Convergence is a Reality

Originally Published: March 2006

The convergence of television, radio, movies and the Internet appears to finally be upon us. In the early days of the Internet, one of its greatest promises was of bringing all forms of digital entertainment together and delivering it right into our living room or office in one shiny package. Over a decade later, that promise is becoming reality.

Up until now, the lack of widespread broadband Internet access and the lack of PCs powerful enough to power all forms of entertainment hindered the convergence of television, radio, movies and the Internet. Consumers did not have the ability to reliably and quickly receive streaming audio and video. With long load times and poor quality, even audio and short video clips were too much for dialup. But as broadband has exploded in growth, and the PC has grown into a powerhouse, so has the opportunity to converge.

Along with improved technology, consumers are showing an increasing desire for individualized entertainment experiences. More and more Americans want entertainment on their terms… when and where they want. Digital video recorders, mobile phones with audio and video capability, inexpensive digital still and digital video cameras, PDAs, handheld video game consoles that play movies and digital music, satellite radio and iPods (with video and audio capability) and other digital audio players have made it easy for consumers to access their favorite TV shows, movies and music anywhere and everywhere they want. Personal choice is driving consumption. With these new technologies, people are creating and publishing personal videos, composing and broadcasting original music and creating personal online outlets with services such as MySpace.

The popularity of devices that allow consumers to access content when and where they want is most obvious in Apple’s iPod. As reported by Marketing News, Apple sold 42 million iPods in 2005 with 14 million sold in the quarter ending December 31, 2005. The launch of the video iPod only increased the public’s desire for the product. iTunes sold one million video downloads in the first 20 days of the video iPod’s launch in October 2005 and eight million video downloads were sold through mid-January 2006. iTunes now has approximately 83% U.S. market share of legal music downloads and according to NPD Group/NPD Techworld, Apple holds a 73.9% market share of all digital music manufacturers.

The popularity of devices such as the iPod, digital video recorders and satellite radio is increasing the speed at which traditional media outlets are fragmenting. This fragmentation continues to affect major networks and broadcasters as the captive audience they once had continues to diminish and consumers increasingly feed their entertainment desires on their terms. These major networks and broadcasters used to control distribution of radio and television, but that is no longer the case.

True convergence will only exacerbate this trend. As the home PC becomes the hub of home entertainment, consumers will have access to literally thousands of radio stations, television channels, movies and web-based entertainment at the click of a button. Companies like Dell and Sony are already producing computers that serve as the entertainment hub of the home. Sitting in your living room lounge chair, you can now watch one NCAA tournament game in high definition from the local CBS affiliate, click over to watch your alma mater play in a different tournament game on sportsline.com, surf over to eBay and buy the first Sweet 16 t-shirt that your school has produced in fifteen years, click over to ESPN to check how your five brackets are doing in their $10,000 bracket contest, switch over to MySpace to see if any of your “friends” are at the game, then you can Instant Message your dad to discuss the goaltending call the referees just missed, and when your team finally wins the game, you can go to Wikipedia to research just how good the Connecticut Huskies are since you’re looking past George Mason, as that is obviously a “gimmee” game. To some this sounds like the promise of what the future might bring, but in reality, the dream of convergence (with the Internet and your home PC as the entertainment hub) has finally arrived.

While convergence will continue to give the traditional media conglomerates (including television, radio, newspapers, magazines, etc.) problems with ratings and maintaining advertising revenues, it is great for the consumer who wants entertainment on-demand. Media organizations will have to come up with effective ways to sort out their audiences and allow marketers the opportunity to effectively target specific audiences. And the consumer will only have to sit back, relax and enjoy the converged experience. Isn’t it time you put your feet up and let the entertainment come to you?