10 Industries Battle For Your Digital Home

By Ian Bell January 3, 2005

According to “The Battle For The Digital Home,” a new report from Forrester Research, Inc. (Nasdaq: FORR), while some industries are better positioned for success, all must focus on capturing andcontrolling new revenue streams through key cross-industry partnerships and acquisitions.

Forrester’s evaluation places each industry into one of three categories: leaders (cable, game, PC, and software industries); challengers (content, portal, and telco industries); and long shots (consumer electronics, retail, and satellite TV industries). The report makes recommendations for each industry on changes that can advance market position in the digital home — 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).

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“Businesses in every industry must fight to protect their assets, retain customers, and stave off competitors. 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,” says Forrester Research Vice President Ted Schadler. “Companies that master skills like experience design and customized delivery will lead the way by creating services and products that earn consumers’ loyalty.”

There will be no winner-take-all industry in the battle for the digital home. Success will reside with businesses that partner outside their industries to establish six new power positions that will control the lion’s share of consumer spending: personal entertainment, intelligent devices, application-device combinations, immersive experiences, collaborative experiences, and core services.

Because the digital home power positions traverse industry lines, Forrester sees many partnerships forming during the next three years. Potential digital home alliances include:

— A joint venture between the NFL and FOX to create an immersive experience where sports fans can choose viewer-selected camera angles and split-screen content.

— Sony’s acquisition of Clear Channel to combine Sony’s music and devices business with Clear Channel’s radio stations to offer personalized time-shifted digital radio.

— Google’s acquisition of TV Guide’s interactive program guide allows it to deliver a best-in-class personalized media application — video search.

— A partnership between Microsoft and BellSouth, Verizon, and SBC to provide an operating platform for IPTV.

— Disney’s acquisition of Electronic Arts. With EA’s sports games, Disney/ESPN becomes the premier sports brand on PCs, TV, and game consoles.

— Apple’s acquisition of TiVo, providing Apple with a service platform for TV and video on-demand.

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