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0 eBook Reading Interactive Television Digital Audio
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FIGURE 4-1 Number of US consumers likely to adopt device by 2005 (in millions)
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28 million consumers will purchase an eBook reading device 37 million consumers will use interactive digital audio 31 million consumers will subscribe to a multifunctional interactive television service
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Based on their stated preferences, consumers want eBooks that are highly reliable They want access to an extensive library of works on a lightweight device that has a back-lit screen displaying a clear, highly readable image Color and connectivity are cool; features like phones, pagers, organizers, and video are far less attractive (see Figure 4-2) In a digital audio device, consumers want high sound quality, access to virtually any music, a device that is virtually indestructible, and adequate storage capacity In interactive television, consumers are expecting video-ondemand, the flexibility to watch programs any time they want, the ability to watch past programs at will, and almost total control over live television, from pause to instant replay Key to the mass-market potential of these entertainment devices is their ability to excite consumers beyond the young early adopter trendsetters (see Figure 4-3) The appeal of these devices already touches the average consumer This finding is quite surprising; conventional wisdom has it that younger consumers are more open to new technologies, and thus would be the early adopters of most new digital devices Our study indicates that consumer interest in future digital entertainment devices is actually quite high across the age groups we surveyed, provided content is readily available and these devices have the functionality consumers want
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Video on Demand Watch Programs at Any Time (flexibility) Watch Programs from the Past Year at Any Time Control of Live Television (ie, pause, instant replay)
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795% 720% 705% 698%
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Critical device and content features
CHAPTER FOUR eBooks Digital Audio
660% 594% 685% 605% 816% 713% 842% 711% 728% 530%
Interactive TV
638% 660% 761% 625% 512%
All Consumers 15 24 years 25 34 years 35 44 years 45 55 years
*Likelihood of adoption defined as expressed interest of 70% or higher; assumes device price is fair and reasonable, and content is priced 20% less than today for audio and eBooks
Likelihood of new device adoption by age group
How content companies approach digital content will dictate their ultimate destination: Digital Purgatory or Digital Nirvana Content companies can either work creatively and collaboratively to shape and optimize the digital content experience for consumers, or suffer as consumers experience the pain and frustration of conflicting standards and proprietary solutions The choice and the future of digital devices and content lie largely in the hands of the people leading the content industries today In Digital Purgatory, proprietary solutions block interoperability and content is scarce Complexity and restrictions constrain the marketplace, and the entire industry never escapes from its traditional media mindset Vendors overlook consumers in the rush to secure advantageous positions in the new digital environment Instead of working to develop integrated solutions that simply and conveniently provide consumers with broad access to secure content, some companies promote proprietary solutions with limited access to selected content an approach that Accenture s research suggests will actually inhibit the growth of these new digital content markets
Ultimately, and regardless of what digital providers may want, a de facto standard usually emerges, leading consumers back on the path toward Digital Nirvana But until this happens, billions of dollars in potential revenues are needlessly squandered We re suggesting that by addressing consumers digital content needs, content companies can avoid the detour to purgatory altogether
Visionary leaders can head straight for Digital Nirvana, in which open standards abound, content is abundant, convenience and control are paramount, and value-added products attract consumers By learning lessons from past mistakes VHS vs Betamax, stereo vs quad, and DVD vs Divx content competitors can recognize success traits New markets require cooperation Win win business models are superior to win lose approaches, and satisfying consumer preferences is critical to long-term success When industry analysts look at the potential growth of the digital market over the next several years, their forecasts typically number in the millions of dollars Based on Accenture s research, Accenture concludes that under the right conditions, market size could significantly exceed these expectations and may easily reach into the billions of dollars (see Figure 4-4) For example, Accenture predicts that an early market comprised of Internet-savvy music fans will embrace legal digital music, leading to a market that could total $32 billion by the year 2005 The explosive popularity of Napster among early adopters proves that consumers across a broad range will play digital music files For digital TV, Accenture predicts a total industry revenue from DTV of $301 billion in the year 2005 This forecast includes revenues from basic service, premium channels, video-on-demand, other interactive services, related telecommunications services, and advertising Four key factors drive the rate of adoption of digital media:
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