HPA Tech Retreat: Examining the Content Consumption Ecosystem
By Carolyn Giardina
February 17, 2012
February 17, 2012
- Testronic Labs CEO Seth Hallen related that in 2011 home entertainment suffered in hardware and content sales. He suggested that part of the problem was the economic environment and in part what he called “consumer burn out.”
- Citing FutureSource research, Hallen reported that there were 485 billion video views in 2011, with YouTube making up 45 percent of those. Free online TV and movies represent another 8 percent, and other free content such as MTV is another 46 percent. This means that 1 percent was paid content in 2011. “This represents massive consumer competition for eyeballs,” Hallen said. “This is an indication of what the industry is up against.”
- Hallen suggested that growth in connected device ownership will boost online revenues. 60 percent of U.S. phone owners had a smartphone in 2011, and that is expected to grow to 90 percent in next 3-4 years, according to the FutureSource research. “We are moving into a fragmented world when it comes to entertainment access.”
- On content: “Packaged delivery is still a very important part of the business, and will continue to be so.” He added that by the end of the year, 1/3 of all U.S. homes are expected have a Blu-ray player, and BD-Live is an important bridge. “Online access is the future.”
- DECE’s Jim Taylor — citing rental/VOD, sell-through, subscription, and ad supported models — said, “all of these business models will be part of electronic distribution… I think sell-through will be a tiny part. If initiatives like UltraViolet are able to gain traction, then I think we’ll see the pendulum switch back.”
- “We have seen a significant shift to streaming from download.” But Taylor pointed out that ubiquitous streaming requires ubiquitous Internet, and there will be situations when bandwidth won’t be there, especially with the move toward higher resolutions. Taylor suggests that streaming and download will continue to co-exist.
- Taylor’s UltraViolet status report: Roughly 100 titles are available from Warners, Sony, Universal and Paramount. A launch is currently underway, focused on streaming. Mid-year developments will “pave the way for download.” “UltraViolet is focused on purchase… I don’t see physical media disappearing anytime soon,” he predicted.
- “We are making progress toward ubiquitous access to content,” Taylor said. That effort includes the introduction of DECE’s Common File Format (the spec is publicly available). DECE is additionally working on a Common Streaming Format (CSF).
- Taylor: “Nirvana might be that everyone standardizes on CFF… It might also be that UltraViolet becomes the EST option for all services. The ecosystems can interoperate… Do I think we are going to get there? No, I don’t. The question is will we end up with a totally fragmented marketplace. If we can get to at least a semi-fragmented marketplace with more interoperability — that would be a great place to be.”
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