Digital Home Convergence
Digital Home Convergence
Digital Home Convergence
Overview
As technology and entertainment converge inside the home, major players in various industries are taking different strategies in planning for the future. The concept of the ādigital homeā will likely take one of two forms: a closed wired entertainment network (PVRs, OnDemand) or an open wireless data network (web, email, VOIP, IPTV). The closed model is already being offered in many homes across the country, but as technology advances, the open model will become the standard. It is important to understand how both technology and entertainment are companies are strategizing to control the ādigital homeā.
Based on research in this report, it appears that four things are likely to occur. First, convergence of technology will create the need for standards in the digital home network. Much in the way it took some time before the Wintel model became standard, we will have to wait and see which model takes hold in home entertainment. Once a model is chosen as standard, there will be an explosion of products and services catering to that model in the market. Second, increasing competition will lead to alliances between companies in different industries. PC technology companies that have no presence in home entertainment might look to deal their way into the ādigital homeā. For example, Microsoft is currently striking deals with several major phone companies to provide the platform for IPTV. Many people also suspect that Apple might acquire TiVo in order to gain a presence in TV and create a service platform for video-on-demand. Third, the successful companies in the battle for the digital home will be the ones who earn customer loyalty. Consumers are reluctant to change their behaviors, especially ones like TV watching that are so entrenched. Companies need to deliver products and services reliably in order to facilitate a consumer shift to the ādigital homeā. Finally, major content providers will hold up the process until they see digital distribution as a way to increase their long-term profits. Home video divisions of entertainment companies are extremely profitable. They do not want to jeopardize this profitability just to be at the front of the technology curve. The infrastructure behind the ādigital homeā will have to be in place before the major studios choose to participate.
Hardware – PCs
Companies in the personal computer space will be looking to form new relationships with other companies in order to gain an advantage.
Microsoft
Microsoft