Analysis – Page 2 – Digital-Lifestyles

Silver Surfers Take To The Web

Silver Surfers Take To The Web New research has revealed that over two thirds of all European silver surfers use broadband as their main Internet connection and that broadband adoption amongst the old ‘uns is growing faster than average European Internet users (26% year on year growth compared to 14%).

According to the research from the European Interactive Advertising Association (EIAA), the growth in broadband penetration is having a big impact on how the old folks are communicating and spending their leisure time, with one in four logging on to the Internet in a typical week. Weekend use was recorded as growing at a rate of 19% year on year.
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US Mobile Game Revenue Soars

US Mobile Game Revenue Soars Mobile games are starting to rake in big revenues in the States as perambulating punters warm to the idea of downloading games for their phones.

According to research firm Telephia, earnings from the category of games known as “on-portal” took a hefty 61 percent leap skywards in the fourth quarter of 2006 in the US.

Telephia say that over 17 million Americans downloaded a mobile game during the last three months of 2006, representing a beefy 45 percent jump from the 12 million recorded during the same time of 2005.

The US now makes up nearly a third of the worldwide mobile gaming market, which shaped up at around 38 million downloads per month in 2005, according to stats firm iSuppli.

Their figures predict that the number will hit around 134 million game downloads every month by the year 2010.

US Mobile Game Revenue Soars Although you might imagine that mobile gaming would be the near-exclusive preserve of socially challenged males aged 25 to 36, Telephia says that it’s the ladies who are the hottest to trot, with 65 percent of U.S. mobile game buyers being of the female persuasion.

With the U.S. mobile game revenue registering a till-straining $566 million revenue in 2006, there’s clearly big profits on the horizon.

iSuppli are predicting that the worldwide mobile gaming market will be worth $6.1 billion by 2010, up mightily from 2005’s total of $1.8 billion.

Source

IPTV Growth To Boost Video Market To $277Bn By 2010: iSupply

IPTV Growth To Boost Video Market To $277Bn By 2010: iSupply Research house iSupply are predicting that IPTV will be boosting the reveneue generated by the premium video services market from its current level of less than $200Bn to a whopping $277Bn by 2010.

Their definition of the premium video services market takes in pay-TV, mobile video, DVD, broadband video and theatre/box office receipts, but when advertising revenues are added, the total market reaches a stunning $370Bn.

iSupply see IPTV growing at frankly amazing rates. In 2005 they saw IPTV worth $681m and, with their estimate of a Compound Annual Growth Rate (CAGR) of 103 percent (!), see it reaching a calculator-busting £23.5Bn in 2010.

It appears that they see the public’s willingness to pay for content expanding significantly. Strange, but we and our other tech-aware pals are finding ourselves just not watching that much mainstream content – even if it is available on-demand.

IPTV Growth To Boost Video Market To $277Bn By 2010: iSupply That aside, iSupply see the battle royal between two big, hairy beasts – the current pay-TV world of direct-to-home satellite and digital and analogue cable TV services – and the telcos who will be pushing quad-play.

On the physical format side, iSupply point out that DVD sales are slowing, and will continue to do so, with the decline over the next 3-4 years being as much as 15 percent to 20 percent.

One very interesting point that is raised by them is

With most movie libraries and television series already on DVD, Hollywood studios are generating more than half of their revenues from DVDs—and are running out of new content to sell, making this an issue of paramount importance to them. One cause of the DVD sales deceleration is the fact that consumers have become more price-sensitive, believing that the average DVD cost of $20 is too expensive, especially compared to renting.

It’s not clear where this leaves Blu-Ray and HD-DVD – both on the price of the media (which is expected to be higher than DVD) and on the material that is available. Given Hollywood’s slow ability to make new material, and that most of it will have been sold on DVD already – it’s not clear if the new formats will help them.

Information on Premium Video Services Market report

Vodafone And Orange 3G RAN Share: Examined

As has been mentioned on Digital-Lifestyles, Orange and Vodafone have entered into an agreement to share their 3G Radio Access Network (or RAN). We thought you’d appreciate some more depth … and who better to give it than Steve Kennedy, our telco guru.

Currently Vodafone have a bigger network than Orange, so Orange would gain more than Vodafone from the deal, but in future it means that new cell sites will be used by both operators.

The agreement could have covered 2G (GSM) too, but as Vodafone use 900MHz systems and Orange use different systems operating in the 1800MHz band, it just not possible. That said, it’s likely future technology would allow both sets of frequencies to operate within the same radio equipment.

There will still be interesting problems to sort out for 3G sharing, as Vodafone exclusively use equipment from Ericsson, while Orange use equipment from Nortel, Siemens, Nokia and Alcatel.

Once the network is in place, each network will be responsible for enabling their own network services and ensuring quality of service, etc. As competition for customers increases this is a sensible way for operators to reduce cost, share the infrastructure and compete on service. It’s a shame the fixed networks don’t take this view, as has been pointed out before, the LLU operators could join forces and build a joint LLU network and then compete on service. This might give them a larger network, which would be of a size and scale to compete with BT’s upcoming 21CN.

Why the rush to build?
With a 3G license comes obligations and one of these was to reach 80% of the population by the 1st Dec, 2007. Though the GSM network coverage hit that a while ago, 3G expansion has been slower with few customers really wanting 3G services so the operators have built 3G networks in densely populated areas where they can make revenue from those customers. That means big cities have been covered, but elsewhere 3G coverage is patchy to say the least.

Hutchinson 3G (or 3 the new entrant into the mobile world) has been rapidly building its customer base and building a network to match. In June 2004, Ofcom tried rules that 3 had SMP (significant market power) in the 3G world, which meant it would be regulated by Ofcom much in the same way BT is for fixed networks. The other 3G operators happily supported Ofcom in this view. 3 didn’t want the increased regulatory burden and disagreed with Ofcom’s ruling, so appealed to the Competition Appeal Tribunal. They won their appeal in November 2005. This was the first time any network has successfully appealed against a SMP designation.

3 wasn’t happy about having SMP forced upon it and therefore made noises to Ofcom about coverage obligations, which the other networks weren’t meeting. They’ve got 10 months to hit that 80% figure.

Though city centres might have a demand for 3G (for data services, no one cares about 3G voice – a voice call sounds the same whether it’s 3G or GSM), as you leave dense urban areas the appeal of 3G is less. Well maybe not less, but there are less people to use it and less of a reason for the networks to install 3G infrastructure and sites.

The cost of a 3G cell is probably not much different in terms of equipment from that of a 2G cell, one major difference is the amount of bandwidth needed for the cell, as data volumes are significantly higher (maybe 40Kb/s using GPRS data compared to maybe 2Mb/s for 3G, multiply that by 10 users and it’s 400Kb/s compared to 200Mb/s).

UK backhaul (i.e. the pipes used to connect cells) are expensive. The more rural the cell site is. the less chance there is that anyone (except maybe BT) has got any kind of high bandwidth connectivity. Therefore, the costs of the backhaul may well exceed that of the cell site itself.

Sharing makes economic sense
Orange and Vodafone have to hit that 80% figure or Ofcom can impose fines which could be significant. Therefore the build out of a shared new network makes economic sense. It’s half of what they’d each have to pay.

In this climate of everyone’s customers wanting everything for nothing, being able to reduce your build costs may well be the straw that doesn’t break the camel’s back.

Mobile Data Services Set To Rake It In

Mobile Data Services Set To Rake It In High speed mobile phones and new gadgets are set to send revenue from mobile entertainment services soaring over the next five years, according to market research firm Informa Telecoms & Media.

Boffins at Informa expect the market for delivering content and services on mobiles to rise from $89.3billion in 2006 to $150billion by 2011.

Mobile music – already the biggest earner – will continue to whip up the biggest wedge of wonga, although its market share is expected to dip from 40 per cent in 2006 to 36 per cent in 2011 in the face of newer consumer technologies like mobile TV and video service.

Mobile Data Services Set To Rake It In “Advanced mobile content and services have been slow to take off, but this should not be confused with the deepening relationship that we have with our mobile phones,” commented report author Daniel Winterbottom, senior analyst at Informa Telecoms & Media.

“Over time, users will warm to other data services as well. The mobile web is a prime example: WAP failed to take off when it was first launched, but five years on, more and more users have become comfortable with accessing news or other information on their mobile phones,” he added.

The analysts also predict that the market for mobile entertainment services, including games, gambling and naughty adult content, will more than double during the same period, increasing from $18.84 billion in 2006 to a bumper US$38.12 billion in 2011.

Mobile Data Services Set To Rake It In User-generated content is also expected to grow, with Informa predicting that revenue from user-generated services will hit $13.17 billion by 2011.

Full of enthusiasm for the future, Daniel Winterbottom enthused: “The arrival of the mobile web on the mobile handset over in 2007 and beyond will see users embracing the same content they take for granted on their PCs.

[Via]

Laptops Outsell Desktop PCs For First Time

Laptops Outsell Desktop PCs For First Time Notebooks outsold desktop PCs in Western Europe for the first time, as Acer leapt ahead of Dell to grab second place in PC sales in Europe, the Middle East and Africa (an area known in da biz as ‘EMEA’).

The figures from research firm IDC show Acer sneaking into second place for the fourth-quarter 2006 sales, with Dell box-shifting activities hit by slow commercial demand and competition from top dog HP.

Michael Larner, IDC senior research analyst, commented that Acer’s growth was fuelled by competitive desktop offerings and surging laptop sales which saw the company retaining its position as the Lord of laptop floggers.

Top overall PC vendor HP enjoyed a successful autumn, with sales expanding by a hefty 62 percent over the quarter.

Laptop sales up
The total PC market in EMEA grew by 10.4 percent during the quarter, although increased laptop sales were countered by desktop sales declining by 5.7 per cent in Western Europe.

Laptops Outsell Desktop PCs For First Time Laptop sales totalled 8.4 million during the quarter, against 8 million desktops, but corporate refresh cycles are expected to elbow desktop sales skyward in the second half of 2007 with Windows Vista expected to drive consumer – but not business – sales, as IDC’s Andy Brown explains:

“In general, enterprises are not moving to new operating systems, at least not until the first service pack, so we don’t expect to see a massive impact in the corporate space in 2007. Once issues of application compatibility are sorted, companies will start to consider it.”

Conversely, business desktop sales went up by 10 per cent here in Blighty-land, but IDC reckoned that this was down to the fact that us go-getting Brits tend to go through commercial desktop refresh cycles earlier than our European chums.

IDC

Broadband-Enabled Televisions to Reach 162 Million by 2011

Slotting in nicely with Microsoft’s Xbox/IPTV Announcement (You’ll be able to watch IPTV through your Xbox toward the end of the year), Just the Beginning, says The Diffusion Group.

Broadband-Enabled Televisions to Reach 162 Million by 2011

A surge in the availability of high-quality web-based video content and the proliferation of solutions that network-enabled TVs will usher in a ‘new wave’ of television viewing, one defined less by ‘walled garden’ PayTV operators and more by open access and a variety of highly-specialized niche content.

According to Broadband Video: Redefining the Television Experience, The Diffusion Group’s latest report on IP media, the number of broadband-enabled TVs – those capable of directly or indirectly receiving broadband video content – is expected to exceed 162 million households globally by 2011.

“It is fair to say that the democratization of video delivery is officially underway,” noted Colin Dixon, senior analyst and author of the report. “As the Internet finds its way to the primary home TV – and it will – incumbent PayTV operators and established broadcasters will gradually lose control over the types of video consumers can watch. In the next few years, a growing number of consumers will look to the Internet as means of expanding the variety of content to which they have access, much of which will be available on-demand and specifically suited to their tastes.”

Dixon mentions five factors which in combination are creating a ‘tipping point’ for broadband TV including:

Broadband-Enabled Televisions to Reach 162 Million by 2011

The widespread adoption of broadband Internet service;
The expanding variety of video content available on the Internet;
The introduction and push of solutions intended to enable Internet video viewing on the TV (such as Microsoft’s Xbox/IPTV platform and Apple’s pending iTV adapter);
The entry of top-tier content producers into the Internet marketplace, many of which are now pushing high-value franchise content onto the web; and
The move from short-form ‘snack’ Internet video content to full-length TV programming and movies.
The impact of these trends remains lost on the vast majority of video entities. As Dixon states, “While the subject of Internet video is on everyone’s tongue, very few have a full understanding of how Internet-based video will impact the traditional TV business.”

In many cases, consumers will simply use a proxy to enable an Internet-to-TV connection – that is, instead of having a modem embedded in the TV which connects directly to a broadband service, consumers will use an Internet television adapter, or iTVA, such as a Internet-enabled game console, media-centric PC, digital media adapter, or hybrid set-top box to access web-based video content.

Dixon notes that for those with a broadband Internet connection, it is becoming quite simple to both provide and access Internet-based video on the living room TV. “Not only is it now technologically feasible for most consumers, but economically attractive for content providers.” In other words, the value proposition is both supply- and demand-driven.

As well, the Internet video space is undergoing a shift away from short ‘video snacks’ and toward longer form narrative content more characteristic of TV in terms of production quality, video quality, and length.

Broadband Video: Redefining the Television Experience is TDG’s latest report on the digital home and IP media. In addition to expanding greatly on the themes illuminated in TDG’s free white paper, The Emergence of Broadband Television, the full report explores in detail how many broadband-enabled televisions will actually be connected to the Internet and used to receive broadband video. Further, the report discusses the types of video services that will be launched from the Internet targeting the television and includes specific revenue estimates for these servic es. The report also looks at the barriers to open access to Internet from the television and how these barriers will be overcome.

The Diffusion Group

Viacom’s Big Shift to Digital: Summarised

Viacom's Big Shift to Digital: Summarised Viacom have been making further moves to secure their future in digital media. Given all of the moves they’ve made this week, we thought it was worth summarising it.

The first recent deal was the one with Viacom doing a multi-part deal with Google. Viacom will provide Google with video clips and commercials for syndication through Google’s AdSense network, with income being split three ways, Viacom; Google; and the Web site owner. Videos from the Viacom group of companies will also sell their videos on Google Video for $1.99.

The day after this Viacom announced that they were going to buy Atom Entertainment (AtomShockwave as was, made up of Shockwave.com, AddictingGames.com, AtomFilms.com and AddictingClips.com). Viacom put $200m on the table for this one.

They’re be adding this to their other recent purchases, XFIRE, Y2M, GameTrailers.com, IFILM and Neopets, placing them all under MTV Networks.

Viacom's Big Shift to Digital: Summarised Viacom are experts at delivering messages (TV, films and adverts to you and me) on television and films, and as we can see from the above deals, they’ve caught on that they really ought to be able to do this online too. To try and simplify this, they were looking for a way to smooth the transition of their content to the digital realm.

This brings us to the latest deal, between Viacom and Adobe, where Adobe’s Engagement Platform will be the preferred tool to digitise the content. The two will also ‘work together in developing new media applications,’ which sounds like an interesting idea, sadly no further detail was available.

The upshot of this is pretty bad news for Microsoft and Real as Viacom will be serving all of the online video adverts using Flash Video. Another nail in the coffin for a use of Microsoft’s Windows Media.

Viacom
Google
Atom Entertainment
Adobe

Hollicks Eyes ITV For Takeover Rumour?

Some commentators expect ITV’s share price to renew vigour over the coming weeks, as rumours of a fresh takeover are fanned by its institutional shareholders. This is despite poor audience performance and strong competition from a publicly owned, but very commercially managed, C4. There are those who are keen to take over the ITV helm where Greg Dyke so publicly failed.

Critics of ITV’s current management are keen to back a plan that can create value where Charles Allen, the current ITV supreme, has so miserably failed. The individual who is being ‘bigged up’ as heading the next takeover bid is the former United Business Media (UBM) executive and Labour luvvie, Lord Hollick.

Hollick knows more than a little about UK commercial TV. While he headed up UBM, it controlled Meridian TV with the most affluent ITV franchise areas that UBM then unloaded to Granada before Granada and Carlton formed ITV. UBM was also at the time of Hollick’s chairmanship a key mover and shaker in the formation of Channel Five, with UBM holding 35% of the company ahead of RTL taking sole ownership.

Hollicks Eyes ITV For Takeover Rumour? Some wonder why the continued interest in ITV as the deregulated non-linear future hurtles closer, but in truth, ITV has a value in both its content and brand that may be undervalued. The channel when compared against the triple and ‘four-play’ options that are so exciting the Telco executives, still has programmes that viewers will seek out. The next 12 months are critical to the brands long term success, as it’s multi channel strategy is tested by the Freeview expansion of C5 with two more channels. Not forgetting the move of Channel 4’s film channel to an advertising supported free to air proposition, a strong assertive strategy could turn the corner for the dominant UK commercial player but more On Digital type disasters could spell a long and unpleasant demise.

The other left field possibility is that US media titan Time Warner in selling off its UK AOL business has an eye on acquiring a much bigger UK fish that looks astonishingly like the UK’s main commercial TV network- eyes should be glued to the unfolding drama.