The Future of Home Entertainment Moderator: Steffen Bartschat SVP Engineering, Sonic Solutions & Co-chair, GABA Software IG [email protected] 05 November.

The Future of Home Entertainment

Moderator: Steffen BartschatSVP Engineering, Sonic Solutions & Co-chair, GABA Software IG

[email protected] November 2009

Our Panelists

• Jeff Klugman - SVP/GM at TiVo.    

• Jim Taylor - SVP & Chief Technologist at Sonic Solutions. 

• Roland Vlaicu - Director of Technical Marketing, Dolby.   

• Todd Collart - SVP New Media at Deluxe Digital Studios.  

• Michael McGuire – VP Research at Gartner.

• Jerry Pierce – CEO/Founder at AZEC, Inc, and former

SVP Technology, Universal Pictures.

Overview: Technology in Transition

• High Definition TV• Blu-ray Disc• 3D• Set-top box / DVR• Smart TVs• Delivery• Casual Consumption & Device Integration• Media Server• Questions• Predictions

High Definition TV

0

10

20

30

40

50

60

70

80

2007 2008 2009

Watch HD Own HDTV Own >32 in TV

• 80% own DVD player• 78% own cell phone• 71% own PC• 40% own video game system• 20% own home theatre system

Source: CTAM

Blu-Ray

Source: FutureSource Consulting

3D

Would You Recommend the 3D Experience?

23%

50%

20%

7%

Definitely Yes Possibly Yes

Probably Not Definitely Not

• Cinema: 30 releases in 3D in 2009• 3D produces 3x revenue of 2D• 3D TV programming “widely

accessible” by 2011..(?)

Graph Source: Quixel Research

Set-top Box / DVR

0

10

20

30

40

50

60

70

80

% of Homes

DVR Penetration

USA

UK

Japan

• Time Shift (DVR)• Place Shift (e.g. Slingbox)• The “Google of Television” –

TiVo CEO Tom Rogers

Graph Source: ZenithOptimedia/Nielsen

DVRs Are Changing TV/Ad Viewing

ViewersFastforwarding

30%

44%

50%

60%

0%

10%

20%

30%

40%

50%

60%

CableDay

CablePrime

BCastDay

BCastPrime

ViewersTimeshifting

TiVo Inc. Proprietary Information 8

23%

33%

38%

50%

0%

10%

20%

30%

40%

50%

60%

CableDay

CablePrime

BCastDay

BCastPrime

TiVo Inc. Proprietary Information 9

Where are the commercials?

Grey’s Anatomy – ‘Staring at the Sun’

10.0%

7.5%

5.0%

2.5%

0.0%

Perc

en

tag

e o

f V

iew

ers

in

Pla

y S

peed

Time into Program (Ticks at 10 Minutes)

LiveNear Live (within 1 hour)1-6 hour delay4.6 hour – 2 week delay

Smart TV

0

5

10

15

20

25

30

2010 Est

Connected Devices (in M)

BDTVSet-topGame

• iPhone: 2B downloads, 100,000 apps!

• “With iPhone everything changed, we think a similar thing could happen on TVs” – Eric Kim, SVP Intel

Graph Source: Parks Associates

“Sofa Factor”

# Users (000's) - Monthly

0

50000

100000

150000

200000

250000

300000

2008 2009

Watch Phone

Watch DVR

Watch Internet

Surf Internet

Watch TV

Source: The Nielsen Company

Time Spent (Hrs) Per Month Per User

3 36 72 3

26 26

139 141

0

20

40

60

80

100

120

140

160

2008 2009

Delivery

How important is being able to watch videos on Internet vs.

renting by store/mail?

0

10

2030

40

50

6070

80

90

Very Somewhat Not

18-24 25-34 35-54 55+

• DVD-by-mail business will peak in 5-10 years – Reed Hastings, CEO Netflix

• “The concept of a flat-rate infinitely expandable service is unachievable” – Dick Lynch, CTO Verizon

Graph Source: Kaufman Bros., Zoomerang

Device Integration – the Apple Factor

Portable Music Players

Apple Other

Sandisk Microsoft

• Apple TV – set top box - future DVR?

• iTunes – content delivery vehicle & app store!

• iPod, iPhone – casual portability

“Apple could leverage its deep library of content with many network and cable channel content owners to provide unlimited access to a sub-library of its TV shows for a standard monthly fee” – Gene Munster, analyst Piper Jaffray

$30-$40/month for iTunes vs. $85/month for Cable?

Graph Source: Apple Inc.

Missing in Action: Media Server

• Remember 2007?• “As a software platform and an

“always on” device in the home, Windows Home Server offers independent software vendors tremendous opportunities to build innovative products for the digital home. Microsoft anticipates that a wide range of third-party applications and tools will emerge for Windows Home Server, such as family schedule management, home automation systems, security solutions and more. “ – Microsoft, Jan 2007

Questions?

Predictions

Time-Shifting is pervasive in DVR Homes and increases in Primetime

Time-shifted

Live

Total

About 30M DVR households in US today; +50 M in 3 years