Report author and SBD Technical Analyst, Abhishek Visveswaran, talks about the in-car video market in Europe.

Q: First of all, is the in-car video market changing?

Abhishek Visveswaran: Traditionally, in-car video systems have been restricted to Rear Seat Entertainment (RSE) systems, mainly aimed at keeping children occupied on long journeys. However, this is now changing as Hard Disk Drive (HDD) navigation systems are become increasingly popular. Our research shows that over 85% of HDD systems are equipped with DVD video drives.

Moreover, the vast majority of vehicle manufacturers in Europe now offer video playback in some form and a few of them even have it available on all of their models. Vehicle manufacturers such as Mercedes and Land Rover are also introducing dual-view screens so that the front passenger can watch movies without distracting the driver. However, RSE systems continue to dominate the market using a variety of screen locations and configurations.

Q: You mentioned DVD drives, what about Blu-ray discs and high definition?

AV: In countries such as the UK, domestic Blu-ray sales witnessed a growth of over 450% in 2008. A number of suppliers like Panasonic and Mitsubishi Electric have already shown concepts of Blu-ray players for cars.

When it comes to Blu-ray inside the car, the key question is ‘Why?’. Blu-ray discs perform the same function as DVDs, but add a high definition picture and better sound quality, however this cannot be experienced unless the video is viewed on a large screen with a premium surround sound system.

The deciding factor for in-car Blu-ray players will be the purchasing behaviour of consumers for their homes. There is a great demand for high definitions TVs, but the trend in sales of Blu-ray discs and DVDs for movies will dictate what consumers expect in the car.

Q: That covers playback media, are there any significant changes in the TV market?

AV: The biggest change is the switch-over from analogue to digital TV (DVB-T) across Europe, but this has not come as a surprise and many vehicle manufacturers already fit DVB-T tuners in the car that can receive free-to-air channels. However, the emergence of Pay-TV and Interactive-TV services could have a significant impact on the design of the in-car DVB-T receivers.

Countries such as Italy have a Pay-TV penetration of over 30% and consumers use pre-paid smartcards in television set-top boxes. If this trend picks up in other countries, in-car receivers will have to be modified to support smart card slots.

The other new feature is Interactive TV, which allows the viewers to access program-related content. For example, people can vote during shows, purchase goods when they see adverts or even change the camera angle during a football game. However, the technology standards used for this vary from country to country (e.g. MHP, MHEG-5 etc). This means that if someone drives from one country to another, they will be able to see the program, but not be able to interact with it.

Q: Finally, what is SBD’s outlook on the in-car video market for the next few years?

AV: We believe it is critical that vehicle manufacturers should not confuse what consumers what in their homes with what they expect inside the car. There is always hype surrounding new technologies in the Consumer Electronics (CE) market and new products will continue to be launched almost every month. However, very few of these will have a significant and immediate change in the way people discover and view media.