Home entertainment networks coming on strong

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Jul. 06, 2006

By 2010 some 30 million households are expected to have "connected entertainment networks," according to a recent study by Parks Associates. A connected entertainment network is "a network composed of either a PC connected to at least one consumer electronic (CE) device or multiple interconnected CE devices such as a whole-house DVR system," according to Parks.

Parks expects connected entertainment to be the core of entertainment and business opportunities in the digital home. In the near term, the market is being driven by video service providers deploying whole-house DVRs, and CE and networking vendors offering digital media adapters. But Parks sees a longer term need for "cross-industry collaboration," such as efforts like the Digital Living Network Alliance (DLNA), to fully realize the opportunities in connected entertainment.

Forecast of U.S. Connected Entertainment Households
(Click image for larger view)
Source: Parks Associates

"Consumer electronics (CE) manufacturers are still searching for the Rosetta stone of the connected entertainment market," said Harry Wang, research analyst at Parks. "To move beyond the early-adopter stage, CE manufacturers must ally with content and service providers, software developers, and silicon designers to build elegance and usability into product designs, and bring popular digital content to consumers' fingertips anywhere in the home."

"Networks in the Home: Connected Consumer Electronics" examines the market potential for network-capable consumer electronics products, profiles early adopters and use cases, probes the requirements for connectivity technology and home networking infrastructure, and forecasts market demand, according to Parks.

Home Media Servers

In a related study, ABI Research suggests that growth in digital entertainment content and the maturing of key industry initiatives for media networking are driving the adoption of digital media servers in the home, a trend that will lead to the "transformation of existing products such as PCs and set-tops into whole-home media servers," according to ABI.

"With the arrival of faster in-home digital networking technologies such as MoCA, an industry-accepted framework for networked digital media distribution in DLNA, and the increase in both pay-TV and Internet content moving over in-home networks, the home media server is becoming a key beachhead in the digital home," says principal analyst Michael Wolf.

ABI expects the digital media server will evolve into four main categories: PCs, set-top boxes, consumer electronics devices such as gaming consoles or PVRs, and Network Attached Storage (NAS) hardware. The PC media server market alone is expected to go from $3.7 billion in 2006 to $44.8 billion by 2011 as mainstream PCs become fully functional media servers.

More information on the ABI study, "Home Media Servers and Entertainment Hubs", is available here.

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