New Research Around Home Entertainment Hub of the Future

Research finds what consumers envision as the "ideal" entertainment server for the home.

Internet Home Alliance and Parks Associates Research

Sheds Light on 'Ideal' Entertainment 'Hub' of the Future
Research shows that more than 67% of households with broadband access find entertainment server concept appealing

November 12, 2003, Monterey, CA - Consumers envision the "ideal" entertainment server as a stand -alone consumer product that can network wirelessly to consumer entertainment and computing devices within the home and act as the central storage device for both pre -packaged and family -created video, audio, and photo content. It enables users to automatically connect to both in -home and portable entertainment devices across their home network and allows them to access any form of applicable content using a simple TV -focused user interface and remote control.

This according to new research into entertainment servers by Internet Home Alliance, the leading cross -industry network of companies advancing the home technology market, and Parks Associates, a leading market research and consulting firm. The research, which included both quantifiable consumer survey data and a series of focus groups across diverse geographies, was conducted to better understand consumer perceptions about, and interest in, the emerging 'home entertainment server' product category. A key goal of the research was to gauge consumer preferences for entertainment server form factors and functionality, which can be incorporated into a PC platform, standalone consumer electronics device or a cable or satellite set top box.

"Based on this research, there is a significant market opportunity for entertainment servers," said Tricia Parks, founder and president, Parks Associates. "Translating this into real market growth will require developing server platforms that are simple for end -users to manage and use, developing non -intimidating form factors, providing consumers with the assurance that their digital content can be saved and made portable for greater flexibility in use, and assuring consumers that their content will always be accessible to them."

Following are the key findings from the research report, which is entitled Video Distribution:
· More than 67% of broadband consumers find the concept of an entertainment server appealing. End users surveyed found that the most compelling benefits of an entertainment server are the opportunity to have one entertainment device and realize the "one remote control" dream; the capacity to watch all available content from multiple rooms and from multiple devices; and the ability to download data at will for time -shifted TV and movie watching. Wireless solutions for entertainment networking are strongly preferred.

· Those not expressing an interest in entertainment servers cite time constraints and discomfort with operating new or complex -sounding devices.

· There exist paradoxical findings about home servers among participants. Paradoxes are common in pre -market studies and often remain through early market stages as consumers sift through their fears, desires and expectations about new products. Among the paradoxes uncovered in this research was that computer -centric consumers are a population most excited about this concept. Another finding is that true collectors of audio and video, a logical first choice for enthusiasm, reveal a strong attachment to the old ways of storing and managing data.

· "Simplicity" is cited as critical to the success of entertainment servers. Simplicity of the user interface is cited as a defining issue for the success of entertainment servers. The majority of those surveyed express strong reservations about a PC -oriented solution. An overly complex user interface and the possibility of bugs and operating system crashes were the most cited fears. This suggests that a great deal of thought will be required in determining the optimal choices for form factors, screen displays, remote controls, etc. It is also interesting to note that many participants express a strong desire to be able to touch their products, share physical media and even display their collections. In addition, the participants expressed a strong desire for backing up and archiving content, whether for recorded or downloaded content, e.g., television shows, or for personally created content from digital cameras or camcorders. This suggests that a DVD recording capability will be a compelling feature for entertainment servers.

"The key to unlocking the exciting potential of digital entertainment devices, including broadband -delivered entertainment, is the home network," says Jeff Cove, Panasonic Vice President for Alliances and Business Development. "At Panasonic, we're committed to delivering products that harness the power of in -home networks and digital media technologies, and the Alliance/Parks research helps us understand the needs and concerns of consumers for network entertainment devices."

"Internet Home Alliance has provided a great opportunity for us to work together with leading manufacturers to develop future product strategies," said Mike Weir, Vice President of Worldwide Consumer Marketing, Hewlett -Packard. "Digital entertainment is an exciting area that HP is exploring and this research provides directional information that we can use to develop simple and rewarding technology for consumers to use in their home entertainment systems."

An executive summary of the report is available to the public at the Internet Home Alliance web site, www.internethomealliance.com, and the Parks Associates web site, www.parksassociates.com. The full report is available to members of Internet Home Alliance.

About Internet Home Alliance
Internet Home Alliance is the leading cross -industry network of companies advancing the home technology market. A non -profit organization, the Alliance provides companies with the collaboration, research and real -world testing opportunities they need to launch their home technology products more quickly, successfully and cost effectively. Members of the Alliance come from a variety of industries and include such leading companies as Best Buy Co. Inc, Cisco Systems, Inc., General Motors, Hewlett -Packard Company, IBM, Invensys, Microsoft, Panasonic (Matsushita Electric Corporation of America), SBC Communications, Sears, Roebuck and Co., Sun Microsystems and Whirlpool Corporation. For more information, visit www.internethomealliance.com.

About Parks Associates
Parks Associates is a market research and consulting firm that provides information and analysis on emerging residential, small office and light commercial technologies. Founded in 1986, Parks Associates creates research capital for companies ranging from Fortune 500 to small start -ups through market reports, multi -client studies, consumer research, workshops, and custom -tailored client solutions. Its market expertise encompasses the full range of connected -home solutions, including home networks, digital entertainment, broadband and Internet services and home systems.

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For more information, contact:
Lisa Tarter, 415.203.2462, ltarter@dynabrand.com
Carla Stanmyre, 512.347.0048, cstanmyre@dynabrand.com

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