Insider Reporter

Insider Report

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

w/e January 13, 2008 SCRI International, Inc © 1984 - 2007


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Global DTV penetration 43% in 2012

The proportion of digital TV subscribers worldwide is predicted to exceed 40 per cent by 2012 according to a report by the Korea Information Society Development Institute. The report said the current rate is 22 per cent with 239 million subscribers and the number will exceed 43 per cent with 540 million by 2012.

North America is expected to have virtually completed the transition to digital TV as 98 per cent of people will have digital TVs in their home. West Europe follows with 86 per cent predicted and the region is followed by Middle East (30 per cent), Asia (29 per cent), East Europe (23 per cent), and Latin America (21 per cent).

China will have 60 million subscribers, the biggest contributor to the global digital TV industry development. The US will have 39 million, Japan 20 million, and India 23 million. Those four nations will have 54 per cent of global users.

Digital cable TV will secure 249 million subscribers by Feb 2012 and digital satellite service subscribers will add 33 million to the current 87 million by 2012.

CEA: More than half of U.S. households own a DTV

More than half of U.S. households own a digital television (DTV), according to new research released by the Consumer Electronics Association.

The industry group, comprised of more than 2,200 companies, reported that as the nation transitions to digital television, consumers are adding DTV to their homes at a record pace.

"With 50 percent of U.S. homes able to experience the reality of digital television, we have crossed a critical threshold," said Gary Shapiro, president and CEO of CEA, in a statement. "2008 will continue to demonstrate the growth and success of DTV, with nearly 32 million units forecasted to ship. Consumers are particularly keen to add HDTV to their homes, with high definition expected to account for 79% of total DTV shipments in the U.S. in 2008."

According to new CEA sales projections, manufacturers will post 11% revenue growth, to more than $25 billion, from sales of digital televisions in 2007. CEA also forecasts 13% revenue and 17% unit sales growth for digital television in 2008.

CEA released its statements on the U.S. DTV market just a week before its Consumer Electronics Show in Las Vegas. The group noted that DTV and related products will be prevalent throughout the record-setting 1.8 million net square feet of show floor space. DTV will also be a hot topic at 2008 CES events and conferences, with members of the FCC, National Association of Broadcasters, National Cable and Telecommunication Association, and various companies within the DTV realm slated to present.

The end for HD-DVD?

Warner Bros. Entertainment, which currently releases movies on both HD-DVD and Blu-ray format discs, said last Friday it would drop its support for HD-DVD titles in May.

In announcing its decision, the company said consumer “confusion and indifference” was translating into marketplace inertia that was preventing mass-market adoption of an HD disc format. Additionally, Kevin Tsujihara, president of the Warner Bros. Home Entertainment Group, said consumers “have clearly chosen Blu-ray.”

A consumer survey released in December from The Diffusion Group revealed, however, that among those interested in buying a high-def DVD player, 43 percent expressed a preference for HD-DVD compared to 20 percent who chose Blu-ray. Thirty percent were undecided.

The HD DVD Promotional Group issued a statement late Friday calling the decision “a setback for HD-DVD.” But Michael Greeson, president and principal analyst for The Diffusion Group, forecasts that the move will have a more dire impact. “With Warner going Blu-ray only, Paramount and Dreamworks will likely follow suit, leaving Universal as the only major studio supporting HD-DVD. HD-DVD’s lifetime as an HD movie fromat is now numbered in days, weeks at the most,” he said.

Greeson added that the timing of the Warner Bros. announcement is unfortunate for consumers. "It's disappointing that Warner chose to wait until after the Christmas shopping season to make the announcement. They should have declared their allegiance before shoppers spent money on HD-DVD players and discs. That wasn't going to happen, of course, because they wanted to clear their inventory of HD-DVD titles.”

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Supplier confidence strengthens through 2007

Broadcast and media technology suppliers are upbeat about the global market. Confidence levels have improved through 2007 based on the latest International Association of Broadcast Manufacturers (IABM )Industry Trends Survey undertaken by Ernst & Young LLP. The IABM represents broadcast and media technology suppliers worldwide.

Respondents seeing increased or significantly increased confidence outnumbered those seeing decreased confidence by 7:1 and up from 4:1 earlier in the year. The 12 month outlook is good too with a 7:1 ratio up from 6:1 in the Spring. According to IABM CEO Roger Crumpton, "this reflects our own analysis and confirms how strong the market has been in 2007. The outlook is good but there are indications of financial pressures on the horizon."

Margins are suffering though, selling prices are seeing some downward pressure and cost prices are rising. 20 per cent of respondents commented on falling prices compared to 2 per cent reporting an increase - a ratio of 10:1. This is primarily due to the impact of the dollar exchange rate in the Europe, Middle East and Africa region. This again confirms other IABM research that suggests prices are falling at an average 5 per cent per annum.

Increase in US Advertising

Total US measured advertising spending is projected to increase 4.2 per cent in 2008, according to the full-year forecast released today by TNS Media Intelligence, provider of strategic advertising and marketing information. Measured expenditures are forecast to grow by 3.6 per cent in the first half of 2008 followed by a gain of 4.7 per cent in the second half

New mobile broadcast platform

Samsung Electronics, MobiTV, Nokia Siemens Networks, Rohde & Schwarz and SES Americom IP Prime are set to demonstrate a national distribution platform to enable mobile TV services in the US using local broadcast TV spectrum. The platform is planning to showcase a complete mobile TV technology solution in 2008, with consumer trials planned in US cities to be announced later.

The platform will deliver local and national programming and interactive applications to consumers on mobile devices "in-band," i.e., through local TV stations’ existing transmitters and spectrum.

The platform offers another alternative for broadcasters to avoid using the MNOs that currently control content and, effectively, the handset market. However, it will go up against the recently announced LG/Harris system and could give the US electronics/broadcast market another standards headache.

NBC in alliance to fight video piracy

NBC Universal has formed a coalition with a group of technology companies, including AT&T and Microsoft, with the aim of developing anti-piracy measures that would restrict the illegal transfer of copyrighted video content over the internet.

NBC, which is owned by General Electric, is also understood to have approached Apple to discuss how anti-piracy technology could be used to stop unauthorised copyright-protected content being transferred to the computer maker’s devices, such as the iPod. However, Apple is believed to have refused to participate in any anti-piracy discussions with NBC. NBC and Apple have a strained relationship and recently had a public disagreement about pricing, which resulted in NBC pulling its TV content from Apple’s iTunes platform.

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Ciprico Q4 Revenue Up but YTD down

Ciprico Inc. reported revenue for the fiscal fourth quarter ended September 30, 2007 of $2.2 million, up $0.6 million, or 34%, sequentially. The period’s results are in line with the Company’s previous guidance of a 30% increase over its third quarter revenue. Sales for the period were down 22% year-over year. Sales for fiscal year 2007 totaled $8.6 million, a 28% decrease from the prior fiscal year.

“We are pleased with our quarter-over-quarter revenue growth and the initial traction of the RAIDCore™ product,” said Steve Merrifield, chief executive officer. “However, it takes a significant investment of time and resources to move the market from hardware-based products to a new and innovative software technology. More than 80% of our professionals at Ciprico are new in the past 12 months, combine that with the transition to a new product line, and we believe certain year-over-year comparisons are less meaningful given the new direction of the Company.”

Broadcast International Closes on $15 Million Offering

Broadcast International, Inc. announced that it has closed and received the funding from the sale of approximately $15.0 million of its 6.25% senior secured convertible promissory notes, due December 21, 2010.

The notes are convertible into shares of Broadcast common stock at an initial conversion price of $5.45 per share. Additional terms and conditions of the transaction were previously announced. As part of this offering, Broadcast also 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 Broadcast common stock at a price of $5.00 per share.

The funding will be used to finalize development of the CodecSys technology on IBM’s Cell Broadband Engine™ (Cell/B.E.) multi-core processor and the IBM BladeCenter® QS21 server and to fund the market launch of the combined IBM/BI encoder beginning the first quarter of 2008. In addition, Broadcast will use these resources to fund other CodecSys development projects, as well as further develop and market key strategic corporate initiatives.

“This round of funding is the latest in a series of significant company milestone this year, which include our license agreement with IBM and receiving the U.S. Patent for CodecSys,” said Rod Tiede, President and CEO of Broadcast International. “We are confident that 2008 will bring major new customers for the IBM video encoder, featuring our CodecSys compression engine, as well as additional CodecSys licensing agreements and positive results from other promising corporate developments.”

Optibase to Purchase 10% of Scopus' Outstanding Shares

Optibase Ltd. announced that it entered into agreements with existing shareholders of Scopus Video Networks Ltd. to purchase in the aggregate 1,380,000 ordinary shares of Scopus, representing approximately 10% of Scopus' outstanding shares, for an aggregate consideration of approximately $8.6 million. The agreements are subject to customary conditions. The transactions are expected to close in January 2008.

Optibase currently owns 3,725,223 ordinary shares of Scopus, representing approximately 27% of Scopus’ outstanding shares, and, following the consummation of the transactions, would own approximately 37% of Scopus' outstanding shares.

Sony and Disney buy FilmFlex

FilmFlex, the cable movies VOD service in UK, has been bought by Sony Pictures and Disney. The two studios already owned a third each of the business, and acquired the remaining third held by SeaChange subsidiary OnDemand Group. The stake was acquired for approximately $14.5 million.

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Pinnacle Systems Introduces Free Video Editing

Pinnacle Systems, Inc., the consumer division of Avid Technology Inc., announced a new video editing application, called VideoSpin™, that it is offering as a free download from Amazingly easy, fun and free, the VideoSpin application is for all consumers and will especially attract users who don’t want to spend much time creating movies. Since the public Beta version was launched in the Fall of 2007, VideoSpin has been successfully used by nearly 60,000 consumers attracted by the simplicity of being able to quickly create entertaining videos and post them on the Web or email them to friends and family.

By leveraging the editing engine of its award-winning Pinnacle Studio™ software and making the editing process virtually foolproof, Pinnacle Systems has filled a huge gap in the video editing industry. Consumers of all ages and all walks of life can benefit from the VideoSpin editor, including fans of online video-sharing sites, teachers, seniors and students as well as the millions of people with digital videos and photos accumulating on their PCs.

Specifically designed to make video editing and sharing fast, easy and fun, VideoSpin editing will appeal to people who want a solution that takes the complexity out of video editing while still enabling them to put some “sizzle” in their movies using Hollywood-quality video effects. A trusted name in the consumer video editing industry, Pinnacle Systems makes VideoSpin editing even more compelling by offering the complete package, not just a trial version, absolutely free.

“In developing VideoSpin, we focused on putting the fun in video editing for consumers with all levels of experience by making it faster and easier than any other product on the market,” said Tanguy Leborgne, Pinnacle Systems Vice President of Worldwide Marketing. “Beta users tell us the tutorial is invaluable because it guides them through every step of the movie-making process and makes using the VideoSpin album, timeline and preview components easy to understand. Many of them have already posted their videos to the Web using the Beta version.”

Designed for Windows XP with SP2, or Vista™ systems, the VideoSpin application is available for download by the end of January at no charge from

VideoSpin comes with a 15-day trial of its Advanced Codec Pack to enable users to create and edit MPEG-2, MPEG-4/DivX® files and to share videos on devices like the Apple iPod® Video. Users can purchase the pack for $14.99 or continue using VideoSpin without these features when the trial is over.

DVCPRO P2 HD Series Adopted for Beijing 2008

Panasonic announced that it has reached an agreement with the Beijing Olympic Broadcasting Co., Ltd. (BOB) on the use of its DVCPRO P2 HD series with solid-state memory and newsgathering systems for broadcasting as the official video recording equipment for the Beijing 2008 Olympic Games.

Panasonic's DVCPRO HD was adopted in May 2006 as the official recording format for the Beijing Olympic Games. All international video delivered from the International Broadcasting Centre (IBC) -- to be completed in Beijing in June, 2008 -- to the rights holding broadcasters around the world will be produced and distributed in 1080/50i full high-definition (HD) format. HD video equipment was already used during the Torino 2006 Winter Olympic Games, but only on a limited scale which was about 40% of the production. The Beijing 2008 Olympic Games will be recorded and broadcast entirely with HD systems, a first in the history of the Olympic Games.

Panasonic's digital broadcasting technologies, which have been used as the official recording format in eight Olympiads, starting with the Barcelona 1992 Olympic Games, will continue their contribution to recording video of the Olympic Games in the HD era. Panasonic is expected to provide 250 recorders, 100 camcorders, and 1,500 monitors for the 2008 Beijing Summer Olympic Games related businesses.

"Video has played a vital role in the development of the Olympic Movement," said Tadao Shimozuru, Director of Professional AV Systems Business Unit, Systems Business Group, Panasonic AVC Networks Company. "Panasonic has been contributing to the recording of Olympic Games as an Official Worldwide Olympic Partner since Calgary 1988. TV broadcasts of the events are watched by some 4 billion people around the world. Our mission is to keep contributing to the success of the Olympic Games. In the HD age, Panasonic will provide both experience and the latest HD equipment, such as the P2HD AJ-HPX2100 and 3000 series, for use during the Olympic Games, starting in Beijing. We will support the presentation of the Olympic Games in HD."

"The Beijing 2008 will be the first Olympic Games in which everything will be broadcast from the venues in high definition," said Manolo Romero, Beijing Olympic Broadcasting's CEO. "Approximately 20-25 percent of residential TV sets are either high definition or 16:9 wide screen, which means that we will televise in the highest technical standard available, but many people around the world will see it in the format of 4:3 television sets. For those people who have the upgraded sets, they will enjoy a great viewing advantage."

LG enhance mobile TV

Woo Paik, LG's chief technology officer, has announced the firm's new mobile TV vision at CES 2008. MPH - or Mobile Pedestrian Handheld - is due to revolutionise US mobile TV, Paik said, bringing live digital broadcasts to mobile phones, notebook computers, personal media players, GPS units, and in-car TV sets.

Developed with Zenith and Harris Corporation, LG's MPH technology is set to enhance the mobile video picture to offer broadcast-quality video. "LG's new MPH technology is TV to the power of three," Paik said at LG's keynote at CES 2008 this morning. "It allows high speed mobility for users, high-definition quality programming, and multicast variety for broadcasters." MPH will support DVB-H technology, which has already been adopted as the European mobile TV standard.

Comcast and Panasonic launch portable DVR

Comcast and Panasonic will launch a co-branded portable digital video player that can show videos like Apple’s iPod and record shows from any US cable operator's system. The AnyPlay device is the first of a range of new electronic devices based on technology developed jointly by the cable industry and consumer electronics makers intended to increase interoperability among cable operators - and increase their threat to satellite TV rivals.

AnyPlay can record up to 60 hours of video and plays DVDs and CDs. It also features an 8.5-inch display screen. The device was unveiled at the Consumer Electronics Show in Las Vegas.

Comcast Chief Executive said ahead of the show that the industry had been working on the technology standard for several years and now plans to roll it out across the United States this year. "We knew we needed an open, national and interoperable structure between cable companies," said Roberts, who is also chair of industry technology trade body Cable Labs."We also knew there would be more competition and we had to change," said Roberts. "The era of closed cable is over and the era of open cable is here."

Electronics devices compatible with the technology, called Tru2way and previously OpenCable Platform, are expected to be available at retail outlets later this year and will be able to work without a cable operator-supplied set-top box.

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ScheduALL Names Joel Ledlow as CEO

ScheduALL, aprovider of real-time resource management and reporting software to the broadcast, production, and media industries, announced the appointment of Joel Ledlow as chief executive officer (CEO). Ledlow brings 19 years of executive-level experience in business development to ScheduALL, with expertise in identifying emerging markets and implementing scalable best practices that significantly improve stakeholder value. In his new role, Ledlow will focus on ScheduALL's next generation solutions, customer care, and expanding its presence in key markets such as Europe and the Middle East. Ledlow will also establish West Coast operations in Los Angeles that will provide enhanced services for ScheduALL's growing number of entertainment industry users.

Ledlow has served as CEO for Acarra, a "growth catalyst" consulting firm for technology companies based in Boca Raton, Fla.; CEO of Touch Point; and as vice president of CyberGuard during its aggressive growth run (400%) from 2001 to 2005, Productivity Point, International Paper/XPEDX, SYSCO, and Parisian.

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