The Future of Digital Home Entertainment: Key trends and drivers shaping devices, content and services

Despite the economic slowdown of recent years, digital home entertainment looks set to evolve and grow significantly over the next five years. The convergence of technologies and platforms, lifestyle trends, a growing need for mobility, and technological advances are all combining to fundamentally change the ways in which consumers interact with digital content. In turn, these trends and ‘meta-themes’ are forcing broadcasters, media agencies and conglomerates, service providers, device and consumer electronics manufacturers, and communications operators to rethink the value chain and restructure their business models. In the future digital home, content will be king, and consumers will expect to be able to access synchronized content and digital content libraries instantaneously on a range of connected devices, in a variety of locations.
The consumption of digital entertainment content is being driven by the rapid transition to online and mobile platforms, on which consumers of tomorrow will expect the ability to watch broadcast TV, access video content on-demand, personalize Internet radio stations to suit their own preferences, play games, and store media collections, whether inside or outside the home - this concept of the ‘porous home’ will be a defining feature of the future of digital home entertainment. This report analyzes the trends, technologies and business models of the enablers and providers of digital content. Furthermore, it defines six ‘Meta-themes’ that can be used as a template for defining and considering the future shape and growth of the digital home entertainment market. These six meta-themes are then applied to each of three main digital home entertainment markets: TV and video; Music and audio content; and Gaming.

Key features of this report

• Defines six ‘Meta-themes’ that can be used to define the future shape and evolution of the digital home entertainment market.
• Applies each meta-theme to analyze and forecast the future evolution of three sub-markets of the digital home entertainment market, namely: TV & Video; Music & audio; and Gaming.
• Provides market sizing and opportunity statistics for consumer electronics manufacturers.
• Provides forecasts for the growth of the IPTV, DTT, cable and satellite TV markets.
• Explains how new entrants to the market are already disrupting traditional business models of content providers and media publishers, and how they can respond and adapt to the changing conditions.
• Offers in-depth analysis of the future of the gaming market.
• Explains and analyzes the concept of the ‘Porous home’.


Key Market Issues

• The economic downturn and it’s impact on sales of consumer electronics devices over the next few years.
• The increasing convergence of devices, services and content delivery platforms.
• The impact of emerging technology platforms for the delivery of TV and video, music and gaming content.
• The impact of the cloud on technological evolution in the future digital home.
• Changing consumer lifestyles and how this alters preferences in how they consume media.
• How vendors and service providers can differentiate themselves in a crowded and converged marketplace.
• Certain devices are becoming ‘content hubs’ for digital home entertainment.


Key findings from this report

a) The future of digital home entertainment can be defined and analyzed using six key ‘meta-themes’. All of these themes interrelate with each other, but the key ones are convergence and specialization.
b) Around 45% of mobile Internet users are expected to be in Asia-Pacific by 2014 .
c) The CAGR for mobile music over the period 2009-2013 is forecast to be 38%, almost double that for the online channel.
e) The number of households receiving digital TV globally is expected to grow from just over 211m in 2009 to reach 274m by 2012. Satellite and cable will remain the two largest delivery platforms for digital TV between now and 2012, however, IPTV will grow the fastest.
f) The VOD market is expected to generate almost $9bn in revenues in 2012.

Key questions answered

a) Which technology platform for delivering TV content in future represents the largest market opportunity?
b) How will the cloud shape the evolution of the digital home entertainment market?
c) Will consumers pay for digital content in future?
d) What are the six meta-themes that can be used to forecast the evolution of the market?
e) How can vendors and service providers create new market opportunities and attract new consumers?
f) What role will mobile devices have in the future digital home?

Report Highlights

[Studien Infos ausblenden]

The Future of Digital Home Entertainment
Executive summary 12
Drivers and inhibitors of digital home entertainment 12
Trends and meta-themes in digital home entertainment 13
The future of digital home entertainment: TV and video 14
The future of digital home entertainment: Music 15
The future of digital home entertainment: Gaming 16
Chapter 1 Introduction 20
What is this report about? 20
Who is this report for? 21
Definitions 21
Chapter 2 Drivers and inhibitors of digital home entertainment 24
Summary 24
Introduction 25
Market context 25
Content provision and delivery models 26
Market drivers 28
Connectivity 29
Fixed broadband penetration 29
Mobile broadband penetration 32
Mobility, the cloud and the ‘porous home’ 33
Consumer behavior and lifestyle 35
Work-life balance 35
Media consumption 37
Entertaining at home 44
Market inhibitors 45
Global economic downturn 45
Retail sales hit in 2009-2010 45
Recovery begins in 2011 45
Converged devices restrict sales growth 46
Slow technology pipelines 46
Media and content provider challenges 47
The consumer sets the agenda 47
Certain consumers are not comfortable with new technologies 48
Providers need to differentiate themselves from the pack 49
Conclusions 50
Chapter 3 Trends and key themes in digital home entertainment 52
Summary 52
Introduction 53
Six technology meta-themes 54
Analysis of the six technology meta-themes 57
Convergence 57
Service convergence 58
Media platform convergence 59
Device convergence 60
Convergence encourages the 'good enough' concept 61
Maturity 61
Convergence to dominate the evolution of digital home entertainment 62
Specialization 62
Dangers in attempting to appeal to all 62
Understanding consumer preferences 63
Converged services: specialization and customization often overlap 64
Personalization 66
Consumer lifestyle trends point towards individualism 66
The popularity of mobile apps 66
Media and broadcasting sectors driving personalized content 68
Maturity 69
Portability and the porous home 69
Digital content moves from fixed and portable storage devices into the cloud 69
Mobile technology is becoming more important to consumers 71
Fixed devices remain central to home life 73
Maturity 73
Simplification 73
Amount of new devices increases the complexity of the purchasing process 73
Consumer demands for simplicity vary between generation and demographic 74
Fixed and mobile Internet makes life easier 74
The need for simplification does not only apply to devices 75
Differentiation 75
Setting products and services apart from the crowd 75
Apple and Nintendo: examples of successful differentiation 76
Triple-play provides opportunities 77
Chapter 4 The future of digital home entertainment: TV and video 80
Summary 80
The future of TV and video 81
The broadcast industry 81
Web TV 83
IPTV 84
On-demand video 85
3DTV 85
Technology evolution 86
HDTV 87
Internet connectivity 87
3D TV 88
Mobile TV 88
Market sizing and forecast 89
TV and video hardware 89
Global TV sales snapshot 89
Digital TV 90
IPTV 92
HDTV 95
HDTV sets 95
HD services 96
Blu-ray 97
Set-top boxes and DVRs 98
Video-on-demand 99
Internet-based TV and video content 100
Online providers 100
Hulu 101
YouTube 103
BBC iPlayer 105
Comcast and TV Everywhere 105
MLB.tv 106
3D Television 107
Mobile TV 108
Applying the six meta-themes to the future of TV 111
Convergence 111
Differentiation 111
Personalization 112
Simplification 112
Specialization 113
Portability and the porous home 113
Chapter 5 The future of digital home entertainment: Music 116
Summary 116
The future of digital music 117
Evolution of business models 121
Technology evolution 123
Audio formats and quality 126
Digital audio content retailers 126
Market sizing and forecast 128
Digital audio content 128
Portable audio players 129
Networked audio products 131
Applying the six meta-themes to the future of digital music 134
Convergence 134
Portability and the porous home 135
Personalization 135
Simplification 136
Differentiation 136
Specialization 136
Chapter 6 The future of digital home entertainment: Gaming 140
Summary 140
The future of gaming 141
Emerging technologies and trends 141
On-demand gaming – OnLive 142
User-generated content 144
Social gaming 144
Serious gaming 145
Advergaming 146
Micropayment models 147
The changing demographic profile of gamers 148
Market sizing and forecast 152
Games console market 154
Hardware 154
Online consoles 156
Software 157
Online gaming market 158
Massively multiplayer online games (MMOGs) market 159
Mobile gaming market 160
PC gaming market 163
Applying the six meta-themes to the future of gaming 164
Convergence 164
Portability and the porous home 165
Personalization 165
Simplification 166
Differentiation 167
Specialization 168
Index 169
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Table 2.1: Typical Internet connection speeds in different regions of the world, 2009 31
Table 2.2: Average consumer leisure time (hours/day), 2007-2012 36
Table 2.3: Average time spent consuming media (hours/day) by country, 2002-2012 39
Table 2.4: Daily Internet usage, Internet users (000s) and total % of population, by continent, 2008 40
Table 2.5: Average time spent watching TV by country (hours/day), 2008 42
Table 2.6: Average consumer leisure time spent consuming print media (minutes/day, by country) 2007-2012 43
Table 2.7: Electricals retail expenditure in the UK, 2003-2013 46
Table 3.8: Global mobile applications downloads (m), 2008-2014 68
Table 4.9: Global TV shipments by technology (000s), Q4 2009 89
Table 4.10: Global digital TV market by platform (households, m), 2008-2012 91
Table 4.11: European HDTV households (m), 2008-2018 96
Table 4.12: Global 3D TV unit sales and revenue, 2010-2015 107
Table 4.13: Worldwide mobile TV and video content revenues ($m) 109
Table 5.14: Charting global digital music changes, 2003 vs. 2009 119
Table 5.15: Global digital (online and mobile) music market ($bn), 2009-2013 129
Table 5.16: Global iPod and iPhone shipments (000s), 2007-2009 130
Table 5.17: Global sales of dedicated Internet radio units (000s), 2008-2013 131
Table 5.18: Western Europe and US sales of networked audio products (000s), 2007-2013 132
Table 6.19: UK breakdown of gamers and non-gamers by age (%), 2008 150
Table 6.20: The most popular console games worldwide (units sold, m) 151
Table 6.21: Global video gaming market size ($bn), 2003–2013 152
Table 6.22: Global video gaming market break-up by geographic region ($bn), 2008–2013 154
Table 6.23: Global console shipments (m), 2006-2013 156
Table 6.24: Global online console market ($bn), 2008-2013 157
Table 6.25: Smartphone shipments by region (m), 2009-2014 162
Figure 2.1: Drivers of the digital home entertainment market 28
Figure 2.2: Consumer fixed broadband subscribers by region (m), 2008-2014 30
Figure 2.3: Consumer mobile broadband subscribers by region (m), 2008-2014 33
Figure 2.4: Global mobile phone connections and revenue, 2007-2012 34
Figure 2.5: Average time spent consuming media per day, hours (by country), 2002-2012 38
Figure 2.6: Average time spent watching TV by country (hours/day), 2008 41
Figure 3.7: Relationships between the 6 meta-themes influencing the future of digital home entertainment 55
Figure 3.8: How the 6 meta-themes impact on the future of digital home entertainment 56
Figure 3.9: The role of convergence in the future of digital home entertainment 58
Figure 3.10: Global mobile applications downloads (m), 2008-2014 68
Figure 3.11: The porous digital home and the cloud 71
Figure 4.12: Media trends and technology enablers for the broadcasting industry 82
Figure 4.13: Global digital TV market by platform (households, m), 2008-2012 91
Figure 4.14: IP traffic growth (PB per month) to 2012 93
Figure 4.15: Global IPTV revenues and subscribers to 2012 (000s) 94
Figure 4.16: Global VOD revenues ($m), 2007-2012 95
Figure 4.17: European HDTV households (m), 2008-2018 96
Figure 4.18: Global 3D TV unit sales and revenue, 2010-2015 107
Figure 5.19: Music-related activities in the UK, 2009 (% of respondents) 120
Figure 5.20: Global market for online and mobile digital audio content ($bn), 128
Figure 5.21: Global iPod and iPhone shipments (000s), 2007-2009 130
Figure 5.22: Global sales of dedicated Internet radio units (000s), 2008-2013 131
Figure 5.23: Western Europe and US sales of networked audio products (000s), 2007-2013 132
Figure 6.24: Global in-game advertising market ($bn), 2008-2013 146
Figure 6.25: UK breakdown of gamers and non-gamers by age (%), 2008 149
Figure 6.26: Global video gaming market size ($bn), 2008-2013 152
Figure 6.27: Global video gaming market share by format (%), 2008-2013 153
Figure 6.28: Global video gaming market share by geography (%), 2008-2013 154
Figure 6.29: Global console shipments (m), 2006-2013 155
Figure 6.30: Global online console market ($bn), 2008-2013 157
Figure 6.31: Global online gaming market ($bn), 2008-2013 159
Figure 6.32: Global mobile gaming market ($bn), 2008-2013 160
Figure 6.33: Smartphone shipments by region (m), 2009-2014 161
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