Insider Reporter


Insider Report

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

w/e August 26, 2007 SCRI International, Inc © 1984 - 2007

INDEX

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

TECHNOLOGY NEWS

Transformers director Endorses HD DVD

This report is by Phillip Swan, publisher of SCRI's online partner, TV Predictions.

I noted yesterday that Transformers director Michael Bay was screaming his outage at Paramount's decision to exclusively back HD DVD in the high-def format war with Blu-ray. In a post at his personal web site, Shootfortheedit.com, he even vowed not to make a Transformers sequel for Paramount. But then several hours after posting his outrages, he seemed to back track a bit with a new comment posted by his site's webmaster. I then quipped that he would probably be signing up for one of those Michael Imperioli HD DVD commercials before long.

Well, get the cameras ready because Bay issued another post last night at his web site:

"Last night (August 20) at dinner I was having dinner with three Blu-ray owners, they were pissed about no 'Transformers' Blu-ray and I drank the Kool-Aid hook, line and sinker. So at 1:30 in the morning I posted -- nothing good ever comes out of early a.m. posts mind you -- I overreacted. I heard where Paramount is coming from and the future of HD and players that will be close to the $200 mark which is the magic number. I like what I heard.

"As a director, I'm all about people seeing films in the best quality possible, and I saw and heard first-hand people upset about a corporate decision.

"So today I saw '300' on (HD DVD), it rocks! So I think I might be back on to do Transformers 2!"

In Hollywood, consistency is not the currency of choice.

AccessIT DC Revenue Up

AccessIT just reported almost three times the quarterly revenue of the year-ago period, cutting its net loss from operations nearly in half. Management pinned the smaller loss directly to the revenue increase. The company had installed 2,851 digital cinema systems at the end of the quarter, and plans to add a staggering 1,150 new systems in the next quarter to hit the 4,000-installation mark.

AccessIT isn't the only company installing digital systems, of course, but it is a true pioneer. Thomson subsidiary Technicolor is testing a digital distribution plan now; Ron Perelman's Deluxe already has a solution in production; and three of the largest theater chains have started National Cinemedia, with an eye to non-movie monetizing of those projection assets.

But the exploding installation orders say a lot about AccessIT's competitive position -- the market is clearly large enough to give this little fish a comfortable home. You can grow a long, long way from a $215 million market cap and $18.2 million quarterly revenues.

Paramount to drop Blu-ray and back HD DVD

Paramount announced that it's dropping Blu-ray to back HD DVD exclusively in the high-def disc format war.

In addition, DreamWorks Animation, which has yet to release a movie in either format, said it will back HD DVD exclusively as well.

The news is a major boost for HD DVD supporters who have seen their format fall behind Blu-ray in title sales in recent months. However, it's a setback for studio officials and retailers who have been pushing for a single format.

Paramount now joins Universal as major studios that will only release titles in the HD DVD disc format. Paramount's decision will also include movies distributed by DreamWorks Pictures (except for Steven Spielberg films, which are not exclusive to one format), Nickelodeon Movies and MTV Films. (Paramount also distributes films form DreamWorks Animation, although it does not own that part of DreamWorks.)

Four major studios -- Sony, Fox, Disney and MGM -- are backing Blu-ray exclusively. Warner Bros. will now be the sole major studio that will release movies in both formats.

"The combination of Paramount and DreamWorks Animation brings a critical mass of current box office hits to consumers with a line-up of live action and animated films that are perfect for HD DVD," Brad Grey, chairman and CEO of Paramount, said in a statement. "Part of our vision is to aggressively extend our movies beyond the theater, and deliver the quality and features that appeal to our audience. I believe HD DVD is not only the affordable high quality choice for consumers, but also the smart choice for Paramount."

"We decided to release Shrek the Third and other DreamWorks Animation titles exclusively on HD DVD because we believe it is the best format to bring high quality home entertainment to a key segment of our audience -- families," stated DreamWorks Animation CEO Jeffrey Katzenberg. "We believe the combination of this year's low-priced HD DVD players and the commitment to release a significant number of hit titles in the fall makes HD DVD the best way to view movies at home."

With more new releases now split between the two formats, it's unclear how it will affect consumer acceptance of high-def discs. Sales have been disappointing to date due to consumer confusion over the format war.

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INDUSTRY NEWS

Canada's post-production suffers

According to a recent Reuters reports, the rising value of the Canadian dollar has already killed off some 20% of Canada's foreign post biz.

Post is typically affected about six to nine months after the production sector, so of course the ripple effect means this sector is also feeling the fallout from the ACTRA strike that effectively ended in February.

When the loonie is over $0.90 against the American greenback, the profitable service work looks lean, and the indigenous Canadian productions shimmer like gold. In fact, it's the Canadian productions that keep the sector alive and healthy.

Technicolor Toronto's VP of operations Louis Major notes: "The U.S. work is not yet where it was, but the strong domestic feature films, MOWs and series are in full flight. All of these are using a large number of our business units - laboratory, HD dailies, full video and audio post, as well as our digital intermediate department."

Aggressive government incentives in states such as New York and Louisiana aim to undermine any remaining financial advantage of shooting or doing post outside the U.S.

Canadian post shops are covering themselves with a host of game plans that range from diversity or downsizing to minimizing geographical distances - through technology - so work can be done in several countries to take advantage of incentives in Canada, the U.S. and around the globe.

Media General Broadcast Revenue Down

Media General, Inc. reported July 2007 total revenues of $83.8 million, a 3.3 percent decrease from July 2006. By business segment, Publishing Division total revenues decreased 6.8 percent, Broadcast Division total revenues decreased less than 1 percent, and Interactive Media Division total revenues rose 37.4 percent.

In the Broadcast Division, gross time sales decreased $630,000, or 1.9 percent, mostly due to lower Political spending in this off-election year, but also reflecting soft transactional sales, particularly in the automotive category.

Local time sales increased $410,000, or 2.1 percent, primarily due to higher spending in the fast food and services categories, partially offset by lower automotive and furniture advertising. National time sales rose just under 1 percent, as a result of higher spending in the financial and telecommunications categories.

Political revenues of $545,000 compared to $1.7 million last July, and represented early campaign spending from gubernatorial and lieutenant governor races in Louisiana and Mississippi and issue advertising in Florida, Ohio, Georgia and South Carolina.

Equity Media Acquires Three NYC TV Stations

Equity Media Holdings Corporation , one of the largest owners and operators of television stations in the United States, announced that it has entered into a definitive asset purchase agreement to acquire three low power television stations in New York. Under the terms of the agreement, Equity Media will acquire the three stations (WMBQ-CA, Channel 46; WMBQ-LD, Channel 10; and WBQM-LP, Channel 3) from Renard Communications for approximately $8.0 million.

The acquisition will provide Equity Media with a distribution platform for the New York metropolitan area, the United States' largest television market.

"We are excited to be able to announce this important acquisition. New York represents a significant opportunity for Equity's growth plan, and adding these three stations will increase our nationwide footprint to 32% of the U.S. population," said Thomas M. Arnost, President and CEO of Equity Broadcast Station Group. "We look forward to determining the right programming opportunities as we access the millions of viewers in the nation's top ranked market."

Equity Media's entry into New York will also provide assets with additional digital channels and unused TV airwaves, following the anticipated FCC mandated conversion from analog to digital in early 2009, that could potentially be used by other digital applications, services and networks seeking access to the New York market, such as Equity Media's newly launched wholly owned subsidiary, Retro Television Network.

"Our acquisition of the New York station assets will provide an immediate opportunity to realize incremental value through increased content and distribution," said Beau Ferrari, Chief Strategic Officer. "In addition, these assets will give Equity a platform with multiple digital channels to attract services and networks that need to access the nation's largest market."

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COMPANY NEWS

Focus Enhancements Gets Nasdaq Deficiency Notice

Focus Enhancements announced it received a letter on August 15, 2007, from The Nasdaq Stock Market notifying the company that for the past 30 consecutive business days, the bid price of the company's common stock has closed below the minimum $1.00 per share price requirement for continued inclusion under Nasdaq Marketplace Rule 4310(c)(4).

Pursuant to Marketplace Rule 4310(c)(8)(D), the company will be provided with 180 calendar days to regain compliance with Nasdaq Capital Market’s minimum bid price requirement. To do so, the bid price of the company’s common stock must close at $1.00 or more per share, for a minimum of 10 consecutive business days, before February 11, 2008.

If Focus Enhancements does not regain compliance by February 11, 2008, Nasdaq Staff will determine whether the company meets the Nasdaq Capital Market initial listing criteria as set forth in Marketplace Rule 4310(c), except for the bid price requirement. If so, Nasdaq will notify the company that it has been granted an additional 180 calendar day compliance period.

If the company is not eligible for an additional compliance period, Nasdaq Staff will provide written notification that the company’s common stock will be delisted. The company may appeal the Nasdaq Staff’s determination at that time.

Google plans ads for YouTube

Google, which is trying to figure out how to carry ads on its YouTube service without disaffecting viewers, has unveiled its InVideo advertising programme - a vehicle for potential advertisers to reach YouTube's 130 million viewers. Trial sponsors include 20th Century Fox and Warner Music.

Sponsors and video publishers apply to participate at through YouTube. a A campaign will be designed that will appear on appropriate YouTube clips. The ads appear not as traditional 30-second "pre-rolls" but as "overlays", i.e. a message running along the bottom of the screen using up no more than 20 per cent of screen space. Fifteen seconds into a video, viewers are invited to click on the ad. If they choose to do so, the clip is paused and the ad is shown in the video window

Ex-Sony men fund hybrid

One of the most covert start-ups in Silicon Valley, codenamed Building B, has announced a round of funding. Building B is aiming to bring both television and other media content into your living room in competition with cable, satellite or IPTV services.

Building B announced a $17 million (E12.6m) round of funding by venture capital firms Morgenthaler Ventures, Index Ventures, Omni Capital and private investors. Andy Lack, the chairman of Sony BMG Music Entertainment, is joining its board of directors. The 14 month-old company was started by longtime investor and entrepreneur Buno Pati and Phil Wiser, the former chief technology officer of Sony Corporation of America.

The company appears to be developing a hybrid service. It will receive the major channels in high-definition through wireless broadcasts. Since the small firm does not own any spectrum itself, one possibility is that Building B plans to lease digital spectrum from local television stations. The Building B device will receive less popular content over a broadband Internet connection. "We see ourselves as delivering next generation of television without forcing consumers to walk over to the PC to get access to it" Wiser said.

SeaChange Q2 Conference Call

SeaChange International will announce its second quarter fiscal year 2008 financial results on Thursday, August 30 after the market close. The Company’s conference call will commence at 5 p.m. E.T. to discuss the results.

Live Conference Call/Webcast Information
Telephone: 866-322-1550 (U.S.) or 706-634-1330 (International)
Webcast: www.schange.com/IR
Replay Information – Posted until midnight, Sept. 6, 2007
Telephone: 800-642-1687 (U.S.) or 706-645-9291 (International)
Conference ID: 136-31400
Archived webcast: www.schange.com/IR

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PRODUCT NEWS

Avid Contest

Avid Technology, Inc. announced the launch of a contest that challenges students to submit their best reels for judging by today’s hottest film, TV and broadcast news professionals. Beginning August 20, 2007, students aspiring to greatness in film, video and broadcast news editing will be able to upload one-minute reels to Avid.com. All entries will be judged by a team of industry professionals, who will award one grand prize winner and two runners up in two categories – Film/Video and Broadcast News. The reels will be judged on the creative and technical merit of the editing.

Both grand prize winners will take home the coveted “Avid Billy” Award for editing, as well as a $3000 USD online credit to build their own home studio package - comprised of select Avid®, Digidesign®, M-Audio® and Softimage® products of their choice. Additionally, all grand prize winners and runners up will have their reels displayed on Avid.com and shared with Avid’s community of more than 10,000 professional customers, via various Avid promotional vehicles. Most importantly, all contestants who submit reels will have their work exposed to some of today’s most popular filmmakers, editors and news professionals.

3ality Uses Isilon IQ For 3D Broadcast

Isilon Systems has announced that 3ality Digital Systems, a pioneer in digital 3D entertainment, is using Isilon IQ clustered storage to power the creation and post-production of live-action 3D programming. Using Isilon IQ clustered storage, 3ality is able to unify, manage and access vast libraries of complex and extremely high resolution 3D programming from a single, highly scalable, shared pool of storage - accelerating and simplifying its entire digital workflow from shooting and producing, to staging programming for satellite broadcast. In the near future, 3ality, in conjunction with U2, will release "U23D," a live-action 3D film, featuring performances from U2's Vertigo Tour. The movie is the first film ever entirely shot, edited and shown in digital 3D, with production that featured the most 3D cameras ever used for a single project.

"True, all-digital 3D content is rapidly shifting from cinema's future into today's reality, and 3ality is driving this paradigm shift by dedicating our entire workflow to creating live-action, digital 3D content from initial shoot to final, satellite broadcast," said Howard Postley, CTO of 3ality Digital Systems. "Our unique production processes amplify the difficulties of storing digital content many times over, as live-action 3D imagery is much more complex and at higher resolutions than even the most advanced digital video. Therefore, we require storage with unparalleled scale, performance and ease of use and Isilon IQ delivers on all points, helping to refine our production and take our digital 3D entertainment mainstream."

Actual 3D imagery is produced by creating binocular disparity -- slightly different two-dimensional images delivered to each eye -- which are then integrated in the brain into a single three-dimensional image through a process called stereopsis. Using proprietary software running on high resolution digital cameras, 3ality is able to shoot true 3D video by producing simultaneous 2D images for each eye as shooting occurs. This raw 3D imagery is then stored directly on Isilon IQ clustered storage, where it is easily and immediately accessible online for 3ality's post-production team. Using 3Post, 3ality's proprietary production software running on Isilon IQ, 3ality analyzes mass amounts of raw imagery, automatically aligning the depth and convergence of dual, 2D image sets, creating an easy-to-view, truly unique 3D experience for the viewer. With Isilon IQ's easily expandable, high performance single file system, 3ality's production engineers are able to concurrently access and collaborate on multiple images simultaneously, speeding time-to-results while saving valuable time and resources.

"The explosion of digital content is no longer a new phenomenon, it is an everyday reality, and the results of this dramatic shift are creating groundbreaking new opportunities in digital media for pioneering enterprises to deliver never-before-seen entertainment to viewers," said Brett Goodwin, VP of Marketing & Business Development, Isilon Systems. "3ality is leading this next generation of media by capitalizing on the digital content explosion to create one-of-a-kind, digital 3D entertainment. By using Isilon IQ to unify its rapidly growing stores of 3D data into one, easy to use and highly scalable pool of storage, 3ality can accelerate its production times and ensure the world is able to enjoy the benefits of true 3D long before they thought possible."

Prior to using Isilon IQ, 3ality was unable to scale its traditional storage to match data growth demands, separating image sets into disparate silos of data and ultimately limiting workflow collaboration and vital content analysis. Additionally, traditional storage systems' lack of concurrent performance hindered 3ality's 3Post processing operations, resulting in production bottlenecks that slowed project completion times while consuming valuable IT resources. By deploying Isilon IQ, 3ality was able to unify its disparate silos of 3D content into one, single, highly scalable, easy to use, shared pool of storage, dramatically accelerating its digital 3D content lifecycle while significantly reducing costs.

Powered by OneFS, Isilon IQ delivers the industry's first single file system that unifies and provides instant and ubiquitous access to the rapidly growing stores of digital content, eliminating the cost and complexity barriers of traditional storage architectures. OneFS is a unified operating system software layer that powers all of Isilon's award-winning IQ family of clustered storage systems including the Isilon IQ 200, 1920, 3000, 6000, 9000, Accelerator, and EX 6000 and 9000. Isilon also provides a robust suite of software applications including SnapshotIQ, SmartConnect, SmartQuotas, MigrationIQ and SyncIQ that leverage OneFS and clustered storage, providing the highest levels of data protection and automated data management.

Softimage Special

Softimage is running a promotion in which animators can purchase Softimage|XSI Essentials for $1,995 (normally $2,995) and get a free upgrade to XSI 6.5. The promotion runs through September 6th.

Softimage|XSI 6.5 Essentials provides artists with the tools they need to create compelling 3D characters and content for games, film and television. New in Version 6.5, XSI Essentials includes XSI Hair & Fur, as well as Syflex Cloth (a $2,200 value). Enhancements in 6.5 include: High Dynamic Range rendermap support; additional APIs for the XSI SDK; UV editing enhancements; and enhanced audio support.

The company is also offering a special for its XSI Advanced product, which now comes with five licenses of XSI Batch rendering (a $7,475 value) for up to 36 nodes of Mental Ray rendering power.

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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.”

IBM digital media survey results

A new IBM online survey of consumer digital media habits shows audiences are more in control than ever and increasingly filtering marketing messages. The global findings suggest time spent on personal Internet use rivals TV time. Among respondents, 19 per cent stated spending six hours or more per day on personal Internet usage, versus nine per cent of respondents who reported the same levels of TV viewing. 66 per cent reported viewing between one to four hours of TV per day, versus 60 per cent who reported the same levels of personal Internet usage.

To effectively respond to this power shift, IBM sees advertising agencies going beyond traditional creative roles to become brokers of consumer insights; cable companies evolving to home media portals; and broadcasters and publishers racing toward new media formats. Marketers in turn are being forced to experiment and make advertising more compelling.

"Consumers are demonstrating their desire for both wired and wireless access to content: an average of 81 percent of consumers surveyed globally indicated they've watched or want to watch PC video, and an average of 42 per cent indicated they've watched or want to watch mobile video," said Bill Battino, Communications Sector managing partner, IBM Global Business Services. "Given the rising power of individuals and communities, media and entertainment industry players will have to become much better at providing permission-based advertising and related consumer-driven ratings services."

The steady growth of consumer adoption of digital music, video, and other entertainment services, show households are no longer "one size fits all," and content providers and marketers must follow suit. Twenty-three per cent of respondents reported using a portable music service; seven percent reported having a video content subscription for their mobile phones; 11 per cent reported a PC-based music service; and 18 per cent reported an online newspaper subscription.

Saul Berman, IBM Media & Entertainment Strategy and Change practice leader said, "The Internet is becoming consumers' primary entertainment source. The TV is increasingly taking a back seat to the cell phone and the personal computer among consumers age 18 to 34. Just as traditional land lines have been replaced with mobile communications, cable and satellite TV subscriptions risk a similar fate of being replaced as the primary source of content access."

The IBM Institute for Business Value survey of more than 2,400 households in the United States, United Kingdom, Germany, Japan and Australia covered global usage and adoption of new multimedia devices and media and entertainment consumption on PCs, mobile phones, portable media players and more

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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