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Consumers Ready for Convergence of Home Entertainment Platforms

19 Feb, 2004 By: Judith McCourt

Convergence is the next wave for the home entertainment industry as consumers grapple with ways to link their growing collection of consumer electronic devices in their homes that can deliver entertainment.

The 2004 Consumer Electronics Show was abuzz with products that will make it easier for consumers to do just that by networking hardware that runs the gamut from the PC to TV to game players to MP3 to recordable DVDs to digital cameras, as well as wireless connectivity to the Internet.

The dizzying and growing list blurs the boundaries among traditional set-top entertainment, personal computers, game consoles and personal communications devices (cellular phones, PDAs). Hardware is becoming increasingly multifunctional, and the delivery of audio and video content is becoming hardware agnostic. With multiple functionality of hardware often the norm, consumer interest in products such as home media centers that create a seamless delivery of content is poised to explode.

A survey of 300 U.S. households conducted for Video Store Magazine in the first two weeks of February suggests that U.S. households are ready to move toward integrating the growing number of hardware platforms within the household. Nearly three-quarters of U.S households have DVD-playing capability, defined as one or more pieces of hardware that allow consumers to watch DVDs.

According to the survey results, 66 percent of U.S. households say they have dedicated DVD set-top players, compared with 33 percent of U.S. households when the same survey was fielded in the second quarter of 2002. The number of households with multiple dedicated set-top players is also on the rise, as consumers are abandoning their cassette players for DVD players. Driven by lower pricing, multiple dedicated DVD set-top players are in 40 percent of DVD households, up from 25 percent of households two years ago.

In addition to dedicated set-top units, 42 percent of the households surveyed said they have other hardware, such as game consoles or PC drives that allowed them to play discs. When these households are combined with the dedicated set-top households, 71 percent of U.S. households say they have at least one DVD playback device available.

Households with DVD players are more likely to have PCs. Eighty-two percent of DVD households say they have one or more PCs in their households. Thirty-one percent say they have multiple PCs in the household. Internet connectivity follows, with 88 percent of DVD households that also have a PC saying they are connected to the Internet.

With Internet access for DVD households becoming ubiquitous, the trend is toward faster connections, which opens the door to downloading more and more digital content. According to Nielsen/NetRatings, in November 2003, 42 percent of U.S. households had high-speed connections, putting more and more U.S. households in a position to take advantage of the growing library of downloadable audio and video content.

Game consoles are also solidly anchored in DVD households, with 46 percent of DVD households saying they have at least one dedicated game player.

Over the next few months, as we take a comprehensive look at the trends in consumer home entertainment, Video Store Magazine will look at what consumers are doing with the home entertainment devices they have and what they plan to purchase in the next 12 months.

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