This article is the second in a series on the consumer market for converged products. The findings are based on a Web-based consumer study conducted last year. This entry explores findings related to the concept of the media hub, a perennial favorite among online consumers.
The resultant insights can help guide critical product development and marketing activities, whether your firm is in the media hub space or in a related consumer technology market. Because the main finding—that consumers are increasingly accepting of cloud-based services—has implications beyond the products we examined as part of our study.
The media hub may be considered the pre-eminent aspirational technology for the living room. In its ideal guise, the media hub is an all-in-one platform for storing, organizing, accessing and distributing media entertainment. As enabling technologies have changed, so has the media hub concept. We’ve researched various iterations of it over the last ten years, including Cat5-enabled home gateways, next-generation set-top boxes, media adapters and extenders, home servers, even Internet cloud-based mobile platforms.
A number of factors have contributed to the on-going popularity of the media hub concept:
Among other things, these factors emerged unprompted as far back as a 2003 study in which we asked consumers to volunteer media entertainment concepts. Media hub appeal is driven by the desire for easy “anywhere” access to info and entertainment across devices. Many suggested new video delivery methods akin to VOD, such as the ability to see first-run movies at home with the option of digitally recording them. Regardless of the specific device or platform these concepts entailed, most shared the ability to access desired content virtually anytime, anywhere. And that’s what our latest consumer technology convergence survey shows is the most appealing aspect of the media hub concept – the desire for easy “anywhere” access to information and entertainment, across a variety of devices.
Perhaps the most powerful barrier to the adoption of new technology is behavioral inertia. Ingrained consumer habits are challenging to overcome, especially when the benefits of change are uncertain. Technologies with steep adoption curves tend to be those that support established habits rather than require entirely new ones. Products in this category include cell phones, DVRs and MP3 players, all of which enhance behaviors adopted to accommodate earlier generations of products—landline phones, VCRs and portable tape/CD players.
Our research suggests that a critical mass of online consumers have already adopted the type of core behaviors necessary to make the media hub viable. Consider these findings:
These findings indicate market conditions seem more favorable than ever for a breakout version of the media hub.
This is particularly true given that the tools for sharing digital media across devices are largely discrete or otherwise incomplete. For instance, we found that two-in-five online consumers have extended digital music from one device/source to another, while one-in-four have extended digital video. The most popular methods for extending digital video are connecting a PC directly to a TV screen (45%); using an Xbox 360 via Windows Media Center (33%); and similarly leveraging a PS3 (22%). While these home video game consoles have the potential to be powerful multi-use platforms, to date, consumers haven’t regarded them as comprehensive answers to their digital media needs; instead, they tend to use them for discrete tasks like watching ‘Instant Play’ Netflix selections. Our research shows online consumers are looking for an ‘all-in-one’ solution. That’s where the media hub concept comes in.
Media hubs can take any number of shapes. To determine the most appealing option, we first tested four basic configurations:
Among these options, online consumers’ top choice is the hard drive-based configuration, followed by the cloud-based server. The growing acceptance of purely digital media has apparently primed the market for cloud-based solutions. The relatively small differential between the two, however, is the real story. The growing acceptance of purely digital media—media without any physical counterpart—via venues like iTunes and Netflix has apparently primed the market for cloud-based solutions. As might be expected, teens have a greater experience than adults with purely digital media and are significantly more likely to find the cloud-based option personally ‘very appealing’ (38% vs. 26%). This cohort and successive generations will doubtless carry this concept forward into the future.
![[Most Preferred Content Storage/Access Options]](images/most_preferred_storage_options.png)
Our study shows that online consumers regard current media hub options as poor performers in terms of basic functionality like in-home and mobile access; interface familiarity; and most notably, ease-of-use and the assurance of privacy. Media hubs are under-performing on ease-of-use, privacy, and anywhere access. These last two aspects are especially noteworthy because they represent online consumers’ top needs and at the same time, are perceived as the least satisfying features of today’s products. Further, those who prefer a cloud-based solution are especially concerned about backup capacity, familiarity with the interface and privacy safeguards.
![[Consumer Need vs Perceived Performance Table]](images/need_performance_table.png)
Just to be clear, we assessed these basic media hub concepts at a fairly high level. In order to delve deeper into the concept, we tested a more detailed product description (in conjunction with other, potentially complementary concepts such as social TV). In general, this so-called ‘multimedia server’ represents what may be considered the ideal home entertainment accessory—an always-on, interoperable device that supports anytime, anywhere access to desired media.
More specifically, the product description read by study participants consisted of the following:
According to our research, about 14% of online consumers already own somewhat similar devices, such as Hewlett-Packard’s MediaSmart server, or at least perceive that some combination of devices they own roughly covers this range of functionality. Given a “reasonable price,” we estimate up to 30% of online consumers would actually purchase the multimedia server. Curiously enough, a managed media service concept we tested in 2001 generated a similar estimate, indicating that latent demand has remained remarkably stable over the last decade despite an influx of new products.
This level of demand is driven largely by consumer interest in the concept’s core functions, mainly the ability to treat it as a DVR, watch both standard and HD programming on a TV, and play digital music on a variety of devices. The relative importance of these functions reflects the kind of ‘jobs’ or benefit-driven tasks consumers consider essential. They may be viewed as threshold functions, that is, without them, consumers wouldn’t regard the multimedia server suitable for the jobs they want it to perform, regardless of what else it might do. This dynamic explains, in part, why most products in this space have failed—they simply haven’t met consumers’ threshold functionality requirements.
Among the five detailed product concepts we tested as part of our study, the multimedia server generated the greatest estimated demand. Functional benefits have the greatest influence on product adoption, coupled with emotional benefits. Not coincidentally, it also garnered the highest scores for both functional and emotional benefits. As noted in a previous article on technology convergence, “What Consumers Need and Want,” functional benefits have the greatest influence on product adoption, especially among innovators and early adopters, who are habitually geared to look for technologies that stand to make a qualitative difference in their lives. Emotional benefits are important secondary drivers, particularly among teens and young adults who have grown up amidst technological splendor and have a passion for high-performing new technologies. Products that meet consumers’ functional needs and offer a compelling emotional component have the potential to be market-changing (think iPhone).
The media hub concept has proven to be resilient over the last ten years, scoring consistently well among online consumers. It’s clear from the results of our most recent study on the concept that its appeal remains undiminished. Consumers are still waiting for a media hub that offers a comprehensive solution, bridging the worlds of standard computer-stored media content and traditional home entertainment networks. The closer manufacturers can get to this ideal, the better their chances for success.
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Zanthus is a full-service market research-based consulting firm serving high-tech companies. Headquartered in Portland, Oregon, Zanthus is particularly well-known for a uniquely compelling combination of industry and research expertise, plus commitment to reliable research methods and analytical techniques.
The main purpose of the Zanthus Consumer Technology Convergence Study was to identify the most critical consumer requirements for converged technologies. The study consisted of 1,001 online surveys among online U.S. consumers aged 15 and older. The study was conducted April 24 – May 5, 2009. To best ensure representativeness, quotas were imposed based on age, gender, income, race/ethnicity, children in home, and region of the country. The total results have a margin of error of +/- 3.1% at the 95% confidence level in the most conservative case. This means the results come within plus or minus 3.1% of the results that would have been obtained given a census of all qualified individuals. Among this sample, we surveyed 877 adults and 124 teens aged 15 to 17. These sample sizes have associated margins of error of +/- 3.3% and +/- 8.8%, respectively, at the 95% confidence level in the most conservative case. The total results have been weighted to represent adults and teens in their proper proportions. Please note that some questions involve smaller sample sizes; accordingly, the results are associated with correspondingly larger margins of error.