I don’t often refer to competitors’ reports as the analyst community generally likes to maintain a friendly distance. But Canalys’ announcement that tablets should be counted as PCs pretty much forces a reaction.

Canalys appears to be taking a technology-based approach to segmentation. So the fact that tablets have fast processors, can run productivity applications, offer email, and can access the internet, puts them in the same category as PCs, which also do these things. The absence of a keyboard, and the presence of a touch screen, are seen merely as customer options, just as one might specify a blu-ray disc drive or extra memory.

Canalys concludes that the “PC” market is therefore doing extremely well at the moment, largely because of the success of the tablet category.

Segmentation arguments are one of the many joys of industry analysis. Lines are invariably blurred, definitions hazy and perspectives inevitably conflicting. Market forecast buyers must always ensure they understand what is and is not included in any given segment, as this is often a key reason for variations in market estimates from one source to another.

But in spite of these challenges, Canalys seems to be stretching things just a little too far on this occasion. If we want to count the market for “computing devices”, fair enough. Let’s bundle in desktops, notebooks, netbooks, tablets, MIDs, smartphones, and a fair few TV set-top boxes and other devices as well while we are at it. They all offer a similar combination of technical functions, though each is clearly better suited to some more than others.

However precise we try to be about technology or functional definitions, sooner or later, we also have to consider user perceptions. If it surfs like a tablet, plays games like a tablet, and stimulates envy like a tablet, it probably is a tablet. And no amount of ivory tower contemplation will persuade Apple’s iPad customers they have bought a “PC”, however much Microsoft and Intel might wish they had.

Good luck with this one, my friends - you are going to need it.

David Mercer

Client Reading: Global Tablet Sales Forecast by Country

Having tested Microsoft’s Xbox Kinect for the last few days I can confirm that it has the elusive wow factor. Controlling on-screen icons and menus with a wave of the hand is the first sign that this stuff is definitely not of the old generation. Seeing your own avatar mirror your movements introduces the real sense of spookiness which only comes with genuinely ground-breaking technology. And when you are first signed into the service simply by entering the room, the realisation dawns that the age of intelligent technology may finally be upon us. My other conclusion is that if you are not physically fit before you buy Kinect, you certainly will be after a few sessions of gameplay. Microsoft is very clear that the initial raft of Kinect games titles are aimed at its “non-traditional” audience (implying, not entirely accurately, spotty teenagers shooting each other from the comfort of oversized armchairs) and involve varying levels of energy expenditure from a standing position. You may or may not be relieved to know that there is at least one application which does not require you to abandon the sofa: VideoKinect is the built-in video communications service, allowing Kinect games players to take a break to share their exhausting exploits with friends and relatives around the world. As for the games themselves, we found the bowling and track and field in Kinect Sports a lot of fun. Bowling illustrates the strengths of gesture-based gaming because the system appears to recognise genuine bowling actions which are impossible for any controller system to replicate. Track and field includes a variety of athletics events, and, yes, the 100m dash involves running on the spot as fast as you can. Microsoft told me that an elderly 80-year old lady in Australia had enjoyed some of these sports. I would like to see this. Children will love Kinectimals, the classic cutsey furry animal petting game. Choose your favourite cub, cuddle it with your virtual hands, and watch it mimic your actions and learn tricks. Parents of young children should avoid installing this game on their main TV as they will never get to watch TV again. Kinect Joy Ride didn’t work as well for me. This is the main racing game available at launch, and, yes, you have to pretend to hold a steering wheel. I would love this to have worked more effectively, but this is the point at which virtualisation just doesn’t seem to make any sense. Try it at home: See how long you can keep your hands spaced the same distance apart while moving them around in a circle, changing direction frequently, and leaning your body one way or the other to perform tricks. Sorry, but holding a real steering wheel has just got to be a better experience. Microsoft hope that Kinect will help it to “more than double” the number of Xbox 360s sold worldwide so far, which is more than 42 million. Our own core scenario forecast is that Microsoft will fall slightly short of this objective, selling a cumulative 79 million 360s by 2015. Our analysis did allow for further upside to 360 sales as a result of a successful Kinect launch, so we will be tracking its near term progress and impact on core console sales before updating our scenario models. We should also be clear that Microsoft, along with other platform vendors, tends to talk in terms of cumulative sales. Our analysis also takes account of console retirement and replacement, and this could be a critical issue as we begin to understand Kinect’s impact on wider 360 ownership. It is, after all, being offered for sale as a peripheral to existing 360 owners, as well as packaged with a complete 360 console system. Again, the mix between these two packaging options will be important in determining the real impact on the 360’s overall performance. Sales to existing 360 owners may extend the life of the system in those households but will not help to widen the audience. Microsoft’s primary interest will be to increase sales of the 360 itself to new owners. Will Kinect succeed? As always, it will depend on how we define success. Kinect is certainly innovative, and as such it will appeal to existing 360 owners who want to explore the new technology for its own sake or find the new games appealing. Kinect should also bring the 360 more forcefully to the minds of existing owners of other consoles who may be tiring of their current platform. The obvious target is Nintendo’s Wii, global sales of which, as we predicted, are declining by more than 20% this year. While Nintendo works out its post-Wii strategy, Kinect has a window of opportunity of maybe a year to tap into demand from lapsed Wii users. In spite of the enthusiasm indicated above, Kinect is not without its challenges. The biggest concern for many potential buyers will be the space required in front of the TV. Our system is installed in a traditionally small English cottage, and there is just about enough space to use Kinect for the few games we have tried. Demonstrations of some games I have seen suggest that Kinect owners will need clutter-free floor space of three feet by six feet (1m x 2m) at a minimum distance of six feet (2m) from the sensor in order to get the maximum benefit. Xbox actually recommends a distance of 8-10 feet (c. 3m) from the sensor. It goes without saying that this space must be free of all obstacles, alive or dead, if minor injuries are to be avoided. Other commentators have noted the potential for lag in motion sensing. The movements in the self-image window or the avatar certainly appear some fractions of a second behind actual motion. The critical question is whether this has an impact on usability, and so far, in an admittedly short series of tests, I have not noticed any significant negative impact on gameplay. There have been occasions when voice recognition and motion sensing do not appear to function perfectly, but I would not draw any conclusions regarding weaknesses in the technology versus the need for familiarisation. Only time will tell whether these are persistent issues which need to be resolved by further technology enhancements. Kinect’s success will hinge on whether “really clever stuff” is good enough to drive sales, and whether its integration into games is perceived as ground-breaking. Xbox is also taking a risk in focusing Kinect purely on the “active gaming” sector. Nintendo did break new ground with motion control, but Wii games did not always require players to stand up or indeed move around. Microsoft says that developers can deploy Kinect in more “subtle” ways, supporting sit-back gaming. Until such games appear the first titles risk being positioned as a niche market. But overall Kinect is an impressive attempt to take the TV games console industry in a new direction and we believe it will have the initial positive impact on the 360 business which we predicted earlier this year. Judgment on its longer term success will have to wait a few more months once the novelty has begun to wear off, but it would be very surprising if Kinect’s arrival does not push development of games and other TV-based applications in directions we can today only barely imagine. Client Reading: Taming the Waves: Games Console Life Cycles and Platform Competition

Is it a sign of Trouble at’ Mill? Or just another corporate shake-up while business goes on as usual? Microsoft yesterday announced the departure of leading Entertainment and Devices executives Robbie Bach and J. Allard. Microsoft CEO Steve Ballmer will take charge of the division, with Don Mattrick running the Xbox side and Andy Lees the mobile business. There are clearly problems for Microsoft in its mobile business. All the various iterations of its mobile phone software over the years have failed to make significant market impact as Apple and, now, Google, make the running. Microsoft’s biggest problem is that consumer is still a relatively small and fragmented part of its overall business. It’s losing out to Apple, and others, in the consumer market because its primary corporate focus continues to be business users of Windows. Apple, which, not through lack of effort, never achieved prominence in business markets, has been able to focus its strategy on the consumer space without the hindrance of adhering to a corporate software strategy. From Microsoft’s perspective it might seem logical to group Xbox, music players and mobile phones under one roof, but this makes less obvious sense to the outside world. Xbox has been successful largely because it has been left alone to formulate its own strategy focused on games, entertainment and the digital home. Dan Mattrick, whom I met last summer to discuss Xbox strategy, should now try to persuade Ballmer that the Xbox team needs to remain a discrete unit with liberty to forge its own direction, and if necessary outside of the demands of the corporate Windows strategy if necessary. With the launch of Natal imminent, the continued ramping up of online services based around the Xbox 360, and the plateauing of Xbox 360 sales, Microsoft can ill afford a dilution in focus because of this disruption to the senior management team. David Mercer Other Blog Posts Of Interest: PS3 Global Market Share Reached 31% in Q1 2010 Sony’s PS3 to Win Current Games Console Battle; SA Forecasts 47.5 Million Global Console Market in 2010 Sky Player Finally Arrives Where It Belongs, But Work Still to be Done TV or Videogame? 1 vs 100 on Xbox Live Offers Lifeline To Appointment Viewing Client Reading: Taming the Waves: Games Console Life Cycles and Platform Competition

As promised, a quick preview of our games console forecast which will be published early next week. No surprise that Nintendo’s Wii stands in the lead at the moment, within the current generation of systems, in terms of global installed base. We estimate that there will be nearly 76 million Wiis in use worldwide by the end of 2010. But the signs are that the Wii has peaked in terms of console sales, and its installed base will begin to decline after 2011. Meanwhile, Sony’s PS3 and Microsoft’s Xbox 360 will continue to grow, so that the PS3 will become the largest platform globally by 2013. In terms of cumulative lifetime sales we expect the PS3 to hit 127 million units, compared to 103 million Wiis. These estimates are derived from our core forecast scenario, but we have developed various scenarios for each platform. Uncertainties clearly surround each of the major platforms, particularly relating to the new services and upgrades planned by Sony and Microsoft. Natal on the Xbox could be more beneficial to 360 sales than expected, and Sony’s own motion controller, together with its plans to upgrade all PS3s to 3D capabilitiy, also represent potential for upside to our core forecasts. This year’s global market for consoles is likely to fall again, after a 6% decline last year. For 2010 we are predicting global console sales of 47.5 million, a 9% decline.The Wii will account for most of that decline: sales of the PS3 and Xbox 360 are predicted to increase. David Mercer Client Reading: Global Video Game Market Forecast

Things certainly didn't run according to the slick rollout plan Sky and Microsoft had promised us. In the grand scheme of things that is unlikely to have any major impact on tomorrow's world of connected TV. But the fact that two well financed global players can stumble so badly at the first hurdle demonstrates the severity of the challenges that lie ahead in the race to bring online TV to the big screen. The day after the official service launch Xbox posted the following message: “due to the unprecedented levels of simultaneous demand, we did not have the capacity to satisfy all service requests”. Xbox indicates that “many tens of thousands” of users tried to use the service. We, on the other hand, are surprised that this level of demand was not predicted in advance for such a high profile launch. The service will certainly have to cope with much higher volumes if Sky’s expectations are realised. The current status as far as we can tell (neither Sky nor Xbox have admitted to a more detailed analysis of the problems so far) is that some Xbox owners are successfully using Sky Player, some have downloaded it and been unable to use it, and others have yet to be offered the service. After the furore of the first day, when the application was withdrawn within hours of its launch, Xbox admitted that there were issues with some servers and that the service would instead be rolled out gradually to ensure that quality was not compromised. My own experience has veered from the excellent to the frustrating. I can say that we have managed to watch an on-demand streamed movie from beginning to end without a single glitch, and the video quality was quite acceptable. By contrast an on-demand sports game yesterday refused to play for more than a few minutes without buffering. I am currently still encoutering many buffering problems and Sky Player disconnections. I have also noted a few minor niggles with the user experience. The Xbox controller switches itself off after a few minutes of non-use, which is inevitable during the viewing of any TV show or movie. So live pause or any other functions cannot be selected until the controller has connected with the console, a process which usually takes 10 seconds or so. The aspect ratio on a number of shows, notably in Sky World News, are incorrectly set, so that tops of heads and captions are chopped off. News tickers are affected by jerky motion. The release dates of some programmes are not indicated in the programme description, which can be especially frustrating in the news genre. Most of these issues will surely be resolved over time. Both Sky and Xbox may be surprised (although they really have no excuses) at the initial demands put on their software and network systems and have to make further investments in order to maintain quality levels. One further point to note is that fast forward during advertisements during on demand shows has been disabled, which should certainly please advertisers. Assumign that these early problems can be solved quickly, it is clear, as we indicated before, that Sky on Xbox has the potential to shake up the UK's online TV market just as the BBC's iPlayer did two years ago. When it works, Sky on Xbox offers an entirely new way of selecting and watching TV on the big screen. The Sky Movies channel experience alone is transformed by the ability to choose instant start from a selection of hundreds of films. On-demand movies in our view will be one of the most used services, at least until Sky and its broadcast partners populate the libraries of television shows, which currently are somewhat restricted. We remain to be convinced that the streaming platform is yet sufficiently robust to support the expectations of subscribers who choose to get Sky for the first time using the Xbox platform. Given the monthly premium of up to £41 which Sky on Xbox customers will be paying there will be no room for the quality problems which are apparent at this early stage. We are also doubtful that many existing Sky customers will opt to pay an additional £9.75 a month to use the Xbox for live television on an additional TV set. The appeal of on-demand TV is immediately apparent, however, and we expect this to be a key selling point. It could be enough to tempt existing Sky customers to buy an Xbox 360. Xbox had better make the most of this window of opportunity: the rumours are already circulating that the PS3 will also offer Sky Player before too long. Twitter: twitter.com/DavidMercer_SA Client Reading: Online Video: YouTube vs. Hulu - Let the Battle Commence!

The UK’s 1.3m Sky TV subscribers who own Xbox 360s are about to get a real treat. Instead of putting up with Sky’s archaic EPG they will soon be surfing Sky’s content using the slick Xbox Live interface. We were given a live demonstration of the service today and everything (well, almost everything) is looking good for the commercial rollout on October 27th. Let’s get the slight caveat out of the way first of all: today’s demonstration from a central London location used a broadband connection to the production servers which will support the commercial service rollout. However, during live IP “broadcasts” one of Sky’s sports channels the picture was not 100% reliable, and occasional freezing and jerkiness was noticeable on several occasions. This would not perhaps be significant on a normal streamed video service to a PC, but it seems doubtful if TV viewers will be quite so forgiving. I’m sure Xbox and Sky will ensure that the commercial service is not plagued by these slight problems. Sky’s Griff Parry, who heads the Sky Player group, and Microsoft’s Jerry Johnson, head of Xbox Live in Europe, offered a united front to the partnership, claiming that, after initial and understandable caution, both teams had worked together extremely well and with considerable mutual respect. Of course we have seen previous apparently rosy partnerships involving Xbox fail to deliver, but this is clearly different. Sky would not be putting its substantial reputation for quality and reliability on the line if it was not convinced that the Xbox Live platform was robust, and the evidence so far (subject to the earlier qualification) is looking extremely promising. As expected the Sky programming sits behind one of the Xbox Live menu items in the Video Marketplace tab. As soon as the Sky option is selected the background and colour scheme become blue, reflecting Sky’s corporate image. The Sky menu items closely reflect the standard Sky TV EPG, down to channel and genre options. For relevant options there is the choice to watch on demand or live. In my view the biggest benefit of Sky on Xbox will be for Sky Movies subscribers to have access to a considerable library of true VOD movies on their TV set. Sky believes there are two major opportunities from this initiative: first, to secure loyalty from existing customers; and second, to tap into a lucrative 20-30 demographic for which its traditional satellite-based distribution may not be appropriate. Sky is thinking here particularly of young males who have yet to “put down roots”, who may move home frequently, and who inhabit apartments where satellite dishes are prohibited. This segment is seen as prime Xbox owning territory and therefore ripe for upgrade to premium TV services. Besides increasing the overall customer base, the Xbox Live platform offers Sky a new avenue towards advanced services. The early example of avatars sitting in front of a big home cinema screen watching live football together may or may not prove to be a gimmick. But a real opportunity for Sky certainly lies around integrating communications and content into exciting new services. Parry admitted that he sees headset-based voice chat during programmes as one of the most compelling opportunities in the early days of the Xbox Live venture. We can only imagine the possibilities as Xbox continues to add peripherals such as the set-top camera/microphone – the crowd noise during live sports could soon become the sound of a million home-based viewers shouting at the TV screen . Given what has been possible before, it would seem that Sky and Xbox together really can take the TV experience to a completely new level. If anything disrupts progress it will be corporate disagreements, rather than technology failings. Twitter: twitter.com/DavidMercer_SA Client Reading: Online Video: YouTube vs. Hulu - Let the Battle Commence!

It’s what Interactive TV always should have been. Endemol’s smash hit quiz show, 1 vs 100, is now available as a scheduled, interactive show to Gold members of Xbox Live in the UK. Although in beta phase, the service appears to be working well. I suffered one connection dropout during Friday evening’s show, but otherwise was able to participate fully, first as a member of “The Crowd”, and later as one of the hundred members of “The Mob”. Unfortunately, or perhaps not, I was not selected as “The One”. My personal background: I’m not a quiz show fan. I used to keep up with “Who Wants to be a Millionaire” in its early years, and I enjoy satirical “quiz shows” like “Have I Got News For You”, but they hardly count as the same genre. I do not go out of my way to find shows in which I can answer the questions, and had not even heard of “1 vs 100” until Microsoft told the press about its launch on Xbox Live. Some years ago, when red button services were first being rolled out across the UK’s digital TV services, early attempts were made to add interactive audience participation to quiz shows, including “Millionaire”. It was an obvious genre to target, with audiences already sitting at home shouting out answers to questions in frustration at the presumed ignorance of the on-stage participants. But the limitations of the technology, not least through the absence of broadband connectivity, meant that these early attempts were soon abandoned. It’s ironic, but perhaps not surprising, that it has taken a games console, rather than a digital television platform, to demonstrate what interactive television could eventually become. Tens of thousands of people are now participating, live and in real time, in the same scheduled “programme”, responding to questions through their games controller, seeing themselves (well, their avator at least) on the screen, and accumulating points in competition with their remotely connected opponents. The operation of the Xbox Live show is clearly heavily automated, and a few kinks need to be ironed out: the various warning notices and texts were barely legible on my museum piece of a 32” CRT TV, for example. I hope Microsoft is not assuming that every single 360-owner has their console HDMI-wired to a 1080p-capable 50” LCD. The pauses between “rounds” and their accompanying messages can also prove a little tiresome. But generally this is an extremely impressive implementation, as with so many things on the Xbox Live platform. Considering this is a beta test, we can only imagine what further refinements will be made as the show evolves. Our excitement over the technology should not cloud the inevitable doubts over business models and commercial viability. That Endemol, one of the world’s most successful independent developers, has signed up as a partner should be taken as a positive sign, although it has no doubt been suitably rewarded for its risk at this early stage. The trick, as always, will now be to get independent advertisers to recognise the value of targeting 70,000 people (a typical number of simultaneous participants in the US version) whose profiles are well known and whose attention is as guaranteed as it ever can be by scheduled programming. No fast forwarding through these ads… It’s time to reconsider the term “games console”: if Live’s current progress is anything to go by, few other gadgets will deserve the term “home entertainment centre”. Twitter: twitter.com/DavidMercer_SA Client Reading: Global Digital Media Growth Slows to 2.7% in Q4 2008

I won’t read too much coincidence into two recent events: 1. the news today that Microsoft is planning a rival music streaming service to Spotify on the Xbox 360 and 2. my recent breakfast discussion with Don Mattrick, Microsoft’s SVP and global head of the Interactive Entertainment Business (ie Xbox). Two weeks ago, Don had clearly not heard of Spotify when I mentioned it to him. I hope he managed to get to try out the service while he was over in Europe. According to Peter Bale, executive producer of MSN, as reported in today’s Daily Telegraph Microsoft is planning a music streaming service under its MSN umbrella, which “will be a similar principle to Spotify”, and could also make it available through the Xbox360. According to the article Microsoft’s service is due to launch by the end of this month, ie within the next couple of weeks. There are a few oddities in this report. If, as reported, Microsoft is planning to launch the service so soon, it seems unlikely that it is still working out business models, as suggested. Secondly, the company has already announced a partnership with Last FM on the Xbox360 in the US, with the service to be launched later this year. So it’s no secret that Microsoft wants to get into the music streaming business. I have no doubt Microsoft will add music streaming to the Xbox360 in Europe before long. But I suspect the decision has not yet been taken whether to use the new MSN service or to partner with other providers, or, indeed, both. But even when that decision is taken, it will take time before it's ready for rollout to the console. But Microsoft’s strategy is for the Xbox360 to become an all-round home entertainment hub, and music clearly has to be part of the mix. Spotify runs a great service, but if those two can’t do a deal, I’m sure someone else will. Twitter: twitter.com/DavidMercer_SA Client Reading: Global Digital Media Growth Slows to 2.7% in Q4 2008

We met with Xbox executives in London yesterday for a post-E3 briefing. Since few of us had been to E3 in person (relying instead on dodgy video streams) it was a valuable opportunity to make sure we hadn’t missed any of the key messages. As far as the EMEA business is concerned, Microsoft is putting forward a positive story for the 360 in 2009, relative to other console platforms. Without revealing the numbers, according to Microsoft the 360 continues to perform well in a challenging market environment. In general it seems that demand for Nintendo’s Wii console continues to fall, and there is some evidence that Wii owners are beginning to move to the competing systems as they grow bored with the Wii’s novelty factor. Apart from seeing video demonstrations of Natal, the new user control platform, we were also treated to a work-in-progress demo of the recently announced Sky-on-Xbox service. Many details have still to be finalised, and the demo did not use live internet connectivity but was stored locally. Nevertheless, it was clear that Sky Player and Sky TV could become an extremely attractive and easy-to-use service within the Xbox NXE interface. Within the Sky “portal”, viewers will flick around the various Sky options with the standard Xbox controller, using up/down and left/right movements to navigate the horizontal/vertical pathways. One vertical could be a selection of streamed Sky channels (News, Sports News, Arts etc), including mini windows showing live TV. Another vertical might take the viewer through various Sky Player on-demand options – movies, sports, TV shows etc. I can also easily imagine that something similar to the Sky+ PVR functionality will be added at some point, using the Xbox hard drive for storage. We also discussed the impending arrival of instant-on VOD and 1080p content. Contrary to my previous comments, it now seems that 1080p streaming will be available at speeds as low as 6Mbps, in contrast to the 10Mbps we were originally told. The uncertainty over this issue suggests that there is still a fair amount of work to be done before these services are launched commercially. But there is no question that, as the current generation of consoles hits maturity with the games audience they will add ever more capability as non-gaming devices in order to sustain the life cycle to the maximum. It will be very interesting to see how Sky and Xbox develop the marketing and positioning of the 360 console as the video and television services are rolled out later this year. Twitter: twitter.com/DavidMercer_SA Client Reading: Global Digital Media Growth Slows to 2.7% in Q4 2008

Ever since the launch of Xbox 360 there has been speculation that Microsoft would eventually add a Blu-ray drive to the system. We have argued strongly against these rumours. At E3 yesterday Microsoft finally laid its cards on the table: from this autumn it will offer instant-play 1080p content to Xbox 360 users. With a strong nudge in the direction of Blu-ray, the press release says “No discs, no waiting for downloads and no delays”. Xbox Live has offered HD content for some time, but only in 720p. Microsoft appears to have abandoned its previous line of defence, that consumers could not tell the difference between 720p and 1080p. The upgrade to 1080p, and the promise of instant access, finally positions the Xbox 360 as a serious video alternative to Blu-ray Disc-based systems, ie the PS3. Viewers will be able to pause, fast forward and rewind on-demand video content. Microsoft is re-encoding video content, has re-built the technology stack, and is introducing multi-bit-rate encoding and buffering support in order to make these advanced features available. Microsoft has also said that all movies will support shared viewing, so that viewers in different locations can watch the same content and share messages at the same time. The business models behind such applications remain to be determined. Content owners will be able to explore the value of encouraging such social networking activities. We’ve been predicting the 1080p move for some time, while at the same time highlighting the challenges for such services. The Xbox Live network may be up to the task, but the individual user experience will inevitably hinge on the speed and reliability of broadband access. Microsoft originally told us users would need a minimum access speed of 10Mbps, but appears to have reduced that requirement to 8Mbps. This is clearly a significant limitation to the reach of the 1080p service; broadband speeds are rising steadily, but they vary significantly in each country. It also seems likely that heavy users of 1080p streaming may soon encounter the data download limits set by their broadband service provider, as I pointed out when the Sky-over-Xbox service was launched. In spite of these concerns, it is clear that Microsoft continues to extend the boundaries of the traditional games console model towards the all-round home entertainment platform always promised by the Xbox 360. All we need now is for broadband service to catch up with the potential offered by these systems. Twitter: twitter.com/DavidMercer_SA Client Reading: Global Digital Media Growth Slows to 2.7% in Q4 2008