Insider Reporter


Insider Report

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

w/e November 16, 2008 SCRI International, Inc © 1984 - 2008

INDEX

Technology News | Industry News | Company News |
Product News | People in the News | Research News

TECHNOLOGY NEWS

Steady growth continues in IPTV market

Multimedia Research Group’s latest IPTV Global Forecast shows that global IPTV subscribers will grow from 20.4 million IPTV subscribers in 2008 to 89.6 million in 2012. To drive this growth, IPTV Operators worldwide are expected to continue investing in improved Quality-of-Service, ease-of-operation, HD content, exclusive programming and time-shifting as differentiating features.

In Europe, for example, steady IPTV subscriber growth continues while more HD channels are being offered to Western and Eastern European subscribers. By 2012, European subscribers will still be slightly ahead of Asia, with Europe maintaining 41.5 per cent of the worldwide subscriber market and Asia, 35.8 per cent.

By 2012 North America will have only about 17 per cent share of the total worldwide subscribers, however it will dominate the global market in terms of gross service revenue at about $13 billion, due to higher ARPU. Together, Verizon and AT&T are projected to have about 3 million subscribers by the end of 2008, and they should continue their rapid growth into 2012. Smaller U.S. and Canadian Operators are following similar strategies.

Mobile Video Infrastructure Market Ramps Up

The market for mobile video infrastructure will experience rapid growth rates over the next several years in spite of the economy, reports In-Stat. There are many ways to deliver video content to mobile devices; some of these require mobile video-specific infrastructure, such as broadcast out-of-band video services and cellular in-band video services, the high-tech market research firm says. Others, like Internet access and digital terrestrial broadcast TV, utilize infrastructure in place for other video services.

“In spite of the present economic turmoil, consumer interest in mobile video is growing, and service providers must build infrastructure to be in position when consumer demand recovers. Europe is the largest region for transmission revenue due to the number of countries that have launched, or plan to launch, mobile-specific out-of-band broadcast networks,” says Gerry Kaufhold, In-Stat analyst. “Mobile video headends will drive growth for encoders and transcoders to support an increasing number of video channels and display sizes. When the Mobile Internet hits its stride, we’ll see online videos being repurposed for mobile devices.”

Recent research by In-Stat found the following:

  • The U.S. is expected to remain on track to begin deployments of ATSC Mobile and Handheld (ATSC M&H) services during 2009, into 2010, and beyond.
  • In Brazil, deployments of ISDB-T will begin, and ISDB-T supports a built-in mobile service called One Segment (One Seg).
  • DVB-H deployments will continue on a country-by-country basis.
  • MediaFLO will continue to build out in U.S. markets, and may see some new markets developing.
  • Mobile video infrastructure revenues will reach US$291 million in 2012.
  • Transmission network buildouts generate more revenues than mobile video headends.

    Online Video Struggling in the UK compared to the US

    Despite the popularity of online video, new research shows that European content owners are struggling to turn a profit as delivery costs in many cases exceed advertising revenues. By comparison, businesses in the US have been more successful at making money from online content, having negotiated better technology distribution deals and established more effective advertising strategies that include sponsorship and run of site, rather than the inventory based deals that prevail in Europe.

    Screen Digest Head of Broadband Media Arash Amel forecasts that - despite the large audiences, online TV in the UK will represent less than 2 per cent of total TV revenues by 2012. A combination of the limited reach, underdeveloped advertising sales strategies and prohibitive costs from online video services in the UK are responsible. Amel further asserted that only 10-15 per cent of all online video consumed in the UK is actually monetisable with content from the BBC’s online services and user-generated video from YouTube combining to dominate online video consumption in the UK.

    According to Amel, "The current economic model for ad-supported online video distribution in the UK is not working. Commercial UK ad-supported online video platforms are generally loss making, or providing very low profit margins, because of a failure to sell advertising effectively or syndicate their platforms. But the critical question bubbling under the surface is who will pay for the bandwidth. With data transfer costs continuing to rise in relation to falling broadband prices, and so much online video in the UK now either not directly monetisable or loss making, the online video value chain whether for video delivery or service provision will face critical challenges."

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    INDUSTRY NEWS

    Dish Network sees drops

    Dish Network has seen its third-quarter profits shrink 54 per centand its subscriber numbers decline for the second quarter in a row. Dish, the second largest satellite operator in the US, generated $92 million profit on $2.9 billion in third-quarter sales. That compares to $199.7 million profit on $2.7 billion revenue in the third quarter of 2007.

    Dish Network lost about 10,000 subscribers during the quarter ended September 30th, dropping the company to nearly 13.8 million subscribers.

    The company blamed much of the financial slide on much lower revenue from its securities investments.

    Meanwhile, Dish Network has confirmed its’ much anticipated DTVPal DVR will be available for pre-order in the US from November 19th with sales projected to begin in mid-December. The DTVPal DVR claims to be the only digital-to-analogue converter box sold in the US that offers digital video recording functionality.

    Virgin Media cuts 15% of workforce

    Virgin Media announced a 2,200 job cut, or 15 per cent of its total staff, as part of a restructuring operation. The company claimed it would improve efficiency "significantly", and that cuts would be implemented mainly between the end of 2009 and the end of 2010.

    The move by Virgin, which employs 14,600 staff, is seen as necessary if it is to continue to service its recently rescheduled debt burden. It intends the move to improve cash flow by £120 million (E152m) by 2012. Neil Berkett, chief executive, said: "These changes are critical to ensuring Virgin Media is positioned to compete effectively and deliver on our customers’ changing expectations."

    However it’s hard to see how cuts won’t adversely affect customer service, where cable operators have been consistently poor in the past and if there is a negative effect on churn that will hit cash flow.

    Last week, Virgin Media announced third-quarter results that were in line with expectations. A few days earlier, it said it had been successful in its efforts to persuade creditors to put back the due dates on amortisation payments of £4 billion (E5bn) from 2010 to 2012.

    TV stations prepare for 2009 falloff in Web ad revenue

    TV stations must determine whether they truly wish to seize the Internet medium as their own, says Borrell Associates CEO Gordon Borrell.

    It’s not surprising that Gordon Borrell, CEO of Borrell Associates and author of “2009 Outlook: Big Slowdown Begins For Local Interactive Advertising,” is projecting advertisers will begin applying the brakes to interactive advertising next year.

    But it’s not entirely for the reason you may think. While the general slowdown in the overall economy will have an impact, its effect is more about the timing than magnitude. According to Borrell, the weakening economy will accelerate the slowdown, which he originally anticipated happening in 2010, to next year. "It’s somewhat attributable in that we’ve moved our forecast of slowing down of interactive ad spending by about nine months to a year. We didn’t expect this to occur until 2010. Now we are saying that the slowdown will occur in 2009, mainly because advertisers have really been testing interactive media for the past 10 to 15 years and have finally gotten their dials adjusted to the point where they say, “OK, this works if I mix interactive with Yellow Pages, TV or radio.” They have found that they have interactive where it should be, so they aren’t going to increase it drastically anymore.”

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    COMPANY NEWS

    Chyron Q3 Revenue & Net Income Up

    Chyron announced its financial results for the third quarter and nine months ended September 30, 2008. Revenues were $9.3 million, an increase of 7% from revenues of $8.7 million in the third quarter of 2007. Income before taxes for the third quarter of 2008 was $0.6 million as compared to $0.9 million for the prior year's third quarter, with most of the decrease due to lower net interest income, and a foreign exchange loss of $0.1 million in the third quarter of 2008 as opposed to a foreign exchange gain of $0.1 million in the third quarter of 2007. Net income for the quarter was $16.7 million, or $1.07 per share, as compared to $0.9 million, or $0.06 per share, in the third quarter of 2007.

    For the nine months ended September 30, 2008, revenues were $27.7 million, an increase of 20% from revenues of $23.0 million in the prior year period. Income before taxes for the nine months ended September 30, 2008 was $2.0 million, up 25% over the $1.6 million reported for the comparable 2007 period. Net income for the first nine months of 2008 was $18.1 million, or $1.16 per share, as compared to $1.6 million, or $0.10 per share, for the first nine months of 2007. Adjusted EBITDA for the nine month period ended September 30, 2008 was $3.5 million as compared to $2.3 million for the prior year's nine month period.

    Michael Wellesley-Wesley, Chyron President and CEO, commented, "Over the past few years Chyron has made continued progress towards our goal of becoming the leading provider of digital graphics workflow solutions for broadcast, online and out of home applications, and this recent quarter was no different. We reported solid gains in revenue from the previous year, as well as another quarter of profitability. The worldwide shift from analog to digital television, as well as the adoption of high definition television, continue to be the primary drivers behind our growth. We believe that we will continue to benefit from these established trends because we offer systems and services that allow for easy content creation and which best showcase high-quality digital graphics in a most cost-effective way."

    "One of the more exciting events for Chyron during the quarter was the use of our products in the 2008 Beijing Summer Olympics," Mr. Wellesley-Wesley said. "Our systems were used extensively by a number of major broadcasters to provide graphics content, such as score updates and eye-catching graphics throughout this magnificent sporting event. Another recent highlight is Gannett Broadcasting Group's successful deployment of our AXIS web-based content creation solutions across all 23 TV stations in the group. Today all Gannett TV stations news graphics are being created within AXIS. We believe that the return on investment case for AXIS is proving very compelling and we are experiencing great interest as a result."

    Mr. Wellesley-Wesley continued, "While we expect that the global economy to slow significantly in 2009, we will continue to focus on our growth strategy in order to emerge stronger when the recovery takes hold. We will seek to gain market share in broadcast and online graphics content workflow solutions and expand the use and penetration of our AXIS online graphic creation platform. We believe that because our addressable market opportunity is no longer restricted to broadcast television we have additional opportunities for long-term success."

    Dolby Labs Posts Solid Q4 Gains

    Dolby Laboratories, Inc. announced the Company's financial results for the fourth quarter and fiscal year ended September 26, 2008.

    For the fourth quarter, Dolby reported total revenue of $163.1 million, compared to $129.0 million for the fourth quarter of fiscal 2007, an increase of 26 percent. Fourth quarter net income was $48.6 million, or $0.42 per diluted share, compared to $44.2 million, or $0.39 per diluted share, for the fourth quarter of fiscal 2007.

    For fiscal year 2008, Dolby reported total revenue of $640.2 million, compared to $482.0 million for fiscal year 2007, an increase of 33 percent. Net income for fiscal year 2008 was $199.5 million, or $1.74 per diluted share, compared to $142.8 million, or $1.26 per diluted share, for fiscal year 2007.

    "Fiscal 2008 was a strong year for us, as we continued to benefit from the adoption of Dolby technologies globally," said Bill Jasper, President and Chief Executive Officer of Dolby Laboratories. “We finished fiscal 2008 with excellent profitability, a strong balance sheet, a global brand, and a continued focus on driving the adoption of existing and new technologies across our markets.”

    Scopus to Abandon Optibase

    Optibase Ltd. announced that Optibase received today a letter from Scopus Video Networks Ltd. in which Scopus informed Optibase that its board of directors resolved to terminate the negotiations with Optibase in connection with the sale of Optibase's digital video and streaming business. Optibase, together with its legal advisors, is currently examining its alternatives.

    Optibase will report third quarter 2008 earnings results on Wednesday, November 12, 2008 during pre-market hours.

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    PRODUCT NEWS

    Harris Releases IconMaster 3.0; Master Control System Harris Corporation announces the release of version 3.0 of IconMaster, a feature-rich master control switcher that is fully configurable between standard- and high-definition (SD/HD) formats and offers advanced features that enable broadcasters to streamline workflow, centralize media management and lower per-channel costs in multichannel environments.

    IconMaster v 3.0 extends interoperable workflow solutions by enabling control of Harris CENTRIO multiviewers and Platinum routers over Ethernet. By coupling IconMaster with CENTRIO, the master control operator can control the multiviewer directly from the master control switcher. In addition to driving Under Monitor Display (UMD) and tally information to CENTRIO, IconMaster™ drives picture-in-picture source changes when different router inputs are assigned to IconMaster inputs. In multichannel environments, the IconMaster system drives both picture-in-picture content and screen layout changes when changing from channel to channel.

    Leveraging the new IconMaster SCP, a touch-panel-driven software control panel that connects multiple IconMaster module sets, IconMaster v 3.0 provides users with internal and external control over branding, including features such as automatic Emergency Alert System (EAS) and full-quality digital video effects (DVE). IconMaster v 3.0 also utilizes the new Connectus graphics management system for centrally managing and distributing media content across all networked systems.

    Blockbuster VOD STB

    Video rental giant Blockbuster plans to rollout a consumer set-top box in time for the Christmas shopping season in the US that will deliver movies over the Internet to via its Movielink service. Blockbuster acquired Movielink, a video-on-demand service initially launched with backing from the Hollywood studios, in 2007.

    Microsoft Mediaroom IPTV

    Subscribers to TV services powered by the Microsoft Mediaroom IPTV and multimedia software platform have more than doubled, reaching over 2 million subscriber homes and powering services on nearly 4 million set-top boxes worldwide. In the past quarter Mediaroom customers have connected 500,000 new subscribers across the globe.

    AT&T is one of Microsoft’s fastest-growing Mediaroom customers with 781,000 AT&T U-verse subscribers as of the end of the third quarter.

    Tandberg IP HD

    Tandberg Television is continuing to deliver the HD advantage to service providers seeking to satisfy subscriber demand for HD content. The company says its enhanced iPlex high-density, multifunctional, high-performance Video Processing Platform provides even greater compression quality for the delivery of HD programming.

    "We believe that HD is critical for the success and adoption of IPTV in the US and that by offering a variety of HD programming and on-demand content, service providers can remain competitive as they strive to deliver high quality, high value, personalized television services," said Ian Tapp, Senior Vice President of Business Development, at Tandberg Television.

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    PEOPLE IN THE NEWS

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    RESEARCH NEWS

    SCRI RESEARCH NEWS

  • 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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