Companies Prepare for Digital Future Ahead of Berlin's IFA

Samsung hired Tim Burton to direct its Oscar ad.

With tablet and smartphone video content sales expected to hit $9.5 billion in four years, all things digital will be the focus at the world's largest consumer electronics fair in Germany this September.

Berlin's IFA, the world's largest consumer electronics trade show, doesn't kick off until September, but it's already clear that digital and mobile tech will be the focus of this year's event.

A new report by Juniper Research is forecasting an explosion in sales of streaming and downloading services to mobile and tablet devices, with total revenue more than doubling over the next four years to $9.5 billion. That growth is driven by, and will likely in turn help drive, the roll-out of more advanced technology to download and watch video content.

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Another recent study, by German technology association Bitkom, reports that fully 95 percent of all televisions, computers, tablets and smartphones sold in Germany this year will be Internet-capable. Also, 5.3 million tablet computers are forecast to be sold in Germany this year, making it the first time Germans will buy more tablets than TVs.

“Television is losing its video and TV monopoly,” said Michael Schidlack of Bitkom. “Two thirds of people watch [video content] on their PC or laptop, and more than 40 percent of people [in the survey] use their smartphones and tablets to watch video, a third of those to watch linear television.”

The absolute cutting edge in mobile technology will be on display at IFA, which runs Sept. 6 to 11 in Berlin -- including, if rumors are correct, the Galaxy Note 3, Samsung's frontal attack on Apple's dominant iPhone.

Traditional media companies will also be using the event as a launch pad for new multimedia services as they attempt to capitalize on the digital shift. Unitymedia KabelBW, Germany's number two cable company, which is owned by John Malone's Liberty Global, will use IFA to kick off its new Horizon service, which combines TV, VOD, Internet and telephone services in one high-speed cable modem/set top box.

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Behind all this is hope that the spread of mobile video services will mean consumers are willing to pay for premium content. There is still a ways to go; a survey by Deloitte & Touche found that only 21 percent of German consumers were willing to pay for online content to avoid watching ads.

Whatever shiny new toys are on display at IFA this year, the main challenge remains: finding a workable business model to deliver video content that people are willing to pay for.