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w/e December 30, 2007 SCRI International, Inc © 1984 - 2007


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US awareness of switchover grows

According to a survey by Cable & Telecommunications Association for Marketing (CTAM), there is growing awareness of the nation’s February 2009 transition to digital television by US TV broadcasters. However, 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.

Major findings of the CTAM survey show that 48 per cent of US households are aware of the digital TV transition, compared to just 29 per cent from a survey taken in July 2005. Of those who are aware of the DTV transition, 38 per cent said they’d learned about it from TV; 26 per cent had read of it in the newspaper; and 20 per cent had heard about it from friends or family. Fifty per cent of households that watch TV exclusively over the air said they don’t know where to turn for information about the transition.

China's IPTV industry looks beyond 2007

China’s IPTV market this year is falling short of expectations, both in terms of subscriber growth and equipment shipments, according to iSuppli Corp. Subscribers on the mainland are expected to total only 846,000 by the end of 2007, compared to Chinese IPTV operators' expectations of 1.3 million. The overall pace and scale of IPTV deployments have been disappointing this year.

Four operators now have IPTV licenses in China: Shanghai Media Group (SMG), China Central Television International (CCTV), Nanfang Broadcast Media (NBM), and China Radio International (CRI). SMG was the original IPTV pioneer in China and is the only operator actively pursuing IPTV deployments.

As the first IPTV licensee, SMG partnered with China Telecom (CTC) and China Netcom (CNC) to introduce IPTV services in Shanghai and Harbin respectively in 2006. The final outcome of these deployments has been widely regarded as a key barometer of the industry’s prospects.

SMG had planned to expand IPTV to multiple cities in 2007. The State Administration of Radio, Film, and Television (SARFT) approved SMG’s launch of IPTV services in 10 cities: Fuzhou and Quanzhou in Fujian Province, Taizhou in Zhejiang Province, Xian in Shannxi Province, Hanzhong in Hubei Province, Shenyang, Dalian and Panjing in Liaoning Province and Mudanjiang and Heihe in Heilongjiang Province. However, local operators experienced difficulties promoting IPTV services. Fujian and Zhejiang Provinces enrolled about 100,000 and 30,000 subscribers respectively, but the other locations did not come close to meeting their assigned targets.

Meanwhile, the other three IPTV licensees chose to pursue a cautious wait-and-see strategy. CCTV has announced plans for IPTV field tests in Baotou in Inner Mongolia, in Changchun in Jilin Province, and in Nanjing in Jiangsu Province.

Web TV gets more viewers

An increasing number of television viewers are turning to the Internet to watch videos, films and TV episodes, according to a new survey conducted by Harris Interactive. In the past year, YouTube has extended its lead as the top site for online videos, with search engines and television networks gaining ground.

Some 65 per cent of the 2,455 U.S. adults surveyed said they have watched a video on YouTube, compared to 42 per cent at the same stage in 2006.

"Viewing videos online seems to inspire a sense of adventure, particularly among younger viewers," said company VP Joan Barten Kline.

More than one-third of viewers overall and half of those 18 to 24 said there is something they really enjoy about discovering a cool video online. "They seem to take particular pride in their finds online and share them with friends," Barten Kline added.

More than 42 per cent of YouTube viewers said they visit the site frequently, up from 33 per cent last year.

Apart from YouTube, which most people favoured because they felt it had almost every video they could find, 43 per cent said they have watched a video on a TV network Web site, followed by 35 per cent on news sites and less than 30 per cent on search engines such as Yahoo and Google.

Social networks such as MySpace and Facebook as well as music site iTunes also had a lower share of online viewers.

Online viewers said they would watch more TV episodes and full-length movies if more were available. There was less interest in viewing more amateur or user-generated videos, news and sports, according to the survey.

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Warners Posts Alliance with India's Prasad

Warner Bros. Motion Picture Imaging has entered into a strategic alliance with India-based Prasad.

The teaming will allow both companies to bring their combined skills and strengths in digital postproduction and restoration to clients in Hollywood, India and around the world.

"We have an extensive set of tools for postproduction and restoration that we can apply to our various project, and the Prasad facility can handle standard-def, 2K and 4K and shares our own commitment to excellence," said Chuck Dages, executive vp emerging technology at Warner Bros. Technical Operations. "In addition to bringing our combined skills to each other's projects, the time difference between the two companies will allow us to work on projects 24 hours a day."

Saidd Prasad's Sai Prasad, "This will enable us to add considerable value to both Indian and international projects and, most importantly, Hollywood projects."

China DTV subs 23.6m, IPTV subs 1.14m

China Netmedia, a consulting arm of the State Administration of Radio Film and Television (SARFT) has revealed that as of November 31, 2007 the number of cable DTV subscribers in China reached 23.65 million. The figure represents a year-on-year increase of 81.3 per cent and growth of over 200 per cent in the last 4 years. During the same period, IPTV accumulated 1.14 million subscribers, but IPTV growth has dropped from a high of 480 per cent in 2005 to 110 per cent.

By November 2007, 68 cities (including 7 provincial capitals, 39 municipal-level cities, and 22 county-level cities) had completed cable DTV conversion, with the penetration rate of cable DTV reaching 24.33 per cent. The biggest obstacle to DTV conversion is the high level of fragmentation and lack of interoperability between cable DTV operators for each city.

Divided FCC eases media ownership curbs

The FCC this week narrowly approved a loosening of media ownership restrictions in the 20 biggest U.S. cities, despite objections from consumer groups and a threat by some senators to revoke the action.

The FCC voted 3-2, along party lines, to ease the 32-year-old ban on ownership of a newspaper and broadcast outlet in a single market.

In addition, the FCC action exempted 36 newspaper-broadcast ownership combinations that had been grandfathered under the previous rule. It also gave exemptions to six combinations that were pending before the agency.

The FCC's Republican chairman, Kevin Martin, called the move a "relatively minimal loosening of the ban" that could help bolster ailing newspapers in big cities by spreading local news gathering costs across multiple media platforms.

The vote came over the objections of the FCC's two Democratic commissioners who said easing the ownership rule would lead to more consolidation in the industry, eliminate independent voices and degrade local news coverage.

They also said it created a loophole that would let media owners combine newspapers and broadcast outlets in many smaller markets around the United States, not just the top 20 cities. The S&P publishing index gained 1.7 percent.

The FCC action provoked an immediate rebuke from members of Congress. Martin's chief critic in the U.S. Senate, Democratic Sen. Byron Dorgan, of North Dakota, vowed to make good on a threat to pass legislation overturning the changes.

"We're not done with this, not by a long shot," he said.

Analysts at Stifel Nicolaus said the rule changes would probably be challenged in court and on Capitol Hill. But opponents in Congress "will likely have to overcome core Republican resistance and a possible presidential veto," they said in a research note.

The chairman of the House Energy and Commerce Committee, Democratic Rep. John Dingell of Michigan, said he was "greatly displeased" that Martin had gone ahead with the vote.

"Despite specific bipartisan and bicameral opposition, the Federal Communications Commission acted arrogantly and brazenly today to weaken the newspaper/broadcast cross-ownership ban," Dingell said in a statement.

Existing FCC rules ban ownership of a newspaper, and a television or radio station in the same market, unless the FCC grants a waiver.

Outside the top 20 markets, companies can now get the cross-ownership ban waived if they convince the FCC the broadcast station or the newspaper is financially "failing," or that the combination would lead to a significant increase in local news coverage.

"The FCC has never attempted such a brazen act of defiance against Congress," said Democratic Commissioner Jonathan Adelstein. "The law does not say we are to serve those who seek to profit by using the public airwaves."

The vote came a day after a group of 25 senators led by Dorgan sent a letter to Martin warning they would "move legislation to revoke the rule and nullify the vote" if the FCC went ahead with the ownership rule changes.

The group, including Senate Commerce Committee Chairman Daniel Inouye, a Democrat from Hawaii, and the panel's top Republican, Ted Stevens of Alaska, said the FCC had not spent enough time studying the issue and seeking public input.

On November 30, the three Republican commissioners approved an order temporarily waiving the ownership restrictions for media group Tribune Co, allowing the company to proceed with its planned leveraged buy-out.

The previously pending applications for ownership waivers that the FCC granted on Tuesday included newspaper-broadcast combinations owned by Gannett Co in Phoenix, Arizona, as well as outlets owned by Media General Inc in Myrtle Beach, South Carolina; Columbus, Georgia; Panama City, Florida and the Tri-Cities area around the Virginia-Tennessee border.

Tribune shares ended 3.2 percent higher, Media General stock closed up 2.1 percent, News Corp finished 1.2 percent higher and Gannett rose 1 percent, all on the New York Stock Exchange.

While the FCC loosened the ownership rules for newspaper-broadcast combinations, the agency moved on Tuesday to clamp down on U.S. cable operators.

In a move that is likely to face another court challenge, the commissioners voted to bar cable companies such as Comcast Corp, Charter Communications and Cablevision from owning systems that have more than a 30-percent share of U.S. multichannel video subscribers.

Cable operators see no TV writer strike impact, yet

Cable operators have seen no impact on customers signing up for pay-TV packages since a Hollywood screenwriters strike started earlier this month, according to company sources.

Cable officials who spoke to Reuters but did not want to be identified said that the walkout was unlikely to affect subscriptions in the near term or accelerate the rate of cancellations because most of the shows impacted by the strike are still available on free broadcast networks.

The strike, which began on November 5, comes at a sensitive time for the U.S. television industry, particularly for broadcast networks which are trying to stem an erosion of audiences to the Web and other outlets.

Cable operators like Comcast Corp and Time Warner Cable have started to see a slowdown in growth and in some cases have begun to lose basic video subscribers, with greater competition from satellite and phone companies.

"I really don't see any direct impact on cable or satellite because of the strike," said Thomas Eagan, analyst at Oppenheimer & Co. "It could be a positive if it changes consumers' viewing habits to cable networks,"

Eagan said a prolonged strike could help the audience ratings of smaller cable networks.

"As well as improving ratings of cable networks like Discovery, it could increase video-on-demand usage as well," said Eagan.

Talk shows like broadcast network NBC's "The Tonight Show with Jay Leno" and CBS Corp's "Late Show with David Letterman" were immediately impacted by the strike by The Writers' Guild of America since they rely on fresh writing to reflect current events.

At issue are writers' demands for a greater share of revenue from the Internet, widely seen as a key future distribution channel for most entertainment.

Popular premium shows, including the dramas or comedies on cable channels HBO and Showtime, are recorded well before airing and have not been affected yet, though they will be if the strike goes on much longer. Such shows help attract customers to cable and satellite pay-TV services.

Leading cable operators have been keen to push new video on-demand services to consumers after investing significant amounts to develop VOD technology and negotiating with program makers and Hollywood studios. VOD programming is available both for free and at a premium price.

Most analysts say wider economic conditions, including the downturn in the U.S. housing market and subprime mortgage crisis, will have the most impact on subscriber growth trends in the pay-TV market.

"The writers' strike is not a big lever in making a decision on signing up for cable, the big lever is the economy," says Todd Mitchell, analyst at Kaufman Bros. "There's a lot of weakness at the low-end of the consumer market."

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3 Firms Reach Flat-Panel Alliance

Hitachi, Canon and Matsushita reached a basic agreement on an alliance that will see the three companies merging their strengths in flat-panel technology development and production.

Through the alliance, Canon and Matsushita will, by transfer of shares from Hitachi, each acquire 24.9 percent of Hitachi Displays, which is a wholly owned subsidiary of Hitachi that produces small- and medium-sized LCD panels, by March 31, 2008. The deal is subject to approvals by regulatory authorities. Hitachi's stake in Hitachi Displays will become 50.2 percent.

Hitachi said it entered the agreements due to growing demand for LCD panels for a wide range of electronics products, including TVs, and cellphones, which will require ongoing upfront investment and development. The company said it decided to "expand its business alliances with Canon and Matsushita in order to advance the development of cutting-edge LCD panel technologies."

Hitachi expects to "strengthen its competitiveness in the flat-panel LCD TV sector by using state-of-the-art LCD panels to develop the world's thinnest flat-panel LCD TV and its ultra-thin flat-panel LCD TVs "Wooo UT series," the company said. "In addition, by working to optimally allocate business resources in order to establish a stable, high profit structure as a group, Hitachi will work to advance its basic management policy of "collaborative creation and profits.' "

Canon is using the deal to assure stable procurement of LCD panels, while sharpening "its product development capabilities by shortening development times and enhancing product features. It also aims to reinforce its digital single-lens reflex camera and various other product businesses employing high-quality, small- to medium-sized LCD panels in the consumer electronics, office equipment, medical and other fields."

The company also aims to accelerate ongoing development of OLED displays by teaming up with Hitachi, which also boasts advanced display technologies.

As it strengthens its own mainline plasma display panel operations, Matsushita is using the Hitachi investment to also secure a stable supply of LCDs by "deepening its involvement in the businesses of Hitachi Displays" by pushing ahead with construction of a next-generation plant at IPS Alpha, a joint venture between Hitachi Displays, Toshiba and Matsushita.

Matsushita said it sees the new IPS Alpha plant as a possible future base for production of OLED displays. The company intends to continue increasing development and production capability in the flat-panel TV business.

According to a joint statement, a second stage of the agreement will see the three companies changing the ownership structure giving "Canon, a company with extensive know-how in small- and medium-sized displays from the user side, take a majority holding in Hitachi Displays, and Matsushita, a universally acknowledged leader in the TV sector, take a majority holding in IPS Alpha."

Viacom signs Microsoft ad deal

MTV owner Viacom has signed a $500 million advertising and content deal with Microsoft in a move that will see the entertainment company drop Google's DoubleClick.

The five-year deal will see Microsoft's Atlas system replace DoubleClick to deliver ads across Viacom's extensive range of US websites. Microsoft will also have the right to sell unsold display ads on Viacom's websites on a revenue share basis, in a deal unveiled in the US yesterday.

The software giant will license video and audio from Viacom properties including MTV, Comedy Central and Paramount Pictures for use on the likes of MSN and Xbox 360.

Regulatory Filing for Broadcast International

Broadcast International, Inc. announced that it has entered into definitive documentation for the sale of approximately $15.0 million in aggregate principal amount of its 6.25% senior secured convertible promissory notes, due December 21, 2010, and related shares of common stock and common stock purchase warrants. These securities were sold to certain accredited investors.

The notes mature on December 21, 2010, and are convertible into shares of Broadcast common stock at an initial conversion price of $5.45 per share, subject to anti-dilution adjustments for certain corporate transactions. Broadcast has agreed to grant to the holder of the notes a first lien on substantially all of its assets.

As part of this offering, Broadcast issued to the purchasers of the notes an aggregate of 1,000,000 shares of its common stock and warrants to purchase up to 1,875,000 shares of its common stock. The warrants have a term of five years and are exercisable for shares of Broadcast common stock at a price of $5.00 per share, subject to anti-dilution adjustments for certain corporate transactions. Broadcast will use the net proceeds received from this offering for general corporate purposes.

Broadcast has granted the purchasers of the notes a demand registration right in the event that the shares of common stock underlying the notes and the warrants, as well as the shares of common stock issued to the purchasers of the notes are not freely tradable under applicable securities laws within six months following the closing of the transaction.

FTC Clears Google's $3.1 Billion Acquisition of DoubleClick

The Federal Trade Commission (FTC) cleared Google's $3.1 billion acquisition of online advertising firm DoubleClick, which now only needs approval from the European Commission, which is still examining the transaction. The 4-1 vote closed the FTC's eight-month investigation into the deal, which it said "is unlikely to substantially lessen competition."

"The FTC's strong support sends a clear message: this acquisition poses no risk to competition and will benefit consumers," said Google chairman and CEO Eric Schmidt.

"We hope that the European Commission will soon reach the same conclusion, and we are confident that this deal will deliver more relevant ads for consumers, more choices for advertisers, and more opportunities for website publishers."

The FTC stressed that it was only authorized to review potential anticompetitive issues raised by the deal, and released a companion set of principles to address privacy concerns as related to online behavioral advertising.

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Sony Updates Vegas Movie Studio Platinum Edition

Sony Creative Software announced an update to its Vegas Movie Studio Platinum Edition software that makes the application compatible with virtually any consumer AVCHD camcorder from Sony, Panasonic or Canon. As very few software products can currently offer AVCHD editing, this upgrade makes Vegas Movie Studio widely available as an editing option to users of these camcorders.

The 8.0c update is free for existing Vegas Movie Studio Platinum Edition software users and can be downloaded from the Sony Creative Software website. MSRP for the Vegas Movie Studio Platinum software is US$119.95. For more information about Vegas Movie Studio Platinum Edition or any of Sony Creative Software’s leading audio or video editing solutions, please visit

HD/Blu-Ray price slash

Manufacturers of high-definition DVD players are slashing prices in the US in an urgent pre-Christmas attempt to break the deadlock between two rival formats. The cost of key manufacturing components for the Sony-supported Blu-ray players and Toshiba’s rival HD-DVD hardware will fall below $150 early in 2008, according to analysts at Understanding & Solutions entertainment consultancy.

CES 2008 Preview: Digital Cameras & Camcorders

This report is by David Gussman at SCRI's onlne partner, DigitalMediaNet.

As we approach the big event this year in Las Vegas, camcorder announcements should be front and center. Digital camera announcements, however, could be few and far between given that PMA is just three weeks after CES.

I expect swarms of camcorders from all the usual suspects, with Sony and Canon announcing smaller and lighter devices. I'm also expecting more hybrid camcorder announcements. There will be more options for the consumer, including solid-state flash drive-based devices as well as more combo devices, such as hard drives/DVD camcorders. I also see the industry moving to pure HD (full 1920 recording), as they would like to call it.

I would also expect to see an attempt to expand the still-image recording capabilities on camcorders. Right now, most camcorders have not been able to produce good quality still shots because the megapixels are generally low, and, frankly, it hasn't been a huge priority. That should change—albeit slowly—during the year. Consumers want all-in-one devices, so a camcorder that can take quality images would be appealing.

However, we can't forget the standard-def camcorders out there. Even though HD will be highly touted at the show, vendors haven't completely thrown the old standard to the curb. We'll see HDV and miniDV camcorders there as well, though the main focus for camcorders will be HD and hybrid solutions.

For the most part, news in the digital camera department will be very sparse. Since PMA is three weeks after CES, most vendors will wait to announce new hardware there. However, I expect to see camera vendors preview some new technology.

Wi-Fi in digital cameras is not dead. We will see many more options to transfer images to other devices wirelessly. It's becoming apparent that vendors keep trying various methods to integrate the whole package. From digital picture frames to TVs, they are attempting to integrate everything, so I expect we'll see many more consumer-level cameras with Wi-Fi. Improved face detection and higher megapixels will also be announced.

With DSLRs becoming more affordable and easier to use, we are seeing Joe consumer ride the wave of professional photography. Many DSLRs that were announced earlier in the year are just now becoming available for purchase. So, I don't expect to see any DSLRs at CES. However, they do drive the market and as new technologies in digital photography become available, they'll be seen first in DSLRs.

Matrox release new MXO Drivers

Matrox have announced that release 2.1 for Matrox MXO is now available for download. Highlights of MXO Release 2.1 include Mac OS X v10.5 (Leopard) support, Apple Color v1.0.2 support, Adobe Premiere Pro CS3 v3.1.1 support and genlock timing offset controls.

Matrox MXO 2.1 lets you accurately view your Color work on an inexpensive Apple Cinema Display or other DVI monitor. It provides all the tools you need:

Matrox calibration utilities let you adjust and control your DVI monitor exactly like you would a broadcast HD/SD monitor. Controls for hue, chroma, contrast, brightness, and blue-only are provided. This unique control gives you completely accurate color representation you can trust. Super black and super white monitoring on the DVI display expands your viewable color range with Final Cut Pro. User-selectable 1:1 pixel mapping means there are no scaling artifacts to interfere with the pristine view of your footage. All the features of Matrox MXO are now available to Adobe Premiere Pro CS3 users on the Mac as well as for Final Cut Pro users.

Of particular benefit to broadcasters, the new MXO genlock timing offset controls can be used to align your video output relative to your external genlock source to compensate for cable delays within your facility.

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