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.”

Making High-Definition Home Networks Easy: A Special Session Hosted by Pulse~LINK

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

Making High-Definition Home Networks Easy: A Special Session Hosted by Pulse~LINK

Can networking HD devices actually restore simplicity for the consumer? What are the value propositions with enabling whole-home entertainment networks? A panel representing content and service providers, CE companies, and others describe HANA’s latest progress in simplifying and enhancing the HD experience for consumers.

Zephra Freeman, Home Networking Business Development Manager, Digital Interface Business, Texas Instruments, Inc.
John J. Kang, Sr. Director of Business Development, Samsung Electronics Co.
Sheau Ng, Vice President, Consumer and Broadcast Technology, NBC Universal
Paul Pantera, Sr Software Engineer, 4HomeMedia, Inc.
William (Bill) Rose, President, WJR Consulting Inc.
Bruce Watkins, Co-Founder, President/COO, Pulse~LINK, Inc.
Moderator: Harry Wang, Senior Analyst, Parks Associates

Pulse~LINK sponsored this session to discuss HANA's approach in helping consumers better enjoy HD entertainment in their homes. The session featured six panelists representing CE manufacturers, content owners, 1394 chipset makers, networking silicon manufacturers, middleware developers, and integration service providers.

Harry Wang started the session by describing consumers' frustration over the setup and delivery of networked multimedia entertainment in the home and turned to the panelists for clarification on HANA's solutions. The panelists answered questions specific to their components of HANA's specifications, how the solution works, and the benefits for consumers as well as service providers and CE manufacturers. Bill Rose from WJR Consulting emphasized the benefits to consumers of one remote control for all TVs in the home. Paul Pantera from 4HomeMedia explained how his company's solution enables the same on-screen menu for every TV in the household and that OCAP standards from the cable industry will make the UI more easily developed as the HANA framework also supports OCAP standards. John Kang from Samsung showed a remote control model from his company and said that HANA helps simplify consumer use cases with one remote/one UI concept, thus encouraging sales of networked CE nodes. Zephra Freeman from TI explained the benefits of using 1394 as a reliable in-home connectivity solution with superior throughput and a proven content protection scheme, DTCP, recognized by almost all industries, including cable. Bruce Watkins added a chipset maker's perspective, that quality-of-service features of the company's UWB chipset provide guaranteed bandwidth for video streaming in the home and the chipset design is flexible enough to be compatible with either coax or Ethernet infrastructure. Sheau Ng from NBC Universal elaborated that the content industry wants and is ready to support a solution with that is simple to use but has robust security features, all of which HANA has demonstrated.

All panelists agreed that HANA is a fast-track approach with a narrower scope than Digital Living Network Alliance (DLNA). Rose commented that HANA stands to solve the most immediate needs of consumers in their living room and this focused approach will earn support from consumers. Watkins pointed out that all six companies on the panel also have seats with DLNA but they see special value in HANA's approach in tackling the critical aspect of living room entertainment. Freeman added that many components of HANA are proven technologies and they do not intend to re-invent the wheel for potential adopters. Rose provided updates on recent HANA developments – that the promoting member companies and working groups are working diligently to test technology and interoperability and that final standards will be ready for adoption in late 2007.

Apple® iPhone May Struggle Initially to Cross the Chasm

High price point and doubts about utility of a convergence platform could inhibit early adoption

The Apple iPhone may find strong demand among early-adopter technophiles, but building a larger market may be difficult initially, according to "The iPhone: A Consumer Perspective." This new white paper from Parks Associates includes primary consumer data from "Mobile Entertainment Platforms & Services (Second Edition)," a 2007 survey of 2,000 U.S. Internet users. The survey finds only 3% of these consumers have a strong interest in purchasing the iPhone at its $499.99 price point and two-year contract.

"The underlying drivers for converging music, multimedia, and communications capabilities in a device such as an iPhone are certainly prevalent in today's market," said Kurt Scherf, vice president and principal analyst with Parks Associates. "However, the high price point may prevent the iPhone from achieving greater adoption over the short term. It may be an early-adopter product that appeals to technophiles but initially leaves other interested users on the outside looking in."

"The iPhone: A Consumer Perspective" is a free white paper available for download at http://www.parksassociates.com/iphone.htm

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.

Opening Keynote — The Digital Lifestyle: Under Construction

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

Opening Keynote — The Digital Lifestyle: Under Construction
Presented by: Greg Jones, General Manager, DSP Systems Strategic Marketing, Texas Instruments

Beyond the four walls of the digital home is a huge opportunity for delivering content anywhere, anytime – the ultimate Digital Lifestyle. Explore how consumers, service providers, and technology enablers will work together to deliver the vision of the emerging digital lifestyle that is being fueled by new advances in digital signal processing.

Texas Instruments’ portfolio of digital signal processing (DSP) and analog technology solutions represents a broad spectrum of digital lifestyle categories, including communications, digital entertainment, networking, and telemetry applications. Greg Jones, who serves as the general manager for DSP Systems Strategic Marketing, highlighted the importance of the DSP in building a wider array of needed consumer solutions, noting that DSP enables many of the services important to the digital lifestyle, including DSL.

Jones sees a larger role for DSPs in the future across a wide array of emerging consumer applications. Digital entertainment is obviously going to be a significant area as digital signal processing will be necessary in managing bandwidth use and encoding and decoding the many different video codecs and formats. Jones said that there may be upwards of 30-40 different codecs to manage.

In addition, Jones brought up examples beyond entertainment where signal processing will play a role in improving learning and communications (instant translations during phone calls) and transportation (the nearly automated automobile). He also mentioned digital healthcare applications as an opportunity for TI to expand its role. Finally, he discussed how DSP technologies will help service providers offer a higher quality of services by measuring and monitoring traffic and applications with PIQUA solutions.

The home management market – is the 'in search' for the killer application dead?

The market for integrated home systems and controls has always been seen as attractive but I’m coming to the opinion that it’s being held back by a fruitless search to find the holy grail of the sector, a ‘killer’ application that will finally define the market.

Less glamorous though it may seem, I’m increasingly convinced that route to realising the potential of the market is through simple, measured steps.

This view is supported by history. Remember those who don’t know their history are doomed to repeat it! Take the case of electricity. Modern life would be unthinkable without it, yet when electricity came along it was received initially with a muted response.

It was expensive, not least because the size of the infrastructure needed and the investment required to pipe electricity to properties made it difficult to roll out. Even where businesses were willing to make the investment, customers questioned the value. Consumers had gas and paraffin for light and generally went to bed when it got dark so they perceived it to be of little value.

So what made electricity an essential utility in every home wasn’t the fact that electricity could produce light? The market took off when companies like General Electric helped develop a mutually dependent ecosystem based on an increasingly pervasive network, reduced cost of service supply and produced comparatively inexpensive electrical appliances that added value and made an electricity supply desirable to the consumer. It was initially refrigerators, heaters, irons and cookers and later food mixers, air conditioners and entertainment devices that made electricity essential in any home.

The point is that there was no single killer application; it was the availability of a wide range of applications that spurred growth in the whole ecosystem. In this respect the parallels with the growth of broadband are striking as it moves from being an access point to a network of networks to become an essential utility in any property.

Broadband did not appeal to everyone initially when it was only providing faster access to web pages on a PC. It has been growth in the applications and their associated devices - the equivalent of the electricity market’s appliances - and the associated fall in cost of access and the ability to pipe broadband around the property - particularly through wireless LANs - that has driven broadband to reach more homes.

In particular, it has been the ability to use broadband for entertainment applications that has been the real driver to date. Now, home working and e-commerce applications are further building the ecosystem. There is, however, another phase of growth to come with pervasive low-cost broadband - the advent of inexpensive devices that will exploit broadband to deliver convenience, comfort and care in the home. This is the phase in which home management will finally realise its potential.

Internet platforms will provide the key building blocks in the ecosystem needed to enable this new phase of growth. Creating the platform to do this is the difficult bit but it’s what Intamac has devoted itself to, so I’m seeing the impact close at hand. Intamac’s work with partners such as BT, Bell Canada and Cisco Linksys to develop and bundle a new range of innovative and affordable products and services for home suggests that this approach can work and the market is ready.

Using the platform, for example, with BT we have developed a broadband home monitoring service that can be installed by the user with a complete system retailing for under £200. This provides the consumer with new levels of protection in the home and the ability to remotely manage their systems for low monthly fees. It is possible to integrate easily cameras and have pictures sent to mobiles with online video storage capabilities. Companies such as BT and Bell are able to scale up offerings with attractive support packages that generate recurring revenues from a mass market customer base.

Enabled by the platform approach, these products and services are a first step in a huge growth market. Intamac is working to network a wide portfolio of partner products and to help add features that will allow them to be deployed into new and attractive segments such as telecare, and utility and appliance management.

For an infrastructure point of view whilst its clear that web platforms like Intamac’s are being recognised as key node in the new ecosystem it is the advent of low cost wireless networking with technology such as Z-Wave and Zigbee, low-cost IP cameras at under £100 retail, and solutions for remote management of routers that will also drive the market. That’s’ what we’ll need to get to grips with when we all meet at Connections in December.

Opening Comments

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

Opening Comments
Presented by: Kurt Scherf, Vice President and Principal Analyst, Parks Associates

Summary of this session:
Kurt Scherf, vice president and principal analyst for Parks Associates, began Day 2 with an overview of Parks Associates’ latest research across a number of digital lifestyles product and service categories. Scherf reminded the audience of a key point made at the CONNECTIONS™ 2006 conference – that industry consolidation in broadband and access spaces was indicative of the importance of facilities-based service providers in deploying many of tomorrow’s consumer technology offerings. Further, this consolidation is evidence that service providers and their equipment vendors are working to establish seamless end-to-end links between their services and their customers in order to provide a rich array of bundled services offerings and to further strengthen the bond between carrier and customer.

He provided examples of the major consolidation in the past year, just in the broadband and access areas. As examples, he noted Motorola’s acquisition of Broadbus, Cisco’s purchase of WebEx and Ashley Laurent, Ericsson buying Tandberg and Redback, the Alcatel-Lucent merger, and NDS acquiring Jungo.

With this major consolidation in place, a key focus for the next year will be the deployment of actual consumer products and services across the digital lifestyles value chain, including such categories as Data & Voice, Multimedia/Entertainment, Home & Lifestyle Management, and Value-added Services.

Already carriers in the broadband and television services areas are expanding their portfolios of offerings. Competition between and among providers is a key driver for companies desiring to strengthen their services. Residential broadband penetration will exceed 50% of U.S. households this year, and broadband and television service providers will focus on three key tenets as they market their services – Cost, Convenience, and Convergence.

A new area for growth will certainly be in the “Web 2.0” or social networking/media spaces, Scherf said. Parks Associates conducted a significant study in 2006 – Digital Media Habits – that explored consumers and their habits as they relate to self-created and social media. There are definite areas of interest and potential, particularly in how younger consumers are expressing themselves through Web sites and via content sharing. However, there are many questions about how (or if at all) social and community networking will be a significant revenue-generating business.

Home networking has reached new heights, Scherf said, and there is a renewed focus on multimedia and entertainment networks, particularly now that Apple has entered the fray with its own media receiver. Also significant is the involvement of the service provider community in pushing not only data and voice networking platforms but also entertainment (multiroom DVR) solutions. 2007 and 2008 will be significant years for the reintroduction of media adapter devices and for a renewed focus on consumer storage that places as much emphasis on content sharing as it does on safe and secure backup and safekeeping of digital media. In total, Parks Associates expects more than 900 million devices to be deployed in home networks by the end of 2011.

Home and lifestyle management trends indicate some interesting growth opportunities. Remote management solutions – including Web cameras and two-way access – will continue to see growth in the next few years, and the service provider community will be key to deploying more of these to consumers. This sector will also benefit from the current popularity of advanced entertainment solutions because both high-end home theater and multiroom audio could provide a good framework for higher growth of home controls. Health management is also an interesting area of growth. Parks Associates is projecting a $2.1 billion market for enhanced remote and home healthcare applications under four main areas – Acute Care Monitoring, Wellness Monitoring, Geriatric Monitoring, and E-health Services.

Finally, Parks Associates is continuing to watch the development of digital home support and service offerings. This sector, with the promise of reducing the complexity of consumer technologies such as home networking, broadband, and digital devices, abounds with opportunities. Parks Associates has outlined nine major areas where different players could enter and succeed in enhanced customer support – everything from enhanced security and automated fixes to professional technical support and the role of “digital home advisor” services.

Applications & Content for the Digital Lifestyle

Summary information from Day 1: CONNECTIONS™ May 2007, hosted in Santa Clara, CA.

As digital media distribution evolves, business models must evolve to account for convergence between pure consumer-paid services and those supported by advertising revenues. This panel includes industry luminaries on the cutting edge of new media who will discuss its impact on the digital lifestyle.

Brad Davis, Vice President, Advertising Sales, Disney Online, Walt Disney Internet Group
Christine Heckart, General Manager, Microsoft TV, Microsoft Corp.
Yoav Tzruya, COO, Exent Technologies
Moderator: Stuart Sikes, President, Parks Associates

This panel took up the debate surrounding Sokola’s contention that current TV advertising dollars are wasteful and inefficient. The panelists agreed that today’s television advertising is not very good at being targeted and measured. Brad Davis acknowledged that Google’s purchase of DoubleClick keeps him up at night since it gives Google a leg up in display ads. Whether gaming or IPTV services would be the savior of advertising was certainly debatable during the panel. Yoav Tzruya is certainly optimistic, but it’s not a panacea. Christine Heckart acknowledged that the IP properties of IPTV make it a compelling application for targeted and measurable advertising but the footprint of IPTV subscribers is currently so small that advertisers aren’t ready to make the move yet.

More than anything, the panel laid out questions in need of answers. For example, Heckart indicated that most implementations of next-gen advertising are a “science experiment” and some determinations need to be made as to who will be responsible for measuring and reporting advertising results. Will it be today’s well-known companies such as Nielsen, or will it be other parties? In the end, one looming question that the industry needs to answer, according to all of the panelists, is how does money flow from a small core of beneficiaries (content owners) to other players?

Opening Keynote — Media Mobility and the Connected Home

Summary information from Day 1: CONNECTIONS™ May 2007, hosted in Santa Clara, CA.

Opening Keynote — Media Mobility and the Connected Home
Presented by: Ray Sokola, Chief Technology Officer and Corporate Vice President, Motorola, Inc.

More than ever, consumers expect providers to offer seamless, on-demand access to a wide array of personal and professionally created media. The next-generation of technology for the Connected Home will not only enable this access, but expand the consumer's choice and offer more individual personalization than ever before. With these new technology platforms come new and emerging business models: content mobility, on-demand ad insertion, push-to-consumer technologies, mobile advertising and more. In his presentation, Mr. Sokola spoke about the technology innovations that enable the Connected Home environment and discussed how these technologies open the door to new revenue streams for service providers.

In his CONNECTIONS™ keynote, Ray Sokola discussed the underlying trends that allow a product to be “mobility-enabled.” A key starting point is the rise of very affordable storage, both for local (the in-home DVR) and network-based applications (such as video-on-demand with DRAM-based VOD servers). Take every single conversation that a person has during his or her lifetime, for example. They could all be stored on a terabyte (and it could be accomplished rather cost-effectively).

The consumer is going to benefit from the evolution of the set-top box (STB), Sokola noted. First, the STB was all about controlling the channel. It then evolved to a platform to control the time and place of viewing (with DVRs and whole-house DVRs). The third stage will be user-motivated control of programming and content, which leads to interesting applications, such as Motorola’s Follow Me TV™, where time-shifted programming can flow from room to room using home networking.

Finally, Sokola discussed the evolution of advertising, where $70 billion was spent last year just on television ads. Sokola wondered aloud whether this was an inefficient use of ad dollars and if there are ways to make it more meaningful – “repartitioning” it, as he put it. Two new models that may come to fruition are location-based and personalized-driven advertising.

Introduction to CONNECTIONS™: Digital Lifestyle Developments

Summary information from Day 1: CONNECTIONS™ May 2007, hosted in Santa Clara, CA.

The pace of digital lifestyle developments continues unabated. A great deal of activity has occurred in the since CONNECTIONS™ 2006. The Parks Associates’ analyst team has compiled this list of the top trends in the last year:

• Broadband penetration in the U.S. will surpass 50% of residences in the middle of 2007. On a global basis, broadband penetration is approaching the 300 million household mark.
• The two large U.S. telcos – AT&T and Verizon – officially entered the IPTV space in 2006, accounting for more than 200,000 subscribers in the first full year of availability. On a global basis, Europe surpassed Asia in terms of overall subscribers, and there is much more activity in Europe in terms of cross-border competition among different telecommunications providers. At the end of 2006, the total number of IPTV subscribers worldwide was slightly more than four million.
• Entertainment content disruption accelerated with News Corp. buying MySpace and Google buying YouTube – leading to the “NewTube.”
• The launch of all the three new game consoles (Microsoft Xbox 360, Sony PlayStation3, and the Nintendo Wii) was significant. The Xbox 360 and its associated content services are now positioned – according to Microsoft – as second only behind Apple for video downloads.
• Agreement on the underlying protocols that make up the next Wi-Fi standard – 802.11n – was reached. We’re already seeing high volume shipments of Draft-N products, and wireless is aiming at the entertainment and multimedia space.
• Apple announced a month ago that they had sold 100 million iPods (plus two billion music downloads as of year-end 2006), a testament to consumers’ desire for more accessible and easy-to-use media services and products. In addition, the company released AppleTV, where PCs and CE seamlessly interoperate to enhance entertainment applications, and this move should be a significant boost to the growth of multimedia networks.
• Microsoft officially launched the Vista operating system, which places a new level of media creation and consumption capabilities in front of end users.
• Virtual economies are booming — World of Warcraft has nine million subscribers, and Second Life has more than five million users. With this growth, the online gaming community is becoming more entwined with unique social and commerce applications.
• Digital rights management (DRM) issues continue to ebb and flow:

- High-end media server company Kaleidescape was found to be within compliance of the DVD Copy Control Association's license to the Content Scramble System, the method used to encrypt video and audio data on DVDs. Speculation is that this may open the door to “managed copy,” where the studios agree that consumers can take their owned DVDs and make a copy on a server for safekeeping.

- On another positive front, Dan Glickman, the head of the Motion Picture Association of America (MPAA), recently affirmed the studios’ blessing on “authorized copies of the content they [consumers] purchase.”

- Steve Jobs at Apple recently discussed the abolition of rights management for digital music. After all, he argues, fewer than 2 billion songs were sold under DRM with digital music services (such as iTunes); at the same time, the music industry sold 20 billion unprotected songs on CDs.

- Legal challenges persisted to dampen any positive DRM news. A federal judge recently blocked Cablevision from continuing its RS-DVR service, which basically put time-shifting capabilities in the head-end. We view Europe and Asia as much more significant markets for “nDVR” applications. And music publishers are suing XM Satellite for allowing subscribers to copy broadcasts to MP3 players.

• Companies in home controls continued to consolidate, with Nortek acquiring LiteTouch and Gefen and Legrand acquiring Vantage and UStec. Best Buy released its Home System in a Box, called ConnectedLife.Home. BT and Bell Canada marked the entry of telcos into the home security space.
• Retailers, service providers, and third-party entities are discovering there are significant business opportunities in digital home tech and customer support services. Revenues from Best Buy’s Geek Squad services (including product installation, configuration, troubleshooting, and repair) exceed $1 billion in U.S., and other major big box retailers have either launched or rebranded their own digital home technology service offerings. Circuit City launched its firedogSM service in September 2006, and OfficeMax® just launched ctrlcenter™ for remote tech support in April 2007. Both CompUSA and Staples rebranded their tech support services to TechPro and EasyTech, respectively.

Finally, Stuart Sikes, president of Parks Associates, said the industry is moving forward because big players are spending big money to build out the digital home.

KNX is now an International Standard for Home and Building Electronic System (HBES)

KNX is the only worldwide approved INTERNATIONAL STANDARD for home and building control. It already meets the requirements of both the CENELEC EN5009 and CEN EN 13321-1 European standards. Its recent approval as an international standard (ISO/IEC 14543-3) now confirms its global importance.

The predecessor specifications to KNX, Batibus, EIB and EHS, came into being in the early 1990s. At that time nobody could foresee their individual future. These three highly important homegrown European solutions for home and building control initially tried to develop their markets separately and tried to find their own places in European standardisation. Batibus did particularly well in France, Italy and Spain, whereas EIB enjoyed success in the German speaking and north European countries. EHS was the preferred solution for manufacturers of white and brown goods.

In 1997, the three consortia in charge of the above mentioned specifications decided to join forces to develop the market for intelligent homes with the agreed goal to develop a new, common industrial standard that could also be proposed as an international standard. The KNX specification was published by the newly set-up KNX Association in the spring of 2002. It is based on the EIB specification, supplemented with new configuration mechanisms and communication media originally developed by Batibus and EHS.

In December 2003, the KNX protocol as well as the two media, TP (twisted pair) and PL (power-line) was approved by the European national committees and ratified by the CENELEC Bureau Technique as the EN 50090 European Standard. The KNX Radio Frequency communication medium was approved in May 2006.

As KNX increasingly provides specifications that are not only used for the automation of electrical installation equipment but also for HVAC applications, the KNX Association proposed its specifications to CEN for publication as a European standard for building automation control systems. CEN accepted the proposal and the KNX specifications were published by CEN as EN 13321-1.

In view of the large interest in KNX compatible products outside European countries and its proven technology, the KNX association also initiated the necessary steps to have the KNX standard approved on an international level. Countries active in CENELEC proposed the European EN 50090 norm for standardization by ISO/IEC at the end of 2004. In November 2006 the KNX protocol, including all transmission media (TP, PL, RF and IP) was approved for publication as the ISO/IEC 14543-3-x International Standard. This makes KNX the only worldwide open standard for home and building control.

This set of International Standards will encourage users and planners to implement intelligent controls in homes and functional buildings worldwide. Thanks to the published standard, appropriate guidance is now available for parties interested in the use of home and building control. The KNX association expects the publication of its specifications by ISO/IEC to accelerate the development of the market for intelligent home and building controls considerably and offers its services to researchers, suppliers, installers and users worldwide.

Non-European suppliers offering products based on ISO/IEC 14543-3-X will benefit from the well-developed European KNX market for products that meet these specifications and will be able to sell their KNX specified products to a well established customer base. At the same time, suppliers and installers outside Europe will be able to develop their home markets since they are able to offer a wide range of applications from the start.

By joining the KNX Association, companies from all over the world can benefit from the transfer of know-how and licenses within the association, have the opportunity to include their products in the manufacturer and product independent design and commissioning tool, ETS (Engineering Tool Software) and participate in the partnerships and research programs of the KNX Association.

KNX Association is the creator and owner of the KNX technology – the world’s only open STANDARD for all applications in home and building control, ranging from lighting and shutter control to various security systems, heating, ventilation, air conditioning, monitoring, alarming, water control, energy management, metering as well as household appliances, audio and lots more. KNX is the only global standard for home and building control with a single, manufacturer independent design and commissioning tool (ETS), with a complete set of supported communication media (TP, PL, RF and IP) as well as a complete set of supported configuration modes (system, easy and automatic mode). KNX is approved as a European (CENELEC EN 50090 and CEN EN 13321-1) and an International standard (ISO/IEC 14543-3). This standard is based upon more than 15 years of experience in the market including its predecessors, EIB, EHS and BatiBUS. Over 100 member companies worldwide from different application domains have almost 7000 KNX certified product groups in their catalogues. The KNX Association has partnership agreements with more than 21,000 installer companies in 70 countries.

http://www.knx.org/

For more information / material please contact:

heinz.lux@knx.org

Pictures can be downloaded at:
www.knx.org/news-press/press-room

Waiting for Media Convergence

Hello Readers. Andy Angelos from Venture Midwest visiting CONNECTIONS blog once again. After reading the recent post entitled "New Models for Personalized Media Distribution," the Angelos brainstorm turbine ignited with notions surrounding the convergence of personalized media. Internet to TV, TV to phone, music to phone, tv, and Internet, text anywhere - digital convergence is creating an endless tail of consumer decisions. However, overwhelming choices for media consumption may be responsible for the following statistics:

• 84% of American Businesses consider print media their most important information source
• 40% of American Businesses rely on information from podcasts or webcasts
• 32% of American and European mobile phone users use the web on their devices and only 34% of the group is willing to watch mobile ads in current form

Yes, these statistics are from 2007...not 1997 and are courtesy of Publishing Executive - a monthly print publication. Despite the increasing tail of media options, the average consumer continues to interact with the traditional triad of media outlets - print, radio, and television. The print may be online, the radio may streaming, and the TV maybe Tivoed, but the experience remains essentially intact and therefore, separated. Dismal sales for AppleTV reiterate the continued mainstream preference for isolated media experiences.

Digital media adapters, such as AppleTV, are still nascent utilities. Hopefully, improvements like the release of OCAP tool kits from Motorola will enable further integration of media devices.

New Models for Personalized Media Distribution

A couple of articles from today's Wall Street Journal coincided nicely with a keynote at last month's CONNECTIONS conference from Dan Scheinman at Cisco Systems. I was reviewing the audio recording from his keynote this morning and writing a summary for our CONNECTIONS key takeways. Scheinman made four major points that caught my attention during that keynote:

1. Consumer-driven spending for electronics and services was actually helping to increase the rate of growth of overall IT spending - boosting the market from 5% year-over-year to a projected 10% YOY growth;

2. The old model for technology development and distribution - from universities, to big money banks, enterprises, and service providers has been turned on its heel. Consumers and service providers are now leading in many categories of technology development;

3. Hollywood and the major content providers' tight grip on content and its exclusive nature is slipping, as consumers become more empowered; and

4. Content associated with communities was going to characterize the new media distribution models.

When I checked the Journal at lunch, there were a couple of pieces that fit nicely with these main points. First, there was an interview with Radical Media's Robert Friedman, discussing the emerging trend of "branded entertainment" (basically, video content that is highly ad-oriented and aired outside the traditional realm of TV advertising, usually on cable TV or via the Web). Friedman spoke of the need for more (and higher quality) types of ad-oriented programming in light of the fragmentation of the TV audience, but also consumers' willingness to spend time in more immersive ad experiences, if created in a high-quality format.

Then, Carl Folta, Executive Vice President for Viacom Inc. wrote a scathing letter where he rebutted much of what was written in a previous article about the company in a June 2 WSJ article ("Viacom's Split: A Big Why?"). Folta stresses that Viacom has been among one of the most-active media companies in developing a digital strategy. He writes that Viacom has agreements with partners including iTunes, Yahoo, and Joost. In addition, they have 230 Web sites, with more on the way. He notes that the Viacom Digital is the number one entertainment destination on the Internet, and one of the many reasons why revenues attributed to digital entertainment are expected to double to $500 million in 2007.

So, while some might take issue with Dan Scheinman's point that "Why should consumers search for content; it should seek them out" (click on the link to one of our media attendees' reactions to the keynote), the fragmentation he spoke about and the need for media companies to figure out how to best link customers to their content in much more personal ways definitely does resonate. It's one of the reasons why we argue that the intrepid IPTV start-ups around the world should make their move into embracing more highly-targeted and measurable advertising solutions now, rather than wait for their cable competitors to get a leg up on them. It's also why we continue to be very interested in the whole search/user interface category as an emerging opportunity within digital lifestyle markets.

Originally posted by Kurt Scherf on the Parks Associates' blog.

Key Topics at CONNECTIONS™ Europe: Strategies for Digital Living Markets include IPTV, Mobile Entertainment, Home Controls and Management

CONNECTIONS™ Europe: Strategies for Digital Living Markets today announced preliminary topics for its upcoming three-day executive conference and showcase, to be held Dec 4-6, 2007, at the Adlon Kempinski Hotel in Berlin, Germany, and is currently accepting speaker submissions from industry executives interested in participating.

CONNECTIONS™ Europe, produced by Parks Associates in partnership with the Consumer Electronics Association (CEA®), is an executive conference focused on the global market for advanced digital lifestyle solutions.

Topics for 2007 include services, equipment and hardware, and emerging areas for future opportunities:

• IPTV: Business models, consumer segmentation, & forecasts by region
• Remote Self Monitoring: Incremental vs. Core Revenues
• Mobile Entertainment: Shift from portable to mobile video and TV
• Wireless In-home Networking
• Consumer Media Habits
• Social Media and Web 2.0
• Infrastructure Elements: Supplying the Service Providers for IPTV
• Segmenting and reaching consumers
• Social Benefits to E-technologies
• IP-based Entertainment and Control Systems
• Digital Media Servers & Adapters
• Digital Health
• End-to-End Managed Digital Home Solutions

Recent research from Parks Associates indicates the number of IPTV subscribers will reach nearly 60 million worldwide by year-end 2011. Television choices for European consumers in particular will expand greatly in the next several years, due to a growing number of IPTV providers per country, a surge in digital terrestrial offerings, and a resurgence of cable providers in certain markets.

“On many levels, digital home business cases on the European continent are indicative of things to come worldwide for service providers and manufacturers,” said Kurt Scherf, vice president and principal analyst, Parks Associates. “Europe holds a great deal of promise and insight into the next developments in the digital lifestyle space, and we’re pleased to be hosting CONNECTIONS™ Europe to discuss the opportunities, challenges, and business cases for these growing markets.”

Anchor sponsors for the 2006 event included Deutsche Telekom, Echelon Corp., and Siemens Communications.

Current 2007 event sponsors and supporters include Casero, NXP, the Broadband Services Forum, the Wi-Fi Alliance, BPL Today, Connect-World, HiddenWires, HomeToys, IP Television Magazine, Multimedia I.T., Multiroom France, TVover.net, and xchange Magazine.

View the Sponsor Benefits for more information about sponsoring CONNECTIONS™ Europe. www.connectionseurope.com

Shock, horror - UK homes get connected and energy smart

Here in the UK The Daily Express, the self styled `World’s Greatest Newspaper` (that’s code for ` mid-market tabloid desperate to re-live its former glories), decided to lead its front page recently with the sensationalist headline `Gas and Electricity Spies in Your Home`.

The `Spies` to which the newspaper was referring were the consequence of the announcement from the UK Government that EVERY (they are very fond of capitalising what they believe to be the scary implication of the decision) home in Britain is to be fitted with a high-tech meter to track its energy usage.

Shock horror, the so-called `smart` meters will show precisely how much gas and electricity is consumed by households `down to the nearest penny`, says the paper

The Express can hardly control its discovery of the awful truth. `They (the meters) send the information to the power supplier, ending the need for visits from meter readers,` it gasps. Barely able to contain itself further, and in a seemingly brazen attempt to stir up at least some sort of indignation let alone fear, uncertainty and doubt in Middle England, The Express then announces that `Critics fear that the devices will give energy firms the ability to snoop on customers.`

Just to put any nascent incredulity in perspective, just bear in mind that this is a newspaper addressing a population that lives in country that houses around one quarter of the world’s CCTV cameras. And that also has a mobile phone using community that willingly or otherwise lets its network providers know exactly where you are the moment they switch on their trusty Nokia and whose every web site visit is known to their ISP? And precisely what is it that the gas and electricity meter readers have been able to do by entering our homes regularly for the last few decades or so?

The point is that under the Government blueprint, energy suppliers will have to take a lot more responsibility for green issues rather than simply selling gas or electricity. Householders will be offered free devices from May 2008 to monitor their energy usage on an LCD display in their home. The smart meters will be rolled out within a decade, believes the paper. Hurrah might those of us involved in home automation say – in raising general awareness about the importance of energy efficiency it’s precisely this sort of development that will make people keener to control their homes remotely and that’s where Intamac and others come into the picture.

As Phil Bentley, managing director of British Gas, says in the article: `Smart meters will revolutionise how energy bills are calculated. They'll bring an end to estimated bills and give the householder more transparency and control over their consumption.` Yep, that seems to sum it up nicely.

Of course there is always the cash question. Such as who will pick up what The Express says is the estimated £8billion bill for installing the meters. Suppliers or customers? Whatever, given there are around 21 million households in the UK that looks like 380 quid a household including a cost – according to The Express again - of 180 pounds for the meter. For those of us actually involved pioneering internet enablement that looks like a lot of money. Maybe someone needs to look at the infrastructure model or maybe even the business plan again.

If you want to see the article in all its glory go to http://www.express.co.uk/posts/view/7829



Posted by Kevin Meagher, CEO, Intamac Systems (www.intamac.com)

Interesting Technology Developments Throughout History

I had an interesting conversation today with an industry contact who reminded me that he's been waiting for the inflection point for his company's solution to occur for about ten years now! It's a reminder that even the most-promising of technologies can take years - and even decades - to reach their full potential. Look at Wi-Fi as an example. Although it seems that wireless networking came out of nowhere to infiltrate every coffee shop, development of the actual 802.11b standard took years, and not many folks gave it much thought as a consumer-facing solution (it was viewed more as an enterprise or vertical market fit inititially). For even longer developments, look at the home controls industry. We love to bring up the early home controls initiatives, characterized (literally) by basement-sized computers. After 50 years of experimentation, home and lifestyle management looks to be on the rise.

Last night's History Channel program Modern Marvels is another case in point on how technology developments can sometimes take surprising turns as they mature over the years. The "70's Technology" showcase on Modern Marvels featured everything from Mr. Coffee, the Microwave, the Pontiac Trans-Am, and the Concord. In addition, there were a couple of TI people interviewed about the use of DSP technologies in calculators and the “Speak and Spell” toy. They also referred to how the early work in LEDs for calculators eventually found its way into the TI DLP solution for high-definition televisions! I actually had a Speak and Spell as a kid – it was a cool educational toy!

At our recent CONNECTIONS conference, we were reminded that the DSP actually has its roots even further removed from bell-bottom pants and bad disco music! The original implementation was for submarine detection! So, yes, there are always a few surprises in this space.

Greg Jones from TI was a keynote speaker at this year's CONNECTIONS conference. Jones serves as the General Manager for DSP Systems Strategic Marketing, and he highlighted the importance of the DSP in building a wider array of needed consumer solutions, noting that DSL services as completely enabled by DSPs.

Jones sees a larger role for DSPs in the future across a wide array of emerging consumer applications. Digital entertainment, he noted, is obviously going to be a key area, as digital signal processing will be a needed ingredient for managing bandwidth use and encoding and decoding for the many different video codecs and formats that require processing. Jones said that there may be 30-40 different codecs to manage.

Beyond entertainment, Jones brought up interesting examples of where signal processing will play a role in improving learning and communications (instant translations during phone calls) and transportation (the nearly-automated automobile). He also mentioned digital healthcare applications as an opportunity for TI to expand its role. Finally, he discussed how DSP technologies will help service providers offer a higher-quality of services by measuring and monitoring traffic and applications with PIQUA solutions.

Originally posted by Kurt Scherf, Vice President, Parks Associates at http://parksassociates.blogspot.com

Connectivity Changes Everything

Thanks for the invite to contribute to the private blog: CONNECTIONS

I am Ken Sinclair Editor/Owner of www.automatedbuildings.com

AutomatedBuildings.com is an on line magazine and web resource providing the news, as well as connection to the exciting and rapidly evolving industry that automates large buildings. We have become the industries B2B web site providing connection for all new and existing automated building industry stakeholders.

We are a media sponsor of the connection events but my message to the blog is that our June issue is all about connectivity in the large building automation space.

Our last two issues of AutomatedBuildings.com have focused on change in our industry; this change is being driven by the powerful ever evolving connectivity. This new found substance "connectivity" is no longer a concept; it is a reality that is changing how we work and what our industry will look like in the near future. Connectivity concepts such as the smart grid, the greening of buildings with better connections to everything, coupled with connections to powerful web services plus the notion of Buildings 2.0 are all creating several new directions and markets for our industry. This requires that we all re-examine our core business models and make adjustments for connectivity. Our June issue gives you a peek at how connectivity changes everything as our authors talk about aspects of this new virtual substance that you may not of even thought about.

For more and connection to follow this url
http://www.automatedbuildings.com/news/jun07/editorial0906.htm

Thanks for reading! Looking foward to the several connection events