BBC Canvas Adoption, Assuming it Survives

The latest market study from Screen Digest focuses on the prospects for a project Canvas-type venture in the UK. Screen Digest believes that a hybrid open IPTV platform -- such as that proposed by the BBC and its partners -- will attain some degree of consumer adoption.

Dan Cryan, Senior Analyst at Screen Digest says "The BBC track record of building markets with Freeview and the iPlayer has been a well-documented success. There is every reason to think that if a Canvas-type proposition is approved, with the full promotional impetus of the BBC behind it, it will reach at least 3.5 million homes by 2014."

Given recent events at the BBC Board of Governors, however, "if" Canvas is deemed within the public interest apparently remains very much an undecided issue.

Such a platform is both a threat and an opportunity to pay-TV operators. On the one hand giving them wider distribution potential for their content, and on the other hand giving content owners a potential route to bypass traditional pay-TV service providers and go direct to the consumer.

A Canvas-type proposition will offer an alternative, neutrally-branded distribution platform offering linear TV channels, video on demand and web-based applications. Ultimately, it will rival IPTV, cable and satellite and will be separate from the existing Freeview, Freesat and BT Vision offerings.

Despite the support of powerful project partners, Screen Digest believes that a Canvas-type proposition has a number of obstacles to address -- set top boxes will be expensive and the timing may coincide uncomfortably for UK consumers with the launch of HD Freeview.

Hyper-Competitive French Telecoms Market

By 2014, more consumers in France will subscribe to a triple-play service offer -- as broadband service providers invest in fiber-optic infrastructure to stay competitive, according to the latest market study by Pyramid Research.

Pyramid offers an insightful profile of the country's converged telecommunications, media, and technology (TMT) sectors. Their report provides detailed competitive analysis of both the fixed and mobile sectors, tracks the market shares of technologies and services, and monitors the introduction and adoption of technologies, such as WiMax, IPTV, and VoIP.

"Pyramid forecasts that 30 percent of households in France will subscribe to a triple-play offer by the end of 2009, a number we expect to increase to almost 50 percent by 2014," says Jan ten Sythoff, EMEA Manager at Pyramid Research.

"Pyramid expects quad-play adoption to gradually increase to make up 3 percent of households by 2014," he adds.

Fixed-mobile convergence will become an increasingly important competitive focus over the next couple of years.

"On the fixed side, investments into fiber will be key to maintaining a strong position in the fixed broadband sector; the development of Fiber-to-the-Home is a key issue, and ARCEP, the regulator, is promoting cooperation in order to drive FTTH coverage," Sythoff, says.

On the mobile side, competition will increase with the launch of the fourth network, as well as increasing numbers of MVNOs. Pay-TV competition has intensified with the entry of DSL and fiber operators, as content offers and packages are a key differentiator in triple-play bundles.

"Orange has also started selling satellite TV as part of its triple-play packages, in order to provide nationwide TV coverage, not possible through its DSL network," Sythoff explains. "Cable operator Numericable is investing in fiber technology, and we therefore expect cable subscriptions to decline."

Mobile Data Service Price-Leader Examples

In a global comparison of mobile data service pricing, ABI Research found the Netherlands, France and Singapore to have among the lowest prices for mobile broadband plans.

In France, an "unlimited" download plan costs just over $15 per month. Government regulators in other countries can learn from this hyper-competitive telecom services market that has become the envy of consumers the world over.

"ABI Research expects the price of mobile data to fall in emerging regions where network capacity is still under-used," says ABI Research analyst Bhavya Khanna.

However, in developed markets with high levels of smartphone penetration, operators will have to rethink their current pricing strategies of high or unlimited data download plans, as data usage has grown exponentially.

Some countries have already seen the introduction of innovative pricing plans, including pricing by time rather than data downloaded. For example, mobile data plans in Italy and the Philippines allow for unlimited downloads, but with a limited amount of available time per month.

Vendors must also ensure that their price plans remain transparent and fair. Consumers and watchdogs have complained about excessive and uncapped data costs for users who unknowingly exceed their allotted maximum download limit.

This can be mitigated by the use of data caps above which users cannot continue downloading, or through informative advertising detailing the number of web pages or online videos represented by a given data package.

ABI Research tracks mobile data pricing for both handset use and USB modem across 27 countries worldwide. The database includes information about data pricing plans by carrier, as well as a cross country comparison of the lowest cost plan for downloading 3GB of data.

Substantial Upside for Mobile Enterprise Apps

Informa Telecoms & Media forecasts that mobile enterprise revenues are to reach $92.6bn with over 479 million subscribers by 2014, making this a strong growth area for vendors, service providers and content providers.

According to Informa's latest market assessment, mobile enterprise is forecast to generate 24 percent of total mobile data service revenues by 2014, representing a potentially strong revenue generation opportunity for key players.

Traditionally, cellular operators have tried but failed to capture this market and Informa's report highlights the importance of developing strategies to maximize these new revenue streams.

"One of the key drivers of this growth, is cellular operator interest in new service segments including the SME and Soho sector, the opportunities created by mobile convergence, growth in end user outsourcing and software as services (SaaS). These factors will be magnified in the short term by the impact of the global economic downturn," says Paul Merry, Senior Analyst at Informa.

Mobile enterprise is also seen as a major opportunity for new entrant players from the established enterprise IT sector, according to Merry.

These players are a major challenge to cellular operators having pre-existing relationships with larger corporations and access to their IT departments; they also have substantial expertise in the challenging area of enterprise service development and integration.

"Integration is a major headache for enterprise service providers," Merry states, "with larger companies invariably having pre-existing systems that require incorporation."

The other major party involved in mobile enterprise are device manufacturers, who have identified enterprise services as a valuable service sector which they can develop to drive uptake of smartphone devices.

Players in this sphere include RIM, who through their Blackberry enterprise server (BES) and recently launched App World store, provides the service platform and the services themselves to potential enterprise users.

When Smartphones Reach Market Saturation

The next mobile phone feature, no matter how cool it's said to be, apparently isn't enough to create meaningful competitive advantage. Consumers demand applications that leverage a combined set of features and improved performance to enhance their user experience, according to the latest market study by In-Stat.

"iPhone's success has been a bellwether driving users expectations for cellphones," says Frank Dickson, In-Stat analyst. "Touch screens and QWERTY keyboards, as well as accelerated adoption of open source operating systems have combined to create an innovation environment not seen in the cellphone market of the past."

However, are we talking exclusively about early-adopters when we describe these scenarios? I'm not an early-adopter of these expensive smartphones, so I have to wonder when the advanced user market reaches total saturation -- in other words, I'm wondering, are we already there?

In-Stat's market study found the following:

-Media features continue to penetrate the market and the rise of social networking has helped drive demand for integrated cameras.

- Survey respondents with MP3 players are up 17.3 percentage points from 2008 and respondents with video recorders are up 26.2 percentage points.

- Trends that arise from looking at survey results from each of the four years of the survey highlight the trends of features such as speakerphones migrating from features that they are willing to pay for" to features that are minimum expectations for a phone.

- Respondents voiced desires for usability improvement on the less complex features like better audio, better connectivity and simpler to use overall.

- According respondents digital cameras, speaker phones and GPS were the top characteristics of the Ideal Phone.

Mobile Handsets Include Augmented Reality

Augmented Reality (AR), the overlay of graphics onto a video stream or other real-time display, has existed for more than 15 years, with customized applications in industrial automation, theme parks, sports television, military displays, and online marketing.

Recently, an entirely new mass market has opened up in mobile handsets, due to the availability of video cameras, processors, GPS data, compasses, and accelerometers on smartphone handset platforms.

In particular, personal navigation applications for the Apple iPhone and Android platforms have seen strong early adoption, due to the intuitive nature of the real-time display.

According to an ABI Research study, handheld platforms will transform the Augmented Reality ecosystem, with revenue growing from about $6 million in 2008 to more than $350 million in 2014. As advertisers learn to insert tags into navigation displays, mobile advertising revenue will grow slowly, representing a large portion of sectoral revenues in the 2013-2014 timeframe.

"The new capabilities of handset platforms create an explosive opportunity for Augmented Reality technology," explains study author Joe Madden.

Existing technology suppliers will have to adapt, as rapid growth will transform the Augmented Reality ecosystem. Today's customized, direct business-to-business AR supply chain will continue to see incremental growth in military, automotive, and entertainment applications, but those businesses will be overshadowed by the mass-market dynamics of mobile handset application sales and advertising revenue streams.

The study envisions the development of global databases to store a wide variety of geo-tag information. Governments, businesses, and individuals all will contribute information into such databases, so end-users will be able to view information on notable buildings, retail sales, or special events, or simply to mark locations of interest.

Mr. Madden notes that technology advances are still required for Augmented Reality applications to proliferate. GPS location accuracy is not adequate currently for many applications, requiring additional techniques to refine location precision for shopping applications, or for game applications in which virtual objects must be placed precisely on the display near corresponding real objects.

Producing Attractive Self-Published DVD Media

As I've mentioned before, I find myself experimenting with digital video media more and more, as I discover new ways to use this communication format for multimedia storytelling.

Having started my video editing learning experience with Windows Movie Maker, I've tried a variety of other Non-Linear Editing (NLE) system software, and tinkered with a couple of DVD authoring systems as well.

Most of my creations resulted in online uploads to Youtube, and other Web-based video sharing sites. Being a low-budget self-publisher of video content, my prior efforts to create and duplicate limited numbers of DVDs resulted in unattractive hand-written scribbles on the usual bland silver surface DVD-R discs.

Granted, there are solutions to this problem that include laser engraving the surface of specially designed DVDs, color printing directly onto special matt- or silk-finish discs, or laser printing on adhesive white labels that can be applied to discs.

My preferred choice for quickly producing cost-effective limited quantity DVD projects, is to use pre-colored LightScribe discs or pre-printed designer surface discs.

I've experimented with Verbatim brand discs with excellent results. Their color background DVD-R LightScribe discs -- available in five attractive colors -- are a good choice.

If you're like me, and you have fond memories of the cinema era, then you will really appreciate Verbatim's very unique DigitalMovie DVD media that features a film reel design on the top surface.

The DigitalMovie DVD-R discs offer the best combination of alternatives -- attractive professional design and the convenience of being able to quickly create custom hand-written titles directly on the disc.

Staying with that retro media theme, Verbatim also offers their nostalgic Digital Vinyl CD-R media, designed to look like the 45-rpm single record from a bygone era of the music recording industry.

Armed with these distinctive-looking digital media disc alternatives, and a little creative talent on your part, your next multimedia project -- for business or personal use -- should be an eye-catching contrast to the more typical bland results.

Online Video Sites May Adopt Pay-TV Model

According to an eMarketer report, an August 2009 survey provides more insightful datapoints for the ongoing debate about consumer interest in paid (rental) versus free (advertiser supported) services that deliver online video.

Digitalsmiths found that more than 70 percent of U.S. Internet users surveyed had watched online video in the past week, and more than one-half had watched online TV programs.

When asked whether they would pay to watch television programs on demand on a computer or mobile device, online video viewers were split. While 22.6 percent of viewers said they were at least somewhat likely to sign up for such a service, more than three in ten claimed they definitely would not.

Online video viewers similarly disagreed on whether they would pay a rental fee to stream movies on demand.

The eMarketer report highlighted this split among online video viewers. Most would prefer to watch video for free, but a significant minority is willing to pay in order to avoid at least some advertising.

That suggests a hybrid model of reduced advertising along with smaller fees -- similar to cable TV.

"Video destinations that offer extensive content in exchange for fewer ads and lower fees would likely attract a large audience," said eMarketer senior analyst David Hallerman. "That, in turn, would create a robust platform for video ads in an uncluttered environment."

Demand for Internet TV Widget Applications

The Diffusion Group (TDG) has studied a wide variety of widget-based Internet TV applications. TDG's new report "Widgets Gone Wild - Separating Killer Apps from Losers in the Age of Web TV" offers new perspective on this emerging market.

"To date, it has been impossible to introduce Internet applications into the TV environment and make them stick," notes Michael Greeson, TDG founding partner and report author.

"There are a number of culprits involved, ranging from the lack of network-capable TVs and poorly conceived user interfaces, to a genuine lack of consumer interest in the applications offered."

However, a forwarding looking view of the market opportunity paints a very different picture.

Colin Dixon, TDG senior partner and a former member of the Microsoft Web TV team, argues that the age of Internet TV is only now beginning in earnest, having been touted prematurely nearly a decade ago, long before technology and consumer vectors were in alignment.

Today, however, the circumstances are different. "For one, the technologies needed to deliver a rich Internet TV experience are being put in place. Second, today's consumer understands the value that specific Internet applications can bring to their TV experience. Third, a new user interface has emerged that offers an intuitive and easy-to-use means of engaging the web on TV. It is now a question of identifying which specific Internet TV applications are most valued."

TDG's new report includes consumer assessments of 26 different widget-based TV applications covering TV/video, music, photos, on-demand information, social media, interactive advertising, online shopping, and a myriad of other apps now under consideration by CE OEMs and service providers.

Widget applications evaluated in the study include:

- TV and video applications such as access to online TV sites and movie recommendation services.

- Photo and music applications such as TV-based access to Flickr and Pandora.

- Real-time e-commerce (eBay) and interactive advertising for specific TV shows and movies.

- On-demand information such as breaking news, business, weather, sports, and traffic updates.

- Real-time media clipping for ringtones, wallpaper, TV-based instant messaging and access to social networks such as Facebook.

Worldwide Mobile Data Service Revenues

While the world economic recession has caused hardship for many businesses, it has had little impact on their use of mobile data services, according to the latest market study by ABI Research.

In an update to ABI's study, worldwide mobile data services revenues are expected to increase 17 percent in 2010. Through 2014, mobile data services revenues will grow at a CAGR of 12 percent.

Says practice director Dan Shey, "Company consolidations have forced the remaining workforce to become even more efficient. Mobile data services offer the most options for tailoring services to the needs and work practices of workers in order to increase productivity and business efficiency."

Messaging services will maintain their leadership position for data revenues, fueled by the penetration and growing use of SMS services by business customers worldwide.

Total worldwide messaging revenues from this segment will grow 10 percent through 2014, equaling $48 billion.

Mobile broadband revenues will be highest in North America from 2010 to 2014. However, the greatest share the mobile broadband services wallet will go to mobile business customers in Eastern Europe and the Middle East where in 2014 revenues will grow to 27 and 26 percent of total spending respectively.

Application download revenues will see the greatest growth with Asia Pacific mobile business customers. The highest portion of ARPU spend for these applications will come from business customers in Asia Pacific and Western Europe.

DTV Sets are Broadband Entertainment Hubs

With digital television sets (DTVs) supplanting analog models in much of the world, consumer electronics manufacturers are adding new features -- such as Internet connectivity and wireless HD capability to broaden their appeal, according to the latest market study by In-Stat.

"DTVs are competing with computers to be the entertainment hub of the home," says Brian O'Rourke, In-Stat analyst.

TV sets with broadband Internet connectivity are already commercially available in the U.S., Europe, and Japan. Models from Hitachi, LG Electronics, Mitsubishi, Panasonic, Samsung, Sharp, and Sony can connect directly to the Internet without a home computer.

CES 2010 will likely feature a plethora of new TV models, and associated OTT video services.

In-Stat's market study found the following:

- 36 percent of digital TV sets sold in 2013 will be network-enabled.

- DTV Revenue in Asia-Pacific will see a 6.3 percent Compound Annual Growth Rate (CAGR) from 2008 to 2013, the fastest growth among the major regions, except for Rest-of-World.

- DTVs are now the only TVs available in most of North America, Western Europe, and Japan.

- Silicon TV tuners capable of demodulating both analog and digital television signals in a single chipset are beginning to replace Can TV tuners in high-end models.

U.S. PC Market Grew by 2.5 Percent in 3Q09

Global PC shipments rose 2.3 percent year on year in the third quarter of 2009 (3Q09), according to the latest market study by IDC.

The increase is an important continuation of recovery from year-on-year declines of 6.8 percent in the first quarter and 2.4 percent in the second quarter of this year.

Seeing market growth ahead of the launch of Microsoft's Windows 7 bodes very well for the fourth quarter and next year. All regions except Japan either met or surpassed expectations. Portable PCs continue to account for the majority of volume and growth, with Mini Notebooks are still making a substantial contribution.

"Despite the ongoing mix of gloom and caution on the economic front, the PC market continues to rebound quickly," said Loren Loverde, program director for IDC's Tracker Program.

The competitive landscape, the transition to portables, new and low-power designs, growth in retail and consumer segments, and the impact of falling prices are all reflected in the gains by HP and Acer, as well as overall market growth.

"The continued strength of both the U.S. and worldwide PC business in the face of difficult economic environments underscores the value that both consumer and corporate buyers place on PCs," according to Bob O'Donnell, vice president, Clients and Displays at IDC.

With the forthcoming launch of Windows 7 and expected commercial refresh beginning in 2010, the prospects for future PC market growth are very solid.

The U.S. PC market grew by 2.5 percent compared to the third quarter of 2008. Strong Portables sales were part of a back-to-school season that saw consumers continue to gravitate toward lower-cost Portables. Vendors with a solid retail presence were the main beneficiaries as HP regained the top spot in the U.S. market.

Graphics, Video and Audio App Requirements

With the increasing use of rich media content, Internet-connected mobile devices need robust multimedia performance enhancements to provide a quality user experience, according to the latest market study by In-Stat.

As a result, graphics, video, and audio requirements are now strategically important to related semiconductor and system design.

"Multimedia features have moved from simple co-processing functions to the forefront of semiconductor and system design," says Jim McGregor In-Stat analyst.

However, there appears to be an alarming trend of fewer in-house and third-party solutions available despite the growth prospects of the mobile market.

In-Stat's market study uncovered the following:

- The total available market (TAM) for Internet-connected devices is projected to grow at a 22.3 percent compound annual growth rate (CAGR) through 2013.

- 91 percent of Internet-connected devices will be using processors with integrated multimedia acceleration, including 72 percent of mobile PCs, by 2013.

- With fewer in-house multimedia solutions and third-party IP providers, ARM, CEVA, and Imagination are poised to benefit the most from increased multimedia functionality in mobile devices.

- Carriers will account for over 60 percent of Internet device unit sales in 2013.

- ARM, CEVA, DMP, Imagination Technologies and Vivente are all offering IP solutions to address the market.

Best Online Video Advertising is None

eMarketer reports that online video viewership has never been higher, and marketers are eager to reach that audience. However, video viewers apparently dislike advertising. Perhaps marketers should forget about legacy mass-market approaches to viewer engagement, and instead accept that online video isn't at all like traditional TV.

"The audience perspective will also shift as marketers increasingly implement two key concepts," said David Hallerman, eMarketer senior analyst. "It will mean making the length of video ads suitable to the length of content, so that they are not too pushy, and devoting resources to develop high-quality video creative that is well-targeted to the intended online audience."

Marketers still generally shun user-generated video, but the proliferation of short professional content gives them more opportunities for video advertising. Choosing an appropriate amount of advertising for the content and its audience will be key, according to the eMarketer assessment.

"The Internet and TV audience are not one and the same," said Mr. Hallerman. "The Internet audience does not necessarily respond to the same ads in the same way they would after viewing them on TV."

For example, younger people are more comfortable than their older counterparts with online media, which can lead to higher levels of engagement. A drill-down look from Nielsen Online shows that audiences ages 30 and younger are more likely than older viewers to find online video advertising funny, emotionally touching and informative.

Further, there is still about a three-to-one split on whether viewers would prefer to see ads or pay to watch ad-free online videos.

Mr. Hallerman suggests content providers would be wise to consider a hybrid model, much like cable TV, where subscription fees support content with fewer ads. But, I'm not convinced that even this approach is a viable solution to the known problem.

Given the reality, why attempt to force people to watch advertising at all? Why not simply create engaging video content that features a product or service, and thereby offer something of meaningful value to people?

Consumer TVs Entering Pro Digital Signage

According to a Futuresource Consulting market study, the B2B flat panel digital display market has experienced steady growth this year, with the market attaining sales in excess of 400,000 units in Q2 2009.

This represents close to 30 percent year-on-year growth from Q2 2008, underlining the growing acceptance of flat panel product as a viable and ever more affordable technology.

However, this performance also includes consumer TV crossover product, which has been widely adopted in the professional marketplace over the past few years, accounting for over 60 percent of global sales in Q2 this year.

There are arguments and counter arguments for the selection of pro monitors vs. consumer TV products, but ultimately video displays have now become just one element of a wider solution.

"Our research shows the public display application has enjoyed strong year-on-year growth of nearly 40 percent, with digital signage driving flat panel display penetration in almost every application and vertical market," says Chris McIntyre-Brown, Senior Market Analyst at Futuresource.

Retail digital signage has long been seen as the main vertical for flat panel displays -- currently around 45 percent of total public display application sales -- with the obvious attraction of funding the network via advertising revenue.

However, it appears to be the digital signage networks and installations that fail to provide, or even offer, a clear ROI that have suffered -- such as point-of-information or wayfinding installations. After a period of difficult growing pains, the digital signage industry shows signs of maturing beyond infancy to early adolescence.

Securing quality affordable content still remains an issue but this is gradually changing as the industry evolves and the weight of demand drives new initiatives.

Futuresource expects the latent demand built over 2009 to drive strong growth in 2010 reaching 2.4 million units. Systems integration will continue its ascendancy as the lines between AV and IT continue to blur and more emphasis is placed on total solutions.

The challenge for both hardware and software vendors will be how they fit into the new connected age, identifying the most suitable players to partner with, which verticals offer the best opportunities and the most appropriate routes to those markets.

Wi-Fi Starts Cross-Over into Digital TV Sets

As the number of connected consumer electronics (CE) devices continues to grow, network connectivity becomes a challenge. Home network technologies such as coax and powerline are making inroads, however the latest market study by ABI Research indicates that wireless will remain the dominant method.

Connected consumer electronics devices are an important part of the emerging and quickly growing home media network. Consumers are becoming more comfortable with the idea of delivering audio and video content throughout the home, on a variety of devices.

These devices include HDTVs, video game consoles, networked music receivers, and more. However, as these components are frequently scattered around the home, away from the router, wired connections are often not practical.

As a result, Wi-Fi connections in consumer electronics devices will rise from 113 million in 2008 to more than 285 million by 2012.

"While many consumer electronics devices initially adopted Ethernet connections due to cost and potential wireless connectivity issues, Wi-Fi has become the dominant LAN connection type in several device categories," says digital home practice director Jason Blackwell. "Now we're seeing Wi-Fi making its way more aggressively into components including digital televisions."

As bandwidth-intensive applications such as video streaming have become more commonplace, Wi-Fi has evolved with higher speed technologies such as the 802.11n standard. Ethernet will remain a strong second place technology, as it is often integrated in the silicon and does not add a significant amount to the bill of materials costs.

Over time, powerline, coax, and high-speed wireless connections will show growth in adoption, especially among broadband service providers.

Pay-TV Set Top Boxes Transition to MPEG-4

The global pay-TV market has been somewhat unpredictable for vendors that supply the key elements of the service delivery infrastructure. After a record-setting year in 2008, worldwide demand for digital cable set top boxes (STB) is falling in 2009, according to the latest market study by In-Stat.

The slowdown in unit shipments and revenue has generally been concentrated in the comparatively advanced cable markets in North America and Western Europe. The market slow-down has been due to reductions in cable operator capital expenditure (CAPEX) budgets brought on by the global economic recession.

Meanwhile, unit shipments to China are projected to set another record in 2009, approaching 20 million units, contributing to a rise in the overall Asia-Pacific market. In addition, increasing demand for digital cable TV services is pushing digital cable set top boxes into new markets in Asia, Latin America, and in Eastern Europe.

"Even with a slight decrease in unit shipments in 2009, the cable set top box market remains both dynamic and robust," says Mike Paxton, In-Stat analyst. "There are some significant technology transitions, including the transition to MPEG-4 and the move toward a hybrid QAM + IP cable set top box that are creating new opportunities for cable set top box vendors."

In-Stat's market study found the following:

- Global unit shipments of digital cable set top boxes are projected to reach 47 million in 2009, a decrease of 6 percent over 2008.

- Low-cost, digital terminal adapter (DTA) product unit shipments are beginning to have an impact on the cable set top box market in North America, especially in terms of product ASPs.

- While Motorola and Cisco Systems remain the top two cable set top box manufacturers, out of the remaining eight cable set top box manufacturers in the top ten, six of them are from China.

Mixed Upside-Downside of Pay-TV Markets

By 2014, 84 percent of all pay-TV net additions will come from emerging markets, however a successful pay-TV VoD service in these markets will depend on a variety of factors, according to the latest market study by Pyramid Research.

"By 2014, emerging markets will account for 69 percent of the global subscription total, with 84 percent of all pay-TV net additions coming from these markets," says Dan Locke, Senior Analyst at Pyramid Research.

Almost half of the world's pay-TV subscriptions come from Asia-Pacific, mostly from China and India. The next-largest emerging pay-TV nations are Russia, Egypt, Turkey, and Poland.

Even though most pay-TV subscriptions are found in emerging economies, the revenue opportunity in these markets is considerably smaller than in developed ones, due to significantly lower pay-TV ARPS.

Low incomes make high prices for pay-TV unaffordable for most in developing markets, and free or inexpensive alternatives such as pirated content deters adoption even further. As a result, only 20 percent of pay-TV revenue worldwide comes from emerging markets.

"A successful pay-TV VoD service in an emerging market will depend on a variety of factors, including the network technology and architecture, content availability, consumer demand, and the competitive landscape," explains Locke.

Despite lower attach rates in emerging markets than in the U.S., Pyramid believes sizeable revenue opportunities for VoD and DVR services still await due to the sizeable and largely untapped markets.

The Pyramid report provides explanations, examples, and case studies from a range of markets. These cases highlight best practices that can be emulated to build incremental revenue streams with pay-per-view, NVoD, push VoD, a-la-carte channels, movies on demand, DVR and time-shifted TV, subscription VoD, free VoD, true VoD, and interactive VoD.

The report also includes an update on the status of pay-TV adoption and revenue across emerging markets, setting the stage for an analysis of whether VoD can serve as a viable differentiator to help drive pay-TV demand or whether investments in the service are doomed to fail.

It concludes with VoD and DVR adoption and revenue forecasts covering the world's largest emerging markets measured by pay-TV revenue and adoption -- Brazil, China, India, Mexico, and Russia -- as well as forecasts for the U.S., the largest pay-TV market in the world, and the market most likely to experience a downside from the adoption of over-the-top video.

Mobile VoIP is a Threat to the Legacy Telcos

Why all the fuss about the Google Voice service? Let me share my perspective. I've been a user since the Grand Central beta launch. It's innovative, a wonderful productivity enhancement tool, easy to configure, and it's free to use with any mobile phone.

So, why don't Telcos use their service delivery platforms to create these new offerings?

In-Stat believes Mobile VoIP could pose a direct threat to service provider voice revenue. The cost to a mobile subscriber for a minute of voice is at the center of the storm with Mobile VoIP promising to fundamentally change mobile voice economics.

The consumer cost of a minute of voice from a wireless operator can be as high as 45 cents. Admittedly, a rate as high as this would be for overage fees above a standard rate plan. Given rate plans, free week-ends, free weeknights, unlimited calling circles and other plan complexities driven by innovative marketing practices, the actual cost per minute to a subscriber is about 5 cents.

According to Kineto, Mobile VoIP will typically use about 30 kbps. Assuming that a person's cellular subscription with a mobile operator provides a 5 gigabyte mobile data cap for which they pay $30 per month, one could talk for roughly 22,222 minutes using Mobile VoIP over their data plan.

That works out to 0.135 cents minute. While using over 20,000 minutes per month isn't realistic, it does point out that Mobile VoIP offers the potential for unlimited voice calls for $30 per month.

In recent research, In-Stat asserted that Mobile VoIP is moving beyond its initial function as a new mechanism to get inexpensive international calls. While Mobile VoIP poses a direct threat to operator voice revenue, it also represents a dynamic new capability that promises numerous applications.

In-Stat projects that by 2013 Mobile VoIP applications will generate annual revenues of $32.2 billion, driven by over 278 million registered users worldwide, with revenue and users associated with Mobile VoIP being distributed among online Mobile VoIP services, 3G-Based Mobile VoIP offerings, and WiMAX/LTE Mobile VoIP offerings.

Applications such as Skype and Vonage have influenced users to think of voice as a data application. The increasing penetration of Wi-Fi in mobile devices was the beach head that Mobile VoIP applications needed. As user habits are being shaped by rich on-line communication experiences, mobile carriers' control over devices and data applications is waning.

Mobile carrier attempts to slow the spread of on-line Mobile VoIP are proving to be a challenge as well. The ominous cloud of packetized voice is on the horizon, and according to the In-Stat assessment, the compelling economics cannot be ignored.

Marketer Mass Exodus from Brand Building

Three-quarters of U.S. marketers had their budgets cut this year, and two-thirds were expected to drive more sales with an equal or lesser budget, according to the Association of National Advertisers and Marketing Management Analytics.

eMarketer reports that the number one strategy for marketers who wanted to improve effectiveness without spending more, according to the June 2009 poll, was shifting from traditional to digital media.

More than one-half of respondents also reported shifting spending away from brand-building initiatives, and 38 percent were putting more spending into lower-cost media.

The marketer exodus from traditional leap-of-faith brand-related advertising is clearly related to the accelerated move toward more measurable digital marketing practices.

That said, almost four in ten respondents reported that their senior management considered marketing an expense, but more still saw marketing costs as investments in their brand.

The need for marketing accountability is driving many efforts among the marketers surveyed, including an increase in the use of sophisticated analytics and predictive modeling.

Fewer marketers reported this year that it was challenging to train staff to deal with the data compared with last year. But they were much more likely to find it difficult to manage all the disparate tools and output generated by their marketing analysis.

Although many respondents expect their budget for 2010 to increase (36 percent), most believe that accountability efforts are here to stay.

Telecom Growth Hinges on Mobile Data Apps

Analysys Mason forecasts that the worldwide telecommunications market will grow at a 6 percent compound annual growth rate (CAGR) to reach $2.4 trillion in revenue by 2013. This growth will be driven primarily by mobile data service applications.

Communication service providers (CSPs) are launching 3G mobile networks in many emerging markets, such as China and India, and LTE technology will become available in most mature markets during the next few years. Analysys Mason predicts that mobile data traffic will grow at a 131 percent CAGR through 2013.

Roz Roseboro, Senior Analyst at Analysys Mason, says "While mobile data presents the greatest revenue opportunity for operators, it could also be their biggest challenge. They must find ways to monetize that traffic so that all of the value doesn't go to device manufacturers, such as Apple and Nokia, and content owners. Flat-rate plans break the link between traffic and revenue, so are not a sustainable solution."

The report shows that CSPs have managed their costs successfully in a difficult environment. The global telecoms services market grew by 5 percent in 2008 to reach $1.8 trillion in revenue, despite the economic downturn. Even more encouraging was the year-on-year growth in EBITDA, which stood at a very impressive 10 percent.

Other key findings from their report include:

- Mobile services continue to be the leading source of revenue. Mobile voice services accounted for 36 percent of global service revenue in 2008, and mobile data services accounted for 10 percent, while traditional voice services represented only 21 percent.

- There are more than twice as many mobile subscribers in the world as there are traditional voice lines -- 4 billion versus 2 billion. In emerging markets, mobile services tend to account for an even larger share of service revenue -- up to 58 percent, in some cases.

- The mature markets of North America, Western Europe and developed Asia-Pacific accounted for 70 percent of global telecoms revenue in 2008, but the emerging markets registered greater growth rates.

- Sub-Saharan Africa, the Middle East and North Africa, Central and Latin America, emerging Asia–Pacific, and Central and Eastern Europe all achieved double­-digit revenue growth in 2008.

- The top-ten CSPs accounted for 44 percent of global revenue in 2008. All of the top-ten operators, except China Mobile, are based in mature markets, but their sources of revenue vary.

- AT&T, NTT, China Mobile and KDDI generate most of their revenue in their home markets, while Western European leaders Deutsche Telekom, Telefonica, France Telecom, Vodafone and Telecom Italia have significant businesses outside their home markets.

Next Wave of IP Connected Home Devices

Broadband Internet access service adoption and home networking infrastructure advances have contributed to a new wave of digital home connectivity. On the hardware front, the trend in the digital home is headed towards more IP-connected devices, signifying a new era in consumer electronics.

According to the latest market data from ABI Research, connected home devices is potentially the Next Big Thing in the consumer electronics (CE) industry, with a global market value growing by a compound average of 23 percent annually over the next five years to more than $10 billion in 2014.

As ABI industry analyst Serene Fong observes, "Service providers view home networking not only as an avenue to create consumer loyalty, but also as a new revenue-generating cash cow."

Instead of pure voice or data services, service providers now include content, applications, in-home networking, and sometimes gaming and even energy management within their service offerings.

Interest in content sharing among multiple IP-enabled devices is growing as the world's more privileged users explore the new realm of integrated browsing, communication and interactive entertainment experiences.

Studies show that consumers are increasingly investing in digital devices to enhance the quality of their entertainment experience. And, the digitally connected home forms an attractive platform for bringing different -- but now closely related -- industries together.

However, as Fong cautions, "Service providers and equipment manufacturers should not rest on their laurels. Price, product quality and end-user experiences still remain intensely competitive and manufacturers will have to keep their customers satisfied before they can start hoping for real significant revenue growth."

ABI's market study addresses shipments, ASP, revenue information and examines the growth potential of various consumer technologies. It contains segmented market forecast data for devices including televisions, game players, digital cameras and camcorders, digital photo frames, media phones, Internet appliances, DVD and Blu-ray equipment, PVRs, and portable media players.

Global Demand for Over-the-Top TV Services

As we countdown the days to CES in January, now's the time to reflect upon the anticipated arrival of new consumer electronics devices, in particular Internet-enabled flat-screen television sets, that are being introduced to accelerate the demand for over-the-top (OTT) TV services.

According to the The Diffusion Group, revenue from the on-demand delivery of Internet video to the TV will grow from $621 million in 2009 to $2.1 billion by 2014, accounting for more than 25 percent of total annual video-on-demand revenue.

This finding is discussed at length in TDG's latest digital media analysis, Broadband-Enabled TV: Rise of the OTT Provider, authored by TDG senior partner, Colin Dixon.

Fueling this trend, notes Dixon, is the rapid diffusion of ancillary web-enabled platforms such as game consoles, Blu-ray players, and hybrid set-top boxes.

While TVs with embedded broadband support are only now arriving in retail channels, the widespread and growing penetration of secondary platforms will set the stage for a rapid uptake of Internet-to-TV video services, both pay-per-view and subscription-based.

"To put this into perspective, most industry estimates predict 2014 U.S. DVD rental revenue will exceed more than $8 billion," notes Mr. Dixon. "By that time, OTT video rentals will top $2 billion, accounting for 25 percent of home video rentals. If that fails to warn companies like Blockbuster and Time Warner Cable as to the magnitude of this threat, they are asleep at the wheel."

TDG's latest digital media analysis is the first of a two-part report series by Colin Dixon on the emerging opportunities associated with OTT video services. The initial report analyzes and forecasts global demand for Over-the-Top services, and revenue associated with both pay-per-view and subscription video services, as well as the diffusion of broadband-enabled TVs.

The second report in the series will provide forecasts for a variety of web-enabled video platforms including game consoles, Blu-ray players, hybrid set-top boxes, Internet extenders, and others.

Ups and Downs of TV Set-Top-Box Demand

The global transition to digital broadcast television service, and the growing adoption of Internet video by consumers, is creating huge roller-coaster like demand swings for the CE device manufacturers.

In-Stat reported that worldwide Digital Terrestrial TV (DTT) Set Top Box (STB) shipments fell by nearly 35 percent in Q2 compared to Q1. The shift was driven primarily by falling shipments in the North American market following the analog broadcast TV shut-off.

Plummeting unit shipments in North America were partially offset by growth in the Asian DTT market, which actually grew 50 percent to over 1.2 million units.

The satellite set top box market increased unit shipments to 20.3 million units in Q2 2009, making it the largest set top box market among Cable, Satellite, IP and DTT set top boxes.

While IPTV set top boxes saw a slight sequential drop in unit shipments from Q1 to Q2, growth in High-definition IPTV set top boxes was strong. The percentage of HD IPTV set top boxes increased by 9 percentage points compared to Q1 2009.

Overall, for the year 2009, In-Stat expects unit shipments across the set top box markets to be flat compared with 2008. Total revenue will decline by about 1 percent to just below $17 billion in 2009.

The new In-Stat Set Top Box Database tracks set top box (STB) unit shipments, revenues and average selling prices (ASPs) on a quarterly basis. Operator segmentation includes Cable, Satellite, Telco IPTV, and Digital Terrestrial TV.

Upside for Mobile Phone Application Stores

The number of smartphones sold each year will increase from around 165.2 million in 2009 to 422.96 million in 2013, with the total number of smartphone users approaching 1.6 billion, according to the latest market study by Wireless Expertise.

Their latest report demonstrates how smartphone penetration will reach approximately 28-30 percent of the total mobile market by 2013.

"We expect smartphone growth to have a positive impact on the number of application downloads in the short- to mid-term," said Anuj Khanna, CEO of Wireless Expertise and author of the report.

Strong revenues are expected to come from low-end mass market smartphones and mid-to high-end feature-phones in the mid- to long-term as operators and mobile handset manufacturers take app stores to the mass market.

Wireless Expertise forecasts that the global mobile app market will be worth $4.66 billion in 2009, rising to $16.60 billion, in 2013. With mobile phones outnumbering PCs around the world by 4:1, mobile applications represent an even bigger opportunity for the mobile industry.

"With over four billion mobile users around the world compared to approximately one billion PCs, mobile will become the ideal channel for businesses to reach their consumers," continued Khanna. "Mobile operators have to adopt a dual app store strategy, using the now widely-accepted app store model in conjunction with a browser-based widget store, to provide the greatest potential for a mass-market proposition."

The report points out that complacency from existing handset vendors and mobile operators had virtually killed the mobile content market. But mobile applications have reignited the demand for multimedia content and applications.

Wireless Expertise credits Apple for growing the applications market. "Apple has not only invigorated what was rapidly becoming a stagnant mobile content and services market, but its App Store has paved the way for professional content developers and publishers to stand side-by-side with the new breed of garage developers introducing innovative and functional apps," said Khanna.

However, they expect Apple to face tough competition from mobile operators, independent service providers and competing vendor application portals in the next 18-24 months.

The report suggests that Nokia will be very active in the smartphone market and Nokia's biggest advantage over Apple is its ability to offer Ovi on a wide range of handsets, ranging from the high-end to the mainstream. And the fact that Nokia is pushing its app store to a mass market is very encouraging.

Mobile operators releasing a mobile internet API would address the issue of fragmentation and help create a multichannel app services and content retail environment coupled with integrated billing and payment mechanisms.

However, operators must be involved in the delivery and payment of the service with their own platforms giving improved revenue shares as high as 90 percent if they want to compete in this market.

Exclusive Clip and the Rise of OTT Video

First Hulu, then Fancast, and eventually ZillionTV. What does the future of Over-the-Top video look like? -- Broadband-Enabled TV: Rise of the OTT Provider. By the way, kudos to the movie "2012" special effects team.

Proven Digital Marketing Success Strategies

eMarketer reports that McKinsey & Company recently polled people about the benefits gained from using various Digital Marketing practices and associated Web 2.0 tools, both internally and externally.

The study found that several technologies were a benefit for enhancing relationships among employees -- as well as with customers and external partners.

When it came to customer-related benefits, blogs were the most useful tool, bringing measurable benefits to 51 percent of responding companies worldwide. That was followed by video-sharing and social networking, at 48 percent each, and RSS feeds, at 45 percent.

Technologies such as wikis, podcasts, ratings and tags were less useful, but still benefited customer relationships for about one-quarter to one-third of companies worldwide.

More than one-half of respondents (52 percent) said Web 2.0 tools increased marketing effectiveness, while 43 percent reported higher customer satisfaction and 38 percent reduced marketing costs.

Businesses in the high-tech or telecommunications industry were most likely to report customer-related benefits of Web 2.0, at 65 percent, followed by business/legal/professional services firms, at 60 percent.

Companies cannot simply adopt these technologies and expect their customers to use them, however.

Among firms reporting measurable benefits from Web 2.0, 74 percent said it was important to integrate the tools with other forms of customer interaction, and 52 percent said marketing the Web 2.0 initiatives themselves was a best practice.

Fourth-Screen Scenarios in the Digital Home

If broadband service providers want to provide useful value-add services to consumers, then don't they need to become more fluent in the evolving domain of the digital home? It's a challenge, when most of your early-adopter customers know more than your typical front-line employee.

According to a new connected home devices study from ABI Research, fourth screen devices -- some new, some variants on ideas that have been around for several years -- promise novel experiences for users and potential new revenue streams for service providers.

These devices include digital photo frames, media phones, and Internet appliances. Media phones will be among the fastest-growing device types, and will generate a market value above $5 billion by 2014.

ABI industry analyst Michael Inouye says, "While the first media phone models only appeared late last year in the U.S. (earlier in Asia-Pacific), more than 30 million units will be shipped in 2014. These devices, which feature video playback, Internet connectivity, and some form of voice functionality, will be among the strongest performers among Fourth Screen products."

Digital photo frames have been in the market for some years, and currently ship in numbers that dwarf the other categories in this segment. Recently market growth has slowed somewhat, but a new Wi-Fi equipped variant is expected to show strong growth over the next few years before leveling off around 2013.

All these devices share one market obstacle. “Fourth screen devices in general are competing against more multifunction devices such as smartphones,” says Inouye.

But for consumers who want more permanent, dedicated control, they can be a compelling proposition. One key to success for all these new devices is the availability of "mainstream" consumer education. Will those people likely approach a broadband service provider for guidance? I doubt it.

Entertainment Industry Migrates to Online Ads

The Nielsen Company reported that time spent on social network and blogging sites accounted for 17 percent of all time spent on the Internet in August 2009, nearly triple the percentage of time spent on the sector a year ago.

"This growth suggests a wholesale change in the way the Internet is used," said Jon Gibs, vice president, media and agency insights, Nielsen's online division. "While video and text content remain central to the Web experience, the desire of online consumers to connect, communicate and share is increasingly driving the medium's growth."

Year-over-year, estimated online advertising spend on the top social network and blogging sites increased 119 percent, from approximately $49 million in August 2008 to approximately $108 million in August 2009. The share of estimated spend on these sites has also grown, increasing from a seven percent share of total online ad spend in August 2008 to a 15 percent share in August 2009.

While several industries decreased their overall online ad spend year-over-year in August, spending on the top social network sites increased across the board. The Entertainment Industry led in growing its online ad dollars, increasing ad spending on the top social network sites by a huge 812 percent in August. Travel advertisers followed suit, increasing their ad spend on these sites by 364 percent.

"In the past, advertisers had significant concerns with social media advertising," said Gibs. "The considerable increases we've seen in ad spending over the past year suggest that many of these concerns have subsided or been addressed."

In particular, advertisers that want to connect with core fan bases, such as movie studios, are allocating more and more dollars to online communities like Facebook and MySpace, where they can engage in an ongoing dialog with their target market.

The growth of social networking sites has been fueled in part by the explosive growth of Facebook, and it is to this site that many industries head when planning their online ad dollars.

In August 2009, Facebook was the number-one social networking site advertised on by 10 of the 13 industries when ranked by display ad impressions, while Myspace.com led in the other three industries.