Insider Reporter


Insider Report

news and views on broadcast and professional video/audio sectors, worldwide

w/e August 19, 2007 SCRI International, Inc © 1984 - 2007

INDEX

Technology News | Industry News | Company News |
Product News | People in the News | Research News

TECHNOLOGY NEWS

Blu-ray Sales Rising Globally

Sony Pictures HomeEntertainment announced anincrease in total Blu-ray Disc(TM) (BD) salesacross six emerging markets including Hong Kong,Singapore, Taiwan, Eastern Europe, South Africaand the Middle East -- illuminating the positive reception from retailers and consumers for thenew high-definition format since its launch just four months ago in April 2007.

Since April, Blu-ray Disc sales have accountedfor 10% of SPHE's business in the regions.The company saw a 21% increase in BDorders across the month of June alone."It is extremely positive to see an increase involume of BD software sales in these marketswhere piracy has previously ravaged the DVDbusiness," said T. Paul Miller, Senior VicePresident, International, Sony PicturesHome Entertainment.

SPHE is the only studio to have licensed high-definition Blu-ray Disc content for local distribution in many of these markets and new partners are coming on line every month.Among top-selling BD titles from SPHE in these regions are Casino Royale, Ghost Rider, OpenSeason, Kung Fu Hustle, Black Hawk Down,XXX and Stealth. South Africa accounts for the largest share of Blu-ray Disc sales,with more than 15,000 units shipped to date.

HDTV Causing Cable Bandwidth Crisis

Escalating demand for bandwidth-hungry services such as HDTV and online gaming is gradually leading to a critical lack of capacity in cable operators' networks. Several solutions are available and, according to a study from ABI Research, collectively they will account for some $80 billion worldwide in investment over the next five years.

"Cable TV operators trying to satisfy the increasing bandwidth demands of HDTV customers feel very much like the thrifty grocer who tried to cram ten pounds of potatoes into a five-pound bag," says vice president and research director Stan Schatt. "The increasing bandwidth demands on cable operators will soon reach crisis stage, yet this is a 'dirty little industry secret' that no one talks about."

Some of the solutions noted in the study -- such as rate shaping and expanding spectrum beyond 750 MHz -- have already been undertaken by some cable operators (particularly in the United States). However, a number of other solutions will come into play during the 2007-2012 forecast period, including spectrum upgrades coupled with node-splitting, switched digital video, PON overlay, MPEG-4 compression, and home gateway bandwidth management solutions.

Video networking drives 802.11n adoption

The growth of 802.11n in connected consumer entertainment devices will rapidly outpace that of other networking technologies, new research predicts.

A study by ABI Research found that demand from consumers to deploy video entertainment around the home via high-speed networks will lead to 216 million 802.11n chipsets being manufactured by 2011.

"Many consumer electronics vendors see Wi-Fi as the primary way to get network-delivered content to their devices," said ABI Research director Michael Wolf.

"As consumers increasingly source video content on the internet and look towards multi-room distribution, older Wi-Fi technologies do not have the bandwidth to deliver this content, particularly over longer ranges.

"802.11n, in particular 5GHz solutions using 40MHz-wide channels, will help alleviate these constraints."

Competition will be fierce in the consumer electronics space, which is one of the largest growth segments for Wi-Fi chipsets, according to ABI principal analyst Philip Solis.

"Well-established Wi-Fi semiconductor vendors, such as Broadcom and Marvell, will be competing against up and coming Wi-Fi chipset vendors concentrating on market niches, such as Metalink and Nanoradio, " he said.

As laptop OEMs make 802.11n standard on high-end laptops, ABI Research believes this will have a "natural pull-through effect" on 802.11n-enabled home routers.

The wider installed base of 802.11n routers and gateways, combined with increased demand for IP-delivered content on consumer electronics, will push large consumer electronics brands to integrate Wi-Fi in their devices, the study found.

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INDUSTRY NEWS

EchoStar up

EchoStar Communications Corporation reported total revenue of $2.76 billion for the quarter ended June 30, 2007, an 11.9 percent increase compared with $2.47 billion for the corresponding period in 2006.

Net income totalled $224 million for the quarter compared with $169 million in 2006.

EchoStar's DISH Network service added approximately 170,000 net new subscribers during the second quarter, ending the quarter with approximately 13.585 million subscribers to become the nation's third largest pay-TV provider

LIN TV Q2 Net Income Up

LIN TV Corp. reported net income of $3.5 million for the second quarter ended June 30, 2007, compared to a net loss of $244.4 million for the same period in 2006. The increase in net income was largely due to two charges against second quarter 2006 earnings that did not recur in 2007: a $333.6 million impairment charge for intangible assets and broadcast licenses; and a $6.9 million severance charge related to the retirement of the Company’s former CEO. Excluding the 2006 impairment and severance charges, second quarter 2007 operating income decreased by 3% to $23.3 million, due primarily to the expected impact of lower political advertising in the current off-election year.

“We are pleased with our second quarter 2007 operating results and the continued execution of our strategy by our station management teams, particularly in light of the current cyclical challenges facing the TV industry,” said Vincent L. Sadusky, president and chief executive officer of LIN TV. “Our ability to develop multi-platform local marketing programs and reduce same station operating costs have helped offset declines in political and national automotive advertising.”

"Underscoring our focus on localism, our station brands and news programs once again performed well in the second quarter, with many of our stations dominating the May 2007 Nielsen ratings in their local markets, as well as significantly advancing our local website businesses,” added Sadusky. “Our key online audience metrics continue to grow at a rapid pace and our Company is well-positioned to capitalize on the growing digital media and interactive businesses.”

NBC, News Corp selling 10% of TV site?

NBC Universal and News Corp. are reported to be considering selling 10 per cent of their jointly owned, but yet to be named or launched, online-video-distribution venture to private-equity firm Providence Equity Partners for $100 million.

The cash will be used to build and market the venture, which is scheduled to launch this autumn as an outlet for ad-supported and pay-per-view programming from more than a dozen networks and film studios. NBC and News had been expected to spend about $100 million setting up and marketing the venture.

Much of the programming for the venture, temporarily called New Site, will come from networks associated with the two companies, including the NBC network and News Corp.'s Fox network

Univision Q2

Univision Communications Inc., the leading Spanish-language media company in the United States, announced financial results for the second quarter ended June 30, 2007. For the second quarter, net revenue increased 8.2%1 to $562.2 million from $519.4 million in the second quarter of 2006 excluding 2006 FIFA World Cup estimated incremental net revenues of $84.3 million. Including World Cup incremental revenue in 2006, net revenue decreased 6.9% and adjusted operating income before depreciation and amortization2 increased 3.2% to $247.9 million in 2007 from $240.1 million in 2006. Prior to the completion of the merger on March 29, 2007, the Buyers decided to sell the Company’s music recording and publishing businesses. As a result, the music division results of operations, assets and liabilities are reported as a discontinued operation for all periods presented and are not included in the above results.

Andrew W. Hobson, Senior Executive Vice President, Chief Financial Officer and Chief Strategic Officer, said, “Univision’s second quarter net revenue increased 8.2%1 compared to last years excluding the estimated impact of World Cup Incremental in 2006, driven by notable growth in the Company’s radio and online businesses. Excluding the estimated impact of World Cup Incremental in 2006, our adjusted operating income before depreciation and amortization grew approximately 5.0%, led once again by our radio business which delivered strong OIBDA growth of 12.8% in the second quarter.”

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COMPANY NEWS

Chyron Q2 Continues Profits

Chyron Corporation announced results for its second quarter ended June 30, 2007. The Company said that the second quarter of 2007 was its fifth consecutive profitable quarter, and reported net income of $0.6 million or $0.01 per share on revenues of $7.8 million. For the first half of 2007 the Company reported net income of $0.7 million or $0.01 per share on revenues of $14.3 million.

Michael Wellesley-Wesley, Chyron President and CEO commented, "We are pleased to report that we have delivered our fifth consecutive profitable quarter. Our second quarter results are satisfactory and were in line with our plan for the quarter."

He added, "We are currently experiencing strengthening demand for our broadcast graphics and channel branding products; we expect this demand to drive sales growth in the second half of 2007."

Mr. Wellesley-Wesley also noted that the Company's digital displays business continues to gain momentum. "Our ChyTV revenues were $0.5 million in the first half of 2007, an increase of 21 percent over the comparable period in 2006. With the release to production of the ChyTV HD100 and rollout of ChyTV.net as a service at the end of June, I expect ChyTV revenue growth rate to accelerate in the second half."

While second quarter revenues of $7.8 million were $0.8 million or 10 percent lower than the $8.6 million reported for the comparable prior year's quarter, first half 2007 revenues of $14.3 million were $0.9 million or 6 percent higher than the $13.4 million reported for the first half of 2006. Second quarter 2006 revenues were higher due to slippage of customer orders from first quarter 2006 to second quarter 2006. Enhanced product offerings, which now include mid-range high definition and channel branding products, contributed to the increased revenues for the first half of 2007.

International revenues for the second quarter increased to $1.8 million, representing a 72 percent increase over the same quarter of 2006, and for the first half of 2007 increased to $3.1 million, a 46 percent increase over the first half of 2006, reflecting greater market penetration in Europe and Asia.

Gross margins for the second quarter were 69 percent as compared to 67 percent in last year's comparable quarter, and for the first six months were 68 percent compared to 67 percent for the same period in 2006.

Michael Wellesley-Wesley, Chyron President and CEO, commented, "In 2007 Chyron is experiencing a more typical annual revenue and profits pattern, specifically a pattern that should result in consistent, sequential quarterly growth in revenues and profits throughout the second half of the year. Any comparison with 2006's exceptionally strong second quarter was always going to prove challenging because last year's second quarter was such an anomaly."

Focus Enhancements Reports Second Quarter 2007 Results

Focus Enhancements announced financial results for its second quarter and the six months ended June 30, 2007.

“During the second quarter, we posted $8.4 million in revenue, up 18 percent from $7.1 million in the first quarter of 2007,” stated Brett Moyer, president and CEO of Focus Enhancements. “This increase was driven by a 20 percent sequential increase in the Systems Business revenue, reflecting strong FireStore and ProxSys® sales. In addition, improved Systems Business pricing and overall a more favorable product mix drove gross margin as a percent of revenue to 47 percent, compared to 45 percent in the first quarter of 2007. The improved gross margin combined with cost controls narrowed our net loss.”

“Regarding UWB, we have finished the adjustments to bring our chip to production and are in the initial stages of the tape out process. We believe our chip quality and robustness remain best in class in terms of performance. Publicly, we have demonstrated wireless (WiMedia) transmissions of over 40 feet and through people and walls. At Computex 2007 in June, many of our competitors demonstrated transmission between only three and six feet line of sight. As a result, our key original equipment manufacturers and design partners are eager to start design activity with our new chip, which we now anticipate will occur in October,” continued Moyer.

Logic Devices

LOGIC Devices Incorporated reported its results of operations for the third quarter of fiscal 2007, which ended June 30, 2007. Revenues for the third quarter of fiscal 2007 were $1,106,800, down 9 percent from the $1,216.400 reported for the same quarter of fiscal 2006. The Company reported a net loss of $1,427,600 or ($0.21) per share, compared to a net income of $60,100 or $0.01 per share in the same quarter of fiscal 2006. For the nine months ended June 30, 2007, revenues increased 11 percent to $3,727,700, compared to $3,365,300 in the same period of fiscal 2006. The net loss for the nine-month period ended June 30, 2007 was $1,332,300, or ($0.19) per share, compared to a net income of $57,600, or $0.01 per share in the same period of 2006.

“During the quarter we made substantial progress in completing the development project to retool our video frame buffer family with a new foundry source. We also were able to support a number of customer design-ins with the limited frame buffer material we had available that should shorten time to revenue when the retooled design is fully qualified for production. Finally, during the quarter we selected a new, significantly larger, and very technically oriented distributor for sales of our products into the Japanese market,” stated Bill Volz president of LOGIC Devices.

Optibase Announces Changes to Its Investment Strategy

Optibase Ltd. announced changes to its investment strategy. Pursuant to this revised investment strategy, Optibase intends to decrease its holdings in structured notes and corporate bonds. The timing of these sales shall be subject to several considerations, including market conditions.

As a result of the revised investment strategy, during the third quarter ending September 30, 2007, Optibase may realize a financial loss, reflecting the impact of market value reevaluations of its investment in certain structured notes and corporate bonds. The application of such market value reevaluations as of July 30, 2007 would have resulted in a realization of a financial loss of approximately $911,000, which is the difference between the book value and the market value of the securities on that date. The actual effect of such financial loss on Optibase's financial results for the quarter ending September 30, 2007 will depend, among others, on the market value of these securities on that date, a financial profit or loss realized by actual sales of the structured notes and corporate bonds, and Optibase's other financial results.

The Company recently sold one of its structured notes in a principal amount of $10 million and recognized a financial loss of approximately $353,000.

ViewCast Q2 Net Sales up

ViewCast Corporation announced net sales increased 10 percent in the second quarter 2007 compared to the second quarter 2006. In addition, sales from the Niagara® product line increased 72 percent during the second quarter.

Total revenues from continuing operations for the second quarter of 2007 were $3.9 million, an increase of 10 percent over the $3.6 million reported in the second quarter of 2006. The increase in revenue was due primarily to sales of Niagara systems in addition to revenue from Osprey® capture cards.

“Sales for the Niagara streaming encoding systems and Osprey video capture cards will continue accelerating,” said Dave Stoner, president and chief operating officer of ViewCast Corporation. “As market penetration expands, sales from the ViewCast Niagara product line rose 72 percent during the second quarter. The driving force behind this substantial sales growth stems from contracts with our value added resellers and OEM customers. As we continue to build our customer base, we look for sales to remain strong for the foreseeable future.”

ViewCast announced several new Osprey and Niagara products during the second quarter 2007. The Osprey-240 and Osprey-700HD cards take advantage of PCI Express technology to delivery new levels of quality and performance. The Osprey-700HD enables high definition video capture and streaming. Both products will begin shipping in the third quarter.

ViewCast announced a partnership agreement with Adobe® Systems Incorporated to add live web video streaming via Adobe Flash® Player to the broad range of streaming formats supported by its GoStream™ Plus and Niagara® Pro streaming media appliances. In conjunction with the Adobe agreement, ViewCast signed a license agreement with On2 Technologies, Inc. for Flash live video encoding technologies for integration into the company’s Niagara streaming media appliances.

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PRODUCT NEWS

Digital Juice Launches New Print Design Elements™ Product Line

Digital Juice® announced that it is launching a new product line targeting graphic designers called Print Design Elements™. Print Design Elements™ are an extensive library of unique standalone high-resolution layered graphical elements that can be used as-is or added to any design composition. These standalone elements are sold royalty-free and provided in Photoshop® layers for maximum flexibility. There is a minimum of 60-layered PSD files per volume with each graphical file provided at a minimum of 5000 pixel by 5000 pixel resolution.

The initial three volumes of the new collection are graphic and themed "Frames" that artists can use to enhance photography, border a layout, or add an interesting accent to the printed page. Because these frames are layered, the individual parts of the frame can also be isolated and used in an unlimited number of creative ways. "The variety and high detail in these layered graphic elements means they work easily for any number of uses beyond the traditional photo frame." says Jacqui Dawson, Senior Creative Director at Digital Juice. "One of my favorite tricks is to highlight important text or sidebar information with just the corner or edge of a frame which bleeds off the side of the page. Because of the frame's large size and high resolution, I can do this and still maintain the detail and high quality I need for print projects."

The new Print Design Elements™ volumes 1 through 3 can be ordered through Digital Juice's online store (www.digitaljuice.com) or by calling the company's customer service center toll-free at 800-525-2203. Individual volumes retail for $99 each but can be purchased in bundles for up to 75% off.

Microsoft unveils Exchange Server 2007 SP1

Microsoft has unveiled the first Service Pack for its Exchange Server 2007 enterprise collaboration platform, and opened a technology preview for the software.

Exchange Server 2007 SP1 features enhancements including support for Windows Server 2008 and Windows Vista, enhanced integration with Microsoft Office Communications Server 2007, improved mobile device management and advanced security technology.

The service pack also includes features designed to provide greater functionality in the Exchange Server 2007 Management Console, and deliver improved disaster recovery capabilities through Standby Continuous Replication.

As part of the technology preview, nearly a million Microsoft Developer Network and TechNet subscribers can download the service pack beta.

Terry Myerson, general manager for Exchange Server at Microsoft, said: "With the new service pack, we have zeroed in on several areas of investment that are important to our customers.

"This includes support for Microsoft's next-generation platforms and improved mobile device management."

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PEOPLE IN THE NEWS

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RESEARCH NEWS

Mobile Video Telephony and Messaging Services to Exceed $17 Billion

A growing number of mobile carriers worldwide are increasing their video messaging and telephony offerings. According to a new study from ABI Research, the market value for mobile video telephony services including video mail, video calling, and video sharing services, will grow from $1 billion in 2007 to over $17 billion by 2012, a CAGR of 74%.

However the conditions that will drive or inhibit growth of these services by region are complex. According to principal analyst Dan Shey, “The Web 2.0 phenomena and sites that allow posting of mobile video will increase demand for mobile video services. However, global demand inhibitors include income levels, messaging and video viewing alternatives, and handset capabilities. And then there is the uncertainty factor for operators of video services on network utilization which will affect their promotion and pricing strategies.”

Reflecting such complex conditions, ABI Research has created forecasts for uptake of mobile video messaging and telephony services for eight different regions of the world. According to the report, the industrialized regions of North America, Western Europe and Asia Pacific will command 90% of the video services revenues.

While only 10% of the service revenues will come from the developing regions of the world, the opportunity for video services serving customers from developed regions should not be discounted. Says Shey, “The biggest opportunity for carriers in developing world countries is with video messaging services. The mobile phone is the most common device in these regions and 2.5G networks are sufficient for this service. With more people migrating and immigrating to find work, video messaging can be the service that provides a rich form of communication for social and familial connectivity.”

LCD TV Sales to Hit 75 Percent of Market

LCD will continue its ascension to market dominance in the worldwide digital TV (DTV) market, reports In-Stat. LCD will have almost 75% of the market in 2011, with plasma fading to less than 15%, the high-tech market research firm says. A series of seven recent In-Stat end-user surveys spanning six countries in three regions--North America (US and Canada), Asia (Japan and Korea) and Europe (UK, France, and Germany)--revealed other notable findings.

"US consumers exhibited reduced interest in HD TVs," says Michael Inouye, In-Stat analyst. "Respondents most interested in HD TVs, for instance, fell from 17% in 2006 to 13% in 2007, while those least interested increased 12 percentage points in 2007 to 65%. International respondents, however, exhibited more interest in HD TVs. Consumers in France and South Korea, in particular, demonstrated strong levels of interest (44% and 40% high-interest, respectively)."

Recent research by In-Stat found the following:

  • Global DTV unit shipments are expected to grow from 68 million units in 2006 to over 144 million by 2011.
  • Total revenue is expected to grow from US$71 billion in 2006 to US$76.7 billion in 2011; pricing pressures are expected to hamper revenue growth.

    Mobile UGC revenues to rise tenfold

    Social networking services will dominate a burgeoning market for mobile user-generated content, according to a new report from Juniper Research.

    Globally, end-user generated revenues from social networking, dating and personal content delivery services will increase from $572m in 2007 to more than $5.7bn in 2012, with social networking accounting for 50 per cent of the total by the end of the forecast period.

    According to report author Dr Windsor Holden, even though social networking sites are in their infancy, the exponential growth experienced by a number of mobile service providers – in some cases achieved primarily through viral marketing seems to affirm that there is huge potential in this area. “The key challenge now is for those providers to monetise that interest,” he said.

    Holden added that, in the medium term, the highest levels of growth could well be experienced in developing markets with limited fixed broadband access. "In these markets, the mobile phone is becoming the predominant means by which people access the Internet. Hence, the overwhelming majority of online social networking will be conducted via the handset rather than the PC."

    Other findings from the report suggest that the volume of downloads from mobile personal content delivery sites such as SeeMeTV are expected to rise from less than 200m in 2007 to more than 9bn in 2012

    SCRI RESEARCH NEWS -- NEW 2007/08 SCRI Broadcast/Pro Video Reports

  • IPTV / Mobile TV Report: now available, 14 page Executive Summary and Analysis, with over 120 pages of articles and reports from online sources as well as SCRI Insider Reports. Cost is $995, or $695 for current SCRI Insider Report subscribers and clients. Contactdes_chas@scri.com for more info.

  • Broadcast/Pro Video Product Reports. Tracking purchase history (2006), purchase plans (2007 & 2008), brand shares, etc. for each of twenty five specific product types, from Camcorders to VTRs.

  • Broadcast/Pro Video Macro Industry Overview Report. Over 50 pages of analysis and information on the state-of-the-industry compiled from secondary online research sources including industry news sites, manufacturers sites, as well as SCRI's own weekly online News Briefs and Insider Reports.

  • Broadcast/Pro Video Micro Quantitative Product Data Report. 23-page report containing quantitative data tables, for all six verical end-user markets, and all of the 25 Product categories, as well as in total, with summary tables from 2002- 2008.

  • HDTV / Digital Video Technology Trends Survey: SCRI is now conducting the 2007 HDTV / Digital Video Technology Trends Survey. Coverage this year is comprehensive using SCRI extensive dBase of broadcast and pro video facilities in conjunction with NBMedia (Digital Cinematography, TV Broadcast, TV Technology, Videography, DV, Post Magazines & Portals as well as with Penton's Broadcast Engineering Magazine and the Digital Cinema Society's members. Survey questions were developed by SCRI Consultants with inputs from major clients and industry experts. Survey is online now with results available in the fall. Click here to view online survey

    Contact SCRI Research Director, Des Chaskelson for a copy of the survey questions &/or for more information and/or to place an order.

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