|
 In early January in our Digital Home Business newsletter we detailed our five digital predictions for 2006 and now we thought we would share them with our readers.
Of the five predictions, the first three are pretty safe bets since they really are just the extrapolation of current trends, however, the last two are more accurately described as crystal ball gazing. We welcome your feedback in the Digital Forums and invite our readers to make predictions of their own.
Achievement #1: Canadian Wireless Lines will top landlines
Wireless lines topped 15 million in 2005 while landlines fell to just over 19 million. DHC expects that wireless lines will continue to soar while landlines are quietly shut off in favour of wireless and VoIP. Expect the number wireless lines to exceed landlines late in 2006 or early 2007.
Achievement #2: Canadian Digital Television subscribers will exceed Analog
Rogers, Canada's number one cable company reported in early January that the number of Digital households jumped 35% from 675,400 to 913,300 while high speed internet subscribers topped one million. Shaw, Videotron, Cogeco and Bell ExpressVu have all been reporting similar gains.
We expect that by the end of 2006, the number of Canadian Digital Television subscribers will exceed Analog television subscribers.
Achievement #3: Canadian VoIP Subscribers will double to over 750,000
From near zero subscribers at the beginning of 2005, DHC now estimates that as of December 31st, 2005 over 375,000 homes have VoIP services in Canada. From published numbers, we know that the big four Canadian cable companies have more than 300,000 (Videotron 163,000, Shaw 90,000, Rogers 47,900, Cogeco 6,900) subscribers while our estimates put the numbers subscribing to Nomadic VoIP providers such as Primus and Vonage at over 75,000.
We expect that by December 31st, 2006, that number will have double to over 750,000.
Disappointment #1: High Definition DVD
The HD DVD (High Definition Digital Versatile Disc) Promotion Group announced earlier this month that next-generation HD DVD players and HD DVD movies would be widely available in the North American market beginning March 2006, while Blu-ray backers expect their players out shortly thereafter. On the movie side approximately 150 HD DVD titles are expected by the 2006 holiday season with a similar number of Blu-ray titles.
In 2006, both types of high defintion players are expected to be expensive, the movie selection limited and consumers will be required to pay a premium for high-def movies. Proponents of the technology say that early adopters will still buy and they expect prices will fall in subsequent years as adoption rates rise.
We have two words: SACD and DVI-A. What's that you say, SACD / DVD-A?
SACD stands for Super Audio CD and DVD-A stands for DVD audio. Five years ago, audiophiles believed the superior sound quality of SACD and/or DVD-A would drive CD's out of the marketplace, the way CD's drove vinyl out.
In reality, the two competing formats led to consumer confusion, too few titles were released and the prices were too high. The result is few SACD's and DVD-Audio discs are sold today. At DHC we think the move from DVD to high definition DVD may suffer a similar fate.
Many proponents argue that the boost in picture quality and growing adoption of HDTV's will ensure that HD DVD and Blu-ray are a success. The reality is the leap in picture quality from VHS to DVD was astounding and DVD provided so many extra features like chapter skip, menu's and extra features that VHS didn't. Consumers had a compelling reason to upgrade.
The move up from DVD to high def DVD is significant but not astounding. On a 32" HDTV television, which should be the sweet spot for HDTV buyers, we don't feel the picture quality improvement is significant enough to warrant the high cost.
The result is we believe HD DVD and Blu-ray will become this years technology disappointment. We don't think the formats will fail, however, we think that for at least several years, they will remain niche products restricted to videophiles who are willing to shell out the big bucks.
Disappointment #2: Satellite Radio
Earlier this month, Canadian Satellite Radio (CSR) announced that it expects to have 75,000 subscribers by the end of its fiscal year on August 31, 2006 and one million by August 31st, 2010. Sirius Canada has not published any estimates, however, our suspicion is they have similar expectations.
Early feedback from DHC members regarding the two systems has been decidedly negative.
Our readers complain about the high cost of hardware in Canada, the lack of Howard Stern and most importantly, poor sound quality. Grey Market subs, which exceed 100,000 according to sat radio analysts, are telling DHC that they will NOT switch because they prefer U.S. programming and prices.
We expect subscriber counts to disappoint. About the Digital Home Business Newsletter Digital Home Business (DHB) is a weekly newsletter that contains industry facts and figures, survey information and news highlights that is of interest to industry professionals who produce, sell and market products to Canadian Digital Home Owners. The newsletter does not contain product information, reviews or specifications and is not targetted at consumers.
|
