Drivers of Technology Adoption in the Private Home

Convergence. Convergence of technologies has a critical impact on home computing as well as information and entertainment. Although analog technologies generally coincided with a limited one-on-one relationship of applications and appliances, digital technologies have made it possible to perform multiple functions with the same piece of equipment, which has lead to an increasing overlap between the telecommunications, television, and consumer electronics industries.

For the user, it means that the same appliance can be used for work-at-home, chat, children’s entertainment, and online shopping or banking. Apart from technological innovation and cooperation among industry sectors, adoption of interactive media consumption patterns by the users is the third dimension of convergence.

There is a continuing debate as to how rapidly convergence will be embraced by consumers. Although it has been technically feasible for some time, convergence is seen as limited because of demographics, lifestyle preferences, and other factors (1).

For instance, the convergence of television (TV) and computers on the user side has not advanced as rapidly as expected, even though streaming video of television programming is available on the Internet, cable systems offer ‘‘Digital Cable,’’ and cell phones have cameras that permit instant e-mailing of pictures. Most Americans still watch television one program at a time, even though many rely increasingly on the Internet for news, weather, stock market, and other information.

However, at least on the supply side, convergence is gradually advancing. Responding to digital satellite competition, cable companies have enhanced the existing fiber/coax physical plant of their systems with digital set-top boxes and digital distribution technology. These upgrades permit greater channel capacity, as well as interactive features.

On-screen program guides, several dozen pay-pv-view (PPV) channels as well as multiplexed premium cable channels and digital music channels are common. Digital picture, flat-screen technology, surround sound, and high-definition television (HDTV) encourage the trend toward home theaters. In a typical digital cable offering interactivity is limited to two levels of information, which can be retrieved while watching a program or perusing the on-screen program guide; PPV ordering, as well as selection, programming, and recording of future programs through the on-screen guide are also interactive features.

The systems are designed to allow for future expansion, especially online ordering of services as well as other purchases. Some systems offer Video on Demand (VoD), in which users can order movies and other videos from a large selection in a real-time setting. The more common ‘‘in-demand’’ offerings simulate a near-VoD experience, in which the most popular movies are available at half-hour starting times.

Several providers experiment with interactive applications that give the viewer options beyond simply choosing a program, including game show participation, choice of camera angles at sports games, access to background information for products advertised in commercials, and choice of plot lines and endings in movies. Other interactive uses of TV are calling up additional information on news and sports or TV/PC multitasking. Increasingly, TV and radio are supplemented by websites for information retrieval as well as audience feedback and service applications (such as buying tickets or merchandise).

In the consumer electronics sector, convergence is currently taking place both from computer companies and from home entertainment companies. Microsoft has developed a media player that allows integration of video, audio, photos, and even TV content, and Intel is making a significant investment in companies creating digital consumer products (2). On the other hand, Sharp is planning to debut liquid crystal display (LCD) TVs with PC card slots that enable the addition of ‘‘digital-video recording functions or a wireless connection to a home computer network’’ (3).