Insider Reporter

Insider Report

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

w/e December 12, 2007 SCRI International, Inc © 1984 - 2007


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GOA Says US lacks plan for DTV switch

US regulators have "no comprehensive plan" for preparing TV viewers for the approaching switch-over to digital television, according to a congressional study.

The study by the Government Accountability Office took issue with the Federal Communications Commission for lacking an overall strategy for the February 17, 2009 switch, which will require broadcasters to change to digital signals. "Despite efforts by the public and private sectors and ongoing coordination, we found that no comprehensive plan for the transition exists," the GAO said.

Blu-ray & HD DVD Sales: Pitiful

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

In reviewing the news related to the high def format war last week, I was struck by the announcement from the Blu-Ray Disc Association (the BDA), that 4 million Blu-Ray discs have been sold in 2007 compared to 2.7 million on HD-DVD. This Blu-Ray release was released in response to one from the HD-DVD camp concerning the uptick in sales of HD-DVD players and that there have been 750,000 HD-DVD players sold in the US to date, including the X-Box 360 add on. As always, you must take the PR releases from all sides in the format war with a huge grain of salt.

However, there was one fact stated in this release which has gotten little notice, namely the quoted sales figures. Let’s for a moment accept them as true. While 4 million Blu-Ray discs sold is better than 2006, it means that all of the BD discs sold in 2007 don’t even total the sales figures for one major DVD release like Transformers or 300. That’s right, ONE DVD release in 2007, just one, has outsold the entire number of Blu-Ray and HD-DVD’s sold in 2007. How pitiful is that? It just shows how small the HDM market is these days and that the real threat to high def optical medium is not the war but DVD. Stop crowing about your sales figures guys. Neither amounts to a hill of beans. Sales figures will continue to be small until the price of the players goes under $100.00 and the price of discs under $20.

My second item is a pet peeve of mine and relates to the use of trailers on Blu-Ray and HD-DVD discs. One must sit there on some discs and toggle through what seems like an endless string of trailers for movies currently in theaters or soon to be in theaters or already released on HD or BD or soon to be released. The worst offender is Disney. My God, it almost takes 5 minutes to toggle ahead of these trailers to get to the menu. which, of course, can take another couple of minutes to come up.

A memo to the folks at Disney: drop the forced trailers. But them in the extras so we can look at them if we want to. Let us watch the movie we paid for first. Have the menu boot up first. Some studios do this with Paramount and Universal being two. The responsiveness of both format players can be slow enough. Why add to the misery, especially when we are only going to fast forward through them anyway?

Finally, am I the only one sick and tired of the misleading HD ads on TV from the cable companies? Yes you Comcast. They run an ad claiming that they have more HD “at any given moment” than any other provider, including DIRECTV. While that may be true, it is only true because of their HD VOD offerings, most of which could have been recorded off your DVR, or were already shown, or require a fee to be paid or are not very worthwhile at all. What is not true is that Comcast has more linear HD channels than DIRECTV, which would seem to be what most listeners or viewers would assume listening to these ads.

How about less misleading ads Comcast? Tell the viewers or listeners that you don’t have as many HD channels but a lot more HD VOD and crow about the quality of your picture vs. DIRECTV, Just don’t leave the impression that you have more HD channels as that is not true. Take a page from Verizon’s FiOS which now notes it is adding HD VOD and will add more HD channels in 2008. While I would prefer more HD channels now, at least they don’t try to claim that the HD VOD they are adding are the equal to Directv’s growing HD lineup.

Cable Survey Shows DTV Awareness Up but Education Needed

There’s growing awareness of the nation’s February 2009 transition to digital television by TV broadcasters, yet the group of Americans with the lowest level of awareness about the transition includes those that are most deeply affected – households that receive television programming exclusively “over the air.”

These are among the results from the CTAM Pulse, a nationwide survey of more than 1,000 U.S. consumers conducted last month by the Cable & Telecommunications Association for Marketing (CTAM), an association of cable industry marketing executives. CTAM is a member of the DTV Transition Coalition, a group created to educate consumers about the digital transition.

After February 17, 2009, the nation’s broadcast television stations will begin broadcasting exclusively in digital. This means that any consumer receiving broadcast TV over the air on an older analog TV set must take some action for that TV to continue receiving programs from the local TV stations. Those options include obtaining a new digital-to-analog converter; subscribing to cable TV or other multichannel video service, or replacing the analog TV set with a new one equipped with a digital TV tuner.

Major findings of the CTAM survey show that:

  • Forty-eight percent of U.S. households are aware of the digital TV transition, compared to just 29 percent from a survey taken in July 2005;
  • Groups most familiar with the transition are subscribers to broadband services (45 percent), digital cable service (40 percent), and basic cable service (39 percent);
  • Seventeen percent of survey respondents – representing more than 19 million homes – don’t have any televisions connected to a video service provider.
  • Households that don’t have any televisions connected to a video service provider were least familiar with the transition at 31 percent;
  • The survey also indicates how much work remains in educating American consumers about the transition. Forty-seven percent of respondents said they do not know when the digital transition will occur, and 26 percent believe it will take place sometime other than the designated year 2009.

    “In the months ahead, cable companies will reassure their customers that all connected analog sets will continue to display the new broadcast digital TV signals seamlessly. In addition, companies will be aggressively communicating with all consumers to alert them to the transition, help them understand what will happen in 2009, and how they can benefit from this further transition to digital television technology,” said Char Beales, President and CEO, CTAM.

    Other key findings of the survey that will help guide cable’s consumer education campaign on the DTV transition include:

  • Of those who are aware of the DTV transition, 38 percent said they’d learned about it from TV; 26 percent had read of it in the newspaper; and 20 percent had heard about it from friends or family.
  • Fifty percent of households that watch TV exclusively over the air said they don’t know where to turn for information about the transition.
  • The majority of households that currently receive cable, satellite or any other TV service have all their TV sets connected to some type of TV service – and therefore are unlikely to need digital-to-analog converters to keep their analog TV sets working. However, 25 percent of these “connected” households – or 23.3 million homes – said they also have at least one or more “unconnected” sets in their homes.
  • Two-fifths (40 percent) of households with an unconnected television set said they use those sets to watch broadcast TV programs only; 22 percent use them to watch DVDs; and 16 percent use them for video games.

    The industry groups and government organizations that have united to form the DTV Transition Coalition are providing a variety of consumer information services to help educate consumers about their options in the transition. Extensive information is available the Coalition’s principal website at

    $10 Billion Mobile Video Messaging Opportunity for 2012

    Mobile video messaging services are at the center of the technology convergence that is helping mobile customers realize greater levels of self-expression and online community participation, according to a new report by ABI Research. According to principal analyst Dan Shey of ABI Research, “Mobile video messaging is perfectly positioned to take advantage of the convergence of increased mobile device capabilities and consumers’ desire for broader communication options beyond voice. In fact, we expect the opportunity for mobile video services to produce a compound annual growth rate of nearly 60%, amounting to $10 billion in 2012.”

    But mobile video messaging is just part of a much bigger portfolio of mobile video services that includes video calling, video sharing, and mobile TV services. The complexity of the mobile video value chain affects mobile equipment and service suppliers not only in industrialized countries but also in developing regions of the world.

    Given such complex conditions, ABI Research has created forecasts for uptake of mobile video messaging and telephony services for eight regions of the world: North America, Western Europe, Asia Pacific-Developed, Eastern Europe, Latin America, Asia Pacific-Developing, Middle East, and Africa.

    The industrialized parts of the world with the highest concentration of advanced video devices will see the greatest uptake of mobile video services. However, don’t discount the developing regions. Says Shey, “Social networking sites such as Orkut are very popular outside of the US and Europe. Mobile video messaging will facilitate mobile content delivery using a growing base of video recorder devices and established 2.5G networks.”

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    HDNet, DirecTV Settle in Court

    After weeks of wrangling over DirecTV 's carriage of HDNet, the two sides have worked out a deal. Last week, HDNet settled its lawsuit with DirecTV, which was filed after the DBS service was preparing to put the high def channel into a tier of "HD-only" channels. The deal keeps HDNet on DirecTV 's main HDTV platform.

    The move also puts to an end HDNet's complaints about the dispute and its efforts to tie conditions to Liberty Media's pending takeover of DirecTV, something the high def programmer operated by Mark Cuban was pursuing at the Federal Communications Commission.

    AT&T boosts dividend, plans buyback

    AT&T Inc. this week raised its dividend 12.7 percent, announced a share buyback and set a long-term target for its TV service, which is delivered over phone lines, saying it will be available to 30 million customers by 2010.

    At a conference with analysts in New York, AT&T touted a turnaround in its once-shrinking business of serving corporate clients, as well as strong performance from its wireless division. It expects revenue to grow around 5 percent next year.

    The company said it will buy back 400 million shares, which represent about 7 percent of the company's stock, would cost $15.16 billion. AT&T said it expects to complete the repurchase by the end of 2009.

    The company said the new repurchase plan supersedes an existing one announced in 2006. AT&T bought $13 billion in shares under that authorization.

    CNN on YouTube

    The CNN branded channel on YouTube, which features newly extracted content from the channel, is now available to users across Europe, the Middle East and Africa. This move complements a suite of new products and services that CNN and other Turner brands have been rolling out across mobile, web and IPTV platforms this year.

    Sinclair Opposes FCC's NAL

    Sinclair Broadcast Group, Inc. announced that it had recently filed an opposition with the Federal Communications Commission (FCC) to the Notice of Apparent Liability (NAL) issued by the FCC on October 18, 2007. In the NAL, the FCC accused a number of Sinclair stations of failing to comply with disclosure rules regarding political announcements as a result of the broadcast by these stations of an episode of the nationally syndicated, public affairs program "America's Black Forum." "Broadcasters should be very concerned about the Notice of Apparent Liability issued against Sinclair in this matter," stated Barry Faber, Sinclair's Vice President and General Counsel, "because of the dangerous precedent which it would set. To our knowledge the FCC's political disclosure rules have never before been used to fine a television station for airing a public affairs program simply because a paid guest on the program may have received payment from a third party with an interest in what that commentator had to say." Mr. Faber noted further that, "It is simply unworkable and unreasonable to expect broadcasters to interrogate every guest who appears on a public affairs show produced by a third party in an attempt to determine whether the views expressed were in any way influenced by consideration received by the guest. We are hopeful that once the FCC understands the impossibility of avoiding the situation complained of in the NAL, the lack of knowledge by Sinclair about the underlying facts which prompted the NAL and the erroneous factual assumptions which apparently underlay the issuance of the NAL, that it will be rescinded."

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    Network Electronics Acquires Video Products Group

    Network Electronics announces that it has signed a definitive agreement to acquire Video Products Group Inc. of Oxnard, California, USA. The transaction is expected to close in January 2008.

    Founded in 1985, Video Products Group® (VPG) is a leading provider of professional video/audio transport systems for local and wide area networks that employs approximately 60 people world-wide. Video Products Group is well respected in the telecommunications industry through its highly reliable carrier class transport equipment and outstanding customer care. Major carriers around the world rely on VPG for video transport and broadcast services.

    The agreement combines two companies to form a powerful player in the professional video and audio signal transport markets. The deal enables Network Electronics to increase its scope and scale with the industry’s most comprehensive product portfolio for the professional video transport market.

    “The video market is presently undergoing rapid consolidation and convergence, and it is critically important that companies can choose video transport solutions that bridge the telco and broadcast worlds and maximize future flexibility. By bringing together VPG’s technology and video transport expertise with Network Electronics proven solutions, we are able to create a best-in-class offering for video transport solutions. Moreover, VPG’s strong telco customer base, combined with Network Electronics extensive global market presence, adds significant momentum to Network Electronics with increased critical mass and greater opportunities for future growth.” says Oddbjřrn Bergem, CEO, Network Electronics.

    The new combined product offering will be unique in its functionality, features and breadth, enabling telcos and broadcasters to build complete video transport systems from a single source. This end-to-end suite of video transport solutions enables broadcasters and carriers to build intra-facility networks and long distance contribution, production and content distribution networks over IP, SDH/SONET and CWDM and DWDM.

    “The combination of the technology and talented employees of Network Electronics and Video Products Group creates a world class company and provides enhanced future opportunities for all our customers, partners and employees,” says Helen Keane, CEO, Video Products Group.

    STMicroelectronics To Acquire Genesis Microchip

    STMicroelectronics and Genesis Microchip Inc. announced that they have entered into a definitive agreement for STMicroelectronics to acquire Genesis Microchip. The acquisition confirms STMicroelectronics as a leading System-on-Chip (SoC) technology provider to the rapidly growing digital television and display markets.

    Under the terms of the agreement, STMicroelectronics will commence a cash tender offer to purchase all of the outstanding shares of Genesis Microchip Inc. for $8.65 per share, net to the holder in cash, implying a total equity value of approximately $336 million. Following completion of the tender offer, STMicroelectronics will complete a second-step merger in which any remaining common shares of Genesis Microchip Inc. will be converted into the right to receive the same per share price paid in the tender offer. The offer price represents a premium of 60% to Genesis Microchip's closing share price on Monday, December 10, 2007 and 26% to the average closing share price during the last sixty trading days prior to this announcement. During the twelve months ended September 30, 2007, Genesis reported revenues of $191 million. As of September 30, 2007, Genesis Microchip's cash and cash equivalents and short-term investments totaled approximately $183 million. STMicroelectronics will finance the acquisition using existing cash on its balance sheet.

    Through this acquisition, STMicroelectronics expects to expand its leadership in the $1.5 billion digital TV market, one of the fastest growing segments in consumer semiconductors. Genesis Microchip will enhance STMicroelectronics' technological capabilities for the transition to fully digital solutions in this segment and strengthen its product and intellectual- property portfolio.

    Technetix and Arris together

    Technetix Group has entered into an engineering and co-marketing agreement with the Arris TeleWire Supply division of Arris Group. Arris entered the exclusive agreement with Technetix to expand its Regal brand portfolio of drop materials. The newly branded Regal by Technetix series of splitters, taps, in-home active and in-home networking products will include the patent pending, Technetix Ingress Safe technology, which effectively reduces subscriber return channel ingress noise in broadband cable networks.

    "This is an exciting new product suite being introduced into the American cable industry," said Bob Puccini, Arris TeleWire Supply President. "This alliance has created the new Regal by Technetix product line that will change the way our customers battle ingress noise in the future. This is the only product of its kind in the industry and we look forward to showing our customers its clear advantages."

    "We are pleased to have the opportunity to combine our Technetix Ingress Safe technology with the Regal brand while leveraging Arris’ broad reach in sales, marketing and logistical support in our target markets," said Paul Broadhurst, Technetix Group CEO.

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    Broadcast International Inks Deal with IBM for Breakthrough Video Compression Technology

    Broadcast International announced a new license agreement with IBM. The agreement covers BI’s patented CodecSys video compression software running on IBM’s Cell Broadband Engine™ (Cell/B.E.) multi-core processor and the IBM BladeCenter® QS21 server. The combined technologies promise to change the video distribution world by making it possible for cable, satellite or IPTV providers to deliver live HDTV at compression levels four to six times higher than is currently possible. For example, HD video could be delivered at 3 Mbps (in h.264) instead of 19.4 Mbps (in MPEG-2) transport stream.

    CodecSys, bundled with BladeCenter QS21, will be targeted at customers seeking digital content distribution infrastructure solutions such as video backhaul (capturing camera feeds from one location, e.g., a stadium, and moving it back to the studio). The key building blocks of this solution, the multiple codecs running on Cell/B.E., will also be made available through licensing to IBM business partners such as OEM equipment manufacturers to integrate with their traditional encoding solutions and improve their flexibility beyond traditional digital signal processors.

    Digidesign Announces Over 10,000 Downloads for Pro Tools 7.4

    Digidesign announced that it's new Pro Tools® 7.4 software has already surpassed the 10,000 mark in downloaded purchases. This milestone was reached last Saturday (December 1, 2007), after only 25 days on the market.

    Digidesign Pro Tools is used worldwide for digital sound recording, editing, mixing, and MIDI sequencing, and is deployed extensively throughout the music, film, multimedia, television, and radio broadcast industries.

    “Digidesign is fortunate to have grown one of the largest and most loyal user communities in the professional audio industry,” remarked Dave Lebolt, Avid vice president and general manager of Digidesign. “Their allegiance and dedication inspires us to continue to raise the bar as Pro Tools has evolved and grown. Achieving this milestone is extremely gratifying, and is a testament to the importance of Pro Tools to professionals and hobbyists alike from all over the world.”

    Pro Tools 7.4 software has been updated with numerous music and post-production features and workflow enhancements for users of Pro Tools|HD®, Pro Tools LE®, and Pro Tools M-Powered™ systems. Included among them is a powerful, multifaceted new music composition and production tool called Elastic Time, plus improved networking compatibility with industry-standard Avid® video systems, including Avid Unity ISIS® shared storage systems, and expanded support for Avid video workflows.

    Pro Tools 7.4 software is currently available for Windows XP- and Mac OS X 10.4-based Pro Tools|HD systems as well as Windows XP-, Windows Vista-, and Mac OS X 10.4-based Pro Tools LE and Pro Tools M-Powered systems. Expanded Windows Vista and Mac OS X 10.5 (Leopard) support will be announced later.

    NVISION Launches NAB 2008 Technology Roadshow

    NVISION, a provider of router control, and master control systems for TV broadcast and post production, announced the launch of its NAB 2008 Technology Roadshow that will travel to 15 U.S. cities from January 28 through March 24.

    The NAB 2008 Technology Roadshow includes NVISION’s latest HD-ready technologies for routing systems, multi-channel master control, and modular signal processing. With the FCC mandate of February 17, 2009 to cease analog transmissions on the horizon, the roadshow is targeted for all broadcasters to provide immediate information and hands-on demonstrations about systems that will help them migrate from analog to digital broadcasting in a cohesive, highly scaleable, and cost-effective manner.

    “With little more than a year remaining before over-the-air analog transmissions will cease, all broadcasters need to seriously consider upgrading their station’s infrastructure to prepare for an all digital future. The sooner they upgrade their facilities, the sooner they can take advantage of the digital and HD technologies for revenue growth,” said Jay Kuca, director of product management at NVISION. “And with many broadcasters facing time and budget constraints, taking the latest technologies directly is of direct value to them.”

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    Blackmagic Design Appoints Stuart Ashton Business Development Manager for Europe

    Blackmagic Design announced the appointment of Stuart Ashton as Business Development Manager for Europe, effective immediately. Blackmagic Design manufactures the world’s highest quality video cards, converters and routers for the post production and television broadcast industries.

    Ashton will be responsible for sales, business development, customer service and field support for Blackmagic Design in Europe. He brings wide experiences in editing, sales & marketing and logistical operations.

    Ashton has previously worked with Thomson Grass Valley and Reflecmedia, and holds a B.A. in Television Production from Manchester Metropolitan University.

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  • NEW: 2007-2009 HDTV / Digital Trends Report This extensive 75 page report includes an Executive Summary, followed by an analysis, charts and tables of how the broadcast / professional video marketplace equipment endusers respond to the key HDTV / Digital Video Trends -- click to view table of contents

  • 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. 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.

    Weak Q3 STB sales

    According to researcher Dell’Oro Group, the worldwide set-top box market contracted 2 per cent on a sequential basis in the third quarter of this year. Despite strong growth in the IPTV and satellite set-top box market that was not enough to offset the decline in the cable market.

    "Cable operators slowed their acquisition of set-top boxes in the third quarter after having accelerated purchases of mostly standard definition set-tops in the first half of 2007 when they were striving to convert analogue subscribers to digital services before the FCC’s July 1st deadline that required that set-top boxes contain separate security modules," commented Greg Collins, Vice President at Dell’Oro Group. "Because cable operators increased their purchases of set-tops ahead of demand, thereby building inventory, they had much less of a need to purchase new set-tops in Q307," added Collins.

    The report indicates that satellite set-top box market revenues grew faster than unit shipments in the third quarter as consumers continued to focus on high definition and DVR products and services. The IPTV set-top market grew in the mid-teens on a sequential basis on both a revenue and unit shipment perspective during the third quarter as well.

    TV heads Internet viewing

    A majority of US adult Internet users watch video online during a typical week, with TV programming ranking as the most popular content, according to a survey by Choicestream.

    The survey found that 55 per cent of those surveyed watch online video each week, with 65 per cent of that group reporting that they regularly watch traditional TV programming. Overall, 39 per cent of 824 respondents said they watch TV on an alternate device, with the computer by far the most popular non-traditional method. 20 per cent of consumers said they would watch more online TV during the next six months, with 55 per cent of that group saying that would come at the expense of traditional TV viewing.

    Online video viewing is higher among younger respondents, with 66 per cent of those between ages 18-24 saying they watch online video and about 70 per cent of respondents ages 18-34 saying they watch TV on the Web.

    Among those who watch TV on their mobile phones, 47 per cent said they watch at least four hours per week. And 37 per cent of consumers who watch TV on digital-media players like iPods watch at least four hours.

    User-generated content was a distant second to TV in terms of what respondents watch online, with fewer than 40 per cent saying that they regularly watch that type of material. Consumers ages 18-24 watch the most, with about 45 per cent responding that they regularly watch online user-generated content

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