PURGATORY OR NIRVANA? THE DIGITAL DECISION

How content companies approach digital content will dictate their ultimate destination: Digital Purgatory or Digital Nirvana. Content companies can either work creatively and collaboratively to shape and optimize the digital content experience for consumers, or suffer as consumers experience the pain and frustration of conflicting standards and proprietary solutions. The choice and the future of digital devices and content lie largely in the hands of the people leading the content industries today.
In Digital Purgatory, proprietary solutions block interoperability and content is scarce. Complexity and restrictions constrain the marketplace, and the entire industry never escapes from its traditional media mindset. Vendors overlook consumers in the rush to secure advantageous positions in the new digital environment. Instead of working to develop integrated solutions that simply and conveniently provide consumers with broad access to secure content, some companies promote proprietary solutions with limited access to selected content—an approach that Accenture’s research suggests will actually inhibit the growth of these new digital content markets.

Ultimately, and regardless of what digital providers may want, a de facto standard usually emerges, leading consumers back on the path toward Digital Nirvana. But until this happens, billions of dollars in potential revenues are needlessly squandered. We’re suggesting that by addressing consumers’ digital content needs, content companies can avoid the detour to purgatory altogether.


AN ALTOGETHER SUNNIER PICTURE
Visionary leaders can head straight for Digital Nirvana, in which open standards abound, content is abundant, convenience and control are paramount, and value-added products attract consumers.
By learning lessons from past mistakes—VHS vs. Betamax, stereo vs. quad, and DVD vs. Divx—content competitors can recognize success traits. New markets require cooperation. Win–win business models are superior to win–lose approaches, and satisfying consumer preferences is critical to long-term success.
When industry analysts look at the potential growth of the digital market over the next several years, their forecasts typically number in the millions of dollars. Based on Accenture’s research, Accenture concludes that under the right conditions, market size could significantly exceed these expectations and may easily reach into the billions of dollars (see Figure 4-4). For example, Accenture predicts that an “early market” comprised of Internet-savvy music fans will embrace legal digital music, leading to a market that could total $3.2 billion by the year 2005. The explosive popularity of Napster among early adopters proves that consumers across a broad range will play digital music files.
For digital TV, Accenture predicts a total industry revenue from DTV of $30.1 billion in the year 2005. This forecast includes revenues from basic service, premium channels, video-on-demand, other interactive services, related telecommunications services, and advertising.