PC v. TV: The Race for Consumer Dollars

US and European consumers spent a total of $54 billion on multimedia devices, software and services in 1997, a 24% increase over 1996. Eighty-two percent went to PCs and PC software; only 18% went to the TV set and TV-related software and services. According to the study, the PC will continue to dominate the multimedia market until 2005, when total annual expenditure will reach $117.9 billion.

These findings are presented in a study just released by Strategy Analytics within its strategic advisory service, "Emerging Consumer Products and Services", which monitors new consumer technology market opportunities on behalf of leading players.

One of the study’s key findings is the emergence of the "Multimedia TV", which will co-exist with the familiar "Multimedia PC". Largely through the addition of Set-Top Boxes, TV sets are already well established as multimedia terminals. "Offline" multimedia TV platforms include PCTV Set-top boxes and advanced videogames consoles like Nintendo’s N64 and Sony’s Play-Station. In the coming years a whole new range of "online" multimedia terminals will also emerge, such as "NetTV" boxes and interactive digital TV receivers.

"TV is being dragged into the 21st century by the power of the Internet" says David Mercer, Emerging Consumer Technologies Analyst at Strategy Analytics. "For millions of non-PC owners the age of interactive multimedia is finally dawning, but the PC will remain the platform of choice for the serious multimedia user."

Services companies and content providers stand to benefit most from the multimedia revolution. Strategy Analytics forecasts show that multimedia software and services will increasingly take over from multimedia devices as revenue earners. In 1997 60% of expenditure went on devices. By 2005 this share will have fallen to 45%.

(Contact: David Mercer, tel +44 1582 405678, fax +44 1582 454828. email dmercer@strategyanalytics.com)