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VOL 10 NO 1
2012
Digital Media Convergence:
Are the Stakeholders Listening?
Understanding consumer media consumption
patterns is the key to staying ahead of the
perennially changing digital media curve
By Nitin Narang
More than two billion video views a day
on YouTube alone and growing; 600
million+ Facebook users; increasing population
of digital native and digital immigrants realizing
their share of media appetite through internet
and video on demand (VoD); exponential rise
in over the top (OTT) content; TV makeover
for a connected, intelligent, interactive device;
cord cutting and fragmented consumer base
— has media convergence finally arrived? In
general, the view is in the affirmative. But are
stakeholders - TV service providers, content
owners, broadcasters, consumer electronics
(CE) manufacturers and content aggregators
ready to meet the challenge and benefit from
the underlying opportunities?
Convergence has far reaching influence
in social, economic and legal domains and
brings its own set of challenges. This paper
is an attempt to discuss the current media
landscape, stimulators for convergence,
changing consumer habits and expectations and
finally opportunities and strategies for service
providers and manufacturers in the converged
ecosystem.
Lastdecadewitnessedamajoroverhaulin
the channels of content creation; distribution and
consumption led by progress across CE devices;
technology standards;and transformation
across film studios, broadcasters, content
aggregators, Internet Service Providers (ISPs)
and publishers. This outlook is further enriched
with the huge inflow of user generated content
and innovation in social networking mediums.
On the one hand we have convergence and
consolidation across businesses thriving to
reduce cost, improve optimization and on
the other is a complex consumer behavior
driving businesses and technology to present
still more platforms and devices to engage,
fascinate and drive consumption. Meanwhile
the industry faces the ubiquitous challenge of
a winning monetization strategy that is reliable,
sustainable and services a majority consumers.
As newer connected platforms enter
mainstream driving growth and competition,
Infosys Labs Briefings

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content owners are reaching online to consumer
hubs through content aggregators and social
networking mediums, radically changing
the way traditionally content has ever been
consumed.
THE GAME CHANGERS
Media convergence is not new and the concept
is more than a quarter century old which started
with traditional media (television, print, radio)
converging, overlapping and reciprocating
new media – communication, computing and
the internet. Digging deeper the two most
noteworthy factors that have contributed to
media convergence are confluence of two
diverse but related phenomena, viz., (a)
digitization of content — enabling creation,
storage, distribution and delivery across
networks targeting multitude of devices, and
(b) increasing consolidation and common
interests among telecom, film production,
broadcasters and publication houses creating
media conglomerates like Time Warner (Former
AOL Time Warner), Comcast and Google
among others. Apart from these a couple of
other factors that have contributed to this
systematic change are explained below [also
See Table 1].
Reduction in Content Journey Cost and
Growth of Internet
Advancements in research and technology
have resulted in cost reduction across storage,
archival and content delivery techniques
coupled with huge investments by telecom
companies (rollouts of ADSL2+ and VDSL2)
in infrastructure and capacity expansion to
create faster and resourceful networks. Study
shows that average global residential internet
connection download speed has improved from
127 kilobits per second (Kbps) in 2000 to an
average of 4.4 megabits per second (Mbps) in
2010. There is also a significant shift in internet
penetration with almost 60% homes having
broadband in majority of Western Europe, USA,
Canada, Australia and New Zealand and near
Past Current Upcoming Trends
Mainly national broadcasters
Limited Channels, SD Content
Pay TV monopoly, Closed System
100s of Channel - Customized EPG,
HD Content
OTT becoming mainstream, Open Systems
ERP - Content Aggregators, online content and
broadcast, True HD/3D content
Time bound viewing Evolution of PVR anytime viewing Anywhere, Any device, Anytime
Slow home internet Growth of Broadband Faster broadband speeds 3G/4G
Limited quality online content Growth in quality OTT (Over the top)
service providers - Netfix, Amazon,
VCD, Hulu etc
Pay OTT content
Segregated; specific devices Connected Devices - Boxee, Google TV,
Apple TV, Roku
Companion devices - Seamless device, content
interoperabiltity, Mobile TV. Customized and
cheaper devices
Analog Terrestrial transmission;
Audio and Video content
Cable/Low end set top boxes
Digital transmission, IPTV, Hybrid
powerful STBs, Video on demand,
Web Video, Video Communication
Home Gateways connected devices,
Entertainment: Hubs Content Cloud
No interactivity Interactive Services - chatting, polling TV Commerce
Cathode-ray Plasma, LCD, LED, 3D Smart TV
Table 1: Content Consumption Landscape Source: Infosys Research

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100% in Asian countries such as Japan, South
Korea and Singapore [1].
Consumer Turning Publisher
Ease of content creation has given power to
any individual with a decent digital camera
and internet connection to create, share and
publish content in real time. Together with
near unregulated policy watchdog, there is a
potential base of millions of such publishers
churning out blogs, wikis, podcasts and content
through video sharing (YouTube, Youku, etc)
and social networking sites like Twitter and
Facebook among others.
Innovation in CE Devices
Realization of faster processing power with
advancement in chip and rendering technology
has propelled the progression of CE further.
While cathode gave way to plasma, LCD
and LED TVs followed in quick succession.
Technology has moved from HD ready to
Full HD and now 3D. A matching revolution
has started with introduction of Internet TV,
Connected TV and more recently Smart TVs
bringing alive the old-fashioned television
watching with the connected ecosystem and
rich usability experience on a common platform.
There is an explosion of connected smart
devices with iPads, tablets and smartphones as
latest entertainment platforms supplementing
the viewing experience with convenience of
anywhere, anytime viewing. TV is moving
away from a being a dumb, passive terminal to
a network connected entertainment hub.
Compression Technology and Video
Resolution
Improvement in digital compression techniques
with migration from MPEG-2 to MPEG-4 and
H.264 AVC has enabled high quality video
transmission at lower speeds. This movement
has resulted in bandwidth savings and increase
of HD content (720p, 1080i and 1080p) helping
realization of true HD experience.
Availability of Premium Content
Until recently online content was synonymous
with low quality, freely available media, which
is not the case anymore. Today content creators
and film studios are increasingly creating and
distributing high resolution, quality HD content
either directly or through service providers and
content aggregators, thereby alleviating scarcity
of quality content. OTT services are no longer
seen complementary but entering mainstream
platform offering convenience of on-demand
and catch-up TV at competitive cost. It is
estimated that OTT video will grow from $1
billion in 2010 to over $20 billion by 2014 [2].
DIGITAL MEDIA LANDSCAPE
Convergence has brought a shift in viewing
experience from static (or passive) to user
controlled and interactive system that is
largely a reflection of consumer behavior,
available technology and cultural background
[Figure 1]. Independence to access and consume
media services anytime, anywhere and on
any (connected) device has given power and
convenience to consumers while adding
new business models and opportunities for
publishers and content owners.
Device manufacturers are also
innovating unified, multi-functional, connected
and interoperable devices to replace several
individual devices while simultaneously
opening newer avenues for consumption and
business growth. This is nothing short of a
revolution.
One of the most important attributes of
connected landscape is on-demand access and

4. 22
integration with social networking enabling
interaction, feedback, creative participation and
community formation around the media content
[3]. Media consumption has a direct correlation
with content availability and although free
content is available from large number of
websites like YouTube, flickr, Dailymotion,
Metacafe and others, premium content services
like Hulu, Vudu, Netflix, Amazon VOD and
LOVEFiLM are attracting huge subscriptions
either directly or through syndication with major
networks and broadcasters. Content delivery
environments are gradually moving from
predominantly closed to partially open enabling
consumers to explore beyond the confines of
service providers’ mandated environment.
WHAT RESEARCH SAYS
In the last few years several studies have been
undertaken by major industry stakeholders
and consulting firms to measure current
usage patterns and business spending in the
converged world. These findings provide
insight into consumer behavior and help in
predicting future growth engines. Some of these
findings are listed below.
■■ The global online video community will
include more than 1 billion users by the
end of 2010 and video traffic will surpass
peer-to-peer as top internet traffic
contributor by end of 2010 [1].
■■ More than 43 million US homes will have
at least one connected TV by 2015. This
represents 37.1% of the USA’s current
115.9m TV households [3].
■■ By 2014, it would take more than two
years to watch the amount of video
that will cross global IP networks every
second. To watch all the video crossing
the network that year would take 72
million years [4].
Figure 1: Converged Ecosystem Source: Infosys Research
Consumer
Content
CE and SW
Vendors
Network Operator
Service Provider
Content OwnersŸ
Ÿ
Ÿ
Ÿ
Ÿ
Ÿ
Digitization of Analog content
Explosion of Video Portals
Social Networking Sites
OTT (Over the Top)
DLNA across home device
User Generated Content
Ÿ
Ÿ
Ÿ
Ÿ
Ÿ
Anytime Anywhere Any device service
Mobile Consumers
Personalized Content
Control and Flexibility
Rich Quality of Content
Ÿ
Ÿ
Ÿ
New Delivery Devices: Blue
Ray/Game Console (PSP / Xbox) /
Connected Tvs / Tablet (iPAD /
Xoom / Galaxy) / 3D Television /
Smart Phones / Home Media
Gateway
Emergence of Platfoms: iOs /
Android / Honecomp / Microsoft
MSTV, etc.
Consolidation among Content
Owners / Distributors and network
operators

5. 23
■■ Study covering 300 million users across
nations reveals that people are spending
up to 35 percent of their leisure time
watching TV and video content. While
a majority users, about 93 percent still
watch scheduled linear broadcast TV
once a week, more than 70 percent
consumers surveyed are streaming,
downloading or watching recorded
broadcast TV on a weekly basis, and
50 percent are using internet based
ondemand TV/video every week [4].
■■ Estimated 57 million US broadband
households will be viewing full-length
online video on TV by 2014 with on
demand video revenues projected to
reach $10 billion by 2014 [5].
■■ By 2014, the sum of all forms of video
(TV, VoD, internet video, and peer-
topeer) will continue to exceed 91
percent of global consumer traffic with
expected global internet traffic to be
around 767 exabytes by 2014 [4].
■■ The number of households with a
connected Blu-ray player will jump from
5 million in 2010 to 66 million in 2014 and
European households with a connected
TV will grow from less than 4 million in
2009 to 47 million in 2014 [6].
■■ 20% of TVs shipped in 2010 will be
network enabled, which is projected to
reach about 60% in 2013 [7].
If the above figures are any reflection
of the exponential growth in consumer
devices and content consumption, there also
exists significant number of bottlenecks and
challenges, for example, service cost structure,
content repurposing, existing hardware
utilization, support for multiple platforms
and formats, content digitalization, legal
compliance, monetization, system and content
security, media rights and licensing, quality of
service, customer supports, network neutrality,
etc., that need to be consciously resolved to
remain aligned with the projected growth
trajectory.
WHAT CONSUMERS WANT
Internet breed consumers are expecting far
more connected, integrated and hassle free
experience that brings together their digital
devices and services in simplified, cost effective
ways. Digital entertainment is intertwining with
consumer lifestyle habits with on-demand and
seamless device service integration becoming
a standard norm. As digital transformation
continues to gain ground, a section of consumers
are exploring and embracing new experiences
while others are taking a cautious approach
till the dust settles. Despite all the research
happening in this space, there still exists a
gap in service offerings due to high consumer
heterogeneity and expectations. A few common
parameters that list high on user expectation
index are discussed below.
Ease of Content Search and Navigation
Fast and extremely simple user interface to
search and navigate to the desired content
remains a critical ask. The ability to locate the
best of the web (and not from limited content
sources) with same power as on a PC but
without the PC experience remains a crucial
success criterion. Microsoft Kinect, LG magic
motion remote control, remotes using gesture
commands such as flicking and rotating are
innovative experiments in the domain with

6. 22
robust and smartly integrated solutions to
dominate the space.
Quality Content
High quality video and uninterrupted viewing
experience on chosen consumption devices is
becoming increasingly important. Consumers
are not interested in understanding the complex
arrangements between co-owners and content
journey logistics but demand reliable and hassle
free service.
Flexibility and Control of What and When to
Watch
Consumers are demanding higher control
with regards to searching of content that
suits their requirements across various media
sources. As digital video recorders (DVRs)
provide users the option to record and watch
later at a convenient time, consumers expect
on-demand and catch up TV service to allow
anytime viewing without requiring any advance
planning or being limited by DVR disk capacity
or recording failures.
Ubiquity of Content and Choice of
Consumption Device
Although PC is still the most widespread
medium to watch online video and other devices
are gradually increasing their share, consumers
want ubiquity with seamless interoperability of
content across multiple screens and liberty to
buy once - play anywhere/any device capability
without worrying about content protection,
platform limitations or incompatible formats.
Right Price Tag and Service Personalization
Whilst large number of consumers still like to
have content for free (and accept embedded
advertisements), there is also a growing section
who are ready to pay for quality content in
exchange for improved viewing experience.
Consumers belonging to the latter category
will still weigh cost before using service or
content buy decisions. Personalization is
perceived to bring time savings and improve
usability experience and consumers are looking
positively towards capability to customize TV
channels, VoD packages and applications in
accordance with individual preferences.
Socialization of Media Consumption
Research shows a rising section of TV viewers
are simultaneously online while watching
television that provides avenues for social
interaction with people talking about TV
shows as they are watching them. Consumers
want to be part of this new interactive group
viewing experience with viewers discussing,
recommending and sharing views on content
through social networking forums. Consumers
are increasingly wanting to watch video from
other users, watch what their friends and group
users are watching, read, review and evaluate
ratings on forums and blogs before deciding
what to watch — a dramatic shift from been
force fed with limited options to a selected
and evaluated choice based on individual
preferences.
KEY STAKEHOLDERS - CHANGING ROLES
With consumers at the epicenter of change,
there are several key stakeholders who have
a pivotal role to play for their own business
growth. While alliances and partnership among
stakeholders are increasing, fierce competition
is also forcing stakeholders to enter and
overlap each others’ domains leading to more
chaos and fostering further competition. CE
manufacturers are building content portals
and apps stores to differentiate their products;
social networking services are introducing VoD

7. 23
and streaming content; content aggregators
are turning into content creators; and service
providers are creating customized portals and
devices. While competition is healthy in that it
removes inefficiencies, it would do good if the
stakeholders practice collaborative coexistence
for the ecosystem to succeed as a whole.
Traditional TV Service Providers
Service providers had an unobstructed
monopoly which is beginning to get threatened
with falling advertising revenues and growth in
OTT services forcing them to relook strategies to
retain and grow their customer base. Research
points that cheaper service alternative, newer
features and better customer support are the
major reasons for consumers to switch their
service and OTT has a definite advantage
with lower cost and wider options. Service
providers have huge benefit of having existing
network in consumer homes, long relationships
and extensive support structure and hence in
order to remain competitive, they will need to
continuously explore and widen their service
portfolios that can be done by —
■■ Building online content portals offering
more online video, catch-up and on-
demand services for TV and other
connected devices.
■■ Replacing existing set tops with next
generation platforms – connected home
gateways and broadband-powered
hybrid boxes supporting enhanced
interactivity, streamlined search,
recommendation engines and richer
user experience.
■■ Embracing OTT opportunity with the
support of dedicated content delivery
networks (CDNs) to extend consumer
freedom and experience while ensuring
quality of service.
■■ Customer engagement by increasing
localized and niche content services.
■■ Bringing social networking directly on
the platform or through complementing
second screen devices bridging
consumer’s appetite for content from
Flickr, Twitter, Picasa, Facebook, Skype
and other social media.
■■ Support for newer features for
content sharing among device, video
conferencing, etc.
■■ Realizing the power of connectivity for
interactive context based advertising
with extension to T-commerce.
CE Manufacturers
Benefiting through manifold sales of new age
connected computing devices, CE manufacturers
are actively seeking to differentiate their products
through cost differentiation, bundled applications
and content packages in collaboration with
content aggregators and distributors. CE devices
like media players, set top boxes, HD TV sets are
expensive and unless mature, pose resistance for
mainstream consumers to commit on adding or
replacing an existing device. Consumers need
confidence of assured shelf life for the product
that requires manufactures to introduce more
mature, stable, tested and future technology
compatible products while simultaneously
innovate to build adaptors for compatibility.
There is also a major thrust to reduce cost of
new technology and innovate in the field of
companion devices like handhelds.

8. 22
Studios and Content Owners
Digitization of large existing content archives (and
newly generated content) and collaboration with
broadcasters and content aggregators is growing
business prospects for studios and content owners
by extending service across additional platforms
and devices. In addition newer opportunities are
arising for content owners to explore go-direct
business models thereby bypassing service
providers. Premium content owners who need
to expand service reach beyond traditional
subscription model, face challenge of maintaining
the value of content in a connected, multi-screen
world. Innovation in revenue generation through
advertising in OTT delivery model and online
availability of selected content after a duration
gap from original broadcast are some of the
strategies for consideration.
CONCLUSION
Today there is a gradual but significant shift
in the modes of content creation, distribution
and consumption. This coupled with increasing
consumer expectations is driving innovation,
collaboration and consolidation among key
players. While consumers are increasingly
adopting on-demand services and aspiring for
variety, flexibility, choices, convenience and
value for money, industry stakeholders will
have to constantly deliberate and re-invent
their strategies by bringing innovative products
and services to exceed the evolving consumer
expectations so as to remain ahead of the curve.
REFERENCE
1. Cisco Visual Networking Index (VNI)
Forecast, 2009-2014. Available at-http://
www.cisco.com/en/US/solutions/
collateral /ns341/ns525 /ns537 /ns705 /
ns827/ white_paper_c11-481360_ns827_
Networking_Solutions_White_Paper.html.
2. MRG research on OTT Growth.
Available at http://www.mrgco.com/
pr/2010_11.29.html.
3. Forrester Research Blogs by James
McQuivey. Available at http://blogs.
forrester.com/james_mcquivey.
4. Ericsson-MultiScreenMediaConsumption
2010 report. Available at http://www.
ericsson.com/news/1440031.
5. Wikipedia definition for New Media.
Available at http://en.wikipedia.org/
wiki/New_media.
6. Futurescape Connected TV White
Paper -Parks Associates Available at
http://www.futurescape.tv/connected-
television-white-paper.html.
7. Display Search Q3, 2010 Quarterly TV
Design and Features Available at http://
www.displaysearch.com/cps/rde/
xchg/displaysearch/hs.xsl/quarterly_
tv_design_features_report.asp.

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Author’s Profile
NITIN NARANG is a Lead Consultant with the Engineering Consulting Practice at Infosys. He can be
contacted at Nitin_Narang@infosys.com.