News and New Products

Vying for Control Over the Digital Home

Online staff -- Electronic News, 1/5/2005

Ten industries are vying for control of the “digital home,” but some are better positioned than others to capture a big share of that emerging market.

That’s according to a new report from analyst firm Forrester Research, which says that among the industries battling for dominance are consumer electronics, PC, content, games, telecommunications and cable.

“While some industries are better positioned for success, all most focus on capturing and controlling new revenue streams through key cross-industry partnerships and acquisitions,” Forrester said in its report.

Leaders in the race are the cable, game, PC and software industries.  Challengers include content, portal and telecommunications industries. Long shots are consumer electronics, retail and satellite television provider industries.

"Businesses in every industry must fight to protect their assets, retain customers, and stave off competitors," said Ted Schadler, a Forrester VP, in a statement. “Ten years ago, cable companies owned TV in the living room. Today they compete with satellite TV -- and they'll soon compete with telcos -- for customers. Companies that master skills like experience design and customized delivery will lead the way by creating services and products that earn consumers' loyalty."

Forrester defines the digital home as “an environment in which devices connect to one of two networks: a closed, wired entertainment network for digital TV and video on-demand and an open, wireless data network for Web browsing, email, music, photos, and voice over IP (VoIP).”

But while the Forrester report says some industries are better positioned for success, it also asserts that there will be no winner-take-all in the battle for the digital home.  Rather, success will come to companies that partner outside their industries to establish power positions in the spaces that control most of the consumer spending: personal entertainment, intelligent devices, application-device combinations, immersive experiences, collaborative experiences and core services.

Forrester envisions many new partnerships over the next three years.  The research firm gave some examples, such as a joint venture of the NFL and FOX to create an immersive sports experience allowing viewers to choose camera angles and split screen content.  Another could be Sony’s acquisition of Clear Channel to create time shifted digital radio using Sony devices and Clear Channel content. Or, Apple could acquire TiVo, providing Apple with a service platform for TV and video on demand.