Interactivity, competitive business models, and value-added services driving expansion of the digital lifestyle

Consumer demand for interactivity in entertainment and control at home is driving adoption in technology products and services, according to Parks Associates analysts at CONNECTIONS. The conference focused on access services, video delivery, online content services, advertising, digital health, digital media, and home systems. Parks Associates forecasts over 400 million households worldwide will have digital television services by 2012.

ADVANCED TELEVISION
Kurt Scherf, Vice President and Principal Analyst, highlighted key developments in advanced television services and discussed future areas of focus, including bandwidth issues and the “interactive experience” enabled by VoD, widgets, and advertising. Currently the lack of easy, high-quality connections between VoD services and the TV is a key inhibitor to the growth of the broadband VoD market. Parks Associates expects to see an increase in products and services aimed at connecting content to platforms in 2008 and beyond.

PORTABLE DEVICES
John Barrett, Director, Research, highlighted recent findings from National Technology Scan 2008, a telephone survey of U.S. households. “In the past year, approximately 45 million households purchased a mobile phone, 29 million purchased a digital camera, and 27 million purchased an MP3 player,” Barrett said. “Portable devices are clearly capturing the consumer's attention right now more so than stationary devices."

BROADBAND
Michael Cai, Director, Broadband and Gaming, spoke about the changes in the broadband market. He predicted the next competitive cycle will center on bundles and value-added services. “Telcos will focus on multiplay bundles and value-added services, forcing a response from cable MSOs,” Cai said. “The increased importance of customer retention will lead to new and more intense rounds of loyalty programs and other customer retention tactics.”

HOME SYSTEMS
Bill Ablondi, Director, Home Systems, highlighted growth in home systems, stressing their expansion into broader markets, including areas such as multiple-dwelling units, which represent new opportunities for digital systems and services. Also, remote home monitoring services offered through telco/MSO service providers will revolutionize the traditional home security business as broadband services disrupt yet another business model. Parks Associates forecasts that self-monitored households will nearly triple to more than 6 million by 2012.

PERSONAL HEALTH
Harry Wang, Director, Research, discussed personal health solutions. Parks Associates predicts this space will achieve $2.5 billion in U.S. device and service revenues by 2012. “There are significant barriers to overcome, but consensus is forming that technology can help empower consumers and health professionals in achieving better care at lower costs,” Wang said. “Now the technology industry must work with the health community to extend adoption to a broader patient population and convince the health ecosystem of the value of personal health technologies.”