Is digital media convergence a meaningful concept?

Let me start off with a caveat. The discussion here will focus on next 6-12 months since I believe that with the pace of technological change in this space, to predict anything beyond that is merely entertaining ourselves with fantasies.

Convergence is a concept that has been pushed by technologists for years but consumers have largely rejected the concept. While there are numerous examples of how consumers prefer to consume their media to have the most enriching experience, let me just discuss one case study to illustrate the point that any discussion of convergence is more complex than it appears to be.

Camera phones

Camera phones started to become available on a big scale during the 2002-2003 period and by 2004, they took off - selling about a quarter billion units that year. I have not seen the final numbers for 2005 yet in the public domain, but the estimates range from 280 million to 300 million units. If you add it all up, some estimates indicate that there could be as many as one billion camera phones out there.

You would expect then that consumers must be going nuts taking pictures with their camera phones. On the contrary, if you take a look at Flickr, almost all photos are taken with a full-fledged digital camera. I think a phone camera does make sense when you are sipping a martini at "Pure" and Paris Hilton walks in. You quickly snap a few photos to post on your blog the same day or even blog by email almost immediately. However, when you want to build a good photo album online or to print your pictures, a digital camera is the only option.

And what consumers are indirectly saying is supported by Kodak research. The company found that nearly two-thirds of camera phone owners rarely, if ever, upload pictures to a computer. And 70 percent never (or rarely) send photos to other phones. In other words, consumers understand that mobile phones are best suited for having a phone conversation - not for taking pictures.

Where are we likely to see convergence?

Consumers are saying that they are willing to use some applications of convergence. For instance, most sane people do not watch "The Daily Show" on their computers, but if they miss an episode and there is particularly funny clip, they don't mind looking at only that clip (not the whole episode) on the web. I have seen people kill time playing games on their mobile phones while waiting in line at the RMV, but don't expect these game enthusiasts to abandon their PS2 or XBOX. There are numerous other instances of how convergence is happening on a limited scale.

What does it mean from an investment perspective?

Just because a bunch of technologists have come up with something they think is "cool," it doesn't mean that it is cool for an average consumer. Merely packing more features in a device may actually be counter-productive, making it bulkier, slower, less user-friendly, and expensive. So as you evaluate a potential new product and when you have listened to those entrepreneurs who think that their device will change the world (remember the refrigerators connected to the web - not many of them are sold each year), step outside the conference room and show it to a bunch of teenagers. You will get better data on the potential that way.

How to learn more?

If you are excited by technological developments in the world of media, entertainment, and technology, and want to find out where the business opportunities lie, I invite you attend a panel discussion on the topic of convergence at TiECON moderated by Josh Bernoff.

- By Jay Dwivedi