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Q3 2014

Industry Report

New Business Models for Connected CE

This report examines the challenges and opportunities of generating recurring monthly revenue from selling content placement and advertising revenues. It provides a five-year global forecast for the share of recurring monthly revenue that connected devices may obtain as well as their impact on video subscriptions and ad revenues for MSOs and telcos.


Download Table of Contents (PDF)

The Bottom Line


1.0          Report Summary

1.1          Purpose of Report

1.2          Scope of Report

2.0          Market Landscape

2.1          Consumer Adoption of Home Entertainment Devices

2.2          The Competitive Landscape

3.0          Market Drivers for Alternate Revenue Streams

3.1          Low Profit Margins

3.2          Higher Profit Potential of Alternate Revenue Streams

3.3          The Decline of Hardware

4.0          Market Barriers to Alternative Revenue Streams

4.1          Low User Base

4.2          Company Culture

4.3          Device Purchasing Cycles

4.4          Unsatisfactory User Experience

4.5          Expanded Pay-TV Set-Top Boxes

5.0          CE Device Business Models

5.1          Hardware-Based CE Business Models

5.1.1       Value Equation

5.1.2       Innovation


Form Factors

Larger Screen Sizes

Flexible Displays

Game-Changing Form Factors

New Features

5.1.3       Premium Products

5.1.4       Single Brand Ecosystems

5.2          Alternate Revenue CE Business Models

5.2.1       The Alternate Revenue Market

5.2.2       Content Services Model

Other Content Services Fees

5.2.3       Subscription Models

Subscription Sales

Subscription Services

5.2.4       Vertical Integration Model

5.2.5       E-Commerce Transactions

5.2.6       Advertising

Data and Analytics

6.0          Alternate Revenue Potential

6.1          Models for Key Industry Players

6.2          Subscription Sales

6.3          Subscription Services

6.4          Content Services

7.0          Implications and Recommendations

8.0          Appendix

8.1          Research Approach/Sources

8.2          Glossary

8.3          Company Index

Consumer Adoption of Home Entertainment Devices
Home Entertainment Product Ownership in Germany, Spain, and the U.K.
Annual CE Purchases (2007 - 2013)
U.S. Households with Internet-Connected CE (2010 - 2014)
Households with Internet-Connected CE in Germany, Spain, and the U.K.
Percentage of Broadband Households Connecting CE Devices to the Internet in the U.S.
Percentage of Broadband Households Connecting CE Devices to the Internet in Western Europe
Competition for Unit Sales vs. Competition for Alternative Revenue Streams
Average Price of an HDTV
Percentage of Broadband Households with a Pay-TV Service Subscription
Average Price of a 50-Inch or Larger Smart TV
Screen Sizes of Flat-Panel TVs
CE Buyers by CE Spending Segments
CE Spending by Income Level
CE Spending by Age Group
Average Monthly Content Expenditure for Most-Used Connected Device
Average Monthly Content Expenditure for Most Used Connected Device
New Business Model Players for Home Entertainment Devices
Share of 2014 Sales by Manufacturer
Most-Used Connected Devices
Average Time Spent per Person by Platform
Google Comparison of Rich Media Ads to Text and Standard Display Ads
Ecosystem for Alternate Revenue Business Models
Percentage of Broadband Households with OTT Subscriptions
Content Subscriptions Accessed Through a Connected Device
Alternate Revenue Stream Models for Key Industry Players
Examples of Subscription Sales Revenue Scenarios
Examples of Services Subscription Revenue Scenarios
Example of Content Services Revenue Scenarios

© September 2014 Parks Associates
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. 

Parks Associates has made every reasonable effort to ensure that all information in this report is correct.  We assume no responsibility for any inadvertent errors.


The Parks Points Newsletter Features All Aspects Of Our Research, Including Smart Home, Iot Devices, Entertainment And Digital Media, Security, Energy, Health, And Consumer Data.