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The May 23, 2005 Issue Provided by System Dynamics Inc.
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Convergence Is Back

All forms of media--data, voice, audio and video--are being carried with the same IP protocols over the same "fat pipes." These are going to multi-function devices--most cellphones already include digital cameras and voice recorders, and some handle video recording and playback, PDA functions like contact databases, and mores. Companies that used to be in different businesses--cable companies, telephone companies, mobile carriers, and even power companies--are all taking about the "triple play" of data, voice and video.

"Convergence" is a good way to describe these changes in residential broadband. We've been reluctant to use the "C word," but now is a good time to start using it again.

There's an irresistible tendency to hype a new technology concept. When hype goes wild and the concept fails to meet its overblown expectations, analysts and reporters debunk the claims, and the technology concept falls into disfavor. If the concept has real merit, it slowly starts proving its potential, and analysts again start looking at it favorably.

The Gartner Group describes this phenomenon as the hype cycle. Successful technologies go through a five-step sequence including the "Peak of Inflated Expectations," the "Trough of Disillusionment" and the "Slope of Enlightenment" between the initial hype and the eventual success.

The concept of "convergence" was very strong during the "dot com" era and has been out of favor since the bust. Remember the headlines asking "Is Convergence Dead"? Now it is making a comeback.


Convergence Takes Many Forms

The new question becomes "What is convergence, anyway"?

We found a talk by Henry Stevens useful in answering the question; this is a video interview put together by Telecom TV from the International Engineering Consortiumís 21st Century Communications World Forum in London. The interview focuses on the impact that convergence will have on the telecom sector and reports on the major concerns of senior carrier executives as convergence starts to take hold. Stevens observes that there are many types of convergence--his talk focused on five his research shows are important today to service providers:

  • Voice and Data--such as VoIP as an application of data
  • Fixed and Mobile--"access technology convergence" which is sometimes talked about as fixed/mobile convergence (FMC)
  • Telecom and IT--in which the next generation of telecommunications networks use IT to make applications and content usable over multiple types of networks and easily accessible to end users
  • Telecom and Media/Content--such as music and games to cell phones and over broadband links
  • Telecom & Consumer Electronics--such as Wi-Fi equipped cameras or MP3 players.

An ETRI presentation Convergence Service of Fixed and Mobile Network provides another useful view. It describes fixed/mobile convergence occurring in four areas:

  • Types of content: Voice, Data and Media (Audio and Video)
  • Delivery mechanisms: Broadcasting, Telecommunications and Internet
  • Services: Information, Entertainment and Communications
  • Devices: Computers, Terminals, and Electronic Home Appliances

Changing What You Count

When people's behavior changes, systems that have long served their purpose must adapt or become outmoded. The affect of convergence on people's behavior is a case in point. A New York Times article Our Ratings, Ourselves by Jon Gertner discusses the changes occurring as TV is seen on cell phones, radio goes on the Web, more and more media content is available on-demand and single purpose devices suddenly become telecom/media "Swiss Army knives".

The number and categories of people reached by advertising has long determined how companies spend their advertising dollars. TV consumption has historically been measured by families who record their viewing habits in a diary or have an electronic meter attached to their TVs. The impact of today's media consumption--any time, any place, on many different devices--destroys the validity of a system that measures only one type of device (the TV) in one location (the home) and may require users to actively participate in the process.

Current work is focusing on a passive approach to measure what kind, and how much, TV and radio programming a person is exposed to during the day. One trial solution from Arbitron and Nielsen Media Research is a so-called "portable people meter" (PPM) worn by random volunteers; its data about media the person encountered is collected nightly.

It is much too early to see how this culture change will be reflected in what media are popular and how advertising dollars will follow. However it plays out, one thing is certain: convergence will cause many major economic and societal changes.