Insider Reporter

Insider Report

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

w/e February 1, 2010 SCRI International, Inc © 1984 - 2009


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


Consumer electronics market returns to growth

After a 6.7 per cent drop in 2009, the global consumer electronics market is expected to achieve a mild recovery in 2010, with revenue expanding by 1.6 per cent partly because of improving sales of LCD-TVs, digital STBs and appliances, according to iSuppli.

Worldwide consumer electronics OEM revenue will rise to $317.3 billion in 2010, up from $312.3 billion in 2009. While a less than 2 per cent increase represents only marginal revenue growth, it marks a welcome turnaround after a dismal 2009. The 6.7 per cent fall in consumer electronics OEM revenue in 2009 represented the market‚s first annual decline since the 1.6 decrease during the dot-com bust year of 2001.

"Sales of consumer electronics rebounded in the second half of the year, setting the stage for renewed growth in 2010 and beyond," observed Jordan Selburn, principal analyst with iSuppli. "One major bright spot for consumer electronics in 2009 was the LCD-TV segment, which achieved 4.2 per cent revenue growth due to incentives in China and the increasing sales of LED-backlit sets. The LCD-TV market is set to extend its winning streak in 2010 as stabilisation in the global economy and declining prices prompt consumers to keep buying."

Global LCD-TV OEM revenue in 2010 will rise to $75.5 billion, up 5 per cent or $3.6 billion, from $71.95 billion in 2009, the largest dollar increase of any consumer electronics segment for the year.

The next biggest growth area in terms of dollars will be digital STBs, which will see OEM revenue rise to $18.2 billion

Two-thirds of US consumers own HDTVs

A study from ORC examining US consumer awareness, has revealed that nearly two-thirds (62 per cent) now have an HDTV in their home, and another 12 per cent are looking to purchase one within the next two years. This brings the potential market penetration to nearly three out of four households.

Back to SCRI News Briefs Index


RIP Miramax

Miramax-filmsThe distribution company behind such great breakthrough films as Pulp Fiction, The Crying Game, Clerks, Sex, lies and videotape, The English Patient and No Country for Old Men has officially been laid to rest. Miramax Films, the pioneer’s of the indy film movement who were the brainchild of Harvey and Bob Weinstein have finally laid off the reminder of their workforce.

According to Disney, who acquired the company in 1993 for $70 million, “Miramax will consolidiate its operations within Walt Disney Studios, and will be releasing a smaller number of films than in previous years. But it will continue to operate within the Walt Disney Studios.

However, in October Disney already announced that Miramax would cut down its production by 70%, down from 6 or 8 movies a year to just 3. Some the of more recent offerings ended up as flops such as Cold Mountain and The Four Feathers. One thing is for sure, with so many remakes and carbon copies out there Miramax was the one company that seemed to make major motion pictures that mattered and carried some sort meaning. This will be a very sad day for true film lovers out there.

Time Warner Cable Posts Better-Than-Expected Q4 Profit

Cable TV operator Time Warner Cable, Inc. reported a profit for the fourth quarter that also topped analysts' estimates, compared with a loss last year. The turnaround reflected the absence of cable franchise rights impairment charges the company recorded last year. Total revenues grew 3%, which also beat Street view, helped by higher subscription revenues. The company also initiated a $0.40 per share quarterly dividend.

Net income for the quarter attributable to the company was $322 million or $0.91 per share, compared to a loss of $8.16 billion or $25.07 per share last year. Prior year results included $14.82 billion of impairment of cable franchise rights. The company noted that the prior-year quarter results were recast to reflect the reverse stock split.

Subscription revenues grew 4.2% to $4.33 billion from $4.16 billion in the prior-year quarter, driven by a 3.6% increase in residential subscription revenues and a 14.1% growth in commercial subscription revenues. Revenues from Video grew to $2.69 billion from $2.65 billion in the previous year. High-speed data division generated revenues of $1.16 billion, up from $1.08 billion, while Voice division recorded revenues of $484 million, higher than $435 million in the prior year. Advertising revenues declined 17.6% to $201 million from $244 million in the year-ago quarter, due primarily to year-over-year declines in the auto, political and media categories.

In the preceding third quarter, Time Warner Cable reported a 11% fall in profit, hurt by higher interest expense, despite a 4% growth in revenues. Time Warner Cable's third quarter net income attributable to the company was $268 million, compared to a profit $301 million last year. However, earnings per share dropped 17% to $0.76 from $0.92 a year ago. Quarterly total revenues rose to $4.50 billion from $4.34 billion a year earlier.

Back to SCRI News Briefs Index


Avid Q4 & YTD revenue down, losses continue

Avid reported revenues of $174.7 million for the three-month period ended December 31, 2009, compared to $206.7 million for the same period in 2008. The GAAP net loss for the quarter was $17.9 million, or $0.48 per share, compared to a GAAP net loss of $100.3 million, or $2.71 per share, in the fourth quarter of 2008.

The GAAP net loss for the fourth quarter of 2009 included amortization of intangibles, stock-based compensation, restructuring charges, acquisition related costs, net gains from divested product lines and related tax adjustments, collectively totaling $16.5 million. Excluding these items, the non-GAAP net loss was $1.4 million for the fourth quarter, or $0.04 per share.

The GAAP operating loss for the fourth quarter was $15.1 million, including amortization of intangibles, stock-based compensation, restructuring charges, acquisition related costs and net gains from divested product lines collectively totaling $17.1 million. Excluding these items, the non-GAAP operating profit was $2.0 million for the fourth quarter.

“Avid has made good progress this quarter. Our revenues were up sequentially and we believe our markets are stabilizing with some signs of recovery,” said Gary Greenfield, chairman and CEO at Avid. “We reported a non-GAAP operating profit for the quarter and with the majority of our cost structure transformation complete we feel we are well positioned for margin expansion.”

Revenues for the year ended December 31, 2009 were $629.0 million, compared to revenues of $844.9 million for 2008. GAAP net loss for 2009 was $68.4 million, or $1.83 per share, compared to GAAP net loss of $198.2 million, or $5.28 per share for 2008. GAAP net loss for 2009 included $55.7 million of amortization, stock-based compensation, restructuring charges, acquisition related costs, net gains from divested product lines and related tax adjustments. Excluding these items, the non-GAAP net loss was $12.7 million or $0.34 per share for 2009. GAAP net loss for 2008 included $172.9 million of amortization, stock-based compensation, restructuring charges, net gains from divested product lines, impairment charges and related tax adjustments. Excluding these items, the non-GAAP net loss was $25.2 million or $0.67 per share for 2008.

The company’s cash balance on December 31, 2009 was $109 million, or approximately $2.91 per share.

Sony acquires Convergent Media Systems

Sony Electronics announced that it has acquired Convergent Media Systems, a provider of video integration solutions to the enterprise market. The Alpharetta, Ga.-based company has established itself in digital signage and content distribution systems and will be integrated as a subsidiary into Sony Electronics’ broadcast and professional products business.

According to John Scarcella, president of Sony’s Broadcast and Business Solutions Company, the acquisition of Convergent is a “key building block” of Sony’s worldwide business-to-business strategy to accelerate its transformation into a solutions-focused organization. Sony will leverage Convergent’s experience and resources to provide end-to-end systems solutions and managed services in both new and existing professional markets.

“Convergent possesses skills that are necessary for success in the solutions business, adding another layer to our already strong field team,” Scarcella said. “Our customers expect a ‘one-stop’ source when making purchasing decisions for system solutions. Now with Convergent, we can install and integrate the best technology available together with providing content creation, monitoring and distribution services. As a result, our sales people can go to a customer and more confidently offer a comprehensive proposal. It makes the difference between simply reacting to an opportunity vs. proactively selling an end-to-end solution.”

Bryan Allen, Convergent CEO, added, “We’ve had a professional relationship with Sony for many years, and extending that collaboration makes sense for both of our companies and our existing customers. We’re very familiar with the markets that are important to Sony and our expertise and resources perfectly complement their technologies. We are excited about being a part of Sony and leveraging its resources, technologies and capabilities to offer our customers a variety of digital media solutions.”

The addition of Convergent’s resources – including its approximately 150 full-time employees in North America, its extensive network of field service affiliates, and a state-of-the-art network operations center -- will support Sony’s sales and marketing efforts for its key technologies. These include 4K digital cinema system installation and content distribution, professional displays and digital signage, remote monitoring and system diagnostics. The Convergent acquisition is also expected to strengthen Sony’s competitive position in new areas of business for Sony such as providing products and services to corporate, education and government markets, where Convergent already reaches more than one million people. Convergent has currently been working with Sony in support of its 4K rollout and will continue to be an integral part of that deployment.

Thomson Becomes Technicolor - GVG Stil on the block

Thomson SA shareholders approved of the company’s debt restructuring plan that renames the company “Technicolor,” the parent of the Grass Valley division announced. Shareholders approved several resolutions, including one proffered last month to reduce the company’s debt of €2.8 billion (US$3.9 billion) by 45 percent. The plan also includes a capital injection of €348 million (US$491 million), a €1.3 billion (US$1.8 billion) debt-for-equity conversion, and a bond buy-back provision.

Thomson sought protection from the French government last year in an effort to fend off creditors it was unable to pay. It was granted this sauvegarde, or “safeguard,” status last November. It filed Chapter 15 in a U.S. bankruptcy court last month to protect its American assets. Around 47 percent of its 2008 revenues were generated in the United States.

The French media giant put the Grass Valley and digital signage divisions up for sale last February when it also warned of breaching loan covenants. Reuters reported that Thomson Chairman and CEO Frédéric Rose said at today’s shareholder meeting that the company was “still in talks about these asset sales.”

Thomson will officially become Technicolor on Monday, Feb. 1, and trade on the New York Stock Exchange Euronext Paris under the symbol “TCH.” The role of chairman and CEO will also be separated under a new executive structure when the company emerges from sauvegarde next month.

Harris Broadcast Reports Q2 Increased Orders

Orders in the Broadcast Communications segment were $139 million in the second quarter, significantly higher compared with sequential first quarter orders of $124 million. The rebound in orders in the second quarter was an encouraging sign that the market has begun to improve. Revenue in the second quarter was $117 million, comparable with the prior quarter of $119 million. Revenue was $163 million in the prior-year second quarter. Operating loss in the second quarter was $5 million for the segment, compared with operating income of $12 million in the prior-year quarter.

During the quarter, Harris successfully deployed several FAME™ (Full-Motion Video Asset Management Engine) solutions for government applications. The solutions, which were developed for the military, have broad applications in both government ISR and commercial markets. FAME increases visibility into the vast amounts of real-time and archived video collected from manned and unmanned aircraft and ground-based sensors. This cross-over application offers more opportunities for Broadcast Communications to partner with the company's Government Communications Systems business and reach a broader, more diverse base of customers.

Harris secured new projects in the quarter with two large sports arenas and continued implementing the first-of-its-kind, advanced media workflow solution in the NBA's Orlando Magic Amway Arena scheduled to open in October.

Harris also delivered solutions for a variety of broadcasters to support their coverage of the Winter Games in Vancouver next month. For example, the company is providing an end-to-end HD broadcast solution to support Canada's Olympic Broadcast Media Consortium's unprecedented coverage of the games. The Harris ONE™ solution brings together highly integrated products that enable advanced media workflows and provides the Consortium with the highest quality broadcast technology for delivery of games coverage.

Kodak’s Q4 Revenues Increase 6%, Profits Surge

Eastman Kodak reported fourth-quarter 2009 earnings from continuing operations of $430 million, or $1.36 per share, on sales of $2.582 billion, reflecting the emergence of a company able to deliver improved profitability especially as the economy recovers.

“Despite a difficult economic environment, we delivered in 2009,” said Antonio M. Perez, Chairman and Chief Executive Officer, Eastman Kodak Company. “Our momentum is returning and our strategy is paying off. During 2009, we generated significant traction with our key digital businesses, we achieved sustainable operational improvements across the company, our earnings improved substantially, and we ended the year with more than $2.0 billion in cash on our balance sheet.”

Graphic Communications Group fourth-quarter 2009 sales were $779 million, a 5% decline from the fourth quarter of 2008. Fourth-quarter earnings from operations for the segment were $36 million, a $40 million improvement over the year-ago quarter. This earnings increase was primarily driven by operational improvements across all product lines, increased demand for digital plates and enterprise workflow products, and lower raw material costs.

Film, Photofinishing and Entertainment Group fourth-quarter sales were $589 million, a 10% decline from the year-ago quarter. Fourth-quarter earnings from operations for the segment were $53 million, compared with earnings of $39 million in the year-ago period. The increase in earnings was driven by significant operational improvements in Traditional Photofinishing, cost reductions across the segment, favorable foreign exchange, and improvement in raw material costs, partially offset by industry-related volume declines in Film Capture, and negative price/mix.

“In the second half of 2009 we began to see some improvement in the economy, and that helped to highlight the true strength of our digital portfolio,” said Perez. “During 2009, we doubled the installed base for our consumer inkjet printers while maintaining our price premium. In the fourth quarter, we grew sales of commercial inkjet products, including a 33% increase in sales of our VL2000 printing system and enjoyed continued strong customer orders for our PROSPER product line. We delivered positive cash performance before restructuring for the past two quarters and for all of 2009, and our cost structure is providing us with significant operating leverage as the economic recovery continues. We enter the new year with the most competitive digital portfolio ever, strong presence in key markets, and a significant amount of positive momentum. All of this positions us well for improved performance in 2010.”

Pixelworks Reports 16% Sequential Q4 Revenue Increase

Pixelworks, Inc., a provider of video and pixel processing technology, announced financial results for the fourth quarter ended December 31, 2009.

Fourth quarter 2009 revenue was $19.4 million, above the range of management guidance for the quarter. Revenue for the 2009 fourth quarter increased 16% sequentially from $16.7 million in the third quarter of 2009 and was up 2% from $18.9 million in the fourth quarter of 2008.

Fourth quarter 2009 GAAP gross profit margin was 46.6%, above the range of guidance for the quarter, compared with 43.9% in the third quarter of 2009 and 45.4% in the fourth quarter of 2008. Fourth quarter 2009 non-GAAP gross profit margin was 50.0%, at the high end of guidance for the quarter, compared with 47.7% in the third quarter of 2009 and 50.4% in the fourth quarter of 2008.

“2009 was a year of significant challenge and significant progress for Pixelworks,” said Bruce Walicek, President and CEO of Pixelworks. “Despite a difficult macro-environment, we achieved important financial and development milestones and exited the year with significant momentum. Our focus on execution and operational efficiency enable us to enter 2010 with an array of exciting new products, bolstered by a streamlined expense base and a significantly strengthened balance sheet. Most importantly, we have reached the inflection point where new products are now driving our growth and the Company is positioned to take advantage of explosive growth opportunities in the digital video market.”

Back to SCRI News Briefs Index




2009-2010 Broadcast Pro Video Marketplace Reports

2009-2010 Broadcast Pro Video Marketplace Reports Series is now available. A total of 25 individual product reports as well as a macro industry overview and micro quantitative data analysis reports are available. Contact for more information.

Back to SCRI News Briefs Index