Strategy Analytics has been designing and analysing large scale consumer surveys for many years. Some of this work has been used by our industry analysts to support their regular market and competition tracking. We have also conducted frequent consumer surveys to support proprietary project and consulting activities.

Recognising that every client has its own particular set of interests, questions and perspectives, we have now opened up some of the results of these surveys to our client base via a powerful new web-based interface and analysis tool. The ConsumerMetrix service collates the results of three years’ worth of survey results, comprising more than 15000 online consumer interviews and offering millions of unique datapoints. Survey results are easily selected and instantly available according to the needs of the individual user, and can be downloaded in Excel and Powerpoint format for incorporation into customers’ own reports.

ConsumerMetrix surveys cover the US, France, Germany, Italy and the UK. Additional international market coverage, including Canada, Spain, China, India, Japan, South Korea, Russia, the Nordic region, Poland, Hungary, Brazil, Mexico and Indonesia, is available at the request of subscribers.

Subscribers can use ConsumerMetrix to assess survey data about the world’s leading technology and service provider brands and who their current and potential customers are.

ConsumerMetrix is designed to answer key tactical, consumer-facing questions like:

·         How many people plan to buy an Xbox 360 or PS3 during the next 12 months?

·         How do nations vary in usage of digital video recorders?

·         How do the profiles of Samsung and Sony customers compare?

·         Which television service providers have the highest satisfaction ratings?

·         Which brands are people most likely to choose when they next purchase a TV, PC or mobile phone?

·         How do the demographics of Apple v. PC owners compare?

·         How many people are using the major OTT video services and which devices are they watching them on?

·         How much do consumers expect to pay for iPads or other tablets?

·         How useful do consumers find TV mobile phone apps?

·         Which consumers are using multiscreen TV?

·         How many Sky Digital customers plan to drop the service during the coming 12 months?

ConsumerMetrix covers a wide range of themes and technologies related to the digital consumer, television, video and media sectors. The outline is presented below:

We are excited by the strong interest already shown in this service, which we believe is unique in many respects. Please email digitalconsumer@strategyanalytics.com for further details and a personal demonstration.

I think I must amaze some of my younger colleagues when I show them one of our ancient hard copy multi-client studies, a few dusty samples of which I keep stacked away in a cupboard in my office. The fact that a research report can exist on paper alone takes some getting used to in this online era.

 I have little cause to refer to them nowadays, of course, but that changed recently when Strategy Analytics decided to renew its focus on smart home. Back in 1986, shortly before I joined the company, it published a study called “The Interactive Home”, so I was curious to see how some of those predictions stacked up with the benefits of 25 years of hindsight.

Sure enough, we talked about the concept of “smart home” in that report, largely in the context of home automation, management and security. We noted in particular that in Germany “there seems little or no coherent drive twoards realisation of ‘Smart Home’ concepts at present”. A key obstacle was the high levels of rented and apartment accommodation, which reduced the need for automation and security systems.

The conclusions in the UK also make interesting reading: we identified a “growing body of serious PC owners” who would “help open up the information-related interactive sectors”, as well as opportunities in interactive television and electronic publishing. The study also concluded that “energy telemetry” was “likely to emerge as a prime investment area in the early 1990s”.

The study had a 10-year forecast horizon, which is fairly ambitious compared to regular analyst reports. We may laugh now at a forecast of what would happen in the late 1990s, but that seemed as far off in 1986 as the 2020s seem today. And in fact, as so often happens with emerging technologies, while the long-term scenarios were broadly correct, the future timing of events was misunderstood. And in general the report was over-optimistic in terms of predicting the speed with which new “smart home” services would emerge as mass market opportunities.

Given those past uncertainties and false dawns, the question posed by my colleague, Bill Ablondi, is right on the mark: “Smart Homes: Why Now?”  He identifies a number of reasons to think that we may not have to wait another 25 years before true interactive home technologies become widespread, including:

·         Consumers becoming increasingly connected via mobile devices  

·         Broadband service providers need to develop additional revenue generating units (RGUs) to offset declining growth in traditional businesses  

·         Expansion of offerings from traditional home security systems providers into self-monitoring and control products and services

·         Introduction of affordable, retrofit solutions that can enhance lifestyles, safeguard homes and reduce home operating expenses

·         Manufacturers of appliances and home systems desire to differentiate their offerings and expand their opportunities

·         Government incentives and mandates to reduce energy consumption by connecting residential customers to advanced electricity distribution and management systems

In other words, some high value industry sectors are getting serious and see that many pieces of the smart home jigsaw are lying around waiting to be put into place. Key barriers remain, of course, not least persuading consumers that there is value in these systems and services. That’s a key set of questions which our new advisory service, Smart Home Strategies, will be exploring over the coming weeks and months.

David Mercer

Client Reading: Smart Homes: Why Now?

“The TV” has been about more than “TV” for many years. Ever since the first video recorders arrived back in the late 1970s, bringing home video to millions of millions of TV sets around the world, TV viewers have been faced with ever-increasing choice in what they watch and when they watch it.

The latest stage in this evolution has been the arrival of internet connectivity to the TV itself and to many of its attached devices. While such products have been around for a few years, it’s only relatively recently that improved bandwidth and usability have allowed people to explore the world of internet video on their big screens.

Our recent survey of nearly 5000 respondents across the US and Europe suggests people are taking to this “connected TV thing” in a big way. Based on the survey’s findings we estimate that 42 million homes across the two regions are now connecting a TV screen to the internet, in some way or other, in order to watch TV shows or movies. This is not a daily activity for most people just yet – this is the number of homes doing this monthly, weekly or daily. But it’s a clear sign that the concept of connected TV is becoming more widely accepted.

Significantly we found much higher usage in the US than in Europe – 20% of US homes are using connected TV compared to 10% of European homes. The Germans are falling some way behind the rest of Europe: only 6% of German homes are using connected TV currently, compared to 12% in both France and Italy – the UK proportion stands at 9%.

New digital service providers such as Netflix and Hulu have seen tremendous progress in the States in the last couple of years as they become available on multiple connected TV devices. Europe has yet to find its own equivalent, although each market can name examples of localised services.

People are still working out the best way to get connected TV content onto their TV set. In the US the games console is leading the way: in Europe the most popular method is to connect a PC to the TV using an HDMI cable. But the majority of connected TV viewers are actually making use of more than one solution. There may be a number of reasons for this: certain content is only available from different devices; or they are using different TV screens at different times.

We are in the early days of the connected TV revolution, but the momentum shows no sign of decline. As Ultraviolet launches and Apple considers its own streaming movie service, this market is set to get a lot more interesting over the next few months.

David Mercer

Client Reading: Multiscreen Connected TV: Assessing Device Usage and Ownership

I listened in recently to an analyst webinar given by Dave Durnil, director of advanced content at Qualcomm CDMA Technologies. Dave's role is to convince games publishers that Qualcomm's Snapdragon system-on-chip platform is suitable for "console-quality" games. So far things seem to be going well, with more than a 100 games optimized to the Snapdragon platform.

Qualcomm’s strategy, according to Durnil, is based on the premise that smartphones will replace TV games consoles. Durnil provided various statistics which demonstrate the “decline” of the console market, which do not match Strategy Analytics’ own analysis, so that’s an unfortunate place to start the discussion.

There’s no question that the quality of games on handset devices is improving rapidly, and will continue to do so through more advanced mobile platforms like Snapdragon. But why is Qualcomm asking the question, will phones replace consoles? If it truly expects Snapdragon to match or exceed the capabilities of TV consoles in the future, surely it could enter the dedicated TV console market and sell even more devices?

The flawed assumption seems to be that consumers are willing to use their handsets as TV peripherals, using either an HDMI lead or short-range wireless connection. Our research so far has suggested this type of behaviour is something which only a small number of people are interested in: for example, in our July 2011 consumer survey, only 6% of 4800 respondents said they were very interested in using a mobile phone to send high definition TV and video to a TV set.

Many people also doubt whether a mobile-dedicated platform really will be able to compete head-to-head with a TV-based one, but let’s also put those doubts to one side for the sake of argument. If Qualcomm is right, and Snapdragon really will be able to compete with PS4 and Xbox720, what is to stop the company offering its technology platform to console manufacturers, as well as handset makers? Games publishers would presumably be delighted at the prospect of authoring to a common mobile/TV platform.

The concern, as we have seen with Nokia in the past, is that a strategy focused on traditional strengths can blind a firm to growth potential outside of its comfort zone. Qualcomm should be careful not to fall into that trap: its gaming strategy suggests that it could have a future beyond just the handheld device. 200 million TV games consoles will be sold worldwide over the next five years – is Qualcomm missing out?

David Mercer

Client Reading: Global Connected Consumer Electronics (CE) Devices Market Forecast

Rarely has an emerging consumer technology divided opinion so forcefully as 3DTV. Commentators seem to feel obliged to take an extreme position: either this is the first step in a major home entertainment revolution; or it’s a unnecessary, if not outright dangerous, innovation imposed on unwilling television viewers. Some industry players, particularly TV manufacturers, have certainly been guilty of excessive hype in talking up 3D; and some observers seem to latch on to every slight sign of weakness as evidence of impending market collapse.

The truth, inevitably, lies somewhere in the middle, and is therefore less likely to grab headlines. The complexity of the picture probably explains why we don’t hear much about this side of the story. The fact is that people are buying 3DTVs, although not in great numbers, yet. And according to more than 200 3DTV owners across the US and Europe in our recent survey many of these people are watching shows in 3D and enjoying the experience, although a minority are less happy with what they have seen. There is certainly a general desire to improve on various aspects of 3DTV as it stands today, such as availability of content and glasses issues.

Indeed, the biggest concern with 3DTV owners is, not surprisingly, the need to wear glasses. An overwhelming majority of respondents agreed that they would watch a lot more shows in 3D if they did not have to wear special 3D glasses. However, this is not stopping them watching 3DTV altogether: more than two thirds of 3DTV owners are watching 3D programming at least once a week, and 41% are watching on a daily basis. Given the relative paucity of available programming in 3D, this is a relatively positive finding, although it may also reflect the fact that nearly half of 3DTV owners are making use of the TV’s in-built 2D-3D conversion feature.

There is a mixed picture when it comes to the overall 3DTV experience as well: most 3DTV owners agree that the quality of the 3DTV experience overall has been very good. But most people also agree that watching too many shows in 3D makes them feel sick. So it seems that 3DTV is likely to remain an occasional activity for most viewers until the technology matures.

As we have reported previously, a third of homes will own a 3D-ready TV by 2014. The evidence from our latest research suggests that actually watching shows in 3D is likely to become a regular activity for at least a half of those homes, and that’s assuming content availability and quality at today’s levels. Sceptics should remember that the 3DTV market is still at the beginning of a long development curve: and the industry needs to keep working to address the many challenges which lie ahead.

David Mercer

Client Reading: 3DTVs: Buying Intentions and Early Adopter Feedback

A colleague and I witnessed a fascinating example at lunchtime today of why LG’s strategic conversion to passive 3D is likely to gather momentum with retailers and across the industry. Demonstrating 3DTV in-store is never easy at the best of times. TVs need to be set up with appropriate demonstration material, glasses need to be available, and customers have to be persuaded to pick up those glasses and try out the demonstration.

LG appears to have done a deal with our local John Lewis department store, because the company’s two new passive 3D sets have been moved to a prominent position at the front of the AV department – a few weeks ago they were positioned in amongst the rows of regular TVs. Judging by our short time in the area, it seems to have worked because a couple of other customers also came along to try out the demo while we were there.

The first good news was that the store feels comfortable enough, given their low value, to leave several pairs of 3D glasses lying around, unsecured, next to the TVs. Customers do not therefore feel as inhibited in picking them up and trying them on as they do when they see glasses tied by a security wire to a specially designed point-of-sale unit.

However, the main problem then became apparent:– the two LG TVs (one 42”, one 47”) were positioned below standing eye level. LG’s Film-type Patterned Retarder (FPR) technology limits the 3D effect to same-height viewing. If you are standing with your eyes above or below the top or bottom of the display you will see not a 3D effect, but what will appear like ghosting with very little image depth. So to see the 3D image effectively in the store we had to crouch down. The transformation was dramatic: suddenly the quality of the 3D material became apparent across a variety of clips, including sports, movies and nature. I have seen enough 3D demonstrations to have become sceptical about many so-called improvements, but this was genuinely impressive. Inevitably the quality of content production had an impact on the 3D effect, but overall I was very pleasantly surprised. One or two other customers were watching the same demonstration and were also making encouraging comments.

We then tried a Sony 3D demonstration, which was parked in the regular line of TVs. Here we saw immediately the weakness of the active shutter approach: four pairs of glasses were available for the two TVs on display, but neither TV was set up to demonstrate 3D. I had to fiddle with the menu to get the set to convert 2D to 3D, and then it became clear that the glasses were simply not functioning. After an assistant finally came over to help us we established that only one of the four pairs of glasses had a working battery. By this time, even though the (2D converted) 3D demonstration was reasonably good, we both felt we would have long ago walked away as potential customers.

Finally an assistant helped us with a Samsung active shutter demonstration. Again, there was a considerable delay while the set was configured correctly and the glasses were found and prepared for use. The 3D experience again was of good quality, in my experience, although people perceive the impact of 3D differently according to the content itself. Nevertheless we again felt that the usability of the active shutter TV and glasses would be seen as a strong negative by many customers who had already experienced the LG approach.

So once John Lewis positions their LG TVs at correct viewing height, I think they will find they have hit on the ideal in-store 3DTV demonstration. I notice today that Cello Electronics, a UK TV manufacturer, has joined the FPR club and will launch budget-price passive 3DTVs this summer (42” retailing at £499). Sony, Samsung and Panasonic had better beware: active shutter’s days look like they are numbered and manufacturers which remain wedded to that technology could lose share rapidly if they don’t find an answer before long.

David Mercer

Client Reading: Cost Concern & Lack of Interest Main Barriers to 3D TV Adoption

I took an hour or so away from the excellent Connected TV Summit last week to stop by at the Screen Media Expo at London's Earls Court. While it’s not a consumer event I was interested to see what was claimed to be the latest in autostereo 3D from a Hungarian technology developer, iPont. iPont has recently established its UK office in Oxford, and is going to be in the news this weekend as it is supplying the technology behind the first public broadcast of an autostereo 3D football match.

Sky will be transmitting the European Champions League final in 3D, and most home- and pub-based viewers will need to wear 3D glasses. Sky’s 3D productions and broadcasts are tailored specifically to the needs of glasses-based technologies, but iPont’s technology converts the standard live Sky 3D broadcast for viewing on autostereo displays, and this will be demonstrated to an invited audience at the Walkabout pub in Covent Garden, London on Saturday evening.

iPont gave several demonstrations at Screen Media Expo, including 3D Blu-ray and football matches, though none of the latter were broadcast live. They were using autostereo displays from Tridelity and Alioscopy. As with all 3D content, the production quality of the material varied, but in general the 3D effect was impressive, at least relative to most other autostereo demonstrations I have seen. iPont claims that its current technology supports nine viewing angles, but I did not notice as strong a deterioration in viewing experience between viewing points as with some other technologies, such as Toshiba’s autostereo TVs.

iPont’s “secret sauce” is a box of software tricks which converts stereo 3D, on the fly, to multi-angle autostereo 3D. Autostereo displays rely on the availability of multiple angles in the video content which generate multiple viewing angles from the display. The (extremely) expensive way to do this is to set up multiple camera positions during content production, but this is always likely to prove cost-prohibitive. iPont’s current technology works at the consumer or viewer end, and could be included in 3DTVs themselves (iPont is in discussion with leading TV manufacturers).

Perhaps more significantly for the longer term is the prospect of including this type of conversion software into the production and transmission chain. Rather than having the set-top box or TV doing the work, the conversion would be encoded into the broadcast stream. Major US and European broadcasters are known to be interested in this approach. As the technology moves towards commercialisation it is certain that standards bodies and regulators may start to pay close attention as well.

David Mercer

Client Reading: 3D in Europe: Challenges and Opportunities

At the recent Blu-ray Academy and Mediatech conference in Hamburg, Germany I presented Strategy Analytics’ vision for the future of 3D in the home, focusing on the European market opportunity. We are clear that 3D in the home is going to happen, and more rapidly than some observers seem to think.

(I was surprised recently at the response to our recent 3D forecasts by the normally reliable CEA, whose Chief Economist Shawn DuBravac described them as “the worst forecast yet”. I worry for the CEA’s own forecasts if this overreaction reflects the quality of their analysis. Since we published our 3D analysis, several other analyst firms have come out with similar pictures, and the industry itself also seems to be in broad agreement. Time for the CEA to clarify why it’s out of line, perhaps.)

In spite of the CEA’s scepticism, we estimate that some 15% of European homes already own a digital TV set-top box which is 3D-capable, and nearly as many own a 3D-ready games console. The number of homes with 3D-ready TVs is very low, of course, but now growing quickly as 3D becomes a more common feature on plasma and LCD TVs. By 2014 more than 40% of European homes will have a 3D-ready TV, and nearly a quarter will own a 3D Blu-ray disc player.

In spite of these projections there is still a lot of work to be done to dispel some of the uncertainty surrounding 3D. Our European surveys (carried out in Q3 2010) indicated low levels of understanding of 3D issues. Only just over a half of Europeans correctly believed that 3D TVs were available to purchase: the remainder were uncertain or believed wrongly that it is not possible to buy a 3D TV. Likewise, barely half of Europeans know that you need glasses to watch a 3DTV at home. The greatest lack of knowledge surrounds the health impact of 3D TV: only 32% of Europeans believe that watching 3D TV does not cause damage to the eyes: half are unsure and 17% believe it does cause damage.

These are big communications challenges for all industry players to overcome. Nevertheless there is evidence of strong interest in 3D TV, with two thirds of Europeans interested in watching 3D movies and nearly a half interested in 3D versions of TV shows. As the base of installed 3D-ready hardware grows, the opportunity now lies with television content producers to make the most of this opportunity. If that content doesn’t materialise people may never see a need to put on the goggles.

David Mercer

Client Reading: 3D in Europe: Challenges and Opportunities

Barely two years after first announcing its intention to buy Pure Digital Technologies, makers of the Flip camcorder, Cisco is closing the division, making 550 people redundant. The move is part of a series of steps intended to drive Cisco’s business towards “greater operational excellence”.

As well as closing Flip, Cisco will “re-align” other elements of its consumer business in line with its core strategic objectives. Specifically, that will mean that Umi, the consumer telepresence business, will be folded into Cisco’s Business TelePresence unit; and the Linksys home networking group will be refocused towards the core networking infrastructure activity at Cisco.

Video remains a core strategic objective for Cisco, and its vision remains that the network will expand into a video platform in the home. But the company has accepted that retail consumer electronics is, for the most part, outside of its competency, and will now focus its efforts on helping its service provider customers to maximise the potential of the dramatic changes in consumer media and technology markets expected over the next 5 to 10 years.

We have tracked Cisco closely over the years, and have noted on many occasions the challenges associated with a dual service provider-retail strategy. Not just because of the potential customer conflicts this entails, but also because of the highly contrasting economic and business challenges of retail and service provider models. If Cisco had been serious about consumer electronics, its overall results would inevitably have been impacted by lower margins: the only major player which has managed to avoid this golden rule is Apple. The real disappointment with Flip was that its famed ease of use and software strengths could not be transferred to other Cisco units in the consumer space.

Cisco's announcement includes a review of the Eos Media Solutions products in terms of its integration with core video technologies. Eos is a key element in the Videoscape strategy announced at the end of last year, so its future is particularly important. If Eos capabilities can be repositioned towards the needs of video service providers in over-the-top video and television services, this can only be a good thing.

Cisco may be pulling out of consumer markets, but they remain vital to the company’s interests. How and how fast consumers switch to IP-based video services and devices over the coming years will have a major impact on the company’s core technology and network businesses.

David Mercer

Client Reading: CES 2011: Connected TV Growing Up and Tablets Join the Ecosystem

Based on most of the games press coverage, which frequently focuses on the US market alone, you might be surprised to hear it; but Sony's PlayStation 3 has passed Microsoft's Xbox 360 in one key respect: the global active installed base of consoles.

Our ownership models apply assumptions about device retirement life cycles to console sales data on a regional and global basis. We published updated, in-depth analysis on games console market and ownership dynamics to our clients in our March 2010 report, Taming the Waves: Games Console Life Cycles and Platform Competition.

According to our newly revised model, the global active installed base of PS3s reached 43.4M at the end of 2010. This exceeded the equivalent number of Xbox 360s by 43.9M. We estimate that the overtaking maneouvre happened during December 2010 as the holiday season reached its peak.

As we have predicted previously, we remain confident that the current Sony system is on course to become the largest global TV console platform by 2013. In fact, PS3 sales globally slightly exceeded our early 2010 forecast, and with expectations growing for a PS3 price cut this year, the console’s sales trajectory is likely to continue in line with our predictions.

At the same time we have also revised upwards our forecasts for the Xbox 360. At 12.1M, sales in 2010 were very close to our High scenario, and our model has been adjusted to reflect the improved outlook driven by the success of Kinect.

So what of Nintendo’s Wii? As we predicted more than a year ago, sales fell significantly to 17.2 million in 2010, just 3% away from our forecast. We have therefore made only minor revisions to our model, which predicts that the peak in the active installed base of Wii is going to occur at some point during 2011, probably around the middle of the year. In terms of annual sales, both Sony and Microsoft will exceed the Wii this year, although in terms of active ownership, the Wii will not be passed by the PS3 until 2013 and by the Xbox 360 in 2014.

As we predicted more than a year ago, we still believe that Nintendo may have a surprise up its sleeve for E3. Much of the attention will inevitably be on the 3DS and the games and applications developed for it. But Nintendo cannot afford to rely on the handheld market alone for its future success. In the TV space it will be planning the Wii’s successor and may well discuss this by mid-year. If the company had planned correctly in our view, it would be ready to launch Wii2 by end 2011, at least for the Japanese domestic market. This timing would take some of sting out of the tail of its two rivals’ continued strength.

However we will not be surprised if Nintendo’s many fans now have to wait until 2012 for the Wii2, even if announcements are made at E3. The actual launch will  not come a moment too soon, because the Wii is now looking very tired and sales will decline rapidly over the next 12 months.

David Mercer

Client Reading: Global TV Games Console Forecast: Will Sensor Technology Revive Demand?