MCG Reports
Display Opportunities in the DTV Era
by Charles McLaughlin | chuck@mcgweb.com | Telephone: 650 323 7155
and Ron Cooke | research@wizwire.com| 530 269 3804
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The Internet is redefining the concept of what constitutes entertainment. Interactive Internet traffic is a growth market. It is dominated by the culture of the PC industry. Lots of creative energy. Freedom to experiment. That puts conventional TV content creation and distribution at a disadvantage. By 2003, MCG estimates that 30 to 50 percent of the potential video audience will receive the majority of its content from Internet based resources.
Regardless of the choice of entertainment displays, the consumer ends up with a system that is optimized for conventional entertainment, not for the new era of interactive video and communications. As a result, neither small nor large screen DTV setssuitable for interactive video applications. The former lack adequate definition and the latter have insufficient resolution for up close viewing.
MCG has developed an alternative forecast for DTV that incorporates a more realistic schedule, recognition of the role that WS-SDTV will play in the market for DTV content and services, and an assessment of the video PC as a center for home entertainment. The estimated penetration of HDTV is reduced from 40 to 27 percent of the content available in 2006. PCs exist. They take viewer market share. TV sales, after a brief surge of DTV interest in the mid-years of the forecast period, settle back to 1998 levels. In short, the video PC- particularly the Internet connected PC- is where the action is during our forecast period.
SCOPE
The second report in the MCG DTV series, "Opportunities for Displays in the DTV Era", focuses on the competition for eyeballs between television and the Internet in the U.S. home market and the implications for the television, monitor, and flat panel display industries. The report examines the implications of the explosive growth of Internet services and content, especially the prospect of Internet video and high bandwidth home connections.
Consumer demand for interactivity, community, and interactive video are predicted to continue the erosion of television's share of consumer attention. Instead of convergence, it will be more like cultural shock. Disequilibrium will result. Only the technology is converging to a common interactive digital link, certainly not the worlds of television and the Internet.
In our premier DTV report published in December, "The Impact of DTV on Television and Computer Displays, we were asked by our subscribers to look broadly at the market forces shaping the DTV roll out and convergence and to develop a detailed display forecast. Our latest report focuses on the most important trend identified in the initial report: the continued assault of the Internet and home PCs on the television audience.
METHODOLOGY
MCG conducted over 150 person to person interviews with key personnel from the retail, telecommunications, entertainment, computer and consumer product industries. Personal interviews were supplemented by extensive secondary research. The primary and secondary research was tabulated, analyzed and interpreted.
CONTENTS
To read the Report Highlights. The Table of Contents details the organization of the report.
The report contains four major chapters as well as an introduction, executive summary and conclusions.
Chapter 3 examines and contrasts the market forces of the Internet and entertainment worlds. Interactive vs. passive entertainment. Two-way vs. one-way communication. Up close and personal vs. laid back couch potato. A PC monitor at .5 m vs. a TV at 2-3 m. High definition and resolution vs. bigger screen size. Consumer demand for multi-function, affordable viewing is translated into display performance specs and price points.
The bandwidth issue is examined in Chapter 4. Analog vs. digital. SDTV vs. HDTV. Increased choice vs. network programming. The business models and strategies of the digital pipeline companies are compared: interactivity and multicasting vs. broadcasting. The current strategies of the movers and shakers are highlighted. The bottom line: everyone wants digital and interactivity, but only on terms and conditions that put them in control. The solution: high bandwidth 2 way connections with hundreds of channels of SDTV programming and a modest proportion of HDTV.
The implications for the display industry are discussed in Chapter 5. Big markets for value priced widescreen monitors and SDTVs are where the action will be. Plus a major opportunity for flat panel displays for Internet appliances and PC video monitors. HDTV will happen, but it is a sideshow. The chapter summarizes the requirements for display products and analyzes the winners and losers by display technology.
Two forecast scenarios are presented in Chapter 6. Case One assumes that DTV rolls out on the FCC's optamistic schedule and contains a high proportion of HDTV programming. The scenario in Case Two presents a more realistic projection of HDTV and SDTV. It forecasts that the adoption of HDTV and SDTV will lag the FCC's schedule by approximately 2 years, resulting in a significantly lower content of HDTV. Instead of HDTV, digital pipeline capacity is use for interactive services and more choices of WS-SDTV programming. The result; a stagnate television market and a rapidly expanding market for video PCs and appliances.
REPORT FORMAT
The report is provided in printed format. It includes 129 pages and has 28 tables and 16 figures. Please contact MCG to arrange a preview of the report.
MCG PERSONNEL - About the authors
This study will be co-managed by Ron Cooke - author of last year's well received report on the market for FPD monitors, and Chuck McLaughlin - who is a recognized authority on display technology.
SUBSCRIPTION AND DELIVERY
The report was completed in April 1999 and is available by next day delivery. The subscription price for the report is $4,950.00 per copy. Please contact Adrienne at MCG for detailed ordering information.