Media Servers To Attain Niche Status

According to new research from The Diffusion Group, despite the fact that media servers and digital media adapters were well-hyped and widely discussed, and despite the fact that early forecasts from a number of research firms were quite rosy, the devices have suffered from extremely limited demand. The Diffusion Group believes that demand for both these solutions will remain limited and that what unique functionality these solutions do offer will be quickly integrated into other platforms.

“It is not that this type of functionality is undesirable,” said Michael Greeson, President of The Diffusion Group. “The premise of networking stored digital media content to multiple devices in the home is valid, but consumers aren’t looking for separate devices to enable this experience. Instead, the applications and benefits enabled by these two platforms will be increasingly integrated into devices with which consumers are more familiar – such as DVD players that are now evolving into DVD-recorders or set-top boxes with built-in hard-drives and integrated networking.”

“While media servers were originally positioned to be the hub of the digital home, demand for these solutions has never gotten off the ground. Media Center PCs have been moderately successful in terms of consumer adoption, but this is more due to normal PC replacement cycles than to something uniquely compelling about the Media Center PC,” said Greeson. Other media server platforms have been much less successful, although the push of high-end digital set-top boxes by cable and satellite video service providers offers a case for optimism. “However,” says Greeson, “this is a push model, where the equipment is subsidized by the service provider in order to generate digital media service revenue, as opposed to a ‘pull’ model where consumers are so enamored with the device that they run to the retail store to purchase one.”

The Diffusion Group says the same holds for the digital media adapters or DMAs. Introduced a couple of years ago, the idea was to make it easy to get content from the PC to other media devices in the home, such as a TV or stereo. “Not long ago, there were ten to fifteen companies offering DMAs,” said Gary Sasaki, a contributing analyst with The Diffusion Group and President of DIGDIA, a media consultancy. “At this year’s CES, DMAs were hard to find. Part of the reason for the premature demise of DMAs is that their functionality appeals mostly to early-adopter or technology-savvy buyers. Additionally, and somewhat similar to media servers, the functionality of DMAs is slowly getting integrated into other more familiar product categories.”

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