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Place Shifting to be Free and Embedded

TDG Press Release

Place Shifting to be Free and Embedded, Dedicated Hardware Models to Fail

New Report from TDG Offers Unique Insights into the Emerging Business of Place-Shifting

Download this TDG Press Release as a PDF

December 13, 2007 (Dallas, TX)

Despite the push of hardware providers such as Sling and Monsoon Media, place shifting – an application whereby consumers gain on-demand access to media they have stored at a location other than where they are at the time – is destined to become an embedded functionality of home devices such as PCs and set-top boxes, leaving hardware players companies such as Sling scrambling for survival. The Diffusion Group’s latest ‘new media’ analysis, Bending the Rules of Time and Space: Trends and Analysis for Place Shifted Media, presents the industry’s first thorough, pragmatic analysis of this emerging space.

Place shifting requires a consumer to have Internet access at both their current location and at the location of the digital content (for example, on their home PC which acts as a server device with the ability to push the consumer's content to remote devices such as mobile platforms, laptop PCs, and even remote TVs -) any device that has an Internet connection and houses client software to interface with the place-shifting server.

Colin Dixon, Broadband Media Practice Manager at TDG and author of the new report, argues that several market trends suggest that place shifting will move away from stand-alone, dedicated hardware platforms to become a purely embedded application. Dixon points to two recent market events:

1. With Microsoft's entry into the place-shifting space (one premised on its acquisition of WebGuide), this nascent domain will be forever changed. Since Microsoft is delivering this functionality for free (and with the entire Microsoft infrastructure behind it), one can assume that personal streaming services will rapidly become part of core Media Center functionality. Dixon expects that a future Vista service update or Windows release will include a place shifting component.
2. Orb Networks (a pure-play embedded PS solution) recently announced that its software will be delivered to close to 70 million WinAmp users as part of a major software update. As with Microsoft's offering, consumers do not have to pay a dime for this functionality - it simply comes as part of a larger download. This resulted in the doubling of Orb's registered users to two million, all via a single broad download.

For these reasons, Dixon believes that business models attempting to extract a separate fee for this functionality are certain to have a hard time succeeding in this market space. Even if place shifting proves to be a compelling application, it will not be capable of acting as a stand-alone revenue driver or support an independent hardware platform.

Given how rapidly place shifting will be embedded in devices such as game consoles, cable/satellite TV tuners, hybrid IP/digital set-top boxes, and digital media adapters - combined with its status as a "free" application - Dixon argues that, within the next five to ten years, place shifting will have a sizable impact on how consumers engage with digital media.

"We strongly believe that place-shifting functionality will become a standard feature of almost every Internet-connected home media platform," said Dixon. "EchoStar's recent purchase of Sling Media is an indication of how important even established media companies believe place shifting will become. Should this happen as we expect, it will forever change the rules of portable media consumption."

Dixon predicts that by 2012, there will be close to 95 million active, configured place shifting servers in broadband households around the world. The most frequently used device for this function will be the PC, followed by game consoles, hybrid IP/digital TV set-top boxes, and digital media adapters (with 8.7 million units).

Bending the Rules of Time and Space: Trends and Analysis for Place Shifted Media identifies and discusses the specific factors that will shape the future of place shifting technologies and solutions; forecasts both configured and active PS servers and clients; and offers an analysis of the different revenue models that will be associated with place shifting (including commerce, service, and advertising-related revenue). Bending the Rules of Time and Space will be published during the first week of January 2008 but discount advanced purchases are now available. For more information, please contact Andy Tarczon at 469-287-8060.

About The Diffusion Group (TDG):

TDG is an analytics and advisory firm helping companies in the connected home and broadband media markets. Using a unique think-tank approach that blends executive-level consultants and in-depth market research, TDG generates reasoned and pragmatic insights that help clients make intelligent market decisions. TDG produces more than just research - we create Intelligence in Action®.


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