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Mobile satellite TV ‘massive growth’
New analysis from Frost & Sullivan's Space & Communications Group, European Mobile Satellite TV Markets, finds that that the market earned revenues of $1.92 million in 2007 and estimates this to reach $3.3 billion in 2014.
"As Mobile TV services continue to grow across Europe, customers and operators require a reliable and pervasive service coverage, which can transmit high-quality, dedicated programs," notes Frost & Sullivan Research Analyst Natalie Bentz. "The distribution and transmission by satellite, through the hybrid network or backhaul, will both greatly contribute to the success of Mobile TV by providing what the industry and the customers ask for."
IPTV Operators Searching for Competitive Differentiation
In the past five years, IPTV has grown from a handful of deployments by a few pioneering telcos and ISPs to an established part of the pay-TV landscape with services spanning the globe from Australia to the Ukraine. But now, according to ABI Research, this “adolescent” industry must find ways to create a distinct identity so it can continue to grow and prosper, with IPTV operators creating unique service offerings that are differentiated from the traditional video services of their key competitors.
Some services have recently crossed the symbolically important 1-million-subscriber threshold. But, says senior analyst Cesar Bachelet, “IPTV operators must now leverage the characteristics of the new platform to produce a differentiated offering, redefining the experience of television.”
How are they to do this? Bachelet offers several suggestions.
Operators should focus on integration of Web content (text or video) with traditional broadcast content. New technologies offer the ability to pull real-time feeds from the Web and combine them with broadcast video content.
Offering subscribers the ability to access the EPG (electronic program guide) and DVR functionality through any Internet-connected device, e.g. a PC, mobile handset, or portable device.
Targeted advertising. IPTV’s interactivity and personalization allow much more effective ad strategies than conventional broadcast.
“From a technology perspective,” Bachelet concludes, “all the tools are there, enabling IPTV operators to move to the next level and bring greater choice, convenience, and control to consumers. However, operators must tread carefully in order not to overwhelm subscribers with too many new features at once, and business models still need to be defined for some of the new value-added services in order to monetize them without alienating subscribers.”
IPTV to drive take-up of pay TV in Western Europe
The pay-TV market in Western Europe is generally considered to be mature, but the increasing deployment of IPTV services will see the market enjoy a modest rate of growth in the number of households subscribing to pay-TV services, according to the research published by Analysys Mason.
According to the report, ‘Pay TV in Western Europe: market sizings and forecasts 2005-2013’, the number of households subscribing to pay-TV services will increase at a CAGR of 3.2 per cent from 90.6 million in 2007 to 109.2 million by the end of 2013.
"The adoption of IPTV services will be driven by a combination of factors, including the proliferation of multi-play strategies; latent broadband growth; improving brand recognition, broadening content offerings, and the general move towards digital TV services as the analogue TV signal is switched off in Western Europe," said the report's author Richard Hadley. "However, the growing popularity of IPTV among households will contribute to a slow down in pay-TV spend as these predominantly lower-value TV packages are increasingly bundled with telecoms services."
Regulation to hamper mobile TV?
A recently published study conducted by industry association the Broadcast Mobile Convergence Forum (bmcoforum) analyses the status of national licensing frameworks for terrestrial mobile broadcast TV in 23 countries, among them 21 from Europe. It concludes that a significant number of countries are still lagging behind most advanced countries in defining their regulatory framework including the licensing conditions and processes.
Operational in Italy for two years, some one million users own mobile TV capable devices. Licence granting is completed in Austria, Denmark, Finland, Germany, The Netherlands and Switzerland and in process in France and Hungary. Therefore, notes bmcoforum) the majority of continental European countries have assigned terrestrial frequencies, established regulatory and licensing frameworks and have started or are about to launch mobile broadcast TV services in 2008. Other countries such as Belgium, Greece, Portugal and Spain as well as the majority of Northern and East European countries have not yet decided upon licensing conditions and processes.
According to bmcoforum, these processes normally take quite some time and effort requiring public consultations and law changes. bmcoforum therefore sees an urgent need for these countries to speed up the decision process in order to take advantage of the present market opportunities for terrestrial mobile broadcast TV. "As according to the European Commission, mobile broadcast TV can reach a worldwide market worth up to €20 billion by 2011, bmcoforum is urging all national regulators to allow for a fast service kick-off in their countries," said Claus Sattler, executive director of bmcoforum.
Further analysis of regulation and licensing practice, and of the experiences of countries more advanced in these processes, is under way at bmcoforum to support implementations of regulatory frameworks in countries which are about to decide on their regulatory frameworks and preferred business models.
Online videos viewed up 13%
comScore, has released March 2008 data from the comScore Video Metrix service, indicating that US Internet users viewed 11.5 billion online videos during the month, representing a 13-per cent gain versus February and a 64-per cent gain versus March 2007.
In March, Google Sites once again ranked as the top US video property with more than 4.3 billion videos viewed (38 per cent share of all videos), gaining 2.6 share points versus the previous month. YouTube accounted for 98 per cent of all videos viewed at Google Sites. Fox Interactive Media ranked second with 477 million videos (4.2 per cent), followed by Yahoo Sites with 328 million (2.9 per cent) and Viacom Digital with 249 million (2.2 per cent).
Nearly 139 million US Internet users watched an average of 83 videos per viewer in March.
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Ads will move to Internet TV
Yankee Group has claimed that there is a significant shift taking place in the advertising industry—cable and IPTV operators will lose out to Internet video platforms in the competition for the incremental ad revenue that supports investments in interactive television. By the time cable and IPTV operators will be able to deliver interactivity to a large number of households, content owners and advertisers will have already made long-term interactive platform investments online.
According to the Yankee Group Report, The High-Water Mark for Interactive Cable, digital and interactive advertising is the cornerstone for the infrastructure investments necessary to support interactive programming. Cable networks will continue to command large linear audiences and above-the-line advertising revenue, but cable operators will be limited in their ability to deliver interactive experiences that can compete with Internet video.
"Ubiquitous broadband connectivity is driving a new media mix for time-shifting and ad-skipping audiences," said Daniel Taylor, senior analyst, Yankee Group Consumer Research group. "Advertisers see interactive television as a way to reach viewers in this increasingly saturated media environment. But in light of recent Internet video developments, it's time for cable operators to face facts about their abilities to deliver interactive experiences."
DirecTV up 10%
DirecTV’s first-quarter net income rose 10 per cent amid higher net subscriber additions and a lower subscriber cancellation rate. The company reported net income of $371 million, up from $336 million, a year earlier. Revenue rose 17 per cent to $4.59 billion.
DirecTV said US net subscriber additions rose 17 per cent to 275,000, putting the total at 17 million, up 5.2 per cent. Average revenue per subscriber increased 8.6 per cent and average subscriber-acquisition costs climbed 6.7 per cent. The monthly churn rate fell to 1.36 per cent from 1.44 per cent.
In April, Liberty Media boosted its stake in DirecTV to 48 per cent after buying nearly $2 billion of the company's stock. In February, DirecTV said it is expecting $20 billion of US revenue in 2010. The company said at the time it anticipates cumulative net subscriber additions of 1.5 million to 2 million over the next three years.
DISH Network Q1
DISH Network has reported total revenue of $2.8 billion for the quarter ended March 31, a 7.5 per cent increase compared with $2.6 billion for the same period in 2007. Net income totalled $259 million for the quarter compared with $157 million during the corresponding period in 2007.
DISH Network added approximately 35,000 net new subscribers during the quarter giving the company close to 14 million subscribers.
HBO on iTunes
HBO cable network is expected to start selling shows on Apple iTunes digital entertainment service, with flexible pricing. Episodes of some HBO shows are likely to be sold at the standard price of $1.99 per episode or higher marking the first time Apple has agreed to selling television shows at different prices in the US.
Studio and music company executives have pushed for variable pricing, such as the ability to sell some content at lower prices and new releases at higher prices, which they believe would improve sales from its older catalogues.
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Harris Corp. Up for Sale?
Harris Corp. executives are not commenting about a Wall Street Journal report Friday that it is exploring its strategic options, including a sale of the company.
The newspaper cited several firms, such as Raytheon Co., BAE Systems and Northrop Grumman Corp. that could be potential suitors for the Melbourne-based Harris (NYSE: HRS), according to wire reports.
Harris, though, could decide against any sale, the reports also said.
Harris is an international communications and information technology company that sells to government and commercial markets in more than 150 countries. With annual revenues in the $5 billion range, Harris employs more than 16,000 people, including about 7,000 in Brevard County.
Scopus Attempts to Fight Off Attack by Optibase
Scopus has issued a letter to shareholders requesting that they vote against a proposal by Optibase to replace current Board members witih Optibase appointees.
On April 18, 2008, Optibase, a 37% shareholder of Scopus,
demanded that Scopus convene, within 21 days, a shareholder meeting to (1)
approve a resolution that will declassify the Board of Directors and (2)
elect a slate of directors proposed by Optibase, such that, following
adoption of these resolutions, the Board of Directors will be comprised by
a majority of Optibase's nominees. This demand came shortly after the
negotiations between Scopus and Optibase regarding a possible business
combination were suspended.
As background to this move by optibsae, Scopus states the following in theri letter to shareholders:
" Commencing September 2007, we and Optibase held preliminary discussions
regarding a possible negotiated business transaction. During such
discussions, we explored a few alternatives, including a full merger of
Scopus and Optibase. Beginning January 2008, we engaged in preliminary
negotiations with Optibase regarding a possible acquisition by Scopus of
Optibase's operations through an asset purchase transaction.
During February and March 2008, these negotiations evolved and led to
an extensive due diligence and the exchange of draft transaction documents,
whereby we were considering to acquire Optibase's operations in
consideration for ordinary shares of Scopus. The proposed transaction
entailed, among others, a termination of the current classified structure
of the Board and appointment of representatives of Optibase to our Board.
However, in early April 2008, the negotiations strained, when, in our view,
Optibase was attempting to renegotiate some of the key terms of the
transaction, primarily the proposed consideration. We thereafter made a
good faith attempt to propose a viable solution, which was communicated to
Optibase on April 14, 2008. Optibase responded by sending us its proposed
shareholder resolutions on Friday, April 18th, effectively "suspending"
(using Optibase's own words) the negotiations.
During the discussions and negotiations with Optibase, your Board held
numerous meetings to carefully evaluate the transaction and ensure that the
interests of all shareholders are protected. While we believe that a fair
transaction with Optibase could be achieved, Optibase has chosen to use its
position as a principal shareholder of the Company to attempt to replace
your Board. This, in our mind, will allow Optibase to impose a transaction
which, in your Board's view, would have provided disproportionate benefits
to Optibase to the detriment of our other shareholders. In other words, we
believe that Optibase's interest is not aligned with those of our other
Chyron Q1 Up Big Time
Chyron announced its first quarter financial results for 2008.
For the first quarter ended March 31, 2008, revenue was $8.3 million, an increase of 28 percent from $6.5 million in the first quarter of 2007. Operating income for the quarter was $175 thousand compared to $16 thousand in the first quarter of 2007.
Net income for the quarter was $255 thousand, or $0.02 per share, as compared to $44 thousand, or $0.00 per share, reported for the first quarter of 2007.
Michael Wellesley-Wesley, Chyron President and CEO, commented, "Our first quarter sales grew 28 percent year-over-year and reflect strong demand for our broadcast graphics and channel branding systems and services. This demand is driven in large part by the worldwide transition from analog to digital television and the increasingly widespread adoption of HDTV. The changes in newsroom workflows inherent in the transition to digital television and our customers' drive for increased production efficiencies are resulting in increased spending in the area of graphics and video asset management infrastructure where we have best of breed solutions at competitive price points."
"We successfully launched our AXIS suite of web-based content creation services at the recent NAB tradeshow. The AXIS suite was awarded the TV Technology Star Award for technological innovation and met with enthusiastic customer reaction. A major US TV Group has already indicated its desire to deploy AXIS across all its TV stations and in the online world Yahoo Finance is using AXIS on a daily basis to build components for its Tech Ticker video service."
"Now that the initial AXIS services are available as a commercial solution, we are focused on execution and building the subscriber base. The first market we intend to address is our more than 5,000 broadcast customers worldwide. It is, however, worth emphasizing that the AXIS approach to content creation based on the 'computing in the cloud' model opens up market opportunities for Chyron that go way beyond our traditional markets."
Mr. Wellesley-Wesley concluded, "We are very excited about our future prospects. Our momentum and recent market share gains in the broadcast business which are exemplified by our winning the NBC Universal and NBC Olympics business, coupled with our successful integration and introduction of AXIS, put us in a strong position to drive future growth. With a large number of our broadcast customers owning and operating large, diverse businesses including newspapers and websites, we are optimistic that AXIS subscriber growth will benefit from our existing relationships in broadcast and that Chyron will translate that success into a leadership position in Online and Out of Home digital video graphics solutions."
Focus Enhancements Reports Dissapointing Q1
Revenue for the first quarter of 2008 was $3.9 million, compared to $7.1 million reported for the same quarter of 2007. The decrease is primarily attributable to lower Direct To Edit™ (DTE) disk recorder sales. Operating expenses were $6.8 million, compared with $7.3 million in the prior year period. Research and development (R&D) expenses were $3.6 million, compared to $3.9 million in 2007. Net loss for the first quarter was $6.0 million, or $0.07 per share, versus a net loss of $4.4 million, or $0.06 per share, in the same quarter of 2007.
Brett Moyer, president and CEO of Focus Enhancements, stated “We are clearly disappointed with these first quarter results. Our DTE recorder sales were impacted by transitioning camcorder technology at the professional camcorder level. However, as the quarter ended, we believe our customer’s inventory levels were back in line with current sales demand and initial second quarter orders indicate the sales situation is improving. With the successful launch of the new FS5 DTE recorder and new media asset management (MAM) products at 2008 NAB, we believe our System Business’ sales will significantly increase in subsequent quarters this year when compared to the first quarter 2008. Our new System Business products concentrate on expanding file format and multi-platform support across our product families to establish a continuous workflow and seamless interoperability platform with popular non-linear editing systems and video camcorders. Most notably, this has led us to work together with SONY on developing a customized media server exclusively for the Sony XDCAM EX™ format, that supports Sony’s powerful new PMW-EX1 camcorder. Additionally, in the Semiconductor Business, we believe 2008 demand for GPS and portable media player devices will drive year-over-year growth.”
Cablevision buys Sundance
Cablevision is close to an agreement to buy the Sundance Channel, jointly owned by NBC Universal, CBS, and actor Robert Redford, in a cash and stock deal valued at close to $500 million.
A purchase of Sundance will strengthen Cablevision's position in the independent-film programming arena as the cable operator already owns another film channel, IFC. At the end of 2007, IFC was available in 42 million homes compared with 28 million for Sundance, according to SNL Kagan.
Comtech acquires Radyne
Transmission specialists Radyne it has been purchased by Comtech Telecommunications. Under the terms of the agreement, Comtech will pay $195 million.
Myron Wagner, Chief Executive Officer of Radyne, said, "This strategic combination makes sense for both companies and I firmly believe it is the right step at the right time for all of Radyne's stakeholders. Our shareholders will benefit from a significant premium to Radyne's stock price, our customers will benefit from greater resources and product offerings, and our employees will benefit from being part of a larger, more diversified company."
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Autodesk Acquires Assets of REALVIZ
Autodesk, Inc. announced that it has completed the acquisition of substantially all of the assets of REALVIZ S.A., the privately held developer of image-based content creation software. Terms of the transaction were not disclosed.
REALVIZ was founded in 1998 and is headquartered in Sophia Antipolis, France. REALVIZ’s technology provides efficient ways to generate 3D content and visual effects from photo imaging and 2D environments. Its products are used for panoramic photography, image-based modeling, match moving and optical motion capture. REALVIZ’s flagship products are Stitcher software for the creation of panoramas and 360° virtual tours, and ImageModeler software to produce 3D models from photographs.
“REALVIZ’s technology bridges 2D and 3D, linking the virtual and real worlds. 3D models can be created from simple 2D images, and virtual environments can be built from conventional photographs,” said Amar Hanspal, senior vice president, Autodesk Platform Solutions and Emerging Business. “REALVIZ’s technology is complementary to Autodesk’s modeling, visual effects and animation products. It will enable us to increase the use of 3D technology across many industries, including architecture, film, broadcast and game development.”
REALVIZ’s clients include Boeing, NASA, Daimler Chrysler, Cinesite, Framestore CFC, Sony Pictures Imageworks, Warner Brothers Animation, Electronic Arts and Activision. REALVIZ technology has been used to create visual effects for Zodiac, The Host, Children of Men, Superman Returns, Harry Potter and the Goblet of Fire and many other blockbuster films.
Autodesk intends to develop and sell REALVIZ’s Stitcher Unlimited, Stitcher Express, ImageModeler and Movimento software as standalone products. Matchmover, Retimer and VTour will no longer be available as standalone products; core technology from these REALVIZ products will be integrated into future versions of Autodesk’s existing products, enabling customers to bring the real world into design environments.
The following REALVIZ offerings have been discontinued: Stitcher Pro, Stitcher Unlimited DS, StoryViz, and hardware and software product bundles. Education versions of ImageModeler and Stitcher continue to be available. Student versions of ImageModeler and Stitcher are no longer available.
Microsoft Messenger TV
Microsoft has launched Messenger TV, software which combines its Windows Live instant messaging service with video functions. The application, available throughout Europe, is part of the group's efforts to increase potential sources of Internet advertising revenue.
Microsoft has struck initial deals with the likes of EMI, Channel 4, National Georgraphic, Reuters and ITN to provide a range of content and clips to drive the launch. Advertising opportunities will include pre-roll ads and a banner that runs at the bottom of the Messenger TV window.
Orb enables live TV on iPhone
Orb Networks has unveiled a way to stream live TV to the iPhone and iPod touch, allowing users to enjoy the immediacy of live sporting events and fast-breaking news whilst on the move.
To get around the iPhone’s extreme limitations on supported video formats, Orb created a special application, OrbLive, to enable the streaming of any video format to iPhones. "Although the iPhone provides users with a great way to experience the web, it offers a sub-par streaming video experience. When all the carriers’ free phones can stream lots of things that my iPhone can’t, something’s seriously wrong," said Joe Costello, CEO of Orb Networks. "OrbLive finally brings the iPhone’s streaming video experience up to par with other mobile phones."
XM, Sirius suffer on merger wait
XM Satellite Radio reported slower growth and wider losses as it hangs on for the merger with rival Sirius Satellite Radio. The Justice Department has signed off on the combination, leaving the Federal Communications Commission to decide whether to put conditions on its likely approval of the merger.
With the deal in limbo, XM has seen sales stagnate, its costs to acquire subscribers have increased, and its debt level jump 12 per cent in three months, to $1.66 billion. These are uneasy times for a company with heavy losses, coming off a rapid growth phase and now entering a sluggish consumer environment. In February, with no merger in hand, and its cash level down to $156 million, XM tapped $187.5 million from its $250 million credit line.
For the first quarter ended March 31, XM posted an adjusted loss of $30.7 million, compared to a loss of $27 million, in the year-ago quarter. Sales were $308 million, up 16 per cent from the $264 million level last year. But the top- and bottom-line results missed analysts' targets calling for a loss of 39 cents on $313 million in revenue.
Despite one million gross subscriber additions, the company managed to add only 303,000 net new users after subtracting all the people who canceled service. That compares to the 868,000 gross additions and 285,000 net subscribers gained in the same period last year.
Sirius reported in-line results Monday in after-hours. On customer gains, the company said gross subscriber adds were 1 billion with a total of 332,538 net new subscribers. That compares with 988,458 gross additions and 556,500 net adds a year ago. Like XM, Sirius said it would hold off on a business forecast until it received an FCC decision about the merger.
Sirius also reported a 33 per cent increase in first quarter revenue, to $270.4 million. The net loss for the three-month period was $104.1 million, an improvement over the first quarter 2007 net loss of $144.7 million.
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PEOPLE IN THE NEWS
News Corp promotes Mockridge
News Corporation has confirmed that Tom Mockridge, Chief Executive of Sky Italia, has been appointed to the additional role of Chief Executive, European Television. In this new role, Mockridge will directly oversee the company’s television operations in Europe, outside the UK.
Optibase Announces Approval of a Private Placement to CEO
Optibase Ltd. announced that its board of directors approved a private issuance by the Company of newly issued ordinary shares of the Company to Mr. Shlomo (Tom) Wyler, the Chief Executive Officer and Executive Chairman of the Board of Directors in consideration for US$5 million in cash, in the aggregate. The purchase price per share will be determined based on the average of the Company's closing price on the Nasdaq Global Market during the 30-day period preceding the issuance date of the shares. The Company undertook to make its best efforts to register for resale the shares under the Securities Act of 1933 within 6 months as of the issuance date.
Horowitz departs SES Americom
SES Americom President and CEO Edward D. Horowitz has resigned from the company to pursue opportunities with Global Entertainment and Media Holdings Corporation, the satellite services provider said. Romain Bausch, SES chief executive and chairman of the SES Americom Board, willt akeover until a replacement is found.
Bausch said Horowitz was instrumental in the further integration of SES Americom into the SES family and developing new market areas, such as IP-Prime. Because of that work, "The company is on track to grow in each of its market sectors, thus maintaining its industry leadership in North America," he said
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SCRI RESEARCH NEWS
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
2007 - 2009 HDTV / Digital Trends Report
IPTV / Mobile TV Report