Transcript Presentation Title - Digital Media Conference

Digital Media Trends to Watch
Changes in Content Consumption
Joe Bates
Director of Research
Consumer Electronics Association
4th Annual Digital Media Conference
June 22, 2007
Agenda
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About CEA
Trend #1: Disruptive Distribution
Trend #2: Greater Consumer Control / Choice
Trend #3: Greater Realism
Trend #4: Greater Connectivity
Trend #5: Greater Portability
Presentation URL / Contact Info
• NOTE: All 2006 figures are estimates, all 2007 and beyond are
projected
About CEA
• More than 2,100 members
• Top 20 Trade Association
• Represents entire range of consumer technologies
• More than $140 billion in annual U.S. sales by members
• CEA Market Research
• 300 consumer research studies
• Sales data and forecasting program
• Research Library
• Economic Insights
Disruptive Distribution
The Shifting Media Continuum
Video? Music?
Purchasing
Physical
Media
Digital
Media
Video?
Physical
Media
Music?
Usage
Digital
Media
Video Download vs. Physical DVD
Digital
Download
30%
Early Adopters
Early Mass
Late Mass
Late Adopters
OVERALL
70%
Physical
DVD Copy
19%
81%
15%
85%
16%
84%
20%
80%
Base: All Online US Households
Reasons for Preferring Physical Media
68%
Want to immediately play
without any hassle
52%
Physical copy easier to
share with friends/family
37%
Afraid something may
happen to the digital file
37%
Like in-person
shopping experience
Fewer restrictions with
physical media
Like to display collection
of DVDs or CDs
49%
36%
27%
34%
33%
29%
28%
27%
CDs
DVDs
Greater Consumer
Choices & Control
Digital Recording Options
Millions of Unit Shipments
18.1
16.9
16.9
DVD Recorders
13.3
DVR
7.0
6.4
7.4
8.0
8.2
2009
2010
4.8
0.2
0.3
2000
2001
0.8
0.2 0.030.5
2002
2003
1.6 1.9
2004
2.7
2005
2006
2007
2008
Emerging Home Services
• FREE Streaming
Network Shows
• Amazon Video
• iTunes Video
• Vongo
• CinemaNow
• MovieLink
• Xbox Live
• Google/You Tube
• Bebo
Desired Activities Using Home TV
91%
Watch DVDs/VHS
88%
Watch TV Programs
54%
Watch Content on DVR
View PC Video
47%
Play Video Games
46%
44%
View Digital Photos
Listen to PC Audio
29%
Access the Internet
29%
20%
Email
Video Conferencing
17%
Access PC Documents
16%
Other
None
1%
4%
Emerging On The Go Services
• Satellite Radio
Courtesy XM Satellite Radio
• Satellite Video (vehicle)
• HD Radio
• Mobile TV (over the air)
Greater Realism
The Shift to HDTV
35
Millions of Unit TV Shipments
30
High Definition
25
20
15
Standard Definition
10
5
0
1999
2000
2001
2002
2003
2004
2005
2006
2007
The Era of HD Gaming
$20.0
Revenues in Billions
$15.0
$10.0
Combined
HW/SW
Revenues of
$13 Billion
in 2006
PS2, XBOX,
Game Cube
Launch
$5.0
Gaming Hardware
$0.0
1999
2000
2001
2002
2003
Xbox 360,
PS3, Wii
Launch
Gaming Software
2004
2005
2006
2007
Packaged HD Movies
Next Generation DVD Forecast*
Millions of Units
11.6
*Includes only component based HD-DVD and Blu-Ray players
4.2
0.3
2006
1.0
2007
2008
2009
Greater Connectivity
Growth of Networks
• Wide area connections
(WiMax, WiFi/Hotspots, Cell, Broadband, SlingMedia)
• Local area connections (Ethernet, WiFi, HDMI)
• Personal networks
(RF, Bluetooth, OE integration)
• Connecting services
(VOIP, vlogs, blogs, social networks)
The Need for Speed
Household Penetration of Connections
51%
40%
Broadband
Home Network
30%
25%
25%
15%
10%
2% 1%
1997
5%
2000
2003
2006
2007
Products Connected to Internet
Desktop PC
Present
Future
83%
65%
28%
Laptop PC
Television
DVR
Media Server
44%
6%
28%
4%
25%
3%
19%
Security System
1%
Appliances
1%
20%
9%
Greater Portability
Portable MP3 Growth
Millions of Unit Shipments
w/ Percent Video Playback
38.3 39.0
33.8
33.0
29.8
24.8
74%
74%
38%
38%
7.1
0.5
0.7
1.7
3.0
46%
46%
80%
80%
58%
58%
14%
14%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Portable Computing
Consumer PC Market Composition
(Millions of Units Shipped)
30
25
20
15
Laptops/Notebooks
10
5
Desktop PC
0
2002
2003
2004
2005
2006
2007
Future Portable Entertainment Uses
Internet websites
(+15)
Music from CDs
48%
(+5)
(+8)
Digital photos
44%
41%
Broadcast radio (AM or FM)
Games
(+1)
40%
Music in digital file formats
(+13)
40%
Television programming
Satellite radio
(+20)
(+35)
Instant messenger
(+11)
Text messages
(+1)
Books on tape/CD
52%
(-18)
Movies from DVDs
58%
38%
37%
36%
35%
32%
Base: Online adults who own a portable entertainment device
Thank You!
[email protected]