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w/e February 8, 2009 SCRI International, Inc © 1984 - 2008


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DTV-Delay Bill Fails To Pass In House

The House last Wednesday failed to follow the Senate's lead and pass a DTV date-change bill, putting the move of the DTV transition date in doubt after all the momentum seemed to be moving toward the four-month delay to June 12.

It was also something of a defeat for the Obama administration, which had pushed Congress to move the date, citing the problems in distributing DTV-to-analog converter box coupons and a lack of funding for DTV education. Republicans pushed back hard, saying it was a solution in search of a problem.

The vote was 258 to 168 in favor of changing the date, but under House expedited rules, a 2/3 majority was required for approval.

A spokesperson for Energy & Commerce Committee Chairman Henry Waxman (D-CA) had no immediate comment on what the next move will be, but ranking Republican Joe Barton (R-TX) has a bill that would pump more money into the coupon box program without moving the date.

Senator Jay Rockefeller (D-WVA), who pushed the Senate bill and struck the compromise that assured its passage, sounded as though he were conceding the date would now not be changing.

“I am deeply disappointed that Republicans blocked the digital television transition (DTV) delay bill today in the House," he said in a statement. "Instead of delaying the transition to ensure that the most vulnerable among us have the ability to prepare for the transition, they have made certain that far too many consumers across the country will wake up on February the 18th and find that their television sets have gone dark and access to news, information, and vital emergency alerts will be unavailable. It did not have to be this way - this situation was unnecessary and avoidable.”

The Senate had passed a compromise bill Monday by unanimous consent, and Waxman had cancelled a markup on his DTV date change bill to get behind the Senate version.

But while no Republican senator opposed the bill, and Kay Bailey Hutchison, the ranking member of the Senate Commerce Committee, actively supported the compromise bill, the House was an entirely different story.

The House had debated the bill Tuesday night, with a parade of Republicans in opposition and only House Telecommunications & Internet Subcommittee Chairman Rick Boucher holding down the fort for the bill's proponents.

The Energy & Commerce Committee's ranking member, Joe Barton, was dead set against moving the date, calling it a potential disaster and saying the $650 million being set aside for reissued coupons for millions of people was a pot of money in search of a problem.

It didn't help that Republican leadership put out a policy statement Tuesday saying "House Republicans oppose any further delay in the deadline."

The momentum had appeared to be clearly in favor of the bill's passage.

Certainly the industry seemed to think the die had been cast. The National Association of Broadcasters, the major networks, wireless companies waiting for reclaimed analog TV spectrum, and the principal ad agency and advertiser lobby groups had gotten behind the change, at least publicly. Barton said many in the media still, privately, were arguing against the move.

After debate on the bill Tuesday night, one Washington TV station was already warning viewers on its Tuesday night newscast that the DTV transition it had been telling them was coming Feb. 17 might be delayed by four months.

House leadership had scheduled a Wednesday vote on the bill on suspension, which is the House's version of an expedited vote with limited debate, no amendments, and a 2/3 majority required for approval. The idea was to get the bill passed as fast as possible given that the DTV date is only three weeks away.

Missouri Republican Rep. Roy Blunt said his vote against the DTV bill was primarily about public safety. "Every day that goes by without this transition is another day that our firefighters, policemen and EMTs cannot effectively communicate," he said.

Blunt said he supported the bill, proposed by Rep. Joe Barton (D-TX), to correct the DTV converter box coupon accounting problem, saying that it would clear up the current backlog. He specifically cited the Fraternal Order of Police objection to moving the date.

NBC: TV shows boost mobile TV usage

NBC Universal said its television shows are driving a large portion of mobile video usage for its mobile phone programming. The US media company reported that generated more than 60 per cent of traffic to NBCU programming on mobile phones.

NBC also said that its share of usage on mobile phones jumped to 11 per cent of all mobile video views at the end of 2008, more than double the year-ago figure. That puts NBCU second in mobile video usage to Viacom, NBCU said.

Super Bowl may have added 2.6m HDTV sales

Super Bowl drove the purchase of some 2.6 million high-definition television units in the US, according to the Consumer Electronics Association (CEA). For the fourth year in a row, the Super Bowl retains the title of top driver for HDTV purchases.

This year is expected to be another record-breaking year for HDTV sales with 29.8 million HD sets expected to ship, out of a total of 34.5 million digital televisions sold in the US in 2009. This is up from 26.8 million HD sets sold in 2008. In addition to key sporting events like the Super Bowl, another factor driving this demand is the drop in the average wholesale price of sets. In the past five years, the average wholesale price for an HDTV has fallen nearly 50 per cent to $849 in 2009.

Significant Gap Between HDTV Ownership & HD Programming

The number of worldwide high-definition television households continues to increase, acccording to a new R&M study. The worldwide total of HDTV households, which are defined as households with an installed HD-capable TV set that also receive and watch HD programming, are on track to increase by 25% in 2008. In 2009, the total is projected to increase by another 30%.

This report examines the worldwide availability of HDTV services and discusses the market and technology challenges facing today’s high-definition service deployments. It briefly examines different HD business models, provides an in-depth discussion of the different distribution platforms for HDTV services, and reports the results of a recent US consumer survey about HDTV services.

In addition, it identifies leading cable, satellite, and terrestrial service providers. The report also looks back at historical HDTV household growth and forecasts worldwide HDTV households through the year 2012.

The number of households with an installed high-definition television (HDTV) continues to grow worldwide. However, this installed base of households is decidedly biased to two countries: the US and Japan. Further, within the US market, there is a significant gap between HDTV ownership and households utilizing HD programming.

The number of US HDTV households, defined as households having both an installed HD-capable TV set and also receiving and watching HD programming, increased by almost 40% in 2008. However, the growth rate could well have been much larger. “In the US, there are more than 39 million households with an installed HDTV set,” according to our analyst. “However, only 22 million of those are HDTV households, meaning that 17 million US households with an installed HDTV set are not watching HD programming.”

Recent research also found the following:

  • On a global basis, HDTV service remains limited to a relatively small number of countries, primarily the US and Japan.
  • At year-end 2008, there were over 36 million HDTV households worldwide, up from 29 million at year-end 2007.
  • Even though the number of European HDTV households is rising, it will be 2011 before the number of HDTV households in that region reaches the 10 million mark.
  • Cable and satellite TV service providers provide HD programming to almost 80% of all HDTV households. Telco TV service providers and terrestrial broadcast TV service providers provide service to the remaining HDTV households.

    Recession won’t stop IPTV growth

    Not even a global financial meltdown can stop IPTV. Despite the worldwide economic crisis, subscribers to telco TV will grow more than three-fold by the end of 2012, says In-Stat. In several key markets, like Brazil, Korea, and India, recent regulatory changes have given telco TV a real boost, the market research firm predicts.

    "A number of new countries, including places as varied as Montenegro, Jordan, and Ghana, saw the launch of their first commercial IPTV offerings in 2008," says Michelle Abraham, In-Stat analyst. "Only a few markets, like Japan and Argentina, remain hamstrung by restrictions that hinder incumbent operators."

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    Charter Possible Bankruptcy Filing

    Charter Communications Inc., billionaire Paul Allen’s money-losing cable-television company, hired law firm Kirkland & Ellis and investment bank Lazard Ltd. to advise on a possible bankruptcy, according to Bloomberg News.

    Kirkland’s Rick Cieri is providing counsel, according to two people involved in talks on Charter’s strategy. Allen has also hired lawyers and financial advisers, people said. If the St. Louis-based company decides in favor of bankruptcy, it may file as soon as next week, said one of the people, who declined to be identified because the discussions are private.

    Charter said Jan. 15 that it was working with bondholders on “financial alternatives” after missing an interest payment to lenders. The company is vying with larger rivals for customers and has more than $20 billion in debt, prompting Moody’s Investors Service to say last month that bankruptcy is likely unless Charter restructures it.

    Allen, the co-founder of Microsoft Corp., has held a controlling stake since 1998 in the company, which hasn’t turned a profit since going public a decade ago. Allen is represented by Nick Saggese of Skadden, Arps, Slate, Meagher & Flom LLP in the talks and is being advised by Miller Buckfire & Co., the people said.

    Disney Q1 Down

    The Walt Disney Company reported earnings for its first fiscal quarter ended December 27, 2008. Diluted earnings per share (EPS) for the quarter were $0.45, compared to $0.63 in the prior-year quarter.

    “We faced a challenging first quarter with many of our businesses impacted to various degrees by the economic downturn,” said Robert A. Iger, Disney’s president and CEO. “We are forcefully confronting current circumstance while investing in the great creativity, brands and assets that are Disney’s strengths and keys to its long-term success.”

    Media Networks revenues for the quarter decreased 5% to $3.9 billion and segment operating income decreased 29% to $655 million.

    Operating income at Cable Networks decreased $69 million to $517 million for the quarter driven by decreases at the domestic Disney Channels and at ESPN. The decrease at the domestic Disney Channels was due to lower DVD sales reflecting the success of High School Musical 2 in the prior-year quarter. The decrease at ESPN was primarily due to lower advertising revenues and higher programming and administrative costs, partially offset by higher affiliate revenue. The decrease in advertising revenues was due to a decrease in sold inventory, partially offset by higher rates. Higher programming costs reflected increased costs for NFL programming. The increase in affiliate revenue was due to higher contractual rates and, to a lesser extent, subscriber growth.

    Operating income at Broadcasting decreased $205 million to $138 million for the quarter primarily due to lower advertising revenue at the ABC Television Network and at the owned television stations and a bad debt charge in connection with the bankruptcy of a syndication customer. These decreases were partially offset by lower programming costs at the ABC Television Network due to a lower cost mix of programming including a shift of hours from primetime to news. The decrease in advertising revenues at the ABC Television Network was primarily due to lower primetime ratings.

    News Corp Reports Mixed Results

    News Corp’s DTH pay-TV and TV networks boosted an otherwise lacklustre set of results that saw $953 million operating income for the first quarter against $1.05 billion a year ago.

    SKY Italia generated operating income of $165 million, an improvement of $117 million versus a year ago with net subscriber additions of 359,000 over the past 12 months. Cable Network Programming operating income was up 31 per cent led by affiliate and advertising revenue gains at the Fox News Channel, FX and the Big Ten Network, as well as continued expansion of the Fox International Channels.

    Fox Interactive Media grows revenues 17 per cent on strength of advertising and search revenue growth at MySpace.Television operating income declined due to lower advertising revenues at the Television Stations and the sale of eight television stations.

    Commenting on the results, Chairman and Chief Executive Officer Rupert Murdoch said: "I’m pleased that our cable group continues to perform extremely well, SKY Italia remains a top performer and Fox Interactive Media is seeing revenue growth even in the face of negative macroeconomic conditions around the globe, including weak advertising markets. All media companies are being tested and the year ahead will be difficult. I am confident that our long-term strategy of cultivating diversified assets at different stages of development, judicious investment of our capital and a strong balance sheet will guide us through these difficult times."

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    Thomson to sell Grass Valley?

    Thomson group has warned it is likely to breach certain debt covenants and needed to bolster its balance sheet, notably by selling more non-core activities.

    The loss-making company said it would sell businesses which contributed around E1 billion to 2008 sales, including Grass Valley and PRN, for which it has already received expressions of interest, and focus instead on providing services to media content creators.

    The group - which said it was in talks with its main creditors and potential equity investors - also confirmed it could seek assistance from the French government's E20 billion rescue fund. The fund is aimed at helping firms classified as strategically important cope with the financial crisis

    Frederic Rose, Chief Executive Officer of Thomson, commented: "Today we announce the refocusing of our business on content creators, leveraging our technological expertise and our positioning with network operators. Strengthening our balance sheet is the precondition to implementing this strategic framework."

    Quantel pulls out of NAB 2009

    Quantel CEO Ray Cross said: "It's not a decision that we've come to without a great deal of thought. However in the current general economic climate we quite simply can't justify the $1million+ investment that exhibiting at NAB would require. This year we're being prudent; I'm sure our customers are too.

    "The roadshows we've been running around the world over the last year have showed us that many of our customers really appreciate the convenience and individual attention that such events can offer," Cross continued. "These initiatives will therefore continue to be at the forefront of our customer-facing activities over the coming months, in combination with the regular visits that our R&D, support, sales, marketing and management teams make to our users.

    "We are busy working on new projects for major customers around the world at the moment and are progressing exciting new developments such as V4.1 and beyond, RED workflow, Stereo3D, Dino and FCP server integration to name just a few. Not going to NAB in this challenging year will allow R&D to focus fully on delivering for our customers. This year delivery, not marketing, comes first," Cross concluded.

    Harmonic Q4 Up

    Harmonic Inc., a provider of broadcast and on-demand video delivery solutions, reported net sales of $96.9 million, up 11% from $87.4 million in the fourth quarter of 2007. For the full year 2008, net sales were $365.0 million, up 17% from $311.2 million in 2007. In 2008, the Company saw revenue growth across the range of its cable, satellite, telco, broadcast and other markets. Both domestic and international sales grew strongly in 2008, with international sales representing 47% and 44% of revenue, respectively, for the fourth quarter and the full year 2008.

    “Moving into 2009, we plan to continue investing in the long term growth of our business. We expect to announce a number of important new product introductions and to complete the acquisition of Scopus, which we believe will further expand our worldwide customer base and strengthen our technology leadership. We will also continue to focus on controlling our costs and improving our operating efficiencies.

    “While the first quarter is usually the slowest period of the year and the global economic situation creates substantial near term uncertainty, we remain confident that our technology leadership, diversified customer base and strong financial position provide us with operational and strategic flexibility. We are well-positioned to further strengthen our competitive position and increase our global market share in 2009 and beyond.”

    Pixelworks Q4 Down

    Pixelworks, a provider of video and pixel processing technology, announced fourth quarter 2008 revenue was $18.9 million, down 12% sequentially from $21.5 million in the third quarter of 2008 and down 30% from $27.0 million in the fourth quarter of 2007.

    “2008 was a year of significant progress for Pixelworks. With the introduction of leading new products, key senior management additions, and substantial strengthening of our financial position, Pixelworks now has the key components in place to capitalize on exciting trends in the video display market. Significant traction with some of the world’s leading electronics manufacturers in 2008 highlights strong customer acceptance of our new products and validates our product strategy,” said Bruce Walicek, President and CEO of Pixelworks. “While we enter 2009 as a much stronger company, the global economic crisis is having a significant impact on our customer base, and as a consequence our visibility into future periods is severely reduced. In response to this challenging environment, we have acted quickly to initiate restructuring actions and reduce our costs. We remain proactive in managing our expenses and focusing on crisp execution of our product roadmaps.”

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    Philips showcases Cinema 21:9 LCD TV

    Philips has unveiled the Cinema 21:9 LCD TV, with an aspect ratio that Philips claims perfectly matches the cinema experience. The company says it will provide film fans with the chance to 'watch DVDs in the way the director intended'.The 56-inch LCD TV will be launched in Spring 2009.

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  • Broadcast/Pro Video Product Sales Top $10 billion -- read more

  • 2008 - 2009 Broadcast/Pro Video Product Reports
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  • 2008-09 Broadcast/Pro Video Micro Quantitative Product Data Report
  • HDTV / Digital Trends Report
  • IPTV / Mobile TV Report

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