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

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


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HDTV 2008: Global Uptake, Strategies and Business Models

Screen Digest has identified three critical success factors that will support the successful migration to HDTV: penetration of HD-ready displays, supply of HD content and HD channels, and the availability of HD broadcast on a variety of television platforms. The report shows that all these are now cleared for a sustainable migration to HD in the long term.

In the next five years, HDTV will mainly develop as a pay TV product in Europe, and mostly a satellite product. However after analogue switch-offs are completed between 2010 and 2012, and digital free-to-air platforms are upgraded to more advanced technologies, they will end-up with more bandwidth capacity and become more widely accessible. It will kick-start the next phase of HDTV migration as HD becomes the mainstream and ultimately, the standard form of free television around the middle of next decade. In ten years, nobody will ever refer to 'high definition' as high definition will be everywhere. However, in the short term, HD broadcast offering in Europe remains patchy, for three reasons:

- Lack of HD on free-to-air platforms: only Sweden has already launched HD on free DTT and only France and the UK are likely to follow in the short-mid-term; 'Freesat HD' despite its name has a disappointing HD line-up and is not likely to make a strong market impact in the UK.

- Lack of local HD channels in many countries: pay TV operators relying mostly on US HD channels supply so far.

- Lack of ambition from a number of European pay TV operators.

HD has not been pushed hard enough yet by many of Europe's pay TV operators. Paradoxically it has been used heavily as a marketing tool, but has not been followed through with the delivery of HD channels – for example, Premiere in Germany still only offers two HD channels and its HD uptake is sluggish. By contrast BSkyB has now 17 HD channels covering all genres, and on the back of this has signed up almost 500,000 subscribers in less than two years – the fastest take-up of any new BSkyB product. There is a clear connection between the depth of the HD offerings and the take up of HD by subscribers.

Making HD Pay:
In European pay TV markets that show signs of maturity, operators can use HD to drive ARPU, increase loyalty and reduce churn rates. HDTV can also drive pay TV acquisition, as new owners of HD-ready sets are frustrated by the lack of free HD sources. Pay TV operators should therefore seize this window of opportunity before free TV eventually accommodates more HD.

MPEG4 migration:
The new Screen Digest report also includes an exclusive and detailed analysis of how the migration to HDTV can also leverage the migration to MPEG4 in a virtuous circle. Screen Digest believes that small and medium sized pay-TV operators might benefit from reduced costs of transmission and release bigger capacity by migrating their subscribers to MPEG4 at an early stage.

Key findings:

  • The penetration of HD-display TVs has reached 20 per cent in Western Europe, 36 per cent in North America.
  • In 2012, in developed markets, HD-readiness will stand between 75 per cent and 100 per cent.
  • Globally, households equipped with HD-display will grow from 87m in 2007 (9 per cent of TV households), to nearly 500m by 2012 (45 per cent).
  • Approximately 100 HD channels available in the US and in Western Europe. Between 2 and 15 in each individual European country.
  • In Europe, there were 1.2m active HD-enabled homes at end-2007 (less than one per cent) out of 30m HD-display homes, pay TV subscribers accounting for 80 per cent of all HD homes.
  • By then, another 110m homes will only watch SD television signals on their HD displays (although many of them will be watching HD movies out of their Blu-ray players or playing HD console games).
  • In home video, the emergence of Blu-ray as the only HD format is bound to drive uptake, overall HD awareness and quality expectations.
  • Beyond broadcasting, cable and IPTV operators are also offering HD VOD offerings. IPTV and online VOD will struggle to offer HD because of bandwidth limitations.
  • HD is becoming one key element in the competition between the four TV platforms (satellite, cable, IPTV, terrestrial) which have different capacities to offer HD content.
  • HD is also a key element in pay TV marketing, helping to drive ARPU and reduce churn, but also potential driving customer acquisition.

    Mobile TV and Video to Exceed $15 Billion

    Consumers are demanding more personalization and entertainment content on their mobile phones, driving mobile video subscription revenue to exceed $3.5 billion in 2008, according to resent research by MultiMedia Intelligence. By 2012, the mobile video and mobile TV market will exceed $15 billion, including direct pay and advertising.

    Mobile video, which relies on the mobile operator’s 3G network for delivery, has the advantage of an established network, making it the stronger of the two categories in today’s market. However, mobile TV infrastructure deployments and mobile TV handsets are rolling out aggressively, making mobile TV the dominant category in 2012.

    The mobile phone is inherently an inferior entertainment platform compared to other media devices like TVs. However, the mobile handset is inherently a superior portable communications platform. It allows for TV advertising outside the home as well as enabling new forms of advertising, including “call to action” advertising. Call to action leverages the handset's built in return channel to deliver advertising beyond the capabilities of the living room TV experience.

    MultiMedia Intelligence also found that:

  • Mobile TV ARPUs are much higher in North America and Europe than Asia due to the lack of free-to-air alternatives.
  • Total Mobile TV and Video advertising revenue, including "Call to Action" advertising, will exceed $1 billion by 2012.
  • With the combination of a large wireless subscriber base and free-to-air alternatives, Asia has the vast majority of mobile TV subscribers. By 2012, Asia will have two thirds of all mobile TV subscribers.

    YouTube gets 1bn daily users but ad revenue lags

    Despite one billion video views on most days, YouTube hasn't been popular with big corporate advertisers. Worldwide revenue from YouTube ads has fallen short of Google's expectations this year, and is likely to total about $200 million for the full year, according to reports in the WSJ.

    YouTube is heading Google's campaign to extend its advertising reach far beyond text ads tied to Web searches, its revenue powerhouse. But Google Chief Executive Eric Schmidt has acknowledged that the company hasn't yet found the best formats for video advertising. Most blue chips are nervous of their ads appearing next to amateur content.

    Copyright litigation has also complicated the YouTube ad push. Viacom is suing Google in connection with clips of television shows and films posted without authorization by YouTube users.

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    TV and film business facing dark days

    According to a recent Reuters report, Lehman Brothers cut the stock ratings on Monday of Walt Disney Co, Time Warner and other top entertainment companies, fearing the television and film industry could suffer the same battering as the music business.

    Along with Disney and Time Warner, Lehman lowered its ratings on News Corp and CBS Corp on concerns about "structural changes that appear destined to impact the core revenue and profits of (the) entertainment business."

    Lehman maintained its rating on Viacom Inc, but nonetheless cut its price target on the stock. It also lowered its overall view of the industry to "negative" from "neutral."

    The shares of all five companies were down -- to various degrees -- in trading on the New York Stock Exchange. CBS suffered the sharpest drop, falling 4.5 percent.

    "To be clear, our fear is that the damage that digital distribution inflicted on the music industry will replicate itself in the movie industry, and our fears are too great to justify keeping neutral or positive ratings on the creators and distributors of movie and TV content," analyst Anthony DiClemente wrote in a research note.

    DiClemente added: "In reality, while there are many obvious differences between music/audio and movie/video media forms, the core properties of video distribution and consumption are not different enough from music content to continue to justify why movie/TV content will be spared fragmentation."

    Specifically, DiClemente argued that, as consumers shift to new types of media -- movie downloads, for instance, or TV video recorders that make it possible to skip commercials -- the big entertainment companies will struggle to replace traditional sources of revenue.

    "We believe fragmentation of media as a result of technological change is highly likely to disrupt the economics of traditional forms of movie and TV distribution," he said. "Content may no longer be king in the entertainment business."

    Take DVD sales, for instance. DiClemente cautioned that it appears the rate of revenue decline from the DVD business will outpace any growth from the digital side.

    DiClemente also cited specific trouble spots at each of the companies.

    Disney must contend with economic problems that could hurt theme park results, an ABC TV network that faces head winds and a stock price that is already at a premium to its peers. He cut Disney to an "underweight" rating with a $29 price target.

    News Corp faces exposure to a depressed newspaper business, its Fox TV network remains challenged and acquisition risk is a major concern, he said. It was cut to "equal weight" rating with a $15 price target.

    Time Warner's additional problems include concerns about future capital allocation of a special dividend from Time Warner Cable, plans for its Time Inc unit and questions about AOL. DiClemente cut the rating to "equal weight" with a $14 target.

    He cut CBS to "underweight" and a $16 target because of added concerns about CBS Radio, structural and cyclical weakness at the CBS TV network and acquisition risk related to its purchase of CNET.

    While Viacom's price target was cut to $32 a share, it maintained its "equal weight" rating because of the possibility of incremental contributions from the "Rock Band" video game, international expansion and the likelihood affiliate fees will provide some stability.

    Broadband In Flight Forecast

    In-flight broadband is entering a new era. In addition to growth in DBS offering on-board flights, the past six months have seen announcements and strategic positioning as industry players prepare to re-launch in-flight service in the wake of Connexion by Boeing’s failure.

    With the imminent re-launch of in-flight Internet service, strategic positioning focuses on two core areas: bandwidth and technology choice. Competitors differ whether to offer a less costly narrowband solution, or a more costly, but more robust and future-proof, broadband solution. Within the broadband space there is also positioning between the two camps of in-flight broadband solution providers, those employing air-to-ground (ATG) technologies and those using satellite-based technologies.

    Despite industry plight, airlines are continuing to invest in new entertainment services due to their potential for additional revenue generation. However, if fuel prices continue to escalate, cash for such projects may be in jeopardy. MultiMedia Intelligence (MMI) anticipates that with a projected 2H 2008 revenue service launch, the in-flight broadband market will grow to over $1 billion by 2012.

    Microsoft & Yahoo consider media partner options

    Microsoft and Yahoo have been holding separate talks with other potential media partners after their negotiations with each other broke down, according to reports.

    Microsoft - rebuffed this year in efforts to buy all of Yahoo and then just its search business - is talking about alternative deals with Time Warner, which owns AOL, and News Corp, parent of MySpace, but any negotiations remain in preliminary stages.

    Meanwhile, talks have continued for months between Yahoo and Time Warner over a potential merger of AOL with Yahoo to create a more formidable advertising and media player, but they are reportedly no closer to a deal.

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    Focus Enhancements to Purchase Wireless Audio IP

    Focus Enhancements has entered into an agreement to purchase certain intellectual property rights for a prototype wireless audio product chipset developed by AudioMojo, Inc. and owned by Hallo Development Co. The digital wireless audio (DWA) technology provides highly sought-after features including two milliseconds (ms) latency, which reduces lip-syncing concerns, and scalability up to 16 channels.

    “Blending superior DWA technology with our video expertise strengthens our UWB strategy and creates a unique capability for Focus Enhancements to deliver wireless media throughout the home,” said Brett Moyer, president and CEO of Focus Enhancements.

    “DWA is an exciting, growing market in its own right. RH Associates projects the total available market for DWA to reach approximately $53 million by 2009 growing to approximately $136 million in 2011. Since we have developed significant long-standing relationships with large consumer electronics companies with our video conversion technology, we intend to leverage these for distribution. In addition to this impressive technology, the rapid time-to-revenue and relatively low cash requirements were important factors in our acquisition decision. With an additional engineering investment of approximately $1.5 million, we expect to sample DWA chips in the first quarter of 2009 and begin production volume mid-2009 in time for the holiday season. Our ultimate goal is to deliver high quality audio and video via UWB using a single radio, thereby lowering the system cost for the large consumer electronics manufacturers.”

    Google ordered to hand over YouTube personal info

    Google is being forced to hand over the personal information of every person who has ever watched a video on the YouTube website as part of the billion-dollar copyright case brought by Viacom.

    A judge in New York has ordered that Google, which owns YouTube, must pass on the details of more than 100 million people to the broadcasting company that owns channels including MTV and Nickelodeon. The data will include unique Internet addresses, email accounts and the history of every video watched on the website, giving Viacom's experts the ability to conduct a detailed examination of the viewing habits of millions of people around the world, raising fresh controversy for Google on privacy.

    Catherine Lacavera, Google’s senior litigation counsel, said Google was "disappointed" by the ruling.She said Google would ask Viacom to "respect users’ privacy and allow us to anonymise the logs before producing them under the court’s order".

    Harmonic Announces Q2 Reporting Date

    Harmonic Inc. announced that it plans to report its second quarter 2008 results after market close on July 28, 2008.

    Harmonic will host a conference call to discuss its financial results at 2:00 P.M. Pacific (5:00 P.M. Eastern) on Monday, July 28, 2008. A listen-only broadcast of the conference call can be accessed on the Company’s website at or by calling +1.706.634.9047 (conference identification code 55489323). The replay will be available after 6:00 P.M. Pacific at the same website address or by calling +1.706.645.9291 (conference identification code 55489323).

    Harmonic intends to discuss financial and other statistical information on this conference call. This information will also be available on the Company’s website at either in the press release related to the above broadcast, by accessing the listen-only broadcast described above or by accessing the replay of the broadcast described above.

    Image Entertainment Net Revenues Expected to Exceed $31 Million

    Image Entertainment, Inc. (NASDAQ:DISK), a leading independent licensee, producer and distributor of home entertainment programming in North America, announced that it expects its fiscal 2009 first quarter reported net revenues to exceed $31 million. This would represent Image’s highest net revenues since the December 2005 quarter.

    Although the first quarter has already concluded the Company cannot provide actual net revenue figures at this time as there are still miscellaneous credits and adjustments that need to be applied. Actual results for the three months ended June 30, 2008 will be available prior to or on August 14, 2008.

    The Company also reiterates that it expects net revenues for fiscal 2009 will be in the range of $115 million to $125 million. The Company is not providing specific earnings guidance for the first quarter or the full year but anticipates that it will be profitable for fiscal 2009.

    Tandberg Q2 Webcast/Conference Call

    TANDBERG® has scheduled a live webcast/conference call July 14, 2008 at 11:00 AM (Eastern Time) or 5:00 PM (Central European Time) to discuss fiscal second quarter 2008 results. A PowerPoint presentation will accompany the webcast/conference call.

    To participate via Internet or phone:

    +1.800.291.4080 (U.S. callers) 0808.234.7616 (U.K. callers) +1.617.614.3675 (international) Passcode: TANDBERG

    Participants are encouraged to download the streaming media software required for the Internet broadcast in advance of the call.

    An online video archive of the broadcast will be available immediately following the call at:

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    IPTV operators need better tools to monitor quality

    Telcos that are investing heavily in IPTV infrastructure and services to drive new revenues also need to ensure that tools and technologies are in place to monitor their customers' quality of experience (QOE) with their video services. However, telcos aren't sure if today's IPTV QOE test and measurement tools provide the right level of service monitoring, according to a report from Heavy Reading, the research unit of Light Reading.

    "Telcos need real-world metrics to be able to verify the health of the video signal as it traverses the live IP network," notes Sam Masud, Senior Analyst with Heavy Reading and author of IPTV Phase II: QOE Is Mission Critical. "The ability to measure the quality of the video signal delivered to real subscribers is a huge issue that will directly affect the success of telco TV ˆ and that means the ability to monitor the performance right to the TV set, using quantitative metrics to evaluate what essentially is a subjective evaluation."

    IPTV QOE monitoring can be the most expensive test and measurement initiative for telcos, but it's essential to guarantee user satisfaction, Masud says. "With video services, telcos are entering a very competitive market sector in which baseline expectations have already been set by cable and satellite network operators," he explains. "Telcos at minimum have to match the perceived quality of existing services before they can expect to leverage some of IP's inherent advantages as a video delivery platform."

    HP Releases Low-Cost Quad-Core Workstation

    HP has released a new AMD processor-based quad-core workstation that's priced at just $599. The entry-level xw4550 includes the Quad-Core AMD Opteron processor and an Nvidia Quadro NVS 290 card.

    The AMD Opteron processor line offers advantages that include enhanced power management and virtualization capabilities, and the overall system efficiency and flexibility of AMD's Direct Connect Architecture.

    While pricing for the workstation can range up to $1,349, the $599 configuration includes Genuine Windows Vista Business 32 with downgrade to Windows XP Professional 32 custom installed, 2GB 6667MHz DDR2 SDRAM, a 160GB 7200rpm SATA NCQ hard drive, and a three-year warranty. ATI's Radeon X1250 graphics card with error correcting memory capability is also available as an option.

    Pioneer to Launch Blu-ray Recorders

    Pioneer says it plans to launch Blu-ray disc recorders by year's end, but it's unclear if they will be available in the United States.

    Reuters reports Pioneer will launch the recorders in Japan, which will be followed by overseas launches. But the article is silent on plans for the U.S.

    In related news, Sony President Stan Glasgow told TWICE Magazine last week that his company does not plan to introduce a Blu-ray recorder this year.

    "I see it in the future," he said. (But) the cost of the drive has to come down dramatically. You will see products in the not too distant future that will record on Blu-ray in a simplified fashion."

    While some high-def enthusiasts have called for the introduction of Blu-ray recorders, manufacturers have been hesitant to offer them here, pointing out that standard-def DVD recorders have not fared well in the U.S. There have been Blu-ray recorders in Japan for a few years.

    Reuters writes that Pioneer will develop the Blu-ray recorder in partnership with Sharp. The company did not reveal any pricing details.

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    NVISION Appoints Roberto Silva as Regional Manager/Latin America

    NVISION announced the appointment of Mr. Roberto Silva to the position of Regional Manager Latin America. Effective immediately, Mr. Silva will head up NVISION’s Latin America operations and sales from Sao Paulo, Brazil. Mr. Silva’s new management role in the company is the outcome of NVISION’s strong annual sales growth in the Latin American markets and the rapidly growing demand by TV networks and local stations in this region for cost-effective, high quality broadcast solutions that enable error-free, uninterrupted transmission of TV programming to their viewers.

    Mr. Silva has 20+ years experience in broadcast technologies, telecommunications, pay-TV, intellectual property, and consumer electronics, working for such companies as Philips, Barco, Telefonica, and DivX. Additionally, he has strong international experience in product marketing, complex sales, and project management. Mr. Silva joins NVISION following his senior management position at DivX, where he was responsible for successfully structuring the company’s start-up operations in South America. Mr. Silva’s diverse executive roles and experience bring NVISION the proven business skills and market knowledge to further expand and strengthen the company’s sales in this region of highly varied broadcast requirements. ”

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

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

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