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Tuesday, March 08, 2005

Digital Lifestyle & Intensifying Service Provider Battle

We recently covered in this blog on extracting value from digital content where we covered the view about the impact of existing players in the entertainment and media industries ss:
a) a devastating body blow;
b) a profit-spewing bonanza or
c) the creation of a promising market in its infancy.
Barron's ina recent cover story writes,
Four large industries - computer makers, consumer-electronics companies, telecommunications providers and entertainment creators
will feel the shock waves of rapidly developing change in the way the world consumes home entertainment.The battle to control the digital home is linked inextricably to the heated fight between the cable and phone operators. The rapid spread of wireless phones, combined with the soaring adoption of the Internet-based phone service known as VOIP, has accelerated erosion of the regional Bells' core residential phone market. Excerpts with edits and comments:
Telco's are making bold moves, ranging from multibillion-dollar projects to compete with their cable rivals in video distribution, to a flurry of mergers with cellular and long-distance outfits. Both cable and phone companies now offer a "triple play" - phone, video and broadband 'Net access - bundled into a single bill. Add wireless, and you have a quadruple play. Ultimately, consumers will reap the rewards of digital convergence, the ability to gain access to any type of media - music, movies, photographs, television - at the push of a button. Today, for the average cable or satellite TV subscriber, the set-top box provides access to, well, just TV.
In the digital home, consumers will have a rich array of choices. Television lovers will be able to choose among conventional scheduled programs, video on demand, shows recorded on DVRs and material downloaded from the Internet. They will be able to access the music and photos on their PCs via the TV. The television will be able to display e-mail and voice mail,the Web and home security and control systems. And all of this will be accessible from any room in the house - and, eventually, from any place outside the house with an Internet connection. Most of this can be done right now.
Shane Robison, the chief strategy and technology officer of Hewlett-Packard (HPQ), puts the annual revenue from all the affected markets north of $1 trillion. 45% of U.S. homes - almost 50 million - will be digital within the next five years. .Cable guys appear better-positioned than the producers of television set-top boxes and their customers to win this. .
We recently covered Microsoft's impressive advances in the Consumer electronics sector.Microsoft has been pushing Media Center, a version of its flagship Windows XP operating system specifically designed for home-entertainment applications. Microsoft said more than 1.4 million Media Center PCs had been sold to date; the software can be purchased only with a new PC.Microsoft wants to transform the PC from "primarily a productivity device to be more of an entertainment experience, a lean-back consumer-electronics experience." In fact, navigating around a Media Center PC with a remote control isn't much different from using a cable box or a TiVo.Intel concedes that the PC may not be the center of the universe when it comes to digital media. And consumers will build their digital home around the content they want to consume.It will be personal. one might build it differently from a neighbor- the PC may have a critical role, but it may not be in the center. In the end, the battle for your living room will be a clash of the titans. "The center of entertainment is still the living room and the television. And net net, they still control the keys to that kingdom - the cable TV providers and applications like Media Centre ( Read Likes of Comcast and Microsoft)- are well set to make the most out of the emerging digital lifestyle market."

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Sadagopan's Weblog on Emerging Technologies, Trends,Thoughts, Ideas & Cyberworld
"All views expressed are my personal views are not related in any way to my employer"