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Summer 2011 Corporate Research and Strategic Analysis CONFIDENTIAL
By: Andrea Sharkey, PhDCorporate Research & Strategic Analysis
Forrester Top 5
Summer 2011
Corporate Research and Strategic Analysis CONFIDENTIAL
Overview
This report provides a brief overview of some of the research
which has been released by Forrester in the past several
months
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Corporate Research and Strategic Analysis CONFIDENTIAL
Overview
This month’s report will focus on the topics of:
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• Integrating Social Media
•The Cloud & Non-Physical Content
•Cord Cutting
•The Post-PC Era
Summer 2011 Corporate Research and Strategic Analysis CONFIDENTIAL
Integrating Social Media
Corporate Research and Strategic Analysis CONFIDENTIAL 5
Social media is no longer just about rekindling old friendships on
Multitasking between PCs and TVs is rising sharply
Corporate Research and Strategic Analysis CONFIDENTIAL
“I chat, browse, or research about what I am watching on TV.”%
According to Forrester, 48% of online Americans
chat, browse or research a show on the Internet while
they watch TV
Corporate Research and Strategic Analysis CONFIDENTIAL 7
And while 44% of those who watch TV and use a PC at the same time are surfing, chatting and emailing
about unrelated topics to what they are watching…
Corporate Research and Strategic Analysis CONFIDENTIAL 8
19% look up stuff they see in the shows
12% look up things from ads
9% shop online for things seen in shows and ads
5% use social media to chat about the show
4% use Twitter to post or follow shows
Corporate Research and Strategic Analysis CONFIDENTIAL 9
To capitalize on this new trend, broadcasters, content creators and celebrities are using social media to
reach viewers
Networks like MTV and
Comedy Central do the same for much of their programming
Popular shows like ‘Glee’ are
placing hashtags on the screen
during the show
Some shows are beginning to have
hosts and stars respond to viewer
questions on Facebook and
Twitter during the show Other shows give
viewers bonus episodes if they
‘like’ the show on Facebook
Summer 2011 Corporate Research and Strategic Analysis CONFIDENTIAL
The Cloud & Non-Physical Content
Corporate Research and Strategic Analysis CONFIDENTIAL 11
Cloud computing refers to anything that involves delivering hosted
services over the Internet
What is “the cloud”?
Corporate Research and Strategic Analysis CONFIDENTIAL 12
And it has 3 distinct properties…
It’s sold on demand – typically by the minute or the hour
The service is fully managed by the provider – the user just needs
an Internet connection
It’s elastic – the user can have as much or as little of the service as
they want at any given time
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2
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Corporate Research and Strategic Analysis CONFIDENTIAL 13
Content is becoming…
More virtual than
physical
More rented than owned
More on-demand than
fixed
Corporate Research and Strategic Analysis CONFIDENTIAL 14
Forrester points out that people are still paying for content
In fact, Americans spend an average of $81 each month on media
products
Corporate Research and Strategic Analysis CONFIDENTIAL 15
But just 34% of that spending goes to media that someone intends to keep on a shelf or stick on a hard drive to call
their very own
Corporate Research and Strategic Analysis CONFIDENTIAL 16
Forrester also sees a shift to more digital content in the future…
of U.S. online adults pay for digital streams and downloads22%
of their monthly content bill goes to this digital content~$20
Both those who do it and the amount spent will only grow as more digital options are
made available
Corporate Research and Strategic Analysis CONFIDENTIAL 17
With these transitions in mind, Forrester argues that portable media players must evolve with the cloud
or become extinct
Corporate Research and Strategic Analysis CONFIDENTIAL 18
Technology firms must focus on the person not the device
Multiscreen and multidevice strategies must focus on the needs of the consumer and
how they use data
Corporate Research and Strategic Analysis CONFIDENTIAL 19
Developers must ensure content isn’t out-of-date on any consumer’s device
By using the consumer’s cloud, devices should sync every device automatically
without the press of a button
Corporate Research and Strategic Analysis CONFIDENTIAL 20
Technology designers need to minimize accessories needed for
multidevice use
The reduction of device specific cables, cases and power adapters is key to consumer convenience
Ultimately, Internet cloud-based products help people to use their
devices together and to their fullest
Corporate Research and Strategic Analysis CONFIDENTIAL
Summer 2011 Corporate Research and Strategic Analysis CONFIDENTIAL
The Post-PC Era
Corporate Research and Strategic Analysis CONFIDENTIAL 23
Forrester defines a Post-PC era as…
“A social and technological phenomenon in which computing
experiences become ubiquitous, casual, intimate, and physical”
Corporate Research and Strategic Analysis CONFIDENTIAL 24
The Post-PC concept is more than a decade old
In 1999, MIT researcher David
Clark spoke of Post-PC Internet in
a future where glasses and
wristwatches would be
connected devices
In 2004, Jonathan Schwartz told The New York Times that the Post-PC
era had been upon us since the turn of the millenium as mobile sales surpassed PC
sales worldwide
Corporate Research and Strategic Analysis CONFIDENTIAL 25
Apple now gets the majority of its revenues from Post-PC devices such
as iPods, iPhones and iPads
Originally named Apple Computer, the company is now called Apple Inc. –
another indicator of this technological shift
This transformation has seen computing evolve from…
Corporate Research and Strategic Analysis CONFIDENTIAL
Stationary Ubiquitous
The availability of new devices, GPS, and the ubiquity of wireless
connectivity mean that computing can be done anywhere and anytime
This transformation has seen computing evolve from…
Corporate Research and Strategic Analysis CONFIDENTIAL
Formal Casual
Computing used to have formal start and finish times, now portable devices
allow people to fill the in-between moments of their day…
…And the primary activities are entertainment based
This transformation has seen computing evolve from…
Corporate Research and Strategic Analysis CONFIDENTIAL
Arms-length Intimate
Desktops kept users literally at arms-length but laptops, netbooks, & tablets
make computing personal…
…In fact, the two most popular locations for computing in the home are the living
room and the bedroom
This transformation has seen computing evolve from…
Corporate Research and Strategic Analysis CONFIDENTIAL
Abstract Physical
Mouse/keyboard interactions are abstract for the user, but touchscreens
and consoles like with the Xbox 360 and Kinect make direct physical
manipulation possible
Corporate Research and Strategic Analysis CONFIDENTIAL 30
A Post-PC world does not signal the disappearance of the desktop and
laptop computer, however
Corporate Research and Strategic Analysis CONFIDENTIAL
Old form PCs will continue to persist along with the new
In fact, U.S. consumers own and use multiple computing devices
Corporate Research and Strategic Analysis CONFIDENTIAL
79.3 million Americans own 3+ connected
devices
4.5 million Americans own 9+ connected
devices
Corporate Research and Strategic Analysis CONFIDENTIAL
The tablet is the newest Post PC device to throw
its hat in the computing ring,
and it has entered the market with a
vengeance
Corporate Research and Strategic Analysis CONFIDENTIAL
In fact, between iPad’s launch in April 2010 and
March 2011, Apple has sold
19.5 million units world wide
Corporate Research and Strategic Analysis CONFIDENTIAL
Tablet Owners and Their Impressions
(Base: 374 U.S. online adult tablet owners)
“I use my iPad/tablet more than my computer when both are available”
While younger people are more likely to see their tablets as replacement
devices…
Corporate Research and Strategic Analysis CONFIDENTIAL
Tablet Owners and Their Impressions
(Base: 374 U.S. online adult tablet owners)
“I use my iPad/tablet more than my computer when both are available”
…The reality is that in a multidevice environment, the device most suited for the task will often win out
Summer 2011 Corporate Research and Strategic Analysis CONFIDENTIAL
Cord Cutting
Corporate Research and Strategic Analysis CONFIDENTIAL 38
Cord cutting refers to the decision of individuals and households to cancel their pay TV services in
exchange for watching TV solely over the Internet
What is “cord cutting”?
Corporate Research and Strategic Analysis CONFIDENTIAL 39
Forrester reports that 24.8 million U.S. homes have watched online
video on a TV set
Corporate Research and Strategic Analysis CONFIDENTIAL 40
Online Americans report that 14% of their total video intake each week
comes from Internet content
At an average of 5 hours of video viewing each day, that means the
average online American watches 42 minutes of
online video daily
Corporate Research and Strategic Analysis CONFIDENTIAL 41
Interestingly, when the online video viewing moves to the TV set the
average time spent doubles to 1 hour and 24 minutes each day
Corporate Research and Strategic Analysis CONFIDENTIAL 42
Previously, connecting a PC to a TV set to watch online video was
difficult to implement…
Corporate Research and Strategic Analysis CONFIDENTIAL
US Homes Accessing Online Video on a TV, by Solution
(millions)
…By the end of 2010, however, a number of
devices give consumers access to Internet video
on their TVs
Corporate Research and Strategic Analysis CONFIDENTIAL 44
Despite these options, U.S. consumers aren’t interested in cutting the cord to replace their
pay TV services with online video just yet
Only 6% of online Americans say they
are interested in cutting the cord And, only 2% say that
they are very interested
Corporate Research and Strategic Analysis CONFIDENTIAL 45
Forrester sees four steps occurring over the course of the next 2 years that will lead to more serious cord
cutting pressure
Four Steps to Cord Cutting by the end of 2012…
Corporate Research and Strategic Analysis CONFIDENTIAL
• Consumers begin to question why they are paying for 500 channels• Begin to think about cutting the additional channels on their list such as movie channels
1. Shaving the Cord
• By the end of 2012 some Pay TV providers could see losses of more than 10% of their subscribers• Many defectors will be using multiple services to meet their needs – movies, TV shows, sports and news
4. Serious Cutting Pressure
• By early 2012 many will realize they can’t live without live news, sports and premium channels to cut pay TV completely• But another half of users will begin to pare back on TV services AND new options they were testing
3. Spending will Consolidate
• For a brief period in 2011, people will actually spend more on video than just a year ago• They may shave their cable bill, but try out additional options for paid content (ie Netflix, Apple TV)
2. Experiment with Alternative Options
Corporate Research and Strategic Analysis CONFIDENTIAL
Reference Articles
• Fogg, I. (December 2010). Portable Media Players Must Evolve with the Cloud or Become Extinct. Forrester Research.
• McQuivey, J.L. (March 2011). Online Video on TV Leads to Cord-Cutting by 2012. Forrester Research.
• McQuivey, J.L., Gownder, J.P. & A.E. Corbett. (March 2011). People Pay for Content: They Just Don’t Own It: Why Control of Digital Subscriptions is the New Media Battleground. Forrester Research.
• Rotman Epps, S. (June 2011). The Products That Lose When Tablets Win. Forrester Research.
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Corporate Research and Strategic Analysis CONFIDENTIAL
Reference Articles
• Rotman Epps, S. (May 2011). What the Post-PC Era Really Means. Forrester Research.
• Shaw, E. et al. (May 2011). Use Social Media to Boost Your TV Audience. Forrester Research.
• Shaw, E. et al. (July 2011). Updated 2011: Use Social Media to Boost Your TV Audience. Forrester Research.
• What is.com (December 2007). Definition: Cloud Computing. Last retrieved at: www.searchcloudcomputing.techtarget.com/definition/cloud-computing.
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Corporate Research and Strategic Analysis CONFIDENTIAL
Further Information
• If you have any questions about the material presented here, please contact Andrea Sharkey (ext. 6360; [email protected])
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