Insider Report news and views on broadcast and professional video/audio sectors, worldwide
w/e August 10, 2008 SCRI International, Inc © 1984 - 2008
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Migration from TV to web ups pace
According to a report by Integrated Media Measurement Inc. (IMMI), more people are switching to the web, even for primetime programming. According to IMMI data, more than 20 per cent of people watch some amount of primetime television programming online.
The IMMI data also tracked participants’ behaviour, showing that within the group of online viewers, 50 per cent are watching programming as it becomes available and appear to be beginning to use the computer as a substitute for the television set. The other 50 per cent are using the Web as a tool to catch up, or to re-watch segments of episodes they have already seen. The data also showed that, in several instances, online viewing of a particular programme was higher than DVR viewing of that same programme, suggesting that the fairly large segment of non-DVR owners are adopting the computer for time-shifting rather than buying a DVR.
"This is the first study to show there are a significant amount of people watching primetime shows online who are not watching some portion of those shows on television," said Amanda Welsh, head of research for IMMI. "Everyone’s been talking about the Internet becoming a substitute for television; however this is the first single-source passive data to show that the migration from one platform to another is actually occurring – and it’s happening fast."
T-Mobile Adds VOD
T-Mobile is planning to launch a video-on-demand service for films and TV shows that can be watched on either a mobile or PC. The operator is in negotiations to "extend existing deals" with a number of its short-form content partners including Ministry of Sound, EMI, ITV, Universal and Warner.
Video On Demand Plus, as the new service is called, will allow customers to rent the long form content for seven days. Viewers will also be able to watch the content across both their mobile and PCs, and will, for example, be able to pause the video on their mobile, and resume where they left off on their PC, as well as the other way around. T-Mobile interactive and video manager Sylvia Radacovska said the mobile VoD service accounts for over half of all video consumed on the network’s Web ‘n’ Walk platform.
HDTV to reach 255m households in 2013
An estimated 45 million households worldwide received HDTV service via DTH, cable, IPTV and DTT at the end of 2007 with approximately the same number of HDTV sets shipping during the year.
In The Worldwide Market for High-Definition TV Equipment & Services 2008 IMS Research forecasts that 255 million TV households worldwide will be watching HDTV by the end of 2013, including video households viewing only pre-recorded non-broadcast programmes. It also expects the Blu-ray Disc market to experience strong growth during the next five years, particularly as Blu-ray Disc drives in new PCs become more common, reaching a forecast $46 billion in revenues in 2013.
Shane Walker, research analyst and author of the study, states, "DTH continues to be the leading platform for HDTV service uptake due to its rapid transition from analogue to digital households and increased HD content availability. HD DTH households are forecast to grow on average at 27.5 per cent annually, reaching 97 million households at the end of 2013. The most significant service uptake is expected prior to 2010, after which time the HDTV household growth rate is expected to fall below 30 per cent annually."
DISH Network HD upgrade
DISH Network Corporation has set the bar for the next-generation HD standard by becoming the first in the industry to offer high definition programming in 1080p, the highest HD resolution available.
This new functionality is part of DISH Network's expansion in high definition services, which includes the rollout of TurboHD, the industry's first 100 per cent, all-HD suite of programming packages. DISH Network has also launched 17 new national HD channels, surpassing its goal of reaching 100 national HD channels five months ahead of schedule. DISH Network now offers up to 114 national HD channels and plans to expand that line-up to 150 channels by the end of 2008, made possible by the recent launch of Echo XI, the most powerful satellite in the company's fleet.
Global Broadband on the Rise
Worldwide consumer broadband connections will grow from 323 million connections in 2007 to 499 million in 2012. According to Gartner Worldwide, consumer broadband connections penetrated 18 per cent of households in 2007, and by 2012 households with a broadband connection will reach 25 per cent.
Five countries exceeded 60 per cent broadband penetration into the home in 2007 and this is expected to grow to 17 countries by 2012. The five countries are Canada, Netherlands, Switzerland, South Korea and Hong Kong.
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U.S. Communications Spending Growth to Continue in 2008
Total communications spending is projected to increase 5.4% to $923.91 billion in 2008, as strong gains in the institutional and alternative media sectors offset the downward pressure of declining traditional advertising spending, according to research released this week by Veronis Suhler Stevenson (VSS), a leading private equity firm dedicated to the media, communications, information and education industries.
While the deteriorating housing market, higher gas prices and a weakening job environment weigh heavily on the overall economy and the advertising sector, the institutional and consumer media sectors remain durable as businesses continue to spend on mission-critical services and consumers use entertainment media to relieve economic stress, according to the VSS Communications Industry Forecast 2008-2012, the leading source for media spending, usage and trends data. The VSS Forecast is the core component of the VSS MediaResearchNet™ 2.0, a digital product that includes the first performance overview of all major media segments during historical recessions and 2008, titled The Recessionary Behavior of Media.
The industry’s primary growth driver in 2008 is the institutional sector, particularly professional & business information services and education & training media. Institutional media spending is expected to increase 8.5% to $245.39 billion in 2008, according to the VSS Forecast. Total spending on communications will continue to outpace U.S. economic growth during the 2007-2012 period, increasing at a 6.2% CAGR compared with a 5.6% CAGR for nominal GDP. Communications will be the second-fastest growing of the 15 U.S. economic sectors during the forecast period and will exceed $1 trillion in 2010, with spending reaching $1.183 trillion in 2012, according to the VSS Forecast.
“The U.S. communications industry has proven to be resilient during difficult economic periods over the last several decades because of the diverse portfolio of spending derived from the institutional, consumer, advertising and marketing sectors,” said Jim Rutherfurd, Executive Vice President and Managing Director at VSS. “While current economic conditions are contributing to the underperformance of traditional advertising and marketing segments, various institutional, consumer and alternative media segments are outperforming GDP due to several factors. Among them are businesses demanding dynamic workflow solutions for competitive global markets, consumers taking ‘staycations’ this summer and spending on entertainment media targeted at the youth market, and brand marketers shifting to alternative media to engage hard-to-reach demographics.”
VSS projects total spending on communications will climb at a 6.2% CAGR from 2007 to 2012, reaching $1.183 trillion in 2012. Institutional media spending is expected to remain the fastest-growing communications sector over the next five years, as well as becoming the largest sector, producing a CAGR of 8.6% to $341.06 billion in 2012 (see the growth and forecast analysis at the end of this release). Marketing services will fall to the second largest communications sector in 2012, reaching $307.30 billion, climbing at a CAGR of 5.8% from 2007 to 2012. VSS forecasts that consumer media spending will post a similar CAGR of 5.8% from 2007-2012, reaching $272.41 billion, while overall advertising spending will be the slowest growing sector with a 4.3% CAGR, climbing to $262.61 billion. As a result of the rapid growth in institutional media, combined with slow advertising growth, institutional media’s share of communications will rise to 28.8% in 2012, up from 22.3% in 2002, while advertising’s share will fall more than four percentage points to 22.2% in 2012 from 26.3% in 2002.
Advertisers Prepare for DTV
Broadcasters and advertisers in the US have joined forces to prepare the advertising community for the February 17th, 2009 transition to digital television (DTV), forming a coalition and unveiling a new initiative: "The DTV Transition: Keeping the Ad Community in the Loop."
The newly formed coalition, which includes the American Association of Advertising Agencies (AAAA), the Association of National Advertisers (ANA), the National Association of Broadcasters (NAB) and the Television Bureau of Advertising, will work to ensure advertisers, as well as viewers, enjoy a smooth transition to DTV.
Comcast up, subs down
Comcast reported an 8 per cent rise in second-quarter earnings and its subs count slid 0.6 per cent, or 138,000 households, to 24.6 million. Comcast earnings were up, consolidated revenue advancing 11 per cent to $8.553 billion in the quarter ended June 30th. Earnings were $632 million, compared with $588 million in the year-ago period.
Comcast added 320,000 digital-cable subscribers that now account for 67 per cent of its total, meaning 16.3 million video subscribers take its digital service. Seven million, or 43 per cent of its base, have advanced services, such as digital-video recorders.
Looking forward, Comcast reaffirmed its guidance that 2008 will end with consolidated revenue and operating cash flow growth of 8 per cent-10 per cent and consolidated free cash flow up at least 20 per cent from $2.3 billion in 2007. Capital expenditure expenses will decline about 18 per cent.
Disney up slightly
Basic-cable networks powered modestly improved earnings reported Wednesday for its third quarter ended June 28th.
ESPN carriage fees and ad gains were the company’s single largest profit driver, but they were accompanied by higher ESPN program and overhead costs. "ESPN led the way, once again," Disney chief financial officer Tom Staggs told an investors' telephone conference. Income from continuing operations advanced 7 per cent to $1.28 billion. Revenue advanced 2 per cent to $9.24 billion
Sirius Purchased of XM Approved by FCC
Sirius Satellite Radio Inc's $3.3 billion purchase of XM Satellite Radio Holdings Inc was approved with conditions by US communications regulators as expected.
"I think this merger is in the public interest and will ultimately benefit consumers," FCC Chairman Kevin Martin said.
Martin said the conditions the FCC imposed on the merger would ensure that satellite radio customers would be able to access the best programming from both XM and Sirius and choose smaller, lower-priced packages of programming if they want.
With the approval, XM and Sirius cleared the final hurdle in a regulatory marathon that began after the merger was first announced in February 2007. Antitrust authorities at the US Justice Department gave their approval in March.
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Scopus to Acquire Optibase
Scopus Video Networks Ltd. announced that it has entered into a non-binding Term Sheet to acquire the business of Optibase Ltd., the Company’s principal shareholder. Optibase, based in Herzliya, Israel, provides professional encoding, decoding, video server upload and streaming solutions for telecom operators, service providers, broadcasters and content creators. According to its audited financial statements, Optibase reported revenue of approximately $23 million for 2007.
“The acquisition of the digital video and streaming business of Optibase is a positive step for Scopus,” commented Dr. Yaron Simler, CEO of Scopus. “We have identified what we believe to be potential synergies and cost savings associated with this transaction. In addition to our current portfolio, Optibase’s products extend the breadth of our offering to our customers, opening up new markets for Scopus. Finally, it should enable us to become a more prominent player in the digital video networking market."
Dr. Simler concluded, “While there are still a few major steps ahead, this is an important development that we expect will accelerate the growth of our business in 2008 and beyond.”
Optibase Q2 Up
Optibase, Ltd. announced financial results for the second quarter ended June 30, 2008.
Revenues for the second quarter ended June 30, 2008 were $5.7 million compared with $4 million for the first quarter of 2008 and $6.7 million for the second quarter of 2007.
Net loss for the quarter ended June 30, 2008, was $2.1 million or $0.15 per basic and fully diluted share. This compares with a net loss of $2.9 million or $0.21 per basic and fully diluted share for the first quarter of 2008, and a net loss of $2 million or $0.15 per basic and diluted share for the second quarter of 2007. Weighted average shares outstanding used in the calculation were approximately 14 million basic and fully diluted for the second quarter of 2008 and 13.6 million basic and fully diluted for the first quarter of 2008 and 13.5 million basic and fully diluted for the second quarter of 2007.
Amir Philips CFO of Optibase, commented, “We gained back our momentum in the quarter with increased revenues. The execution of our strategy continued on track with our two new products, Creator Ingest Server and the EZ TV and the MGW X100 products. Our backlog and pipeline are showing significant growth for the second half of 2008 and we are on track realizing some of the contracts that were delayed last quarter.
“Our bottom-line continued to be impacted by the devaluation of the U.S. dollar compared to the New Israeli Shekel, the result of which again added pressure to our operating income. Despite this, our businesses and sales of our products have shown growth over the first quarter of 2008.”
He concluded by saying, “We are optimistic about what is to come for Optibase in terms of product innovation and new orders. Our strong R & D is an advantage that provides us with the ability to continually accommodate and serve our current and future customers.”
Sony profit sinks
Quarterly profits at Sony have almost halved, hurt by a loss at its mobile JV with Sweden's Ericsson. It said that net profit totalled 35 billion yen (E209m) in the April to June period, down from 66.5 billion yen a year ago. Sony said its net profit in the year to March 31, 2009 would total 240 billion yen, down from an earlier forecast made in May of 290 billion yen.
Dolby Laboratories Q3 Up
Dolby Laboratories, Inc. announced the Company's financial results for its third quarter of fiscal 2008.
For the third quarter, Dolby reported total revenue of $154.3 million, compared to $119.6 million for the third quarter of fiscal 2007, an increase of 29 percent. Third quarter net income was $46.4 million, or $0.40 per diluted share, compared to $29.7 million, or $0.26 per diluted share, for the third quarter of fiscal 2007.
Net income for the third quarter of fiscal 2008 reflects stock-based compensation expense of $5.6 million compared to $5.1 million for the third quarter of fiscal 2007. Net income for the third quarter of fiscal 2008 also reflects charges related to the amortization of intangibles of $3.0 million compared to $1.0 million for the third quarter of fiscal 2007.
"During the quarter, we experienced strong financial results while continuing to make progress in key initiatives such as PC Entertainment Experience and Dolby Mobile,” said Bill Jasper, President and Chief Executive Officer, Dolby Laboratories. “Earlier this week, LG, a global technology and design leader in mobile communications, announced it would introduce high-end multimedia handsets with Dolby Mobile by the end of calendar year 2008.”
Dolby now expects fiscal 2008 revenue to be $605 million to $625 million. Net income for fiscal 2008 is now expected to be $181 million to $190 million. Earnings per diluted share is now expected to be $1.57 to $1.65. While under FAS 123R, stock-based compensation expense may vary based on factors such as stock price or volatility, Dolby now expects stock-based compensation expense for fiscal 2008 to be approximately $23 million. In addition, Dolby continues to expect charges related to the amortization of intangibles for fiscal 2008 to be approximately $13 million.
Nokia ups venture fund
Nokia will invest a further $150 million into its venture investment arm, hoping to find emerging Internet services from China and India. The investment raises funds under management of Nokia Growth Partners to $250 million, increasing Nokia's total venture investments to more than $900 million.
"The investment allows us to act on a global basis," said John Gardner, partner at Nokia Growth Partners, adding the firm aims to invest into 8 to 10 new firms each year. The venture arm plans to establish direct operations in India and China with the funds.
Meanwhile, Google is also considering establishing an investment fund for acquisitions.
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IBC 2008 New Products on Display
Panasonic Pro AVCHD Handheld
Panasonic announced suggested list pricing and a ship date for its new AG-HMC150 professional handheld AVCCAM camcorder. Based on the proven design and advanced functionality of the highly popular DVX100, this new camcorder will offer both 1080 and 720 HD recording with solid-state SD memory card recording. With an exciting range of professional features, impressive picture quality and a sleek, compact design, the new AVCCAM handheld will be available on Thursday, October 2nd at a suggested list price of $3,995.
The HMC150 represents the next generation in affordable HD video production tools. The new handheld provides professionals and enthusiasts alike the flexibility of high-quality 1080/720 AVCHD recording at bit rates up to 24Mbps and a simple, solid-state SD memory card workflow. AVCHD, the industry's new MPEG-4 / AVC Hi Profile compression format, provides a near doubling of bandwidth efficiency with improved video performance over the older MPEG-2 compression used in HDV formats. As a result, AVCHD recordings made by Panasonic AVCCAM camcorders are crisp and clear, even during fast motion, reducing image degradation or dropouts associated with HDV and other tape or disc-based systems.
"With features such as advanced, full 1920x1080 AVC Hi Profile HD recording, higher professional bit-rates, and an affordable and faster, solid-state SD card workflow, the HMC150 offers a state of the art professional handheld solution for those looking for the highest quality and flexibility at an affordable price," said Robert Harris, Vice President, Marketing, Panasonic Broadcast. "The AG-HMC150 offers longer recording times and higher recording quality than is possible with current HDV formats."
IBC 2008 New Products on Display
Micronas DTV demodulator
Micronas has announced the DRX 398yZ family of digital terrestrial demodulators targeted at the rapidly growing digital television market in China. The DRX 398yZ demodulates high-definition and standard-definition television signals according to China's GB20600-2006 standard which is also known as DTMB (Digital Television Multimedia Broadcast). The chip is highly integrated and is optimal for applications including set-top boxes, PVRs, IDTVs, Network Interface Modules (NIMs), USB-TV sticks and PC-TV cards.
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PEOPLE IN THE NEWS
Chyron Hires New VP of Marketing
Chyron announced that it has hired Ken F. Fitzpatrick as Vice President of Marketing. Ken will lead Chyron's efforts to further expand its Online and OnAir graphics product lines and web-based content creation services. Ken will join Chyron effective August 11, 2008.
As a highly experienced senior marketing executive, Ken developed and managed marketing programs for several Fortune 500 companies. He was at Check Point Software where he directed all aspects of the corporate marketing function and introduced the Company’s flagship, UTM offerings. While at IBM he was part of the launch team for the AS/400 product line and established several business partner programs for the platform. As Chief Marketing Officer at Computer Associates, he was directly responsible for transforming the Company’s brand, identity and perception among all its key constituents.
Ken's background includes both public and private company sales and marketing experience. His experience includes scaling up a startup business to $13 million in sales in less than 12 months as well as transforming marketing programs of established companies, helping them to become recognized as leaders in their market segments. He holds a Bachelor of Science Degree in political science from Iona College with post-graduate studies in marketing and computer science.
Broadcast Facilities Names New CTO
Broadcast Facilities, Inc. (BFI),
owner and operator of Andrita Media Center, the largest independent SD and
HD network origination, production, post production and digital media
facility on the West Coast, announced that Tom Mikkelsen has been
named Chief Technology Officer. In this position, Mr. Mikkelsen will
oversee all engineering-related functions and lead Andrita's current
multi-channel facilities expansion.
Mr. Mikkelsen comes to Broadcast Facilities from Qualcomm, where he was
MediaFLO USA, Inc.'s Senior Director, Broadcast Operations. At Qualcomm he
planned, developed and managed MediaFLO's broadcast operations and related
infrastructure. Prior to joining Qualcomm, Mikkelsen held high-level
positions at the Starz Encore Group, AT&T Digital Media Center (now Comcast
Media Center), and Vyvx Advertising Distribution Services.
Mikkelsen earned a BSE degree in Industrial Management from Peru State
College in Peru, Nebraska and holds an FCC General Class Commercial
License. He is a Fellow and active with the Society of Motion Picture and
Television Engineers (SMPTE), as well as the Society of Broadcast Engineers
(SBE), the Society of Cable and Television Engineers (SCTE) and the
Institute of Electrical and Electronic Engineers (IEEE).
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SCRI RESEARCH NEWS
Broadcast/Pro Video Product Sales Top $10 billion -- read more
2008 - 2009 Broadcast/Pro Video Product Reports
2008-09 Broadcast/Pro Video Macro Industry Overview Report
2008-09 Broadcast/Pro Video Micro Quantitative Product Data Report
HDTV / Digital Trends Report
IPTV / Mobile TV Report
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