Friday, July 28, 2006

Whither, the Converged Consumer?

At Home? Or At Risk?

In all the debates, events and industryspeak, one hears the obligatory references to the “Consumer” and there’s usually a sharp split on opinions regarding the consumer. But many questions remain unanswered and you get the feeling that the Converged Consumer is an unknown animal.

This is not without reason – as true convergence is just starting to break around us. As we’ve noted before, there will be 4 services launched in the UK before the end of the year which will offer voice, television and data (BT, Sky, Homechoice, NTL/Virgin). The last of these will be a quad play with Mobile thrown in. Although many argue that the line between fixed and mobile telephony is about to blur anyway.

Bottom line, the converged consumer is a beast we will get to see and understand only starting now. Although Homechoice has been around for a while, it’s market presence has been marginal and there has not been a choice situation yet. For the majority of households consuming Sky Television and BT Broadband (this should be some 8 million homes) the time has come to choose Broadband from Sky or TV from BT, or junk them both in favour of NTL or Homechoice.

The Broadband space alone gives us a good idea of the kind of tough competition we can expect.
According to the FT, in 2003, just 6 per cent of the UK's 25m households had high-speed internet access. The figure was 26 per cent in 2005 and 39 per cent in the first Q1, 2006. According to some analysts, 70 % of households will have broadband by 2010. And it’s not just the number of connections, by the end of this year it is estimated that an 8 Mbps connection will cost about the same to a UK consumer as a dial-up connection did three years ago. Services as fast as 100 Megabits per second have been trialled in the UK, and there is limited availability in some parts of 24 Mbps packages. (all data from the FT, from articles published on July)

I believe that permanent connectivity and broadband access can be significantly lifestyle changing. You suddenly start becoming more web reliant, more specifically Google reliant. On a typical work day, my morning starts with 2 hours of reading – sitting up in bed, while sipping my coffee, I read the relevant sections of the FT, the Wall Street Journal, the Guardian, The BBC Website, the Economist and a host of other emailed news updates. The thing is, I do all of this on my laptop, making notes as I go and bookmarking, scribbling, or referencing. All of which I do online or on my laptop. Going anywhere means a search on a mapping website and looking for things to do involves a search on the TimeOut website, or the SouthBank or specific venues – Regents Park, the Roundhouse or the Royal Albert Hall. The need to remember goes down drastically when all the information is at hand. No matter how esoteric, it will be found in Wikipedia or or on some remote website Google will find. I find myself getting irritated when Google can’t find some information or the website of a company I’m looking for.

People speak often about the dual screen experience or indeed the multi screen experience, with children or young adults using the 2, 3 or even 4 out of laptop, a gaming console, a mobile phone, and the TV simultaneously. This may get simplified with IPTV which is one way of bringing these experiences on to a single screen. The thinking is similar for the Microsoft-Nortel announcement for creating a unified messaging interface. This means that your emails, instant messages, voice mails and any other forms of communication will all come to a single mailbox which can be accessed through outlook on your PC, or on your mobile phone or soon, on your IP enabled TV. Of course there is the question of user adoption – which typically lags technology capability. But some of these are very compelling ideas so the only question is when and not if.

While not everybody will jump into an immersive, lean-forward experience, and turn into “Armchair Athletes” as a well known consulting firm calls them, there will be a dispersion of consuming habits – a distribution covering leaders, and laggards and businesses will have to live with a “portfolio” of digital consumers who will need different types of offerings and solutions depending on where they fall in the adoption curve.

The fun as they say is just beginning.

More on this to follow. The Intellect Convergence Conversation in August will be about the Converged Consumer, and that should throw up some interesting perspectives as well.


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