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w/e February 11, 2007 SCRI International, Inc © 1984 - 2004


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Panasonic & Sony Join Forces on AVCHD Camcorder

Panasonic and Sony have collaborated in the creation of AVCHD, a high-definition digital video camera recorder format that allows for recording and playback of HD images using standard 8cm DVD media. The format is entirely different from HDV (though Sony also offers cameras using the format) and does not involve high-definition Blu-ray discs, which Sony and Panasonic are both behind. Instead, AVCHD HD is designed to compress HD imagery such that it can "fit" onto commonly existing media, as HDV does with Mini DV tape.

The format records a 4:2:0 1080i or 720p signal onto the standard DVD media by using technology employing the MPEG-4 AVC/H.264 codec for video compression and Dolby Digital (AC-3) or Linear PCM for audio. The format will offer a luminance signal of 55.7MHz and a quantization bit rate of 8 bits, the companies announced. The format has the capacity to record at 18Mb/s, which is lower than currently available HDV formats. The two companies intend to license and promote the format throughout the industry.

Blu-Ray Testing Center established by Panasonic

Matsushita Electric Industrial Co., Ltd. announced that its U.S. subsidiary, Panasonic Corporation of North America, will establish a Panasonic Hollywood Blu-ray Testing Center (PHBTC) within the existing facilities of Panasonic Hollywood Laboratory and start testing services immediately.

Blu-ray Discs feature strong copyright protection technology, and conducting logical format verification of entertainment content in replicated BD-Video discs requires technical sophistication. Until now there has been no testing service available for content verification before disc replication although many in the motion picture industry expressed the need for a testing center to provide such services, especially in the Hollywood area. The new Panasonic testing center, PHBTC, meets the industry's need and is expected to accelerate the release of BD-Video titles by the motion picture industry.

In addition, Panasonic is inviting the member companies of Blu-ray Disc Association (BDA) to install their BD-Video playback products, including Blu- ray recorders and players in PHBTC so that content providers and authoring studios can confirm the interoperability of their titles using these playback products.

In addition to the Blu-ray player and forthcoming Blu-ray products, Panasonic is a major contributor to the creation of Blu-ray pre-recorded discs. Established in 2001, Panasonic Hollywood Laboratory is a leading authoring, replication and encoding facility within the industry, as well as a driving force in the research and development of Blu-ray components.

HD EXPO 2007

In the rapidly evolving world of high-end content creation, the future is here before you know it. Save the date of March 8 and register now to guarantee your spot at HD EXPO in March, where you can glimpse into the not-so-distant future and learn how recent advances in high definition technology will impact your projects, your career, and your world. Here is what you will find at HD EXPO March:

  • A discussion of the recent past and upcoming future of the technologies that shape the entertainment industry.
  • Full Speed Ahead: How high speed cameras and technologies are helping storytellers.
  • Loud and Proud in Public: How Filmmakers and Technologists Create Fantastic Screens, Public Space, 3D and Installation Films. More
  • Russian Roulette with Industry Experts

    New Telecom Event Launches at NAB2007

    The National Association of Broadcasters announced Telecom@NAB2007 - a new conference series and exhibition for telecom professionals and network operators. Leveraging NAB's decades of expertise in the delivery of video and audio content to consumer audiences, the new event is co-produced by telecom industry consultants Lightbulb Communications, headed by former USTelecom executive John Abel. The new conference series takes place on Monday, Tuesday and Wednesday, April 16-18, in conjunction with NAB2007 in Las Vegas.

    Telecom@NAB2007 addresses the needs of telecom professionals, telecom business entrepreneurs and network operators who are deploying next generation video networks or who plan to do so in the future. Telecom professionals attending the conference series will tap into the world's largest marketplace of professional electronic media tools and technologies, and interact with content owners and creators representing the broadcasting and film communities.

    "The annual NAB Show is the proven technology destination for video production and distribution," said NAB President and CEO David K. Rehr. "We are excited to announce this addition to NAB2007's offerings for telcos on the cutting edge of IPTV and broadband video."

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    Online HD Seminars from Sony

    Sony Electronics' Professional Media Group is offering a series of online seminars to help production professionals learn more about HD tape and discs, and how best to care for and handle that media. The seminars are led by Wayne Desmond, Sony's national training manager for professional media, and include two topics: Sony HD Media in Perspective and How to Protect Your Digital Assets.

    ABC News Buys Panasonic AJ-HDX900 Cameras

    Panasonic Broadcast announced that ABC News has purchased four AJ-HDX900 2/3" multi-format DVCPRO HD camcorders. The cameras are being utilized by the organization's Washington, D.C. bureau.

    The AJ-HDX900 DVCPRO HD supports 1080 59.94i/50i/29.97p/25p/23.98p/23.98pA and 720 59.94p/50p/29.97p/25p/23.98p recording.

    The AJ-HDX900 features a native 16:9, 2/3" HD, 1-million pixel 3-CCD system that assures stunning images and produces a high sensitivity of F10 (at 2000 lux) and outstanding low-light shooting down to 0.032 lux (at+62 dB gain). It is equipped with 14-bit A/D DSP circuits that provide optimum picture quality, color reproduction and luminance gradation. The AJ-HDX900 offers 4:2:2 color sampling and independent frame compression.

    The AJ-HDX900 offers impressive built-in, image-enhancing features including three Cine-like gamma modes to replicate the look and feel of film, and is compatible with wide range 2/3" quality lenses and accessories. With 1080i, 720p, 24p and 25p capabilities, the AJ-HDX900 is perfect for long-form HD programming and a valuable tool for digital cinematography, cable and television production in any format, sports and events, for globetrotting documentarians and feature crews, and for the rental companies that serve them.

    Amp’d Mobile Inks Hollywood Deals

    Amp’d Mobile, a pioneer of fully integrated mobile entertainment, announced that it has inked development deals with some of Hollywood's biggest players, including Jack Black, Dan Harmon, Rob Schrab and ICEBOX, co-founded by Howard Gordon, the executive producer of “24” and “The X-Files.” Amp’d also announced an extended deal with Donick Cary, co-creator of COMEDY CENTRAL's “Lil Bush: Resident of the United States,” the first made-for-mobile program originally developed by Amp’d Mobile that crossed over to linear television.

    The new line-up of deals comes on the heels of Amp’d Mobile’s recently announced first-of-its-kind deal with MTV Networks to jointly develop made-for-mobile programming that will be exclusively programmed on Amp’d.

    As the only carrier with an extensive in-house development studio dedicated to creating unique and original programming, Amp’d Mobile provides Hollywood’s top creative minds with free reign to experiment with non-traditional content programmed to a rapidly growing young audience.

    Comcast Reports Record 2006

    Comcast Corporation reported results for the quarter and the year ended December 31, 2006.

    Brian L. Roberts, Chairman and CEO of Comcast Corporation, said, "2006 was simply our best year ever. Powered by our triple play offering and superior products, we added more RGUs than at any other time in our history and reported terrific growth in cable revenue and Operating Cash Flow. This record-setting performance demonstrates substantial operating momentum, and we could not be more enthusiastic about the future. Looking ahead, we are perfectly positioned to continue to offer consumers the best entertainment and communications value proposition available anywhere, and to continue to deliver significant value to our shareholders."

    Comcast Cable reported revenue of $6.9 billion in the fourth quarter of 2006, an increase of 14% from the prior year. Video revenue increased 9% reflecting growth in both basic and digital cable customers and increased demand for advanced digital features, such as DVR and HDTV. Comcast Cable added 613,000 digital cable subscribers and 110,000 basic cable subscribers during the fourth quarter of 2006, each representing the highest quarterly additions in more than 10 years. Driven by increasing ON DEMAND movie purchases, pay-per-view revenue increased 24% to $159 million in 2006. Pay- per-view revenue has increased more than 20% on average for the past eight quarters.

    High-speed Internet revenues increased 23% in the quarter to $1.5 billion. The strong growth includes the addition of 488,000 high-speed Internet subscribers, a 12% increase from the same period last year and relatively stable monthly revenue per subscriber. Cable phone revenue increased 77% in the fourth quarter of 2006 to $302 million reflecting the addition of 508,000 CDV customers offset by the decline of 87,000 circuit-switched customers during the quarter.

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    Avid Q4 Revenue & Profits Down

    Avid Technology reported revenues of $239.0 million for the three-month period ended December 31, 2006 compared to $245.0 million for the same period in 2005. GAAP net loss for the quarter was $52.6 million, or $1.28 per share compared to GAAP net income of $18.4 million, or $.43 per diluted share, in the fourth quarter of 2005.

    GAAP net loss in the fourth quarter of 2006 includes a non-cash charge of $53.0 million for the impairment of goodwill associated with the acquisition of Pinnacle Systems in August 2005. As a result of completing its annual goodwill impairment test in the fourth quarter, the company concluded that the fair value of the consumer business unit had declined below the book value, resulting in the impairment charge.

    In addition, the company took a restructuring charge of $3.2 million as a result of reorganizations within the Professional Video and Consumer Video segments that took place during the quarter.

    “As we look back at our performance in Q4, and the full year of 2006, it’s clear that our results were mixed. While our big deal backlog continued to build each quarter throughout the year, including Q4, bringing us to record levels, recognizing revenue out of this backlog continued to be unpredictable. This led to a shortfall in our video business for the fourth quarter,” said David Krall, Avid’s president and chief executive officer. “Our audio business recovered nicely from the slowdown in demand that we saw in Q3 for Digidesign’s Pro Tools|HD® systems, allowing a strong finish for the year. In consumer, we had lower than expected results for the year as the business was slow to recover from the product quality problems with the Studio 10 software. We took an impairment charge in the fourth quarter to reflect the decline in the fair value of the consumer business unit. Nevertheless, we believe that the product quality problems are now behind us, and are pleased that we achieved higher-than expected consumer revenues in Q4 based on strong demand in Europe. We have taken a number of steps to position all of our businesses more favorably for the coming year, including a cost restructuring in our consumer business which took place in Q4. Graham Sharp, our new general manager for our video division, has already implemented a number of changes that are intended to improve the segment’s operations. However, we do not expect the full benefits of these efforts to be realized immediately.”

    Revenues for the year ended December 31, 2006, were $910.6 million compared to revenues of $775.4 million for 2005. GAAP net loss for 2006 was $42.9 million, or $1.03 per share, compared to GAAP net income of $34.0 million, or $.86 per diluted share, for 2005.

    Quantel State of Industry Report

    This report is by Charlie White at SCRI's online partner DigitalMediaNet.

    What's the state of the broadcast industry today? We asked key broadcast product vendors the same five specific questions about their products, customers and growth areas they see for their companies and the broadcast industry in general. We now simultaineously publish the answers of all the companies that responded to our query, in hopes of giving you a good idea of the issues on the minds of broadcast equipment suppliers circa late 2006. Here is the response from Quantel.

    1. Tell us why your biggest-selling product is so successful.
    On the broadcast side of our business, sQ and Newsbox server-based news and sports integrated production systems are highly successful, with users ranging from local to national broadcasters. The reasons for their success are many, but principal among them are:

    Scalable hardware – sQ technology is totally modular, scaling to meet any size of news/sports operation. Whatever the size of the system, it offers all the same tools, capabilities and time-to-air.

    Scalable software – sQ offers a progressive range of desktop shot review and editing tools that all share the same UI but add tools as required for the level of application. The common UI makes training, up-skilling and cross-skilling much easier and more flexible for broadcasters.

    Workflow – sQ systems have the shortest flight-time from ingest to air of any system on the market – a major competitive plus for every broadcaster.

    Openness – sQ systems integrate fully with all major newsroom computers, archive, asset management, automation and Quad-play solutions, enabling the broadcaster to work with best-of-breed system components rather than a one-size-fits-all compromised approach.

    On the button – sQ systems blend IT technology with specialist broadcast hardware to guarantee that the broadcaster’s next-frame imperative is always met.

    HD ready – sQ systems are fully HD capable with no compromises or performance drop-offs

    SD capable – enabling broadcasters to migrate incrementally without redundancy or changes to operational processes.

    Newsbox is sQ technology pre-packaged in off-the-shelf configurations that can be up and running in just hours as a fully featured, full-blown production system.

    2. What do you hear your customers characterizing as their major problem that's solved by your products?
    Very simply, beating deadlines and getting to air fast and first with great looking material, coupled with really effective desktop tools to get journalist and producers editing without fuss or fret.

    3. What do you see as the next growth area for the broadcast industry?
    Leveraging and servicing multiple new-media streams alongside the traditional cable, terrestrial and satellite channels – allowing broadcasters to fully exploit all their content by repackaging and re-versioning to suit the differing media streams.

    4. What's the biggest growth area for your company in particular?
    Right now it’s HD and HD-ready systems.

    5. How do you view the current state of HD conversion industry-wide? Is it a done deal or do we have a ways to go, and what's your company doing to assist in that switch?
    HD conversion has a long way still to go; in some countries it has barely yet begun; while others are well down the track already. Quantel is assisting the switch by offering HD systems at little premium over what broadcasters would have expected to pay for SD equivalents – with no performance or feature compromises. Experience counts in this area, and Quantel has plenty; we brought our first HD product to market in 1985 (HD Paintbox) and have been very active in it ever since. Our HD range now covers DI, editing, effects, graphics and server-based production systems; in fact, we only make HD (and higher resolution) products nowadays!

    Harmonic Q4 Sales Up

    Harmonic Inc., a leading provider of broadcast and on-demand video delivery solutions, announced its preliminary results for the quarter and year ended December 31, 2006.

    For the fourth quarter of 2006, the Company reported net sales of $75.3 million, up 20% from $62.9 million in the previous quarter and up 18% from $63.7 million in the fourth quarter of 2005. During the fourth quarter of 2006, the Company saw increased demand for a broad range of new video delivery solutions from domestic cable customers and new international telco and satellite customers. For the full year 2006, the Company reported net sales of $247.7 million, compared to $257.4 million in 2005. Results for 2005 included significant sales of lower-margin access products for a major telco and sales of lower margin third-party products that the Company no longer sells in significant volume.

    “We are pleased with our strong sales and earnings in the fourth quarter of 2006, driven in large part by the reassertion of our technology leadership,” said Patrick Harshman, President and Chief Executive Officer. “During the quarter, we saw increased shipments to domestic cable customers for a wide range of products, including our high-definition encoders, video processing, video-on-demand edge and optical access solutions. In several intensely competitive evaluations, our powerful MPEG-4 AVC and MPEG-2 high-definition video encoding products have won new business, indicating continued IPTV market leadership and a resurgent leadership position with DBS satellite operators around the globe.”

    “The demand for our next-generation encoders and video processing solutions, coming from a wide variety of US and international customers, confirms our belief that we have the right products at the right time. Our customers have also expressed strong interest in our new on-demand content ingest, distributed content management and streaming solutions, the result of our recent acquisition of Entone’s video networking software business. We believe Harmonic dramatically improved its competitive position in 2006 by introducing compelling new products, expanding its customer base and improving its operating performance. While the first quarter is historically the slowest period in the year, we had strong bookings and sales momentum in the fourth quarter which positions us well as we move into 2007.”

    Scopus Q4 Conference Call

    Scopus Video Networks announced that it will be releasing its fourth quarter and full year 2006 results on Thursday, February 8, 2007.

    The Company will also be hosting a conference call later the same day at 1:00pm EST. On the call, management will review and discuss the results, and will be available to answer investor questions.

    To participate, call one of the following teleconferencing numbers. US Dial-in Number: +1-888-668-9141; UK Dial-in Number: 0-800-917-9141; ISRAEL Dial-in Number: 03-918-0609; INTERNATIONAL Dial-in Number: +972-3-918-0609. at:

    For those unable to listen to the live call, a replay of the call will be available from the day after the call in the investor relations section of Scopus's website, at:

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    Canon announces HV20 HD Camcorder

    Canon has announced the HV20 HDV Camcorder as a replacement for the HV10. The HV-20 features a 10x HD video zoom lens with Super Range Optical Image Stabilization and a Canon "True HD" 1920 x 1080 CMOS Image Sensor. Although Canon claim that the "HV20 HD Camcorder records true 1080 high definition video" it is not actually true. The 1080 variation of HDV (HDV 2) specifies recording at 1440 x 1080, not "true HD" which would be 1920 x 1080. The full size sensor is a good feature but Canon's marketing is misleading. It should be noted that all "1080" HDV camcorders, HDCAM and DVCPRO HD all record 1440 x 1080 instead of the full image size of the specification. Only the mega-expensive In addition to the HV20 HD Camcorder's horizontal design, the HV20 HD Camcorder incorporates an array of new and sought-after features and enhancements that offer users greater creative control and easier connectivity.

    Among the new features within the Canon HV20 HD Camcorder is an "Advanced Accessory Shoe" capable of accommodating such additional components as select external video lights or directional microphones. The HV20 HD Camcorder also features microphone and headphone input terminals with manual level control for professional quality audio recording and a 24p Cinema Mode - found previously only on professional video equipment - that offers the frame rate of motion pictures and imparts a film-like look to the video. The HV20 HD Camcorder also features an HDMI connector for quick and easy one-cable transport of the High Definition video signal to a HDTV.

    For help in focus, critical for HD, the camcorder features Canon's new Instant AF focusing system. It offers an improvement in autofocus speed and accuracy (compared to traditional autofocus systems). The Instant AF feature uses an external sensor, in combination with Canon's autofocus system, to help significantly decrease the time it takes to find focus, even in low light conditions. This new system achieves focus "almost instantaneously", reducing focus hunting.

    Canon's Super Range Optical Image Stabilization helps correct camera shake even when the camera is hand-held and in motion or the zoom is held at a long focal length. Employing both gyro and vector detection methods in order to pick up the widest range of vibrations, the "lens shift" type OIS compensates for a greater degree of camera shake while avoiding the loss of image quality typical in electronic image stabilization systems. In addition, the OIS system can be engaged to help steady camcorder shake when shooting still images, which aids in photographing fast moving subjects or in low light conditions.

    Unlike it's predecessor, the HV10, the HV20 features audio input via a 3.5 mm (1/8") stereo mini jack so that a better microphone can be used, or a signal from a mixer (with appropriate level matching) can be used in the field.

    The Canon HV20 HD Camcorder kit includes a compact power adapter, a wireless remote control, the new, and energy efficient BP-2L13 battery pack, a stereo video cable, a USB cable and a component video cable. In stores in April, the HV20 HD Camcorder carries an estimated selling price of US$1099.

    Adobe announces release of Photoshop Lightroom 1.0

    Adobe Systems have announced that Adobe Photoshop® Lightroom™ 1.0 software is now available for pre-order and is expected to ship in mid-February 2007. Photoshop Lightroom enables professional photographers to import, manage and present large volumes of digital photographs, helping photographers spend more time behind the lens and less time at the computer.

    Lightroom has been in public beta for about 12 months and during that time more than 500,000 people have downloaded and tested the program. In recognition of these testers' help, Adobe is offering Photoshop Lightroom at an introductory price of US$199 through to April 30, 2007 at the Adobe Store. Photoshop Lightroom will later sell for an estimated street price of US$299.

    Photoshop Lightroom leverages Adobe Camera Raw technology and supports over 150 native raw file formats, in addition to JPEG and TIFF, bringing raw conversion into a single workflow experience.

    Adobe Photoshop Lightroom will ship in mid-February 2007 and is available for pre-order in the United States and Canada through the Adobe Store. Recommended system requirements are Macintosh OS X 10.4.3, 1 GHz PowerPC G4 processor or Microsoft® Windows® XP SP2, Intel® Pentium 4® Processor, and 768 MB RAM and a 1024x768 resolution screen. Adobe Photoshop Lightroom is a Universal Binary application that will run natively on PowerPC and new Intel-based Macintosh systems.

    The announcement of Photoshop Lightroom 1.0 signifies the official conclusion of the Lightroom beta program. Users of Lightroom beta will have access to the program until its expiration on February 28, 2007.

    Kodak Releases Version 2.0 of Digital Ice Technology

    Kodak has introduced an enhanced version of its proprietary Digital Ice Technology. The software is designed to automatically detect and eliminate dust, scratches and other anomalies while film images are being converted to digital files for postproduction. Kodak Digital Ice Technology Version 2.0 more fully integrates with other postproduction applications and offers more output options, making it a state-of-the-art tool for creatives and end users.

    Kodak Digital Ice Technology Version 2.0 incorporates an option for providing "untouched" image data along with the output defect matte generated by the software. Snyder notes that the "untouched" information feature can be more efficient for facilities that have invested in other dust-busting workflow technologies.

    The Digital Ice tri-level output defect matte and dirt/scratch utilities are included in Version 2.0. These features offer a first level in-scanner correction option for less significant defects.

    Kodak Digital Ice Technology Version 2.0 is available to current licensed scanner partners for integration during the first quarter of 2007. Scanner manufacturers should be contacted directly for additional information.

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  • 2007 - 2008 US Broadcast/Pro Video Product Reports

    The 2007 - 2008 US Broadcast/Pro Video Product Reports are currently being published to allow equipment manufacturers time to review the data prior to NAB 2007. Reports on Camcorders, Cameras, Camera Mounts, Test & Measurment, Video MOnitors, Character Generators are already available, with the remaining Product Reports due over the next few weeks.

    This 30 volume series of Product Reports (28 Product Reports along with a Micro and Macro Industry Executive Summary) is based on SCRI's comprehensive annual survey among broadcast and pro video facilities purchase history and plans for twenty eight specific product types, tracking market size, trends, growth patterns, brand shares and industry trends.

    Product Reports include a written category overview, analysis and future forecasts, plus quantitative summary tables and charts with annual purchases for 2006, 2007 and 2008 (units and dollars), purchase rates, ASPs ($), brand shares, and other breakouts by product type etc. All data is shown in total as well as by each of the six vertical user markets.

    Product Reports are available for the following product categories: Camcorders; Camera Mounting Systems ; Cameras ; Character / Logo Generators ; Clip/Still Stores ; Composite/Component Encoders/Decoders ; Digital Effects Processors ; Non-Linear Editing Systems ; Graphics & Effects Software ; Graphics & Effects Workstations / Systems ; Master Control Switchers Small ; Production/Post Switchers Small ; RAID Video Storage ; Routing Switchers Small ; Standards / Formats Convertors TBC's / Frame Synchronizers ; Telecine Equipment ; Terminal Equipment ; Up/Down Converters ; Video Compression Encoders: Video Disk Recorders ; Video Monitors \ ; Video Servers \ ; Video Test & Measurement : VTRs

    Contact SCRI's Research Director, Des Chaskelson ( for more information and/or to place an order.

    Survey: IPTV Likely to Generate Significant Revenue

    More than half of communications industry executives believe that Internet Protocol Television (IPTV) can generate significant revenue within the first three years of service, according to findings of a survey released today by Accenture (NYSE: ACN) and the Economist Intelligence Unit (EIU).

    The survey of nearly 350 executives from telecommunications, broadcasting and media companies across 46 countries in the Americas, Europe and Asia revealed industry-wide confidence in the longer-term outlook for IPTV, with 60 percent believing that IPTV will generate significant revenues within three years.

    However, confidence in the short-term outlook remains mixed, with slightly more than half (52 percent) of respondents saying they are not confident in the ability of IPTV to generate significant revenues within the next 12 months. On the other hand, one-fifth (20 percent) of respondents said they are confident or very confident, and more than one-quarter (28 percent) said they are somewhat to fairly confident, that IPTV will generate significant revenues within 12 months.

    “The business case for IPTV, its value-added benefits and its potential remain strong,” said Dan Elron, managing director for Accenture’s Communications practice. “In the long-term, the key to achieving high performance through IPTV is to be visionary, ambitious and open to innovation from many sources. For the shorter term, the key is to quickly adapt to consumer feedback and jump over technology hurdles.”

    When asked what they believed would be the principal revenue source for IPTV, about half (46 percent) of the industry executives surveyed selected advertising. However, network operators, as a subset of all respondents — which included equipment vendors, consumer electronic companies, content providers and broadcasters/studios — disagreed, with three-quarters (74 percent) of network operators saying they believe that subscription fees for premium content will provide the largest recurring revenue stream, followed by basic content subscription fees and then advertising fees.

    “This difference in opinions reflects the broad uncertainty around how media will be delivered and what customers will be willing to pay for,” said Elron. “Carriers are used to subscription revenues and believe that the IPTV experience will soon be comparable to or even better than current video offerings, whereas media executives are more cautious and skeptical of a scenario where a new revenue stream is created so rapidly. The reality is that both revenue streams will be important, but the challenge will be to harness the power of this new technology to create a new video experience that makes consumers and advertisers willing to pay more than they do today.”

    When asked to identify reasons for pursuing the IPTV market, the greatest number of respondents (42 percent) cited new revenue streams, followed by acquiring new customers (28 percent) and increasing sale of broadband access connections (21 percent).

    Overwhelmingly, executives believe that discounted pricing through service bundling will be the primary motivation behind consumer spending. Nearly two-thirds (64 percent) of all respondents — and three-quarters (74 percent) of network operators surveyed — said they believe that discounted service bundles provide the greatest enticement to buy IPTV. The ability to move content between devices was also cited as an important enticement, selected by 38 percent of respondents, as was the convenience of a single bill for multiple services, selected by 31 percent of respondents.

    Yet there are obstacles to IPTV adoption. One-quarter (25 percent) of respondents said that the primary short-term obstacle to IPTV adoption is a quality-of-service issue relating to unproven architectures, low bandwidth and other technology issues. The same number (25 percent) said they believe that quality-of-service issues will be resolved over the next three years, leaving stiffer competition from alternative TV providers as the toughest challenge to the adoption of IPTV. Another challenge to IPTV adoption, cited by 19 percent of respondents, is high subscription fees due to the high cost of network access and equipment.

    When asked which types of companies are most likely to generate revenue from IPTV, the vast majority (87 percent) of respondents selected content providers, followed by telecommunications providers (72 percent). Not surprising, more than two-thirds (69 percent) of respondents said that traditional broadcasters have the least to gain from IPTV, a view held strongly by respondents across all company types, including broadcasters themselves.

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