Taking the Temperature of the State of Home Networking Support Services
We recently surveyed broadband users in the US and Canada, and for those with a home network we asked if they were subscribing to any home network support services. We also asked a number of related questions regarding their current services and providers. We also asked interested home network users related questions about obtaining such services. In addition, we also asked those considering setting up a home network about their interests in subscribing to such services, type of service, timing of service, and pricing. The survey results confirmed our suspicions that the threshold for less tech-savvy consumers to subscribe and pay for support services is lower than for tech-savvy consumers. For one survey group, we also found that for those who were considering starting a home network, 7% were "extremely interested" in paying someone to install and maintain a home network for them.
Although currently a small market, discounting free support services, we expect that fee-based subscriptions and revenue in North America will double from 2006 to 2007, and will show healthy growth through 2011; however, we expect a moderate penetration rate of North American home network households for fee-based services by 2011.
If home networking support services are your thing, make sure you check out “North American Market for Home Network Support Services,” report #IN0703428RC, available online at: http://www.instat.com/catalog/mmcatalogue.asp?id=99
- Joyce Putscher - Principal Analyst
, E-mail:jputscher@reedbusiness.com
In the decade since its conception, the camera phone has transitioned from a novelty to a standard feature on wireless handsets. Industry estimates place camera phones as accounting for more than half of all mobile devices shipped annually. In the United States, it is estimated that half of all cellular subscribers have a camera phone. In Europe and Asia, the estimate may be as high as 75% of wireless subscribers have a camera phone.
Each year In-Stat conducts a cellular phone trends survey. The 2007 survey revealed a noteworthy increase in the number of camera phones in the respondents' current handset. In 2006, 41.3% of respondents reported having camera functionality in their mobile devices. In 2007, that number jumped to 62.0%. The 50.1% increase is statistically significant and may be attributed to industry standardization. Another big leap was the percentage of people who reported having a camcorder in their wireless handset. In 2006, 10.0% of respondents reported camcorder functionality. In 2007, 15.7% of respondents said their handset had this capacity.
Interesting to note is the contrast between respondents who expressed an interest in camera phones and those who possess the technology. In 2006, 32.1% of respondents reported an interest in camera phones. By 2007, that number grew to 36.9%, a negligible increase. Similarly, interest in camcorder functionality was reported at 18.4% in 2006 and 20.2% in 2007.
To learn more about wireless handsets and the factors influencing their development in the next five years, please see “Big Trends Influencing Global Handset Market 2007-2012” (IN0703653WH). To learn more about camera phones, history, current uses and future applications please see “Camera Phones: An Industry Snapshot" (IN0703641WH). Both of these reports will be out shortly and will be located online at: http://www.instat.com/catalog/wcatalogue.asp?id=66
Possible Cisco heir apparent Mike Volpi has agreed to take on the title of Chief Executive Officer for Joost, the Internet video start-up founded by Janus Friis and Niklas Zennström. These two were the Internet innovators who created the Kazaa peer-to-peer file sharing software, and originated Skype, the free Internet Voice-over-IP service that was acquired by eBay for US$ 2.6 Billion. Skype has over 50 million users, so these Joost fellows know a thing or two about massive scale.
The company’s founding CEO, Fredrik de Wahl will remain as Joost’s chief strategy officer.
Mike Volpi’s thirteen years at Cisco systems provides him with insight into the networking business. He managed Cisco’s Routing and Service Provider Technology Group, with annual revenues of about US$11 Billion. He also has gained vast experience in Mergers and Acquisitions (M&A) with over 70 companies acquired during his watch.
But there’s even more to the Cisco Systems side of the story. While most people may perceive Cisco Systems as a pure hardware company, they have been creating a vision for several years around the idea of “Enabling the Connected Life.” Cisco’s latest ads tout the idea of the “Human Network.” Because Volpi has helped Cisco define what this global network means, he’s got insights that should play out very well with Joost.
Joost has just raised US$45 million in Series A funding, on the heels of announcing major video Content deals with Viacom and CBS. Joost has also announced that top tier advertisers will be on board for their full launch this summer.
As In-Stat has reported in several recent publications, Joost (formerly known as the Venice Project) is already delivering beta versions of an approach for streaming professional broadcast-quality TV services over the broadband Internet.
Joost’s founders have taken what they learned about the technology of peer-to-peer file sharing, and combined it with what they have also learned the hard way about the business models of professional TV Content, and have come up with an approach that aims to provide a “win-win-win” situation for all participants.
Joost’s service is free to all online users, but it requires that people download the special Joost software platform. While the Content is free of charge, the Content is also protected. The Joost approach streams video from hundreds of independent PCs, so no one PC has a full version of any file. The Joost technology also monitors the connection of every Joost user on 8-second intervals, and is constantly downloading new decryption codes that make it highly unlikely that a full-sized file can be copied and pirated.
The beauty of Joost’s approach is that it gives the Content owners what they need most: Protected Content Delivery, along with Very Precise Audience Measurement. Each time a piece of video gets viewed on the Joost platform, the number of minutes viewed is reported (in eight second increments!) Advertisers also need to know how many minutes of a program were watched, so that they can ascertain which of their ads got viewed.
Announcements from Joost show that their initial approach is strong enough that major TV networks and “A” list advertisers are at least willing to give them a try. Later this summer, Joost’s global launch will require that they prove that they can scale their service up to support tens of millions of users around the world. Mike Volpi’s experience with Cisco Systems should be a great help for this massive scaling up.
However, Joost’s scale up is going to be much more than a technical issue. The concept of Net Neutrality would suggest that Joost be allowed to scale up their peer-to-peer network without interference from the Broadband Internet Service Providers (ISPs) who actually provide the “final mile” connections to Joost’s end-users. The broadband ISPs will also be supporting the upstream traffic that is generated by the hundreds of peer-to-peer “nodes” that provide bits and pieces of each video clip being viewed.
Joost has an opportunity with Mike Volpi at the helm to reach out to the broadband ISPs and find ways to provide that “win-win-win” approach mentioned above. Volpi’s Rolodex of industry contacts in the Service Provider industry may turn out to be even more important than his technical and managerial expertise.
Certainly, Joost’s service offering stands to benefit if Joost’s users get the most compelling Content, from the most popular programming sources, and have the highest quality user experience. It seems logical that Joost would want to knock down any hurdles to their massive global scale-up by making friends with the network providers that will deliver Joost’s service. I call this having a “good neighbor” policy between online Content services and broadband ISPs.
One scenario might be that Joost begins negotiating preferred carriage deals with the largest broadband ISPs, and working with them as partners to provide Joost’s users with a premier quality user experience. Another scenario might be that Joost becomes a “thought leader” for the entire broadband industry and helps drive forward a fair revenue sharing plan for all participants in online entertainment services.
But there’s even more to this part of the story. Many of the world’s largest broadband ISPs also operate Pay-TV services, such as digital Cable TV or TelcoTV systems. With High Definition TV sales setting records, and people around the globe looking for something to watch on their wide-screen LCD, plasma and DLP displays, whatever Content Joost delivers over the Internet may also need to find its way onto a Pay-TV HDTV service. It will also need to find its way on to mobile video services, as well.
Which brings us full circle back to Cisco Systems. With Scientific Atlanta, Cisco has a tremendous “leg up” to help Joost’s online Content cross over onto HDTV Video-on-Demand services, and also move out to Internet Protocol (IP-based) mobile video services.
Cisco Systems recently acquired WebEx, the leading online webinar and online collaboration service. Cisco appears to be expanding their purview to include Web-based services that provide recurring revenues as well as driving traffic that creates the need for more Cisco hardware.
Might there be a longer-term opportunity that finds Volpi returning to the Cisco fold with the world’s leading online Broadcast TV video delivery service in tow?
Of course, we’ll keep you posted on this important topic.
