Implications for the Consumer Electronics Vendors

The expected explosion in the networked audio segment would have implications to the three major stakeholders of the eco system. We looked at the implications for the music industry and the broadcasters. In this post we will focus on the possible implications for the consumer electronics (CE) vendors.

CE vendors play a crucial role in bringing the music to the home. The growth of networked audio is directly dependent on the the no.of devices available in the market, its price point and ease of use. The vendors themselves will have to overcome the following challenges:

• Networked audio products would need strong sales support and consumer education to raise consumer's interest.
• Ease of use, high quality UI and robust wireless operation will be necessary to move the market from niche to high volume.
  
• Consumers expect to have more convenience and immediacy (no need to boot up a PC for example), therefore the existing wireless handheld devices should act as internet tuners.
• Consumers tend to already have devices that can access internet (Smartphones, PMPs and ofcourse PCs) and would be sensitive to price for adding another device/feature especially at a time when the world is recovering from the downturn.
• Whole Home Audio (WHA), is unlikely to appeal to the mass and may be a overkill. 
• Networking should add value to the existing products (internet radio, AVRs, speaker docs etc.,). This would ensure faster convergence so that more and more products will offer both docking and networked connectivity.
  

Thank you very much,


RamP!
ramp.ramp@gmail.com

Implications for the Consumer Electronics Venodors

After studying the implications to the broadcasters and the music industry, this post looks at the implications of the consumer electronics (CE) vendors. I can think of the following:

Implication for the broadcasters

As more and more audio devices get networked, it would have several implication for the stakeholders - The Music Industry, Traditional Broadcaster and the CE companies. In the last post we looked at the implications for the Music Industry and lets now see the implications for the broadcaster.

• The power of internet to reach across local and international boundaries would result in audience fragmentation. 
• Internet delivery is inherently low cost and presents low barriers of entry to competition. Contrast this with the higher investment costs for broadcast infrastructure. Besides In-car listening is still the largest segment of traditional radio listening and therefore the high cost infrastructure is likely to maintained for many years.
• Next generation networked audio products will come with better UIs and larger color LCD screen presenting a new opportunity for visual ads too, apart from audio-only ads.
• Digital features like pause, replay and seek, as well as on-demand content like podcasts would be introduced for broadcasting making the experience lot more interactive.
• Interactivity ofcourse is the biggest attraction of internet radio. Live broadcasting, e-commerce and interactive advertising would all get inside the home.

Thank you very much,


RamP!
ramp.ramp@gmail.com

Implications for the Music Industry

In the last post we looked at the changes that one could expect in the global music market. These changes would have several implications to the Music Industry itself, the Traditional Broadcasters and CE (Consumer Electronics) vendors. In this post, we will look into the implications to the music industry.

• Biggest change would be the importance of "webcasting" which is poised to become the main source of streaming audio, as opposed to the traditional radio's role in promoting the recorded music.
• Consumers likely to expect such webcasts to be free or very low cost. This would mean established subscription services like Rhapsody and Sirius (who currently charge about $12 a month) are likely to be challenged by new players charging very low subscription rates (example: Pandora) or even completely free.
• Low barriers to entry and the global nature of interner only mean that thousands of webcasters might emerge and this could challenge the current licensing structure of music rights.
• Advertising could be the way forward to make-up some costs.
  
• It would be interesting to see what Apple does. Currently iTunes dominates the paid download market, would they introduce subscription? or even free streaming? Or would they come up with yet another game-changing strategy?
  

Thank you very much,


RamP!
ramp.ramp@gmail.com