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January 16, 2015 12:34 dmercer

One of the key trends at CES 2015 was the widespread renewed interest in audio. After 15 years or so of “digital” (ie online) music in the form, primarily, of convenient but low grade MP3 downloadsand streamed services, it seems that industry majors are finally ready to persuade a new generation of music fans that high quality audio is worth investing in (both time and money).

One element of this revival is the “let’s get Sonos” strategy, which was apparent in numerous demonstrations and launches of a variety of whole home audio systems and technologies. There was a general feeling that Sonos has had things its own way for far too long and is ripe for attack now that connected technologies can deliver an equivalent experience (or close to) at much lower price points.

Samsung went as far as saying that it plans to become the “most innovative audio company in the world”, which, given the number of active specialists in this sector, will take some doing, even for a company of Samsung’s scale and financial might. LG also threw its hat into the next generation audio ring with its MusicFlow offer, while connected audio technology platforms from Qualcomm (AllPlay) and DTS (Play-Fi) could become important new multi-device connected audio platforms. Sony’s strategy is focused on enabling content and services with support for music in high-resolution audio formats.

I was treated to several audio demonstrations at CES which suggested that are many miles ahead on the audio technology roadmap. In terms of sound quality little could beat French specialist Devialet’s new Phantom speakers. The company is adopting a vertical retail strategy and claims strong success from its early store opening in Paris.

I was also interested in directional and noise cancelling technologies, which could become important in the digital home as a supplement to whole home connected audio systems. Harman was demonstrating combined directional/noise cancelling within the automotive environment and confirmed that they would be exploring its potential in the home. I also heard a demonstration of the <<A>> personal directional speaker from French developer AkousticArts (see image). The technology was effective in confining audio perception within the beam, although extraneous noise was still apparent. If it could be combined with noise cancelling this could be a valuable consumer application within a whole home audio environment, so that the science fiction vision of different audio streams following individual users comes closer to reality.

Finally, there was good news for anyone involved in audio services and technologies from a recent survey carried out by CSR (recently acquired by Qualcomm). 90% of respondents (from the US, Germany, UK, China and Japan) said they liked music so much that it was either “part of who I am” or “important to me”. The other 10% said they liked music, even though it wasn’t important to them. The sample was somewhat self-defining, since only people who listened to music at least once a week were included in the survey. But it is still an interesting reflection of the strong role that music plays in many people’s lives. Technology vendors will be working hard over the next few years to persuade those people that their love for music justifies a higher investment in the audio experience.

David Mercer

December 8, 2014 10:17 dmercer

Our latest survey results are just in from the US and the results make very encouraging reading for the Ultra HD ecosystem. Awareness of the Ultra HD term itself has risen by 18 points in less than a year and now stands at 57% of all respondents. “Ultra HD” is still more widely recognised than “4K TV” or “UHD” although awareness of those terms has also improved.

23% of all respondents claim to have watched TV or video on an Ultra HD TV, either in a retail store, in a home or somewhere else. This reaches as high as 40% or more in younger age groups. Of those who have seen an Ultra HD TV, a remarkable 93% say they were either extremely or somewhat impressed with the video quality, when comparing it to “normal HD”. This is a very high rating for any new technology or related service. As a benchmark, when we surveyed cinema goers about 3D a few years ago (3DTV: Will Consumers Buy It?), of those who had seen a 3D movie only 26% were very impressed, half the level we are now seeing with Ultra HD.

We don’t know what sort of content people have viewed, or whether it was originated in 4K or upscaled. However, the fact that nearly everyone who has seen an Ultra HD TV is impressed is very encouraging for TV manufacturers and retailers and bodes well for a strong end to the 2014 holiday season.

David Mercer

September 10, 2014 04:47 dmercer

The television industry is in the middle of the greatest period of change in its history. It has been long predicted. My dusty old client presentations from the late 90s predicted the convergence of broadband and broadcasting: 15 years later that convergence is being felt in every segment of the value chain. This weekend at IBC we will hear how key industry players think  television will emerge from this period of disruption and what they are planning to do about it.

Several themes encapsulate the challenges which lie ahead:

Cloud: no longer just a reassuring/confusing buzzword to throw into management presentations, cloud-based television services are now the talk of the town and represent the future of television delivery for incumbents and new players alike, if tech vendors are to be believed.

Multiscreen: What is “a TV”? As our recent groundbreaking consumer analysis has shown, viewers from many, but not all, market segments are now engaging with television content in multiple ways on multiple devices, including viewing the content on any video-capable display and communicating with and around that same content. Content owners and providers cannot afford to think of a “first” or “second” screens: all are equal in a well-crafted strategy.

Social TV: Television always was social, but technologies continue to drive the concept to new levels. Some viewer segments (primarily moderate, manic and indifferent multiscreeners) are heavily engaged with TV content using social media and before long technology will enable them to click straight from one TV show to another on the recommendation of a social communication. Emerging players like Netflix recognise this, while even advanced legacy players like Sky are struggling to embrace it. They can’t afford to do so for much longer. One question: when we see the first successful rollout of a true transmedia TV experience?

Advertising: The missing link for so long in advanced television experiences. Some day this will all come together and television advertising will be revolutionised. Programmatic buying is likely to be part of the mix, as we reported recently. A seamless multiscreen advertising experience will surely emerge sooner or later: if incumbents continue to resist it then an OTT player will step in to create a new multi-billion dollar opportunity.

Wireless: Television started out as a wireless industry but was overtaken, to a large extent, by wires (cable, copper) and satellite (still wireless). Now that airwaves in many parts of the developed world are being perceived (by some) as less useful for broadcasting those pesky cellular communications people are muscling in on its space as they begin to look more and more like video distributors (mobile video service providers?).  And ironically, they want to use them to start broadcasting again, this time using LTE Broadcast (eMBMS). Our recent report on eMBMS cast doubt on the technology’s impact but this is a topic which will dominate debate for some years to come and whose outcome could have wide strategic ramifications.

Ultra HD: Do people really want better-than-HD TV? Yes, according to our research. And now they are buying UHD-ready TVs the broadcast industry is starting to believe, even some, probably many, will baulk at the cost. OTT, of course, is already doing it. We’re expecting to hear more confirmations, if only unofficial, of 2015 launches for broadcast UHD services.

Exciting times, no doubt about it. The storm is raging, and it’s difficult to see how it will be replaced by calm rather than becoming even more turbulent in the years ahead. Our IBC schedules are packed as usual and I’m looking forward to hearing perspectives and insights from all our industry colleagues.

David Mercer

September 4, 2014 08:45 dmercer

It’s not news that television is changing, but much of the reporting and analysis, even in the industry press, ignores the fact that different people’s behaviour and attitudes evolve in different ways. Not everyone is Tweeting; not everyone is using OTT TV. Television is more important to some people than to others.

We have just published a major new research report which identifies how different user groups (segments in the jargon) are responding to new television-related applications and technologies like multiscreen viewing and social media interaction. We used latent class analysis, a sophisticated, statistics-based segmentation methodology, to identify the critical attitudinal and behavioural characteristics which help define market segments related to new television technologies and services.

(We are offering a free webinar on Tuesday Sept 9th to introduce this research: Register here.

The results highlight the speed with which television behaviour has changed over recent years. Couch Potatoes, a term used to describe traditional TV watching habits, are alive and well. They account for the biggest single segment, 33% of all TV viewers. But of course that’s a significant decline when we consider that this was the commonest mode of TV viewing some years ago. Today’s Couch Potatoes are focused on watching TV on the big TV screen. They have little engagement around TV content, whether online or by talking to friends on the phone, and tend not to use online/OTT TV services.

We have also identifed a related segment, Couch Chatterers, who like TV more than average but are particularly prone to chatting with friends about what’s on TV using voice or texting. Apart from this Couch Chatterers don’t engage in any “emerging” activities like social networking related to TV shows or watching TV online. They account for 12% of the audience.

The second biggest group are TV OTTers, accounting for 26% of viewers. This group tends to be less interested in television generally, but will go online to watch specific shows, including using “new” TV devices like PCs, tablets and smartphones to watch them. But like Couch Potatoes, this group tends not to engage in communications around TV shows, whether using traditional phones or newer means like social media.

The remaining groups are all multiscreeners, but our analysis indicates that there are three distinct types. Moderate Multiscreeners, accounting for 11% of the total, engage in most online TV and social media behaviours around TV to a reasonable degree, with one notable exception: they do not follow TV shows using Twitter.

Indifferent Multiscreeners also account for 11% of the total and are the group which is least interested in television overall; for example, they are most likely to go 24 hours without watching TV, and they are least concerned about missing shows. But when they do watch, they engage with and around the content using social media, voice communications and texting. They are also highly likely to follow TV shows using Twitter, and more likely to use smartphones, tablets and PCs to watch TV content.

Finally we come to Manic Multiscreeners. This is the smallest segment, accounting for 7% of viewers, but is the most active on all emerging behaviour metrics. They are most likely to use service provider VOD and OTT online TV and video services. Every Manic Multiscreener claims to follow TV shows using Twitter.


It is interesting to note that this group is most likely to consider TV as a primary source of entertainment, at the same time as thinking of it as a “huge waste of time”. They also agree most strongly that TV is background to other activities – “the TV is on but I am not really watching it”. One explanation for this apparent discrepancy could be that they feel unable to control their, and their household’s, behaviour. It is also worth noting that these households are most likely to include children, for whose benefit the TV is often switched on.

 When we map traditional demographics onto these segments the weaknesses of traditional segmentation approaches become clear. If television companies and advertisers target “millennials”, for example, on the basis that they are reaching a group which exhibits a common set of new, emerging or advanced behaviours, this is clearly a false assumption. Our research shows beyond doubt that a significant proportion (30%) of millennials are members of the Couch Potato and Couch Chatterer segments. So companies which assume that using social media or online video services, for example, will reach this part of the audience are missing out on 30% of the under 35 population.


In conclusion across the US and European viewer base we found a slight weighting in favour of “emerging” (55%) relative to “traditional” (45%) behaviours. The emerging behaviours as classified here all feature some relatively strong element of multiscreen or online video activity related to consumption of, interaction with and communications around television. These are key elements which will help to define the future of television over the coming years.

David Mercer


May 13, 2014 11:59 dmercer

Xbox made two key announcements today which should help the Xbox One recover from a slow start relative to Sony’s PS4. First, it will offer a new SKU by unbundling Kinect and offering the standalone Xbox One console at $399.  Second it will make entertainment apps like Netflix available without the need for the paid-for Live Gold subscription. These moves will be introduced in all Xbox international markets on June 9th. According to Xbox, “executives have taken customer feedback very much to heart” and recognise that these changes represent “significant business decisions”.

These are two important steps which could be characterised as the removal of two of the lynchpins of Microsoft’s previous strategies. Xbox has pioneered advanced user experience over the past few years with the Kinect technology.  While it admits that Kinect does not always work well with everybody, It had clearly hoped that its appeal was now wide enough that bundling it as standard with the Xbox One console would not prove an obstacle to beating its main rival, Sony’s PS4. That assumption proved wrong and Xbox is now putting it right.

It’s worth considering how Kinect could have been improved. Our own recent research (Xbox One: The Rise of the 'Media' Console) found positive feedback on many of Kinect’s capabilities, especially the TV guide voice and gesture controls. At the same time, as Xbox management confirmed to me today, the company recognises that it has not made as much progress in providing must-have Kinect-based game content as it would have liked. It is perhaps this element above all which frustrates potential Xbox One users who reason that they shouldn’t be asked to pay for something which is used relatively seldom by developers.

In my view the other strategic change could be equally important. Microsoft took the important decision in the days of the original Xbox console to charge for online capabilities, in contrast to its main console rivals. While this may make sense for many gameplay functions, it has always seemed to be pushing things a bit far to keep non-game apps and services behind this paywall. Opening up Netflix and Sky to more casual users should help broaden the appeal of Xbox One still further.

David Mercer

March 20, 2014 12:58 dmercer

Before Christmas I posted a warning to today’s twin tech titans that they couldn’t afford to rest on their laurels. After analysing the latest results from our ConsumerMetrix survey it looks like that warning has intensified for at least one of the two. Apple had one of the weakest performances during the second half of 2013 in our brand preference survey. Its overall rating fell by 5.1 points to 17.3 compared to the first half of 2013 leaving it in fifth place behind HP and only slightly ahead of LG in sixth place.

Apple’s decline was marked by a significant change in ratings from its core customer base, the young and affluent. In the most affluent households (more than $100k annual income) Apple saw the biggest decline of the 21 technology brands included in the survey.

When I discuss our Brand Preference Index with people for the first time, many are surprised to find that Apple is not the number one brand in the first place. In fact it ranked third in Q4 2012 and has slipped to fifth a year later, behind Samsung, Sony, Microsoft and HP.

Source: Strategy Analytics ConsumerMetrix survey, Dec 13/Jan 14


Methodology: The 2013 Q4 ConsumerMetrix survey was fielded online in December 2013 and January 2014. The sample consisted of n=2024 individuals in the US and n=4095 individuals in Europe ages 15-65+. The data was weighted by country, age, gender and internet use to represent the US and European populations of internet users, respectively.

But Apple is not even in first place in highest income households – it ranks fourth - and, as noted, its rating here has been falling rapidly. Apple clearly gets strong media coverage in general and particularly when it launches new products, leading to the perception that it is a market leader in many ways. We believe that the fact that Apple has had fewer high profile launches and obvious hits in recent times is one factor behind its apparent recent decline. It would seem highly unlikely that the brand will continue to fall rapidly in this Index, but the warnings from brands like Blackberry and Nokia suggest that things can change more quickly than anyone had imagined. In a competitive technology market even the leaders cannot afford to relax.

I believe there are several reasons why Apple is not ranked as highly as people expect. One is that we ask respondents to consider what they would normally spend on technology products. It seems that respondents recognise that Apple is a premium brand and, however appealing it might be, those who can’t afford it would not realistically be able to buy it. This analysis is confirmed by the fact that Apple’s profile is weighted heavily towards higher income groups. It ranks only ninth with people who live in the lowest income households.

David Mercer

March 4, 2014 11:43 dmercer

Following my post from CES back in January, more positive news for UHD TV emerges after we have completed the weighting of the latest European survey data in our ConsumerMetrix service. As in the US we found strong interest in buying a new UHD TV over the next two years, assuming the products meet performance and price expectations. 55% of Europeans said they would be very or somewhat likely to buy a UHD TV over the coming two years, split between 15% very and 41% somewhat likely (difference due to rounding).


As I noted previously, the survey question asked respondents to make certain assumptions:

 Ultra HD or 4k TV is a new type of TV which offers significantly improved images compared to today's HDTV. Assuming the price of an Ultra HD or 4k TV was acceptable to you, and assuming the image quality was as good as is claimed, how likely would you be to buy a new Ultra HD or 4k TV within the next two years?

 Some commentators questionned our approach but we feel it is justified to ask consumers to make assumptions about things they are not familiar with. At minimum this research demonstrates that people are indeed interested in improving their big screen TV experience, even when they already have HD. This is an important finding in itself, given that there seem to be many observers doubting the need for Ultra HD or indeed the future importance of the big screen in the home in general.

 Our study also reached the following conclusions:

                    ·        Awareness of the term “Ultra HD” is much higher than either “4K TV” or “UHD”

·        Awareness of Ultra HD declines with age and increases with income

·        Two thirds of higher income households would be willing to buy an Ultra HDTV

·        Intention to buy Ultra HDTV peaks in the 25-34 age group

·        Other indicators of intention to buy Ultra HDTV are number of children in the household and ownership of surround sound systems

David Mercer


January 12, 2014 19:28 dmercer

Amongst the many TV-related themes at CES 2014 was the widespread entry of curved TV screens. Widespread, at least, in the sense that most major TV vendors were showing curved models, without necessarily committing to launch dates or pricing. This included many Chinese brands, who demonstrated their growing strength in global CE markets not only by building bigger and more impressive CES booths every year but also by getting ever closer to catching up on the technological leadership of traditional Korean and Japanese competitors.

There was a lot of anecdotal debate during CES, both in panels and on the show floor, regarding the merits of curved displays. I should confirm at this point that Strategy Analytics has not yet conducted its own user experience research on these displays and until we do, or until the market begins to provde concrete evidence of their appeal, the jury will remain undecided. Nevertheless I can say that we are probably starting from a position of broad scepticism regarding the proposed benefits of this technology. Most CES booths displayed some kind of quasi-technical explanation, usually involving themes such as immersion and fields of view. One major vendor assured us that its own internal user testing had proven beyond doubt that people preferred curved to flat displays.

There is a slight point of irony, of course, in that the CE industry had worked hard for many years to deliver flat displays, after spending the first few decades offering rounded (convex) screens using CRT technology. Flat-ish screens were first achieved by Sony with its famous Trinitron technology, something which helped to secure Sony's leadership in TV back in the 1980s and 1990s. Those displays were flat vertically but curved horizontally. I have no doubt that Sony at that time presented compelling user evidence and technical explanations why that display type was the best for viewing television images.

Rear projection TVs had been flat since the 1970s but these offered poor quality images compared to CRTs and never caught on outside the US. Once flat panel technologies started to penetrate the large screen TV market in the late 90s and 2000s the mass market era of the true flat display had finally arrived. Consumers switched quickly once prices fell, although the thinness and convenience of flat panels was as much a factor in CRT's demise as their flatness.

Now the industry is telling us flat is not good enough. Time will tell. I have been around long enough to know that the cool factor can be enough to drive demand for technologies which may have a relatively weak technological grounding. I would just voice one note of concern after a visit to Samsung's booth. Samsung was showing a side-by-side demonstration of flat and curved TVs, which, I was assured by one representative, were identical in every respect except for the fact that one was curved. The curved display had noticeably improved colour depth and I was told that this was entirely a visual effect caused by the screen's curvature. Unconvinced, I approached a second Samsung representative who confirmed that curved TV did indeed incorporate Samsung's video processing technology Auto Depth Enhancer. While relieved that my ageing eyes had not completely deceived me, I was naturally concerned that such poor information was being given to visitors to Samsung's booth. Not only that, but while I was viewing the demonstration Samsung was interviewing other visitors on their perceptions of the two displays. It will clearly be inadvisable to rely too much on the results of that research if it is intended to demonstrate the benefits of curved v. flat in isolation.

David Mercer



January 8, 2014 11:14 dmercer

Hot off the press Strategy Analytics' new ConsumerMetrix survey carried out over the past few weeks with 2024 US consumers found very strong interest in UHD TV. 19% of people said they would be very likely to buy a UHDTV and 37% somewhat likely within the next two years. Only 24% said they would be unlikely to buy one.

The survey question was phrased as follows:

Ultra HD or 4k TV is a new type of TV which offers significantly improved images compared to today's HDTV. Assuming the price elsewhere of an Ultra HD or 4k TV was acceptable to you, and assuming the image quality was as good as is claimed, how likely would you be to buy a new Ultra HD or 4k TV within the next two Years?

This looks like great news for the CE vendors introducing new UHD models this week. If they get the pricing right UHD could provide a significant business uplift over the near to medium term.

David Mercer

January 8, 2014 00:51 dmercer

New terms often emerge in order to encapsulate hot new technology trends which are less than clearly defined in the specifics or the implications. One such current trend is the Internet of Things, or Everything if you prefer, terms which may be meaningful or empty depending on individual taste. Whatever IoT or IoE ultimately mean or become, there is a strong sense at CES 2014 that their commercial impact is becoming real in some form or other, rather than simply visions on Powerpoint slides.

As an example, the smart home era is now clearly upon us, after emerging as a strong  future trend at CES over the past couple of years or so. IoT discussions generally include the apparent arrival of smart home technologies into mainstream products and services as one piece of evidence that IoT is real. It extends beyond home control and automation, of course, and wearables are the latest incarnation of the broad IoT trend. CES 2014 is littered with wristbands, headbands and other wearable technology products of various descriptions, many of which will no doubt fail commercially. Again, there is a strong sense that out of this emerging, fragmented primordial soup of innovation and ideas a few big winners will emerge in years to come. They may or may not include the smart mug (sic) displayed on Intel's booth, a porcelain coffee cup incorporating Intel's latest thumbnail-sized microprocessor.

Beyond consumer and B2C models, however, the impact of IoE will embrace industry and public services in general, and this is the foundation of Cisco's new strategy. John Chambers regards this year as one of his famous inflexion points where things come together and future concepts suddenly switch from excited chatter to real business decisions. According to Cisco IoE has moved rapidly in recent months to become central to board-level and high level government debates, and Cisco is doing its best to pull together multiple players in the ecosystem to persuade both industries and government bodies that the opportunity is real. It is targeting vertical industries but also the public sector, where Cisco's Joe Bradley discussed the opportunities and challenges in a round table with myself and other analysts. Bradley claims that Cisco has developed at least 40 use cases which show authorities how they can improve the way things are done and save money. One that was emphasised was improvements in how people find parking spaces using sensor networks, perhaps not the most exciting example but one which it is claimed could save many millions of dollars, euros or Yen.

However much Cisco focuses on these B2B strategies, and however much industries and governments start to take IoE seriously, it seems vital that the interests of the end user should not be forgotten. It's clear from this CES that there is a wealth of new connectivity-based experiences coming down the pipeline over the next few years, many of which will challenge traditional norms of behaviour as well as the way that traditional customer-supplier relationships work. Data security is clearly a critical element but in my view the biggest challenges will not be technical but social. The importance of Trust, not just for consumers but for everyone in the ecosystem, should never be forgotten as IoE creates  fundamentally new ways of going about business and government.

David Mercer

Client reading: Intel Sets Sail For Post-PC Era, But Don't Call It That