In-home Interactive Media - UK

Published by: Mintel International Group Ltd.

Published: Nov. 1, 2006 - 111 Pages

Table of Contents

ISSUES IN THE MARKET

Definition

Abbreviations

MARKET IN BRIEF

A market in transition...

...but one that has huge potential

Convergence being seen across all three platforms...

...with analogue switch-off and cheap Freeview boxes driving iTV take-up

Broadband at the heart of PC-based developments

Consoles, too, are increasingly connected

INTERNAL MARKET ENVIRONMENT

Rapid increase in broadband take-up

Figure 1: Internet access, October 2003-May 2006

Security and digital rights a major issue

Film and video downloads the latest challenge

Fighting back against piracy

Legal issues also need to be resolved

Tumbling ad revenues force broadcasters to take a new approach

Channel 4 experimenting with interactive channels

Interactivity can add value to conventional advertising

New technologies undermine current advertising model

Leading the market forward

Figure 2: Type of home visual entertainment buyer, April 2006

Media exposure - chicken or egg?

BROADER MARKET ENVIRONMENT

The Baby Boomers start to find a few grey hairs

Figure 3: Trends in the age structure of the UK population, by gender, 2001-11

‘Everyone is middle class now’

Figure 4: Forecast adult population trends, by socio-economic group, 2001-11

Smaller households, and fewer children

Figure 5: GB households, by type of household and family, 1971-2005

Empty nests should translate to more leisure time

Figure 6: Forecast adult population trends, by lifestage, 2001-11

Greater incomes should boost the market

Figure 7: Trends in personal disposable income and consumer expenditure, 2001-11

COMPETITIVE CONTEXT

Out-of-home leisure activities tempt consumers away from the TV...

Figure 8: Regular leisure activities undertaken in free time, April 2006

...while mobile devices take interactive media out of the home

Mobile television now a reality...

...with manufacturers agreeing to common standards

Threat or opportunity?

STRENGTHS AND WEAKNESSES IN THE MARKET

IHIM - REACHING THE MAINSTREAM, AND CONVERTING THE WARY

Strengths

Weaknesses

Strengths

Weaknesses

PLATFORM STRENGTHS AND WEAKNESSES

iTV - capitalising on familiarity

Strengths:

Weaknesses:

PCs/the Internet - flexibility and power

Strengths:

Weaknesses:

Next-gen consoles - the best of both worlds?

Strengths:

Weaknesses:

MARKET BACKGROUND

Triple-play operators proliferate...

...while ntl becomes the UK’s first quadruple-play operation

Huge growth in the number of multichannel households

Figure 9: UK multichannel TV households, by platform, 2001-06

Figure 10: UK multichannel TV penetration, by platform, 2001-06

Personal computer sales

Figure 11: Consumer expenditure on computers and peripherals, at current and constant prices, 2000-05

Two approaches to TV content via the Internet...

...offering two very different user experiences

Gaming hits the mainstream

Figure 12: Sales of video game hardware/software, 2001-11

PS2 currently dominates the market...

Figure 13: Games consoles have in home, September 2006

...but the next-gen consoles are attracting plenty of interest

Figure 14: Games consoles planning to purchase in near future, September 2006

MARKET SIZE AND FORECAST

2006: Ownership and Interactive use

Figure 15: Population estimates of interactive media ownership and usage by Internet users in 2006 29 Forecasting 2011 ownership levels

Getting interactive

Figure 16: Population forecast of interactive media ownership and usage by Internet users in 2011

FORECAST METHODOLOGY: ESTIMATING CONVERSION RATES

i) Digital TV

Figure 17: Likelihood of non-interactive digital TV viewers using interactive services by 2011

ii) Consoles

Figure 18: Likelihood of non-interactive games console owners using interactive services by 2011

INTERACTIVE TV TAKES ON THE INTERNET

Capabilities vary widely

Two thirds of digital TV subscribers go interactive

Figure 19: Interactive activities consumers have done through their TV in the last 12 months, September 2006

Reaching the youth market

Only one in five users press red frequently

Figure 20: Frequency of using interactive TV services, September 2006

INTERACTIVE TV TAKES ON THE INTERNET - DETAILED DEMOGRAPHICS

Figure 21: Most popular interactive activites consumers have done through their TV, by demographic sub-group, September 2006

Figure 22: Less popular interactive activites consumers have done through their TV, by demographic sub-group, September 2006

Figure 23: Frequency of using interactive TV services, by demographic sub-group, September 2006

PCS - THE ORIGINAL IHIM

Acceptance of the Internet continues to grow

Figure 24: Selected websites actually purchased from in the last three months, 2002-06

The PC’s versatility makes itself felt

Figure 25: Interactive activities consumers have done through the Internet in the last 12 months, September 2006

Online media move to the next generation...

...and broadband opens up new possibilities

The younger generation make the most of the opportunities

PCS - THE ORIGINAL IHIM: DETAILED DEMOGRAPHICS

Figure 26: Most popular interactive activites consumers have done through the Internet in the last 12 months, by demographic sub-group, September 2006

Figure 27: Less popular interactive activites consumers have done through the Internet in the last 12 months, by demographic sub-group, September 2006

GAMES CONSOLES - A THIRD WAY

Consoles: more than just a games machine...

...with convergence becoming a reality

Broadband becoming integral to the gaming experience

Figure 28: Seventh-generation consoles; online and media capabilities as at October 2006

The ideal all-in-one interactive media centre?

Gaming still the key focus

Online gaming already making an impact...

Figure 29: Interactive activities done through games console, September 2006

...as is downloadable content

Convergence, again, the trend...

...for Microsoft, as well as Sony

GAMES CONSOLES - A THIRD WAY: DETAILED DEMOGRAPHICS

Figure 30: Interactive activities done through games console, by demographic sub-group, September 2006

CASE STUDIES

XBOX LIVE

Original Xbox led the way...

...but the Xbox 360 took the concept to a new level

Xbox 360 users demonstrate an appetite for online content...

...with implications that go well beyond the gaming market

Video downloads go live

BT VISION

Capitalising on BT’s broadband network

Partnerships help build a library of content...

...with content seen as crucial in the battle against existing players

A soft launch, with full rollout delayed until 2007

The Murdoch empire takes note - and issues a challenge

SKY SPORTS INTERACTIVE

Open...paved the way for an interactive offering

Sky Sports gave iTV a ‘killer app’

SkyBet - ‘it matters more when there’s revenue to be earned’

THE CONSUMER - HOW MUCH, AND HOW OFTEN?

BSkyB customers use a wider range of iTV features

Figure 31: Selected activites consumers have done through their TV, by provider, September 2006

Information drives iTV usage

Figure 32: Interactive activites consumers have done through their TV in the last 12 months, by frequency of using interactive TV services, September 2006

Adapting to an online life

Figure 33: Interactive activites consumers have done through the Internet in the last 12 months, by Internet use, September 2006

Films download market looks the toughest nut to crack

More than a fifth of Xbox 360 owners have paid to download games...

Figure 34: Interactive activities done through games console, by games console have in home, September 2006

...while next-gen buyers could transform the market

Figure 35: Interactive activities would do through games console if possible, September 2006

Freeview users keen to browse

Figure 36: Most popular interactive activities would do through games console if possible, by demographic sub-group, September 2006

Women may be tempted by non-gaming offer

Figure 37: Less popular interactive activities would do through games console if possible, by demographic sub-group, September 2006

Prospective Wii gamers look the most enthusiastic

Figure 38: Interactive activities would do through games console if possible, by games consoles planning to purchase in near future, September 2006

Clear potential for the non-gaming offer

THE CONSUMER - HOW INTERACTIVE ARE THEY?

iTV usage confined to a few activities

Figure 39: Number of interactive activities done through TV in the last 12 months, September 2006

Younger users like to explore

Figure 40: Number of interactive activities done through TV in the last 12 months, by demographic sub-group, September 2006

The cautious just look for basic information

Figure 41: Interactive activities done through TV in the last 12 months, by number of activities done, September 2006

Most now rely on the Internet for many tasks

Figure 42: Number of interactive activities done through the Internet in the last 12 months, September 2006

Figure 43: Number of interactive activities done through the Internet in the last 12 months, by demographic sub-group, September 2006

Film and TV downloading restricted to the most advanced users

Figure 44: Interactive activities done through the Internet in the last 12 months, by number of activities done, September 2006

Affinity for technology spreads across all platforms

Figure 45: Number of interactive activities done through Internet in the last 12 months, by number of activities done through digital television, September 2006

APPENDIX

Figure 46: Games consoles have in home, by demographic sub-group, September 2006

Figure 47: Games consoles planning to purchase in near future, by demographic sub-group, September 2006

Figure 48: Frequency of playing games console, by demographic sub-group, September 2006

APPENDIX: RESEARCH METHODOLOGY

Abstract

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