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Yankee Group Research Shows Nearly 20 Million U.S. Homes Will Network Consumer Electronics by 2008 (16/8/2004)

Home Networking Awareness of More than 75% Will Translate Into Increased Spending in the Next Five Years

Even though home-networking adoption has increased more than 50 percent annually, less than 10 percent of networked households have networked consumer electronics for shared audio or video. Facing declines in online downloading behaviors, direct competition from portable solutions, and several strategic missteps, networked entertainment hardware and connected electronics manufacturers have failed to stimulate use of home networking for entertainment.

However, in evaluating consumer demand for connectivity applications, distributed entertainment achieves strong interest. Networked entertainment will be embraced once connected homes advance their PC-based multimedia behavior and look to extend network usage beyond broadband sharing. According to a recent Yankee Group report (Home Networking Is Hot, but Consumers Have Not Yet Plugged into Entertainment), almost 40 percent of households interested in connectivity would find a home network very useful for playing PC-based music and movies on any device, or recording TV programming on the PC and viewing it on the television.

"To capitalize on this interest, device manufacturers will have to advance the freedom of licensed content through technology partnerships, focus on the integration of networking into home audio and video and refine existing target marketing strategies to mitigate the competitive threat of portable devices," says Dominic Ainscough, Media & Entertainment Strategies senior analyst. "Without these developments, networked entertainment will continue to be an empty promise that cannot harness existing consumer demand for a seamless listening and viewing experience."

Considering the expanding installed base of households with a simple home network and the impact of increasing demand for Internet content sources, 19.7 million U.S. homes will own a networked entertainment device by year-end 2008.

www.yankeegroup.com