Consumer demand for digital entertainment is being driven faster by the proliferation of increasingly sophisticated hardware, with the challenge for vendors being to provide content and services that users will pay for, analysts confirm.
Jim Bottoms, director and co-founder of specialist marketwatcher Futuresource, said this week's Futuresource Entertainment Summit concluded that the challenge for the next two years will be to match content and services with consumer demand in the wake of the explosion of tablet and smart handheld use.
"Look at what's happening in the whole mobile environment and home entertainment space, particularly from a hardware and content standpoint but also at the infrastructure that enables it," Bottoms said. "Until now, the consumer hasn't had access to these services on the right devices - it has primarily been fed into the PC."
Yet these diverse opportunities continue to be threatened by the dominance of free content across all media, he added.
Bottoms said the new breed of tablet coupled with the expansion of connected TV means consumption of much more video content online, and vendors are moving into position.
"Warner [for example] is delivering movies as an application for the iPhone."
Bottoms said TV sales are still growing, partly because they are diversifying. HD is becoming standard, with 3D tipped to emerge gradually as a must-have in coming years, even as older technologies' market share declines.
Also at the two-day conference were a six-strong panel discussing smart TV, two consumer focus groups, keynotes on intellectual property rights and piracy, and several Futuresource Market Insight presentations looking at key approaching milestones for tech providers.
Another panel looked at the future of broadcasting against the rise of IP content. The free BBC iPlayer has been the most dominant format so far, Bottoms noted, so key for vendors is going to be working out how to get users to pay for content and keep them paying for it.
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