The New Face of the Audio/Video Digital Landscape
Q: A lot has happened in the audio/video world in the past six months. What are the standout developments, to your mind?
Matt: The digital landscape has quickly become a much richer environment, with consumers engaging in an increasingly broad array of content and delivery options. Video has joined audio as something consumers are not only accepting but actively searching out on the Internet; and the lines between audio and video are blurring in consumers' minds. People are going online now not just for music but for video and/or multimedia news clips and other audio-video content. There's also an increasing acceptance of, and demand for, user-generated content thanks to the phenomenal success of YouTube.
What's most interesting about this broader acceptance of rich multimedia content is how quickly consumers have warmed to the idea. In many ways, consumers' first taste of on-demand rich Internet content was via digital music, which took years to really take off. Digital music involved an essentially traditional style of consumption except that the distribution channel was much different. Now, it appears that the longer acceptance curve for music has paved the way both for a faster uptake of online video and for breakthroughs in how video is consumed and what content is sought. Once comfortable with online music, consumers have been very willing to explore online video, and have in fact pushed the boundaries with the types of content they are seeking - especially with regard to user-generated items and short, on-demand and easy-to-consume video clips.
Q: Where are we at with the whole business of "convergence"?
Matt: Convergence has been a slippery topic - and it's been difficult for technology companies to deliver on its promise. There is a changing understanding of convergence, and consumers, while they may not be aware of it, have driven this shift. More and more, people are being exposed to the easy access of digital content across PCs, mobile phones, MP3 players, DVRs, and gaming consoles. Some of these devices can directly access the Internet - but the user experience and availability of content varies greatly. Anyone who has tried to access the Internet via a mobile phone can attest to this. This is confusing to consumers - on the one hand they are hearing about the promise of convergence and new advances in technology - yet there are inconsistencies in the delivery of this promise.
Today's consumers also understand convergence to include the ability to move content around - to access it in different ways and seamlessly transfer it through different devices or technologies. They want to be able to move audio and/or video content from their PCs to their more everyday living environments, including their living rooms, their portable gadgets, and even their cars. Most of all, they want each device to work, and to work harmoniously with other devices!
What we'll likely see more of is technology companies trying to make it easier for consumers to facilitate content mobility. Apple is already doing this in the music world with linkages between the PC, content, and portable devices, and is ideally suited to do the same for the home theater with the Apple TV wireless router that will enable porting and syncing of audio, video, and other digital content from a PC to a home entertainment center or widescreen/flat-screen TV. I envision more manufacturers moving in this direction - particularly as consumers look for converged technology solutions that deliver anytime access to essential content and personalized information. This, in many respects, encapsulates convergence for consumers.
Q: Consumers seem to be expecting greater compatibility - are they worried that all this convergence is going to be hard for them to set up or manage?
Matt: Absolutely. I would characterize this as having been the preeminent barrier to broader adoption of converged devices and content thus far, and it continues to be a barrier.
Our research in this area repeatedly suggests that convergence technologies (such as home digital media hubs) are attractive to consumers, but also that consumers are worried about the complexities involved with set-up, system performance, and compatibility with other hardware and electronics devices already in the home. This "worth it" hurdle - where the consumer asks, "Do the benefits of a given technology outweigh the costs of entry I'm going to have to invest to learn how to use this and make it work?" - is a major deterrent to broader adoption of many innovative and cutting-edge technologies.
Q: Is overcoming the "worth it" hurdle a competitive advantage for a technology company?
Matt: Definitely, for those companies who can deliver. But this is a difficult proposition, as varying systems, hardware, software, and Digital Rights Management (DRM) can inhibit a smooth user experience. This is why some companies have proceeded with "closed" solutions - essentially embedding proprietary operating systems within their products and services to enable a seamless user experience across both device and content. While this approach is inherently at odds with broader convergence across other companies' products and services (e.g., Apple's proprietary FairPlay Digital Right Management system for music) it does facilitate strict quality control and compatibility within the closed environment, and thus delivers on the promise of convergence to the population of consumers using this specific system.
Q: What makes Ipsos Insight a company that can help make sense of all this?
Matt: Our Technology and Communications practice is immersed in this sector, and has been partnering with industry leaders to research and unravel these issues for nearly a decade. We take knowledge about how the category has evolved thus far and apply it to designing forward-looking research initiatives that will assist in formulating and executing solid business strategy. When our clients partner with us, they receive the compelling combination of cutting-edge analytic rigor and comprehensive sector understanding. We have a passion and intensity in our work that leads to strategic and actionable outcomes for our clients.
