Jill E. Posnick
New York
+1 (917) 452 4947

June 20, 2000
U.S. Market for Digital Music, Video and Books to Reach More than $9 Billion by 2005, According to Accenture Study

New Consumer Research Shows More than Half of Consumers -Regardless of Age - Want to Use Digital Media

NEW YORK (June 20, 2000) -- Digital audio, interactive television and eBooks all have much bigger market potential than previous studies suggest, according to a landmark Accenture research study released today. More than half of consumers from age 15 to 55 say that under the right conditions they would use digital devices to access entertainment content within the next five years - that’s twice the market potential of previous research projections.

The national consumer study, "The Morphing Content Consumer: The Future of Digital Devices and Content," addresses the future competitive landscape facing makers and providers of digital devices and content. The study was conducted through extensive interviews across the country with more than 600 average media consumers.

Researchers found that consumers want broad-based content availability, the ability to control the new media experience and a simple, comprehensive solution. It will be critical for content companies to orchestrate effectively these elements if they are to succeed in the new media marketplace. Another key factor is a low risk of equipment obsolescence, which can be managed through the existence of credible industry standards. The high degree of choice and control possessed by today’s consumers demands that content companies work together to develop these standards.

"In order to realize this enormous digital market potential and to be successful, it is critical that industry players put consumers and what they want at the heart of their business models," said Ken Mifflin, partner, Strategic Services, Media & Entertainment, Accenture. "Central to fulfilling consumers’ needs and preferences is the availability of valuable content and enabling consumers to access that content as simply and with as much flexibility as possible."

Key findings from the research include, among other things, market forecasts, consumer feature preferences and elasticity of demand estimates for digital media devices. Examples of key findings include:

The market for digital music, consumer eBooks and video on demand will reach $3.2B, $2.3B and $3.1B respectively by 2005, significantly exceeding recently published industry estimates

Content availability is the number one critical feature for consumer adoption of digital audio, interactive television and eBooks

By 2005, the number of people likely to adopt devices for eBook reading, interactive television and digital audio is 28 million, 31 million and 37 million respectively

The study was conducted by Accenture’s Media & Entertainment practice, as part of its ongoing research into how new business fundamentals are threatening the leadership position of today’s most successful media companies. The research focuses on what content companies, defined as those that acquire, create, manage, promote or distribute content that informs, educates or entertains and is delivered across all present and future media, must do to remain competitive in the near-term and sustainable future.