Deloitte: Voice over IP, analysts forecasting $1 trillion revenue by 2010

You may use this content (better still, argue with me!), but please cite my ideas as (c) 2005, Dr. Bruce Klopfenstein.

---

OK, once again here is a news release of a forecast to drum up interest in investors. Forecasting out even 5 years is dangerous, especially when you're dealing with the future. Some forecasts add disclaimers about war and pestilence, but those cannot be dismissed this time. OK, so away we go (assuming our economies are not brought down by war and pestilence):

"Now, the report says, a wealth of convergence products and services is emerging, from online music to Internet Protocol (IP) appliances. Each of these offerings satisfies a real customer need -- and most are already generating real revenue and earnings.

"Some of the most significant converged services are expected to be from Voice over IP, with industry analysts forecasting $1 trillion in revenue by 2010. In addition, Internet Protocol (IP) appliances, which will include next- generation digital music players, home entertainment services, home video phones and enterprise collaboration services, will also generate sizeable revenue. Other emerging products and services expected to generate substantial revenues by 2010 include enterprise collaboration software, IP television, mobile phone content, networked games and online music."

(Well, kudos to anyone who can collect enough data to prove it's $1 trillion in 2010.) Interesting that they don't seem to see IPTV as one of the primary contributors to 2010 revenues.

Wow, read all the corporate disclaimers at http://www.deloitte.com/us.

Klopfenstein Responds to "Paul Kagan Forecasts 82% of Households Will Be HD-equipped by 2010"

You may use this content (better still, argue with me!), but please cite my ideas as (c) 2005, Dr. Bruce Klopfenstein.

---

Here is a press release with MY COMMENTS IN CAPS. Distribution of this news release further enhances Kagan's chances of selling more copies of his report.

"Kagan Forecasts 82% of Households Will Be HD-equipped by 2010

"MONTEREY, Calif. --(Business Wire = FREEBIE NEWS RELEASE -BK)-- Nov. 9, 2005 -- A new study from Kagan Research, THE STATE OF HIGH DEFINITION TELEVISION 2006, forecasts 377 mil. cumulative HD sets will be sold to consumers by 2015, resulting in 110 mil. HD households. With more than 1,500 of 1,745 commercial and non-commercial U.S. stations broadcasting in digital as of June 30, 2005, and HD set sales now constituting the lion's share of digital TV sales, the HDTV supply chain is gearing up.

"According to Kagan Research associate Patrick Johnson, "At the end of 2004, there were 11 mil HD households; each owning an average of 1.2 HD sets. We project the average price of an HD set will decline some 38% by 2010, reducing the average price to $1,139. Rapid price declines, coupled with increasing levels of HD programming will drive the number of HD households to nearly 97 mil in 2010, penetrating more than 82% of total TVHH."

KLOPFENSTEIN COMMENT: THE DECLINE IN THE AVERAGE PRICE OF AN HDTV SET OF ONLY 38% BY 2010 IS EXTREMELY CONSERVATIVE. PLEASE QUOTE ME ON THAT. I DON'T KNOW WHY WE CONTINUE TO UNDERESTIMATE THE RAPID PRICE DECLINE OF CONSUMER ELECTRONICS DEVICES ONCE THEY HIT CRITICAL MASS.

"The study also reports on cable, satellite and telco rollouts of HD content, projecting that the number of cable HD subs will surpass 30 mil. by 2010, and forecasting that nearly 80% of all multichannel sub growth through 2015 will go to DBS and the telcos.

THAT IS A DARING PREDICTION. THE TELCOS HAD BETTER START DOING SOMETHING DIFFERENT AS THEIR WIRED TELEPHONE SERVICE IS GOING THE WAY OF THE AFTERNOON LOCAL NEWSPAPER.

"Kagan's annual edition of THE STATE OF HIGH DEFINITION TELEVISION 2006 provides an in-depth look at programming strategies, regulatory issues regarding the transition to digital and 10-year forecasts for high-definition DVDs, digital sets, HD sets, and HD subscribers for both cable and satellite operators. Relevant industry statistics and exclusive projections based on Kagan's respected forecasting model include:

-- Kagan estimates in 2005 9.1 mil. HD sets will be sold to consumers. This figure is up from 3.4 mil. and 5.6 mil. in 2003 and 2004, respectively.

IT WOULD ALWAYS BE NICE TO KNOW WHERE THESE ESTIMATES ORIGINATE. ONE OF THE BEST SOURCES IS "TELEVISION DIGEST WITH CONSUMER ELECTRONICS," A VERY PRICEY NEWSLETTER.

-- The number of cable HD subs grew from 675K in 2003 to 2.3 mil. in 2004. At the end of this year, Kagan estimates this figure will grow to 3.8 mil. and by 2010, the number of cable HD subs will surpass 30 mil.

-- The U.S. DBS marketplace saw 10.6% annual sub growth in 2003 and 13.8% in 2004. In terms of HD subs, Kagan projects that by 2010, there will be more than 18 mil.

I WONDER WHAT WILL HAPPEN IF ECHOSTAR AND DIRECTV MERGE BEFORE 2010?

-- Kagan estimates that just 1.1 mil of the sets purchased by OTA subs this year will be digital, and that the number of analog sets in OTA TVHH will be roughly 39 mil. at year-end 2005.

FREE COMMERCIAL FOR PAUL KAGAN:

"THE STATE OF HIGH DEFINITION TELEVISION 2006 is a detailed and forward-looking report that breaks out HD set sales from other types of digital sets; provides exclusive 10-year projections for the number of cable and DBS HD subs, both tier and non-tier; and allocates the number of digital sets sold to consumers each year among subscribers to cable and satellite platforms, as well as those relying solely on OTA broadcasts.

"For Table of Contents and more information on THE STATE OF HIGH DEFINITION TELEVISION 2006 visit www.kagan.com/HDTV/110905"

Klopfenstein Opinion on Yahoo and TiVo

You may use this content (better still, argue with me!), but please cite my ideas as (c) 2005, Dr. Bruce Klopfenstein.

---

First, the news behind the news: whenever two companies announce a new partnership, it has little if any meaning for ("correlation with") whether the joint venture will succeed at some point in the future or not. I wrote an article about this in the Journal of Anecdotal Evidence in 1985. In addition, a big company with lots of cash buying a smaller company also means little (think Microsoft and WebTV). So the announcement itself to me serves only one purpose in terms of its affect on the marketplace: it will have Google and the cable/satellite companies put their talks, if any, on a faster track. For what it's worth, I emailed Google a couple of years back about any interest they might have in coming out with a product that would compete with the most annoying information source on television today: the TV Guide ("What, you really wanted to see what's on tonight by looking at our incredibly slow crawl?") channel. The "Google" brand on a TV program guide sounded to me (still does) like a real winner. (Bruce Klopfenstein, ©, 2003).

---

The Googling of television is predictable and will fundamentally change the way we use television. Television of the future will remind us of these current "good old days" of finding items (no longer just web sites) as we begin to seek TV shows by title or subject, with original production dates becoming less and less important.. (Bruce Klopfenstein, ©, 2005) Yeah, I know, the industry and my academic colleagues are definitely getting a clue on this now. Ev Rogers pointed out (1986) how academic study lags behind new media innovation, which is why I'm excited about my UGA students creating some simple iTV simulations this fall.

---

Just as MSNBC has clarifies when it reports on how well GE is doing, it has the obligation to mention that MSNBC is owned by GE. Thus, I will disclose that I am, as a consumer, a cheerleader for TiVo and sold quite a few in my participant observation days last year at a large electronics retail chain store. I personally (not speaking as an academic researcher here) really hope TiVo survives and thrives. Having said that, I have to look hard to see why the potential adopter (the consumer) will care whether the Yahoo! logo shows up on the TiVo screen.