Insider Reporter


Insider Report

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

w/e December 28, 2008 SCRI International, Inc © 1984 - 2008

INDEX

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

TECHNOLOGY NEWS

Explosive Growth for Worldwide Telco TV Services in 2008

According to a new report from Research and Markets, Telco TV continues to grow as new players around the world get on the bandwagon and existing players increase their footprint, penetration, content, and range of services. The report discusses key players including AT&T, Verizon, France Telecom, Telefonica, Deutsche Telecom, China Telecom as well as other incumbent and emerging operators around the world. The discussion covers not only what they are doing but also how successful they have been and what they face in terms of competition.

While triple play has always been the name of the game, increasingly quadruple- as well as double- and single-play offerings are coming on to the scene. Catch-up TV has gained tremendous popularity around the world. And convergence applications are emerging as Microsoft's Mediaroom platform gains traction.

Content is, at the same time, going more international, ethnic, and local. While this seems like a contradiction, the name of the game is finding content that niche markets are willing to pay for. This year saw a clear trend toward content geared toward immigrant populations, especially in Western Europe. In small towns in North America, there are interesting experiments that revolve around producing very local content. And around the world, the appeal of global giants, like Disney and Sony Pictures, cannot be denied. Spreading content across as many platforms as possible is motivating players to introduce PC and mobile phone-based video offerings that complement their telco TV offerings.

This report discusses where telco TV services are growing, who is providing telco TV, how successful they have been to date, and what types of services are being offered. Worldwide five-year forecasts for subscribers and subscription revenues based on ARPU are included.

Highlights:

  • Telco TV subscribers will grow five-fold to 71.6 million worldwide by 2012.
  • Quadruple-, double-, and single-play packages are joining triple-play offerings.
  • Interactive and convergence features linking TVs with PCs and mobile phones are emerging.
  • Content remains king and is at the same time going international, ethnic, and local.

    Open IPTV Forum reaches 50

    Over 50 organisations are now involved in the initiative to accelerate deployment of IPTV. The OIPF, a pan-industry initiative established in 2007 to produce end-to-end solution specifications to open up access to interactive and personalised IPTV services, has again significantly increased its membership.

    OIPF has revealed the addition of 8 new members. These organisations join the founding members - Ericsson, FT Group, Nokia Siemens Networks, Panasonic, Philips, Samsung, Sony Corporation and Telecom Italia - and a host of other IPTV industry stakeholders, to bring the total membership to 52.

    The new members are: Advanced Digital Broadcast Holdings, BBC, Digisoft TV, FOKUS, Group Canal Plus, MediaTek, RAI and SK Telecom

    Internet Media Device Alliance Formed

    A number of the world’s leading streaming media companies have recently joined together to create a new industry forum called the Internet Media Device Alliance. The IMDA has been formed with the aim of developing and promoting a set of open, interoperable standards and device profiles in order to maximise the growth of a global consumer market in Internet-connected media devices.

    “It’s clear that the time has come for Internet media device companies, broadcasters and content providers to join forces to present a clear message to assure the consumer that Internet radio products are produced and delivered to a certain industry standard,” states Harry Johnson, chairman of IMDA.

    One of the key activities of the Alliance will be to define a series of end-to-end technical standards, functions and profiles to encourage the development of a wide range of Internet media devices. Other objectives include the promotion of Internet-connected device technology to consumers and retailers both within and outside the IMDA. Membership is open to consumer electronics OEMs, retailers, radio broadcasters, content aggregators, online music service providers, device manufacturers and technology providers.

    Nick Piggott, Head of Creative Technology, Global Radio, comments, “We’re pleased to support the foundation of an industry body that will foster agreement on technology between manufacturers and broadcasters, whilst still allowing us to consistently deliver a competitive content experience to connected media devices.”

    The number of Internet-connected media services is rapidly proliferating, representing a diverse range of offerings including: broadcast radio stations, personalised music services, podcasts, on-demand content and on-demand jukebox services. With so many varied services available, it is becoming increasingly important for consumers to be able to confidently purchase a device that works simply and reliably with their favourite content provider. The IMDA Certification and Logo programme will provide increased confidence to consumers and retailers, and allow manufacturers to clearly and consistently co-market their support for such services.

    The nascent membership of the IMDA represents this diverse media eco-system, including representatives from the leading radio broadcasters, music services, technology providers and device manufacturers, bringing an unparalleled breadth and depth of expertise to the new body. In addition to the process of standardising the technology base, the IMDA plans to bring consistency to the marketing of internet connected devices, increasing consumer awareness, understanding and willingness to purchase.

    The inaugural meeting of the IMDA coincides with the annual Consumer Electronics Show in Las Vegas, NV in January 2009. All interested parties are invited to attend the meeting, which will be on the morning of January 9th at the MGM Grand Hotel. The detailed agenda and registration details are available on the IMDA website (www.imdalliance.org).

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    INDUSTRY NEWS

    Media General Nov 2008 Revenue Down

    Media General, Inc. released its monthly revenues report for November 2008. Total company revenues of $65 million compared with $75.8 million in November 2007. The year-over-year decrease of 14.2 percent was primarily attributable to lower Publishing Division revenues, which decreased 17.9 percent, mostly the reflection of a prolonged weakness in newspaper Classified advertising. In the Broadcast Division, revenues declined 10.7 percent, as Political advertising only partially offset lower Local and National time sales. Interactive Media Division revenues grew 7.4 percent, due to a 38 percent increase in Local online advertising and revenues from DealTaker.com, acquired on March 31, 2008.

    "Political revenues in November totaled $2.5 million and were driven by presidential campaign advertising, particularly in Florida, North Carolina and Ohio; U.S. congressional races in Ohio, Georgia, North Carolina, Mississippi and South Carolina; state elections in Ohio; and issue spending in Ohio, Florida, Georgia, North Carolina and Mississippi," said Marshall N. Morton, president and chief executive officer.

    Broadcast gross time sales decreased $6 million, or 18.9 percent. Local time sales decreased $4.5 million, or 23.2 percent, and National time sales declined $3.1 million, or 26.5 percent. Lower spending in the automotive, specialty stores and service categories drove the decline in Local and National transactional advertising.

    Warner pulls YouTube content

    Warner Music Group said it will remove all its videos and songs from Google’s YouTube Web site after renegotiations over royalties failed.

    Thousands of videos from artists including Madonna and Metallica, as well as content from Warner’s music- publishing division, will be taken down, Warner said. Under an agreement reached in September 2006, New York based-Warner received revenue from advertisements and other royalty payments from video streaming, however they wanted an improved deal and negotiations have failed.

    "We simply cannot accept terms that fail to appropriately and fairly compensate recording artists, songwriters, labels and publishers for the value they provide," Warner Music said n a statement.

    Vivendi’s Universal Music Group, Sony and EMI are also in re-negotiation talks with YouTube. Viacom, meanwhile, is suing You Tube for $1 billion for copyright infringement

    Online Video Report

    comScore released October 2008 data from the comScore Video Metrix service, reporting that U.S. Internet users viewed 13.5 billion online videos during the month, representing an increase of 45 percent versus year ago.

    In October, Google Sites once again ranked as the top U.S. video property with nearly 5.4 billion videos viewed (representing a 40 percent share of all videos viewed), with YouTube.com accounting for more than 98 percent of all videos viewed at the property. Fox Interactive Media ranked second with 520 million videos (3.8 percent), followed by Yahoo! Sites with 363 million (2.7 percent), and Viacom Digital with 305 million (2.3 percent). Hulu, a joint venture of NBC and Fox featuring full-length broadcast TV programs, ranked sixth with 235 million videos viewed (1.7 percent).

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    COMPANY NEWS

    Harmonic To Acquire Scopus

    Harmonic and Scopus Video Networks Limited have signed a definitive agreement pursuant to which Harmonic will acquire Scopus. The acquisition will extend Harmonic's worldwide customer base and strengthen its market and technology leadership, particularly in international video broadcast, contribution and distribution markets.

    Under the terms of the definitive agreement, which has been approved by the Board of Directors of both companies, Harmonic will pay $5.62 in cash for each outstanding share of Scopus, representing an enterprise value of approximately $51 million, net of Scopus' cash and short-term investments. The proposed acquisition is subject to customary conditions, regulatory approvals and the approval of Scopus' shareholders, and is expected to close in the latter part of the first quarter of 2009. Harmonic has received voting agreements supporting the proposed acquisition from shareholders representing approximately 50% of Scopus' outstanding shares.

    Harmonic expects to realize cost synergies upon full integration of Scopus of $8-10 million on an annualized basis, making the transaction accretive to Harmonic's non-GAAP earnings in 2009, exclusive of the amortization of intangibles and non-recurring charges such as restructuring and transaction costs. Harmonic will determine the appropriate purchase accounting for the transaction at closing and, accordingly, cannot reasonably estimate the impact on GAAP earnings at this time. See "Use of Non-GAAP Financial Measures" below.

    For the first nine months of 2008, Scopus reported revenues of $55.4 million, an increase of 35% over the comparable period of the prior year. Approximately 79% of these revenues were outside the United States, with no single customer representing more than 10% of total revenues. Scopus has approximately 300 employees worldwide.

    "This acquisition extends Harmonic's diversification strategy, providing us with an expanded international sales force and customer base, particularly in video broadcast, contribution and distribution markets, as well as complementary video processing technology and expanded research and development capability," said Patrick Harshman, President and Chief Executive Officer of Harmonic. "Like Harmonic, Scopus has strong gross margins and a proven track record of innovation and growth. By combining our two companies, we see significant opportunities for product, sales and cost synergies."

    "The combination of Harmonic and Scopus will further extend Harmonic's video delivery leadership," said Yaron Simler, Chief Executive Officer of Scopus. "Harmonic brings its powerful customer relationships, brand reputation, technology leadership and financial resources. Scopus brings its highly skilled employees, proven distribution channels, strong customer relationships and sales momentum in emerging international markets. Scopus' exciting new video products, including our next generation integrated receiver processor (IRP) platform, are a great fit with Harmonic's portfolio of industry-leading products and solutions. We see this transaction as very beneficial for the customers and employees of both companies."

    Panasonic to buy majority of Sanyo

    Panasonic Corp. has reached an agreement to purchase stakes in Sanyo Electric Co. held by Goldman Sachs, Daiwa Securities SMBC Co., and Sumitomo Mitsui Banking Corp., the three financial firms with major holdings in the electronics group, according to reports Thursday .

    Panasonic will pay 131 yen ($1.49) per share for the roughly 70% stake held by three financial firms, for a total of 560 billion yen, according to reports by the Nikkei newspaper and Dow Jones Newswires, neither of which identified its sources.

    The deal values Sanyo, a home appliance and consumer electronics maker, at about 800 billion yen. Panasonic, a world giant in consumer appliances and digital electronics, will make a tender offer for Sanyo shares held by individual investors in February, and will seek to transform it into a subsidiary by the end of March, according to reports.

    Goldman Sachs agreed to sell its stake after senior members of the firm met with their Panasonic counterparts in Tokyo Wednesday, according to reports. Daiwa Securities SMBC Co. and Sumitomo Mitsui Banking Corp. had appeared willing to accept the earlier offer for its stakes.

    The deal would mark the biggest acquisition of its kind between two Japanese electronics groups and could herald the emergence of a global powerhouse in goods ranging from flat-screen televisions to notebook computers and environmental technologies.

    Panasonic, formerly know as Matsushita Electric Works, has forecast fiscal 2008 sales of 8.5 trillion yen while Sanyo's are projected at 2.02 trillion yen. Combined sales from the merger would rival those of electronics and electrical machinery maker Hitachi Ltd. (HIT:Hitachi, Ltd. , which ranks as Japan's largest in the sector. Hitachi has forecast sales this fiscal year of 10.9 trillion yen.

    Panasonic is believed to be interested in Sanyo's rechargeable battery and solar panel business as potential growth markets.

    In 2006, Goldman and the two other Japanese financial institutions purchased about 300 billion yen of preferred shares in the financial-ailing Sanyo which could be converted into common stock at 70 yen per share.

    Goldman considered its options as a minority shareholder, but decided to pull out after concluding share prices could tumble in the current volatile market and that it could not take the risk of building additional stakes in Sanyo through market purchases or direct purchases from other shareholders, Dow Jones Newswires reported. The three firms had an option to buy out the other shareholders, an action that could have been used to block an acquisition.

    Goldman's position was also in question after it reported earlier in the week its first quarterly loss since going public in 1999.

    Panasonic's board will hold an official meeting on the acquisition Friday, but the proceeding appears to be a formality.

    In the lead up to the agreement, Panasonic had offer offered 120 yen per share in November, which it later lifted to 130 yen in early December. Goldman had called earlier called the 130-yen-per share bid too low.

    Macrovision buys TV Guide Network

    Macrovision Solutions Corporation, a digital entertainment specialist, has reached an agreement to sell its TV Guide Network property to Allen Shapiro and One Equity Partners for approximately $255 million, plus up to an additional $45 million payable through earn-out provisions through 2012. The transaction, expected to close no later than April 1st, 2009, includes the TV Guide Online (tvguide.com) business.

    TV Guide Network is the 19th most distributed network and available in 83 million homes. TV Guide.com is one of the fastest-growing online entertainment destinations with over 15 million monthly unique visitors

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    PRODUCT NEWS

    LCD TV sales plummet

    In 2009, worldwide revenues for liquid crystal display (LCD) TVs are expected to fall for the first time since the category was launched, market research firm DisplaySearch said. They forecast LCD television revenues would fall 16 per cent year-on-year to $64 billion in 2009, with total TV revenues expected to decline 18 per cent to $88 billion.

    "DisplaySearch expects that 2009 will be the most difficult year yet for the TV industry and supply chain," the research firm said. The LCD TV market is expected to reach 102.2 million units in 2008, a 29 per cent year-on-year growth, but the figure represents a reduction of 3.6 million from a previous forecast. For 2009, DisplaySearch predicts the LCD TV market will grow 17 per cent to 119.9 million units, 11.5 million units less than previously forecast.

    As for plasma display (PDP) televisions DisplaySearch predicted growth of 24 percent year-on-year to 13.9 million units in 2008. The segment is expected to grow by 5 percent in 2009 to 14.6 million units, lower than a previous forecast, primarily due to the rapid decline in prices of 32-inch LCD TV.

    Avid Introduces Next-Generation Avid Active Content Manager

    Avid Technology, Inc. unveiled Avid Active™ ContentManager 3.0, a solution for broadcasters looking to simplify multi-channel news workflows and create more revenue opportunities by broadening the delivery of content to the Web, wireless devices and other IP-based distribution points. Avid Active ContentManager 3.0 allows broadcasters to efficiently and effectively build Web and mobile audiences by enabling automatic creation and repurposing of broadcast news content (audio, video and graphics) with minimal effort and cost.

    “More people are getting their news on the fly, and pushing stories to mobile devices and the Web are becoming critical channels for us to capitalise on additional revenue streams. We need to be able to move content quickly, without having to rebuild our infrastructure,” said Brian Cottle, system administrator at KOMU TV8 in Missouri. “With Active ContentManager, our staff can easily publish video, audio and graphics material to our station’s Website with a few clicks, and it doesn’t break the budget. We’ve been able to leverage a lot of the infrastructure we have in-house and turn around content very quickly and that has helped us keep a competitive edge.”

    “Avid Active ContentManager gives broadcasters the flexibility and creative control to more effectively build online audiences and additional Web-generated revenue, and it works with just about any news environment.” said Jim Frantzreb, sr. marketing manager, broadcast at Avid. “Not only does version 3.0 break new ground in speed and simplicity, but the connection with an Avid news workflow means that different stories, unaired or alternate clips, or user-generated content can be easily and automatically added to a broadcaster’s Website. This helps broadcasters leverage their market advantage by providing unique Web and mobile content that can attract the loyal viewership that builds revenue.

    Avid Active ContentManager 3.0 is priced at Eur 64,600 (not including server hardware, Microsoft SQL software, encoding software, and PCTV card). The Avid Active ContentManager NewsPoller module is also available for Eur 13,900 for those customers wishing to use an existing content management system. Avid Active ContentManager 3.0 is available now.

    Maxell Introduces Field Tough Disk Technology

    Maxell Corporation of America introduced the newest in removable media designed for high-speed, high-resolution video imaging - the iVDR-Xtreme. Previously announced at the 2008 National Association of Broadcasters Show, Maxell iVDR technology promises high capacity storage in a compact, lightweight, portable design, with a tough and rugged exterior.

    Maxell iVDR-Xtreme boasts a capacity of up to 250GB and when used in a professional setting, is capable of storing up to 20 hours of high-definition video, 19 hours of digital video and 110 hours of DVD-quality video.

    "This drop, shock and vibration-resistant Field Tough Media offers a broad range of broadcast and storage applications like material gathering, editing and transmitting and storing video content, that are simple and easy enough for anyone to use," said Pat Byrne, senior marketing manager for Maxell. "Maxell iVDR-Xtreme technology meets the demands of today's mobile media and high-definition video imaging needs with fast transfer rates, greater storage capacity and continued rugged durability."

    The Maxell iVDR-Xtreme and adapter will be available beginning in Q1 2009 for a SRP of $650.00.

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    PEOPLE IN THE NEWS

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    RESEARCH NEWS

    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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