summer 2011 corporate research and strategic analysis confidential by: andrea sharkey, phd corporate...

Summer 2011 Corporate Research and Strategic Analysis CONFIDENTIAL

By: Andrea Sharkey, PhDCorporate Research & Strategic Analysis

Forrester Top 5

Summer 2011

Corporate Research and Strategic Analysis CONFIDENTIAL

Overview

This report provides a brief overview of some of the research

which has been released by Forrester in the past several

months

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Overview

This month’s report will focus on the topics of:

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• Integrating Social Media

•The Cloud & Non-Physical Content

•Cord Cutting

•The Post-PC Era


Integrating Social Media

Corporate Research and Strategic Analysis CONFIDENTIAL 5

Social media is no longer just about rekindling old friendships on

Facebook

Multitasking between PCs and TVs is rising sharply


“I chat, browse, or research about what I am watching on TV.”%

According to Forrester, 48% of online Americans

chat, browse or research a show on the Internet while

they watch TV


And while 44% of those who watch TV and use a PC at the same time are surfing, chatting and emailing

about unrelated topics to what they are watching…


19% look up stuff they see in the shows

12% look up things from ads

9% shop online for things seen in shows and ads

5% use social media to chat about the show

4% use Twitter to post or follow shows


To capitalize on this new trend, broadcasters, content creators and celebrities are using social media to

reach viewers

Networks like MTV and

Comedy Central do the same for much of their programming

Popular shows like ‘Glee’ are

placing hashtags on the screen

during the show

Some shows are beginning to have

hosts and stars respond to viewer

questions on Facebook and

Twitter during the show Other shows give

viewers bonus episodes if they

‘like’ the show on Facebook


The Cloud & Non-Physical Content


Cloud computing refers to anything that involves delivering hosted

services over the Internet

What is “the cloud”?


And it has 3 distinct properties…

It’s sold on demand – typically by the minute or the hour

The service is fully managed by the provider – the user just needs

an Internet connection

It’s elastic – the user can have as much or as little of the service as

they want at any given time

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Content is becoming…

More virtual than

physical

More rented than owned

More on-demand than

fixed


Forrester points out that people are still paying for content

In fact, Americans spend an average of $81 each month on media

products


But just 34% of that spending goes to media that someone intends to keep on a shelf or stick on a hard drive to call

their very own


Forrester also sees a shift to more digital content in the future…

of U.S. online adults pay for digital streams and downloads22%

of their monthly content bill goes to this digital content~$20

Both those who do it and the amount spent will only grow as more digital options are

made available


With these transitions in mind, Forrester argues that portable media players must evolve with the cloud

or become extinct


Technology firms must focus on the person not the device

Multiscreen and multidevice strategies must focus on the needs of the consumer and

how they use data


Developers must ensure content isn’t out-of-date on any consumer’s device

By using the consumer’s cloud, devices should sync every device automatically

without the press of a button


Technology designers need to minimize accessories needed for

multidevice use

The reduction of device specific cables, cases and power adapters is key to consumer convenience

Ultimately, Internet cloud-based products help people to use their

devices together and to their fullest



The Post-PC Era


Forrester defines a Post-PC era as…

“A social and technological phenomenon in which computing

experiences become ubiquitous, casual, intimate, and physical”


The Post-PC concept is more than a decade old

In 1999, MIT researcher David

Clark spoke of Post-PC Internet in

a future where glasses and

wristwatches would be

connected devices

In 2004, Jonathan Schwartz told The New York Times that the Post-PC

era had been upon us since the turn of the millenium as mobile sales surpassed PC

sales worldwide


Apple now gets the majority of its revenues from Post-PC devices such

as iPods, iPhones and iPads

Originally named Apple Computer, the company is now called Apple Inc. –

another indicator of this technological shift

This transformation has seen computing evolve from…


Stationary Ubiquitous

The availability of new devices, GPS, and the ubiquity of wireless

connectivity mean that computing can be done anywhere and anytime



Formal Casual

Computing used to have formal start and finish times, now portable devices

allow people to fill the in-between moments of their day…

…And the primary activities are entertainment based



Arms-length Intimate

Desktops kept users literally at arms-length but laptops, netbooks, & tablets

make computing personal…

…In fact, the two most popular locations for computing in the home are the living

room and the bedroom



Abstract Physical

Mouse/keyboard interactions are abstract for the user, but touchscreens

and consoles like with the Xbox 360 and Kinect make direct physical

manipulation possible


A Post-PC world does not signal the disappearance of the desktop and

laptop computer, however


Old form PCs will continue to persist along with the new

In fact, U.S. consumers own and use multiple computing devices


79.3 million Americans own 3+ connected

devices

4.5 million Americans own 9+ connected

devices


The tablet is the newest Post PC device to throw

its hat in the computing ring,

and it has entered the market with a

vengeance


In fact, between iPad’s launch in April 2010 and

March 2011, Apple has sold

19.5 million units world wide


Tablet Owners and Their Impressions

(Base: 374 U.S. online adult tablet owners)

“I use my iPad/tablet more than my computer when both are available”

While younger people are more likely to see their tablets as replacement

devices…


Tablet Owners and Their Impressions

(Base: 374 U.S. online adult tablet owners)

“I use my iPad/tablet more than my computer when both are available”

…The reality is that in a multidevice environment, the device most suited for the task will often win out


Cord Cutting


Cord cutting refers to the decision of individuals and households to cancel their pay TV services in

exchange for watching TV solely over the Internet

What is “cord cutting”?


Forrester reports that 24.8 million U.S. homes have watched online

video on a TV set


Online Americans report that 14% of their total video intake each week

comes from Internet content

At an average of 5 hours of video viewing each day, that means the

average online American watches 42 minutes of

online video daily


Interestingly, when the online video viewing moves to the TV set the

average time spent doubles to 1 hour and 24 minutes each day


Previously, connecting a PC to a TV set to watch online video was

difficult to implement…


US Homes Accessing Online Video on a TV, by Solution

(millions)

…By the end of 2010, however, a number of

devices give consumers access to Internet video

on their TVs


Despite these options, U.S. consumers aren’t interested in cutting the cord to replace their

pay TV services with online video just yet

Only 6% of online Americans say they

are interested in cutting the cord And, only 2% say that

they are very interested


Forrester sees four steps occurring over the course of the next 2 years that will lead to more serious cord

cutting pressure

Four Steps to Cord Cutting by the end of 2012…


• Consumers begin to question why they are paying for 500 channels• Begin to think about cutting the additional channels on their list such as movie channels

1. Shaving the Cord

• By the end of 2012 some Pay TV providers could see losses of more than 10% of their subscribers• Many defectors will be using multiple services to meet their needs – movies, TV shows, sports and news

4. Serious Cutting Pressure

• By early 2012 many will realize they can’t live without live news, sports and premium channels to cut pay TV completely• But another half of users will begin to pare back on TV services AND new options they were testing

3. Spending will Consolidate

• For a brief period in 2011, people will actually spend more on video than just a year ago• They may shave their cable bill, but try out additional options for paid content (ie Netflix, Apple TV)

2. Experiment with Alternative Options


Reference Articles

• Fogg, I. (December 2010). Portable Media Players Must Evolve with the Cloud or Become Extinct. Forrester Research.

• McQuivey, J.L. (March 2011). Online Video on TV Leads to Cord-Cutting by 2012. Forrester Research.

• McQuivey, J.L., Gownder, J.P. & A.E. Corbett. (March 2011). People Pay for Content: They Just Don’t Own It: Why Control of Digital Subscriptions is the New Media Battleground. Forrester Research.

• Rotman Epps, S. (June 2011). The Products That Lose When Tablets Win. Forrester Research.

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Reference Articles

• Rotman Epps, S. (May 2011). What the Post-PC Era Really Means. Forrester Research.

• Shaw, E. et al. (May 2011). Use Social Media to Boost Your TV Audience. Forrester Research.

• Shaw, E. et al. (July 2011). Updated 2011: Use Social Media to Boost Your TV Audience. Forrester Research.

• What is.com (December 2007). Definition: Cloud Computing. Last retrieved at: www.searchcloudcomputing.techtarget.com/definition/cloud-computing.

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Further Information

• If you have any questions about the material presented here, please contact Andrea Sharkey (ext. 6360; [email protected])

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summer 2011 corporate research and strategic analysis confidential by: andrea sharkey, phd corporate...

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