By Kurt Scherf, Vice President, Principal Analyst

Publish Date: Aug 05

The advent of digital content services and the emergence of new storage and playback platforms for an array of media will have a profound impact on how digital entertainment dollars are allocated. This survey of 2,000 U.S. Internet households – including 270 teens between 13 and 17 – examines the role of both products and services in shaping entertainment on consumers’ terms.

“Companies that will lead the way in the next wave of digital entertainment concepts will be those that best support consumers’ demands for interaction and enjoyment with an array of content, both personal and commercial,” said Kurt Scherf, vice president and principal analyst. “Understanding exactly which consumer segments are driving content consumption will be key in positioning tomorrow’s hardware, software, and value-added services offerings to appropriate early adopters.”

Download PDF of Table of Contents | More Information on Digital Entertainment: Changing Consumer Habits

Executive Summary

1.0 Digital Entertainment: Changing Consumer Habits Executive Summary
   1.1 The Appetite for Entertainment
   1.2 Survey Work
   1.3 Segmentation Work: “Active Media” Consumers
      1.3.1 Why Segmentation by Media Consumption?
      1.3.2 Segments from this Study
         Active Music Consumers
         Active Photography Consumers
         Active Home Video Consumers
         PC-for-Video Consumers
         Growth of the “Active Media” Consumer Segments
   1.4 What Services are Popular?
      1.4.1 Services Growth: 2004 to 2005
      1.4.2 Planned Service Upgrades
   1.5 What Products are Popular?
   1.6 Internet Access at Home
   1.7 Use of Home Computers for Multimedia Applications
      1.7.1 Music
      1.7.2 Video
      1.7.3 Photos and Home Video
   1.8 Building the Ideal Communications and Entertainment Package
   1.9 Preferred Bundle Provider
   1.10 “TV-on-Consumers’ Terms”: The Impact of the DVR
   1.11 Media Server Functionality: Content and Platforms
   1.12 The Media Center PC
   1.13 Advertising

Slide Deck

Survey Methodology and Profile of the Survey Respondents
“Active Media” Segments Identified in this Study
The Segments and Product Ownership
The Segments and Recent CE Purchases
Defining the Segments
Growth of the Segments: 2004 to 2005
Three Additional “Active” Segments: Broadband-Multimedia
Screening and Information Questions
Current Service Subscriptions (Q4-Q5)
Planned Service Subscriptions(Q6)
Product Ownership (Q7-Q9)
Recent Product Purchases (Q10)
Important Aspects of Product Purchases (Q11-Q14)
Product Purchase Intentions (Q15)
Home Computer and Software Purchases (Q16-Q26)
Internet Access at Home (Q27-Q33)
Use of Home Computers and the Internet at Home: Music Applications (Q34, Q39)
Use of Home Computers and the Internet at Home: Video Applications (Q34, Q40-Q41)
Use of Home Computers and the Internet at Home: Gaming Applications (Q34)
Use of Home Computers and the Internet at Home: Photo/Home Video Applications (Q35)
Use of Home Computers and the Internet at Home: Research/Productivity Applications (Q36)
Use of Home Computers and the Internet at Home: Communications Applications (Q37)
Use of Home Computers and the Internet at Home: Commerce Applications (Q38)
Home Networking (Q42-Q50)
Monthly Expenditures for Entertainment/Communications Services (Q51)
Building the Ideal Communications and Entertainment Package (Q52)
Preferred Bundled Services Provider (Q53)
Expectations for a Discount with a Bundled Services Package (Q54)
The Telcos’ Role in Providing a Bundled Services Package (Q55)
How Much and What Type of TV Programming is Being Viewed? (Q56-Q57)
TV Recording Habits (Q58-Q59)
Interest in Interactive TV Applications (Q60)
Entertainment Activities (Q61-Q66)
Are Consumers Paying for Online Content? (Q67-Q68)
Desired Content from Internet Download Service (Q69)
How Have Media Habits Changed? (Q70)
Value of the PVR/DVR (Q71)
Are Home Computers Co-located with CE Equipment? (Q72)
Content Desired for Media Servers (Q73)
Preferred Media Server Form Factor (Q74)
Awareness/Ownership of Media Center PCs (Q75)
Top Benefits of Media Center PCs (Q76)
Likelihood of Purchasing a Media Center PC (Q77)
The “Active Media” Consumers and the Media Center PC
How Does the Media Center PC Impact Entertainment at Home?
Digital Media Adapters (Q78-Q79)
Advertising (Q80-Q83)
Demographics/Psychographics (Q84-Q103)

Executive Summary

Consumer Entertainment Spending: Products and Services
General Characteristics of Survey Respondents
Multimedia Ecosystems
Factors Used to Determine Active Music Consumers
General Characteristics: Active Music Consumers
Top CE Products Purchased: Active Music Consumers
Factors Used to Determine Active Photography Consumers
General Characteristics: Active Photography Consumers
CE Products Purchased: Active Photo Consumers
Factors Used to Determine Active Home Video Consumers
General Characteristics: Active Home Video Consumers
CE Products Purchased: Active Home Video Consumers
Factors Used to Determine PC-for-Video Consumers
General Characteristics: PC-for-Video Consumers
CE Products Purchased: PC-for-Video Consumers
Growth of Music, Photo, and Home Video Segments: 2004 to 2005
General Characteristics of Survey Respondents
Paid Services Penetration in U.S. Internet Households: 2004 to 2005
Likelihood of Subscribing: Top Eight Services
Top CE Products Purchased in the Last 12 Months
CE Products Planning to Purchase
Percentage of Dial-up Subscribers Likely to Upgrade to Broadband in the Next 12 Months
Broadband Service to which Likely to Upgrade
Monthly Use of Home Computers/the Internet for Music: 2004 and 2005
Monthly Use of Home Computers/the Internet for Video: 2004 and 2005
Monthly Use of Home Computers/the Internet for Photos/Home Video: 2004 and 2005
Communications & Entertainment Services Desired
How Does the Selection of “Base” Services Impact Other Choices?
Preferred Bundled Service Provider
Who is Likely to Switch to a Telco for Bundled Service?
Preferred Bundled Services Provider: By Services Selected in Q52
Likelihood of Switching to a Telco for Bundled Services: By Services Selected in Q52
Top TV Genres Impacted by DVR Use
Top Media Applications for which a “Media Server” Would be Valuable
Preferred Media Server Form Factor
Top Benefits of Media Center PC
Likelihood of Purchasing Media Center PC
The Music, Photo, and Home Video Segments and the Media Center PC: 2004 to 2005
The PC-for-Video Segments and the Media Center PC: 2004 to 2005
Advertising Methods that are Most Relevant to Consumers: By Age
Consumer Comfort with DVR/PVR Ad-skipping Service

Appendices

Section A: Screening and Information Questions
Respondent’s Role: Selecting TVs, PCs, and other Home Electronics Products
Respondent’s Role: Selecting Pay TV, Telephone, and Internet Services

Section B: Product Ownership, Purchases, and Use
Paid Services Penetration in U.S. Internet Households
Paid Services Penetration in U.S. Internet Households
Premium Pay-TV Channels Received
Likelihood of Subscribing: Top Eight Services
Likelihood of Subscribing: Bottom Seven Services
Percentage of Households with at Least one Product: Home Computers and Printers
Average Number of Products Per Household: Home Computers and Printers
Percentage of Households with at Least one Product: Portable Platforms
Average Number of Products Per Household: Portable Platforms
Percentage of Households with at Least one Product: Televisions and Monitors
Average Number of Products Per Household: Televisions and Monitors
Percentage of Households with at Least one Product: Audio and Video Equipment, Game Platforms
Average Number of Products Per Household: Audio and Video Equipment, Game Platforms
Amount Spent for Home Theater Components
Percentage of Home Theater Owners Using a Front Projector
Products Purchased in the Last 12 Months: Home Computers and Printers
Products Purchased in the Last 12 Months: Portable Platforms
Products Purchased in the Last 12 Months: Televisions and Monitors
Products Purchased in the Last 12 Months: Audio and Video Equipment, Game Platforms
Key CE Product Influencers
Where Was the Product Purchased?
Attitudes about CE Product Purchases
Purchase Intentions: Home Computers and Printers
Purchase Intentions: Mobile Phones
Purchase Intentions: Cameras and Portable Music Players
Purchase Intentions: PDAs
Purchase Intentions: Televisions and Monitors
Purchase Intentions: Audio and Video Equipment
Purchase Intentions: Game Platforms
Desktop Computer with a Monitor: How Recently was the Purchase Made?
Desktop Computer with a Monitor: Brand Purchased
Desktop Computer with a Monitor: Price Range
Desktop Computer without a Monitor: How Recently was the Purchase Made?
Desktop Computer Purchased without a Monitor: Brand Purchased
Desktop Computer Purchased without a Monitor: Price Range
Notebook/Laptop Computer: How Recently was the Purchase Made?
Notebook/Laptop Computer: Brand Purchased
Notebook/Laptop Computer: Price Range
Aftermarket Software Purchases: Last 12 Months
Average Spent on Software
Percentage of Respondents with Internet Access at Home
To What Type of Internet Service Do Respondents Subscribe?
Broadband Service at Home
Likelihood of Upgrading from Dial-up to Broadband
Broadband Service to which Likely to Upgrade
Interest in Using a Guaranteed Broadband Service
Which Guaranteed Service Would Respondents Choose?
Frequency of Home Computer/Internet Use: Music Applications
Frequency of Home Computer/Internet Use: Video Applications
Frequency of Home Computer/Internet Use: Gaming Applications
Frequency of Home Computer/Internet Use: Photography and Home Video Applications
Frequency of Home Computer/Internet Use: Research and Productivity Applications
Frequency of Home Computer/Internet Use: Communications Applications
Frequency of Home Computer/Internet Use: Commerce Applications
How is Music from PCs/the Internet Used?
Type of Internet Content Viewed/Downloaded
How is Video from PCs/the Internet Used?
Home Network Status
Home Networking Media Used
What Wi-Fi® Solutions are Being Used?
Where Were Wi-Fi® Components Purchased?
Ever Offered Home Networking from Broadband Provider?
Did Respondents Accept Home Networking Offer?
Interest in Broadband-provided Home Network
Likelihood of Purchasing Home Networking Equipment
Price Willing to Pay for a Wireless Router

Section C: Services Questions
Average Spent per Month on Communications and Entertainment Services
Average Spent per Month on Communications and Entertainment Services: By Subscriptions to Various Services
Communications & Entertainment Services Desired: Household Monthly Budget of $200
Communications & Entertainment Services Desired: Age Differences
Preferred Bundled Service Provider
Preferred Bundled Service Provider: Current Internet Status
Preferred Bundled Service Provider: Current Pay TV Status
Monthly Discount Expected for Bundle
Who is Likely to Switch to a Telco for Bundled Service?
Who is Likely to Switch to a Telco for Video Service? (By Broadband and Service Offering Choices)

Section D: TV Questions
Hours per Week Spent Watching Television
What TV Content is Being Watched with Greater Frequency than Five Years Ago? (Top Responses)
What TV Content is Being Watched with Greater Frequency than Five Years Ago? (Lower Responses)
What Types of TV Programming is Being Recorded on a Weekly Basis? (Top Responses)
What Types of TV Programming is Being Recorded on a Weekly Basis? (Lower Responses)
Average Number of TV Programs Recorded on a Weekly Basis (Top Responses)
Average Number of TV Programs Recorded on a Weekly Basis (Top Responses)
“Interactive” TV Applications Desired

Section E: Entertainment Trends
Monthly Average: Seeing a Movie in the Theater
Monthly Average: Renting Videocassettes/DVDs
Monthly Average: Purchasing Videocassette/DVD Movies
Monthly Average: Renting Videocassette/DVD TV Series
Monthly Average: Purchasing Videocassette/DVD TV Series
Monthly Average: Ordering PPV/VoD Events/Programs
Percentage of Respondents Paying for Online Content Services
Mode of Payment: Music Services
Mode of Payment: Video Services
Mode of Payment: PC-based Games Services
Mode of Payment: Console-based Games Services
Desired Content from Internet Download Service
How Have Media Habits Changed? Frequency at Which Activities are Taking Place

Section F: Home Entertainment Platforms
Most-Useful Features of a PVR/DVR
Is a Desktop PC Co-located to CE Equipment?
Content Desired for Media Servers
Preferred Media Server Form Factor: Summary of All Choices
Media Server Preferences: Ranking Summary (Chart)
Media Server Preferences: Ranking Summary (Numbers)
Awareness and Ownership of Media Center PCs”
Top Benefits of Media Center PC: Summary of All Choices
Top Benefits of Media Center PC: Ranking Summary (Chart)
Top Benefits of Media Center PC: Ranking Summary (Numbers)
Likelihood of Purchasing Media Center PC
Interest in Purchasing Digital Media Adapters at Different Price Points
Interest in Media Adapters for Various Applications
Interest in Media Adapters for Various Applications: Networked Households Comparison

Section G: Advertising
Advertising Format with Which Respondents Interact the Most
Most-relevant Form of Advertising
Comfort with Fast-forward Capability (With Viewer Tracking)
Comfort with Fast-forward Capability (With Pop-up Ads)

Section H: Demographics/Psychographics
Highest Level of Education Completed
Ethnic Background
2004 Total Household Income Before Taxes
Marital Status
Is Respondent Currently Attending College?
Type of Residence Currently Occupying
Own or Rent Home?
Value of Current Home
Size of Current Home
Likelihood of Purchasing a Home
Number of Adults in the Household
Number of Children in the Household
Teenagers at Living at Home
Influence of Teenagers on the Purchase of Products
Work-at-Home Status: Telecommuters
Work-at-Home Status: Take Work Home
Work-at-Home Status: Moonlight
Work-at-Home Status: Full-time Self-employed
Work-at-Home Status: Part-time Self-employed
Home Computer Level of Experience
Level of Agreement with Statements
Gender
Where Do Respondents Live?

© August 2005 Parks Associates
Dallas, Texas 75230

All rights reserved. No part of this book may be reproduced, 
in any form or by any means, without permission in writing from the publisher.

Printed in the United States of America.

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