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The Fragility of Forecasting Tis easy to see, hard to foresee - Poor Richards Almanack Supplementary Material for Chapter 2 in When Media Are New Copyright.

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Presentation on theme: "The Fragility of Forecasting Tis easy to see, hard to foresee - Poor Richards Almanack Supplementary Material for Chapter 2 in When Media Are New Copyright."— Presentation transcript:

1 The Fragility of Forecasting Tis easy to see, hard to foresee - Poor Richards Almanack Supplementary Material for Chapter 2 in When Media Are New Copyright 2010, John Carey and Martin C.J. Elton

2 Famous Forecasts & Predictions Western Union saw no market for the telephone.

3 Famous Forecasts & Predictions, Cont. Western Union saw no market for the telephone. The New York Times in 1939 predicted that TV would never compete with radio since TV required families to watch a screen.

4 Western Union predicted no market for the telephone. The New York Times in 1939 predicted that TV would never compete with radio since TV required families to watch a screen. RCA in 1966 forecast that there would be 220,000 computers in the world by the year Famous Forecasts & Predictions, Cont.

5 A leading US consulting company in a 1980s study for AT&T forecast 900,000 cell phones in use worldwide by the year Famous Forecasts & Predictions, Cont.

6 A leading US consulting company in a 1980s study for AT&T forecast 900,000 cell phones in use worldwide by the year RCA in 1928 forecast that 50% of US households would be watching TV by Famous Forecasts & Predictions, Cont.

7 A leading US consulting company company in a 1980s study for AT&T forecast 900,000 cell phones in use worldwide by the year RCA in 1928 forecast that 50% of US households would be watching TV by AT&T forecast 10 million Picturephones in use by US households in Famous Forecasts & Predictions, Cont.

8 Link Resources in 1982 forecast 2 million DBS subscribers by Famous Forecasts & Predictions, Cont.

9 Link Resources in 1982 forecast 2 million DBS subscribers by The WSJ in 1998 reported a consensus forecast by media analysts of 30 million satellite phone subscribers by Famous Forecasts & Predictions, Cont.

10 Fifty years hence, automobile traffic will have entirely disappeared from the surface thoroughfares of New York City, and people will be shot through tubes like merchandise. - Harvey Corbett American Institute of Architects 1925 Famous Forecasts & Predictions, Cont.

11 Forecasting Group Penetration (Millions of Households) Advertising Age 6.6 AT&T 8.0 International Resource Development 9.8 IFTF11.0 Strategic Inc Southham20-25 Source: Thomson & Bowie, 1986 Market Projections for Penetration of Videotex in US Households by 1990

12 Projected Growth Of HDTV Group Making Projections YearProjected Penetration (%) NTIA EIA America Electronic Association NAB Newsletter, March 1989 Projected Cumulative Penetration of HDTV in U.S. Households

13 Forecast of VCR & Videodisc Player Sales Thousands of Units VCRs Videodisc Players Source: Argus Research cited in Mahony et al 1980

14 Time Period* RegionUnder the SpotlightsIn the shadows Early 1970s for 30+ years North America mainly; also the UK and elsewhere VideoconferencingAudio conferencing Mid 1970s for 10+years Western Europe mainly Videotex (online information) Teletext Late 1970s for 20+ years United StatesInteractive televisionPay cable channels, Pay- per-view TV and video rentals End of 1980s for 15+ years North AmericaResidential broadband networks (fiber-to-the- home) DSL and cable modem technologies Late 1990s for 5+ years United States and elsewhere Online subscriptions to electronic magazines and newspapers Buying printed publications, e.g. books, online with regular postal delivery Second half of 1990s for 5+ years Europe mainlyWAP (for mobile phones) SMS * Starting approximately when the spotlight was turned and covering the period during which the service in the shadows continued to grow rapidly. New Services: Under the Spotlights or in the Shadows?

15 Broadcast Subscription TVVideotex DivxMDS 8-Track CartridgeCable Game Channels (1980s) Quadraphonic SoundSmart Screen Telephones CD-I3-D TV (in the 1980s s) VideodiscTeletext (in the United States) VideophoneIridium Satellite Phone System Fax NewspapersFiber-to-the-home (1990s) Car PhonographsInteractive TV (1980s -1990s) New Media Failures

16 Delphi Survey in 1994 About Media Penetration in 2005 ForecastActual (U.S.) Video CD Player (DVD) 15.1% 70% CD-I CD-Rom Virtual Reality System VOD Digital Terrestrial Broadcast 17.3<2 Fiber to the Home12.2<1 Source: Digital Media Forum, Digital Technology Timeline, 1994

17 Factors Affecting Adoption in the Bass Model pm Adoptions due to External Influence Adoptions due to Internal Influence Non-cumulative Adoptions Source: Mahajav, Muller and Bass p = coefficient of innovation (a constant for the product in question) m = potential number of ultimate adopters (another constant for the product in question) Time

18 Average Annual Growth Rate (Percent) First Year First 2 Years First 5 Years First 10 Years First 20 Years US Telephone B&W Television Color Television Radio CB Radio Cable Television Pay Television VCRs Canada Telephone B&W Television Growth Rates for Selected New Products and Services in the US and Canada Source: Hough (1980), pp


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