Concept Familiarity vs. PC Competition – IDC Report Covers Drivers and Inhibitors for NetTV in Europe
LONDON – JUNE 21, 2000 – According to recent research from IDC, a number of significant changes in infrastructure, bandwidth, content price points, and system capabilities will allow the NetTV market to flourish in the consumer segment in Western Europe. NetTVs include any television-centric information appliance (either set-top boxes or TVs with Internet connectivity built in at time of manufacture) that provides some benefits of the Internet or an Internet-like service.
"NetTV has arrived in Europe, but penetration will take longer than in the United States or Japan," said Catherine Pennington, senior research analyst with IDC’s Consumer Devices program. "However, we do expect growth to accelerate, making Europe an important player in the worldwide NetTV market." Geographically, the deployment of NetTV devices will vary dramatically based on each country’s specific economic, social, infrastructure, political, demographic, and technical dynamics.
Market Drivers and Inhibitors
· The biggest market driver for the NetTV is that television technology is very pervasive and familiar, and the TV is a friendly form factor. TVs will not have to win consumer mindshare in the same way as new form factors do. In addition, its position in the home, large display size, and ease of use make it an ideal delivery vehicle.
· NetTVs can be extremely competitive on price, with some models costing as little as $99 via a subsidized business model. Alternatively, with a guaranteed service contract, the devices can be provided at no initial cost. In a cable model, the set-top boxes provide a wide range of functions for as little as $2 rental fee per month.
· Convergence between the IT and media industries, as typified by the AOL/Time Warner merger, is likely to drive the NetTV market at a fast pace.
· The number-one factor that can stall, delay, or reduce the entire NetTV opportunity is the ability of the PC industry to respond to threats from other form factors. If the PC industry feels threatened by NetTVs, it can certainly respond with more tightly integrated, lower-priced devices and more focused functionality. These devices could actually become NetTVs by definition, as developments such as “Pure Diva” software from MGI allow TV signals to be decoded and displayed on PCs.
· Although the NetTV may be easier to use, and be regarded as a leisure product as it is positioned in the living room, Europeans may not want to purchase an extra Internet device and pay more monthly fees for the same access time if they already possess an access device. With the high television penetration in Europe, the set-top box will be easier to accept than an integrated NetTV, which would necessitate replacing the installed base of television sets.
The Interactive TV Market in Western Europe report (IDC#JP04G) covers recent developments in interactive TV and points to several areas in which PC companies can participate and help move the market onwards. Included within the report are short profiles of the leading NetTV component and service providers. This report is available for purchase from your local IDC office.
IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 500 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at http://www.idc.com.
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