Digital home fails to deliver

Australians are still not buying into the converged "digital home" concept despite huge sales of devices in the category, according to research by channel analyst GfK.

At a GfK seminar, "The Digital Lifestyle: do we buy it?", the analyst presented new research on consumer buying behaviour. GfK surveyed 1171 Australian consumers and found that 35 percent of respondents were "digital disconnected" or didn't even have an internet connection.

Still, 41 percent of respondents had adopted a "digital lifestyle" and a further 18 percent were "latecomers".

Digital lifestylers were defined as people that accessed, used and distributed digital media every week. "Latecomers" were consumers that used the internet, digital devices or wireless networks, for example, at least once a week, GfK said.

Terry Wiley, business group director of custom research at GfK, said he believed consumers wanted digital technology and the features and benefits it provided.

However, 18 percent of survey respondents, the "latecomers", said they were not ready to replace analogue devices. The "latecomers" found that digital products and services weren't good value for money and said they didn't need to connect various digital products together.

Of the 59 percent of respondents living a "digital lifestyle", 50 percent had a broadband, ADSL or satellite connection while 40 percent were using dial-up.

Uptake of digital distribution services was low, with 70 percent of respondents saying they didn't have a cable or satellite TV subscription. Further, only 10.4 percent of Australian households had a home network.

"Over 60 percent of respondents believe we will have some sort of media centre within our homes in two years," Wiley said.

Nearly 40 percent of respondents said they would buy a media centre in that time, he added.

Fifty percent said the media centre would be a digital home hub, while 40 percent thought it would be used as another device, such as a set-top box, although set-top boxes had not sold well.

Some 200 million "digital purchases" had been made in Australia since 2000. Excluding DVD games and other software, that number was 55 million, according to Gary Lamb, managing director at GfK.

For the year ending April 2005, $641 million of digital cameras were sold in Australia.

DVD software sales totalled $939 million, MP3 sales totalled $323 million and plasma TVs $475 million. DVD recorders and LCD TV sales totalled $91 million and $129 million respectively.

"No one is pushing the complete digital solution today," said Lamb. "Australians have been buying digital products at a fast rate, but for me the ability to connect one product to another to enhance its performance is not enough. Are we buying into the digital home? At the moment, there's too much evidence to the contrary."

Despite all the components for a "digital lifestyle" available, consumers weren't necessarily ready for the "revolution" or understood the technology. Retailers and resellers must dispel consumers' fear and cost issues, Lamb said.

"However, full digital conversion is on the horizon," he said.