway is likely to be a key enabling platform for service providers. France Telecom has shipped more than 4 million LiveBoxes to date, and their success with the “unik” fixed-mobile convergence phone service is partially because of the large installed base of LiveBoxes.

Bundling is another megatrend in the carrier market. Cable MSOs are killing telcos in certain markets due to their triple-play success. Fifty percent of Comcast’s new broadband subscribers in Q1 2007 churned from telecom carriers. Consumers are likely to focus first on discounts and on-bill convenience but will eventually demand convergence features. Carriers need to make sure they educate consumers along the way.

Right now, the most successful VAS offerings on the broadband platform are still PC and home network security, although other services are gaining traction. According to Radialpoint, 15% of customers for their carrier clients buy security services from broadband carriers, and it has become a sizable revenue stream. The next step is to provide network-based backup, sharing, and community services. Exclusive content may also be a differentiator, and major carriers have begun investing heavily in content.

Another topic discussed was that consumers don’t always need to foot the bill for the services they receive. Carriers can become arbitrators between consumers and businesses to provide “validated bandwidth” in a similar way to restaurants validating parking for their patrons. However this requires carriers to know more about their subscribers and leverage that knowledge in order to deliver targeted advertisements relevant to consumers. Carriers have not monetized user information very well and have a long way to go before they can catch up with Google and other over-the-top providers. Over-the-top is definitely a threat, but quality will always be important – and carriers can provide that quality with their managed network. Carriers have also begun to use more white-label solutions instead of partnering with companies like Yahoo! and MSN for their Internet services.

IMS will be an important platform if the industry is to realize this vision of experience-based services. Carriers need to improve both the front and back ends of their platforms. Right now the technology is still at an early stage, but investment in the next few years will be significant. IMS will enable carriers to provision new services on the fly. Right now developers have demonstrated only limited applications, but IMS is like IP — it has unlimited potential. However, it will take many years for carriers to transition to the IMS platform. Having the ability to provide both wireless and wireless services will also be extremely important for large carriers. The cell phone will be the key for consumers to access other personalized services, and with more and more broadband-enabled cell phones on the market, broadband solution providers need to begin addressing this platform. Universal parental control and security will also be important. In the end, if carriers can make consumers’ lives easier and more comfortable, they’ll make money.

Delighting the Consumer: Exceeding Expectations for Digital Lifestyles Enhancement

Summary information from Day 2: CONNECTIONS™ May 2007, hosted in Santa Clara, CA.

Delighting the Consumer: Exceeding Expectations for Digital Lifestyles Enhancement

This panel brings together companies that are leveraging consumer research, marketing prowess, and technical expertise to create new applications, services, and devices for end users to enjoy. They will discuss key steps in developing digital lifestyles solutions, from concept to the store shelf.

Ted Feldman, President/Founder, Neosonik
Hestia Lei, Executive Director, U-verse Member Marketing & Programmer Management, AT&T, Inc.
Joe Menard, Corporate Vice President, Consumer Business, AMD, Inc.
Moderator: John Barrett, Director, Research, Parks Associates

Hestia Lei spoke about AT&T’s rollout of its U-verse television services. The service is now available in 18 markets, with a total of 20,000 subscribers, and key features include a picture-in-picture feature that works with any television because it is a tunerless solution. She also noted that the U-verse solution allows for up to four streams to be recorded on the DVR, a significant difference between the AT&T service and other television services. Lei said that the marketing for U-verse has also been unique in that they are leveraging in-home demonstrations with good success. Whereas a satellite marketing effort (in-store, for example) requires on average 2.5 visits to get a customer to subscribe, AT&T is getting subscribers “on the spot.” AT&T is also looking to strengthen its U-verse community of subscribers via a magazine and a special Website.

Joe Menard began his presentation by noting that today’s bandwidth is currently a “non-delightful experience” for consumers. He called for further improvement in in-home connectivity by developing simple solutions that are truly plug-and-play. This improvement, he said, will require open standards. His call to the industry for delighting the consumer includes five key mantras:

• Things should work as promised;
• Premium content should be made easily available;
• Bandwidth needs to be improved;
• The network should have a focus of quality-of-service; and
• The solutions should be easy to understand and buy.

Ted Feldman from Neosnik said that one key consumer desire is ease-of-installation and use with such solutions as home theater and multiroom audio. Retailers and dealers are constantly turning away customers who simply want wireless speakers for their video and audio entertainment purposes at home. Up till now, he said, these solutions simply haven’t been available. However, his company has developed a wireless speaker system that has solved the critical engineering issues in order to assure an excellent sound experience. Ensuring the transmission of audio at just the right amount of time (with the minimum of delay) is absolutely essential to guaranteeing that the solution meets customers’ expectations.

Summary information from Day 2: CONNECTIONS™ May 2007, hosted in Santa Clara, CA.

Lunch Keynote — Intersection of Art and Science: The Digital Disruption of Entertainment

Lunch Sponsored by HomePNA

Presented by: Daniel Scheinman, Senior Vice President and General Manager, Cisco Media Solutions Group, Cisco Systems, Inc.

“We stand at one of the most exciting times in our industry,” said Scheinman as he began his address. The disruptions to the advertising, media, and communications industries, brought by growing broadband Internet access, the digitization of content, and the empowerment of the consumer, are building (and growing) a $1.2 trillion business. Industries, he noted, are being reshaped and creating enormous economic value.

Scheinman covered three main areas in his keynote address: 1) What the recent disruptions mean for the technology industry; 2) What the impact will and should be for media companies; and 3) Cisco’s role in shaping the industry.

As you look at previous eras of major technological innovation, we are just now exiting a the “WAN/LAN” timeframe and entering into a new age of consumer empowerment. This new area will be characterized by very different flows of innovation, said Scheinman. Previously, you could count on technology development flowing from universities, to money center banks, to enterprise, service providers, and finally the consumer. Now, he says, many of today’s innovations are initiated at the consumer and service provider space, and are just now being adopted by the enterprise. Two relevant examples he used were high-definition television and community-oriented networking. Cisco today has 1,500 employees using a third-party community networking site such as Facebook because the company has not yet developed its own internal community solution.

This new age of consumer empowerment will mean even stronger growth for companies in the technology space, said Scheinman. If you look at projections for worldwide revenues for communications, IT, and electronics purchases, it’s a trillion-dollar market, growing at about 5% annually. When you add in the consumer, he expects growth to jump to 10% annually, driven in large part by more rapid-than-expected surges in broadband growth in India and China. “Consumer-oriented technology,” he noted, “will become an important center for profits and revenue.”

The challenge that the empowered consumer brings to content creators is acute, Scheinman noted. Not only are the expecting higher-quality offerings, but content enjoyment is characterized by a massive increase in content availability, plus ever-increasing freedom in how and where consumers enjoy it. The increasing fragmentation of time and space is a huge challenge for the content industry, Scheinman noted, because they lack the fundamental ability to truly connect one-one-one with their audience. In the old days, the connection was generally made at retail or other third-party outlets, leaving the studios to dictate the terms in which they would distribute content. Now, the industry is at a distinct disadvantage in the consumer-as-center-of-the-world model in which we find ourselves.

Two fundamental questions that the content industry needs to answer are 1) What do people want; and 2) Where will they find it? Scheinman says that the answer to these questions lies in a significant opportunity – building communities around content. This is nothing new. After all, we had the water cooler back in the days when the broadcasters and studios were dictating the how and when terms of content enjoyment. Today, younger consumers especially are showing the first indications that entertainment tomorrow will be less about “collecting” than “community.”

Cisco’s role in the new era of community and personalized distribution of content will be significant, Scheinman predicts. The opportunities for the company in the new era lie in three specific areas – Distribute, Connect, and Discover. With its next-gen IP network, Cisco has a strong position in the distribution space, he notes. Now, with Scientific-Atlanta and Linksys as Cisco brands, Scheinman notes that consumers stand about a 50% chance of connecting through the Internet with either of those to companies’ products.

It’s the Discover phase that Dan says is the big challenge and opportunity for Cisco. The company that wins in providing best-of-class solutions for Discover will be solving two fundamental challenges facing the industry:

• How does anyone find anything (and why should they have to work to do so); and
• How do companies build a brand?

One relevant example that Scheinman discussed to answer these to questions is the work that the company did in helping the National Hockey League develop its community-oriented Website. One key and surprising finding for the NHL was the realization that far more than 10% of its fans are female, shattering preconceived notions about what the NHL’s core fan base looks like. These findings prove that successful online community development can lead to surprising results and to business growth, Scheinman said.

In conclusion, Scheinman noted that Cisco has an incredible presence at retail with Linksys and with the service provider community with Scientific-Atlanta. “If we can build the third leg with the content owners,” he said, “we’ll be very successful as a company.”