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Insider Report

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

w/e December 3, 2009 SCRI International, Inc © 1984 - 2009


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TV station Groups Partner for Mobile DTV

According to a report by TVNewsCheck, nine major TV station groups are banding together to develop practical service models, forge partnerships and possibly enter the business in a joint venture.

The nine groups involved in what's being called the Pearl Group or the Pearl Project are: Gannett, Media General, Hearst Television, Cox, Belo, Scripps, Ion Media, Raycom and Post-Newsweek.

Executives for some of the groups confirmed their participation and spoke in general about Pearl, but declined to speak on the record or provide details prior to a planned formal announcement of the initiative prior to or possibly during the Consumer Electronics Show Jan. 7-10 in Las Vegas.

According to the sources, Pearl will have the size and national footprint needed to raise capital and cut deals with wireless carriers, mobile device manufacturers, retailers, other content providers and advertisers.

Mobile DTV promises to deliver rock-solid television to portable and mobile devices with small screens, even in moving vehicles. Broadcasters see it as a way to reach viewers who rely on hand-held devices of one kind or another for phoning, texting, gaming and, increasingly, video and audio services.

Using a small portion of each TV station's digital channel, mobile DTV would complement the station's other HD and SD services, which are meant for reception on large TVs in the home.

To date, work on mobile DTV has been led by the Open Mobile Video Coalition, which comprises broadcasters, manufacturers of transmission equipment and mobile devices and other interested parties.

Since its inception in early 2007, the OMVC has worked closely with the Advanced Television Systems Committee to develop the mobile DTV standard. That work culminated with the adoption of the basic standard last month.

OMVC, through its technical subcommittee, is also continuing to work with ATSC on standards for two-way interactivity, program guides and receivers with built-in DVRs.

Interest among broadcasters in turning mobile DTV into the business has grown rapidly since the FCC informed key broadcasters early last month that it is interested in reallocating broadcast spectrum for wireless broadband access.

The FCC sees broadcasting as an inefficient use of spectrum since most viewers watch TV stations via cable or satellite rather than directly off the air.

When it comes to spectrum, broadcasters now feel that they are being backed into a use-it-or-lose-it position.

The FCC spectrum drive has been "an accelerant" to the entire mobile DTV effort, said one broadcaster involved with Pearl.

Of course, broadcasters' real interest in mobile DTV is money. They have invested millions in new digital transmission facilities over the past several years and they see mobile DTV as a way to make good on that investment by extending their reach or by creating whole new businesses.

According to a February 2008 report by the NAB, the mobile DTV simulcast of stations' primary broadcast service would generate $2 billion in annual revenues, of which $1.1 billion would be accrued by broadcasters, providing the industry with an estimated $9.1 billion in incremental market value.

ultra-HD television (UHDTV) forecasts

If you’ve been blown away by the demonstrations of ultra-HD television (UHDTV) at recent NAB Shows and other industry gatherings, you’ll have some time to wait until UHDTV achieves critical mass with 5 percent household penetration, according to a new forecast from In-Stat.

Regardless, the next five to 10 years will provide service providers, technology firms and media companies a prolonged period during which they can experiment with business models and strategies to make UHD a reality. As originally proposed, UHD offers two levels of resolution: 7680 x 4320 pixels (8K resolution) and 3840 x 2160 (4K resolution). High-resolution digital cinema will expose consumers to high-resolution content. Then, early UHDTVs will be made available to provide a digital cinema high-resolution viewing experience in the home. Ultimately, broadcasters will start offering UHD content to an addressable market of UHDTVs between 2017 and 2022, the research firm predicts.

New research from In-Stat projects that the total installed base of UHDTVs won’t approach 5 percent household penetration in Europe until 2021. It will increase to more than 28.2 percent by 2025, the researcher says. In Asia-Pacific, Japan will be among the early adopter countries.

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Broadcasting & Cable, Multichannel News Sold to NewBay Media

NewBay Media LLC has acquired a TV trade triad from Reed Business Information that includes Broadcasting & Cable, Multichannel News, and This Week in Consumer Electronics otherwise known as “TWICE.” The purchase price was not disclosed.

Each title will continue to be published in NewBay’s line of print, online, and in-person products and services. NewBay’s other titles in the TV trade sector include Television Broadcast, TV Technology, Videography, DV Magazine, Radio World, Residential Systems and others. The addition of these three brands extends NewBay Media’s reach in the broadcast television and consumer electronics markets.

Broadcasting & Cable for many years stood as the periodical of record for the broadcast industry. It was started in 1931 under the single moniker “Broadcasting,” and focused on the radio market. It later covered broadcast and then cable TV. Multichannel News focuses on programming, marketing, finance, and more for the cable and telecom industries. TWICE is a business trade for consumer electronics retailers.

“We’re truly excited to have the opportunity to work with this talented team and to have these market-leading brands join the NewBay family,” states Steve Palm, CEO, NewBay Media. “This acquisition further demonstrates NewBay’s commitment to our goal of delivering value to our advertisers, readers, and partners in these critical markets. With this acquisition, NewBay adds significant depth and breadth to its existing portfolio of broadcast properties.”

Reed Elseveer, parent company of Reed Business Information, first put the 80-magazine unit up for sale in February, 2008. Initial bids were reported to be around $2 billion, but fell to half that toward the end of 2008, according to Folio Magazine. Reed continues to retain control of the Variety franchise.

“We are pleased that our valuable brands have found a great new home with NewBay Media,” Reed Business Information-US CEO John Poulin said. “We’re certain that these titles will thrive under Steve Palm’s capable and experienced management team. We wish them much success ahead.”

GE, Vivendi reach deal on NBC U stake

Word surfaced late Monday that Vivendi and General Electric have come to terms on a price of $5.8 billion for Vivendi's 20% stake in NBC Universal. Agreement removes the biggest hurdle standing in the way of GE's plan to sell 51% of NBC U to Comcast. But insiders cautioned that the Comcast-GE deal will still require a few more days of heavy-duty talks and lawyering to finalize the deal terms now that the Vivendi portion of the transaction is set.

Sources said that, barring any last-minute surprises, a final agreement between GE and Comcast could be unveiled by week's end or early next week. Comcast is expected to fork over $4 billion-$6 billion in cash and contribute its cable networks to NBC U, which will become a joint venture between GE and Comcast but controlled by the Philadelphia-based cable giant. The pending deal also calls for NBC U to take on about $9 billion in debt from GE as part of the sale. GE will have the right to sell more of its stake to Comcast over a seven-year period.

Vivendi's accord with GE came after weeks of talks during which the French telco was said to be coy about its plans for its 20% hunk of the Peacock. Under the deal GE struck with Vivendi for Universal Studios in 2004, Vivendi had an annual option to negotiate the sale of its stake to GE or put it up for an IPO. When Comcast entered the NBC U picture with GE, the proposed takeover provided a clear exit path for Vivendi, whose CEO Jean-Bernard Levy had already declared NBC U to be a "noncore" asset for the company.

If the NBC U transaction is completed, it will vault Comcast into Hollywood's big leagues with a studio, a broadcast net and a clutch of powerhouse cable channels, including USA, Syfy, Bravo, E!, CNBC, MSNBC, G4 and Oxygen, plus a handful of regional sports cablers. Comcast is already the nation's largest cable operator with nearly 24 million subscribers in 39 states, but it has made no secret of its desire to muscle into the content side of the biz. Company launched an unsolicited takeover bid for Disney in 2004 that was fended off by the Mouse House and frowned on by investors, exacting a heavy toll on Comcast's share price.

Brighter Fed forecast Warns of Slower Recovery

A brighter economic forecast from the Federal Reserve and the Conference Board's report that its Consumer Confidence Index rose to 49.5 in November from a revised 48.7 in October were all positive signs for the macro economic ennvironment. However, while better than expected, the report shows that consumers remain gloomy heading into the holiday season. A reading above 90 means the economy is on solid footing.

The government also revised its calculation of third-quarter economic growth down to 2.8 percent from its original estimate of 3.5 percent, the latest sign that the recovery is likely to be slow and bumpy.

Cautious optimism returns to the broadcast and media technology industry - IABM

2009 has been a very challenging year for the broadcast and media technology industry but as the global economic situation starts to ease, so suppliers start to regain some confidence in the market going forward. This is one of the findings of the industry trends survey undertaken by Ernst & Young LLP in association with IABM, who represent broadcast and media technology suppliers worldwide.

In this survey, undertaken in October 2009, 50% of respondents felt that the last quarter of 2009 would be better than the quarter just ended and only 7% felt it would be worse. Going one step further, the growth in confidence for the year ahead shows 65% of respondents expecting an improvement and just 6% predicting a worse situation than now.

Looking forward six months to the spring of 2010, there is certainly more optimism apparent, with 62% of respondents believing that things are going to improve and 35% expecting the situation to remain the same. This reflects a marked growth in confidence compared to the previous survey in May 2009.

Order volumes showed some improvement in the third quarter of 2009 but order values showed less of an increase, suggesting a likely increase in prices and competition and a consequent downward pressure on order values.

Customer deferrals are still commonplace and this continues to be the single largest inhibiting factor to order growth with 48% of respondents citing this as a major barrier to growth. As with the last survey in May 2009, the availability of credit or finance continues to the biggest constraint on the fulfilment of orders. Although apparently slightly less of an issue than in the last survey, 26% of respondents still pointed to this as an inhibiting factor.

On an encouraging note, the survey suggested that the headcount situation may be stabilising with shrinkage having appeared to stop. In fact the survey points to the availability of skills and staff

The IABM Industry Trends Survey analysis is based on a confidential survey of IABM member companies. While the list if participants is by no means comprehensive or representative of the entire industry, the finding are in line with SCRIs fidnings form the enduser facility base.

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Thomson to seek court protection from creditors

Grass Valley parent corporation Thomson SA said it would announce its debt restructuring plan some time soon. Shares of the company were suspended from trading on the Paris stock market pending the announcement, according to Dow Jones. The wire service said the company was expected to seek court protection from creditors.

Suffering from the effects of the collapsed global economy, Thomson put the Grass Valley business up for sale in February. The company estimated its debt to be around $2.8 billion at the time. Grass Valley, along with Thomson’s digital signage division, Premier Retail Networks, generated $1.3 billion last year, or around 20 percent of Thomson’s revenues. PRN was also offered for sale in February.

Thomson’s chief financial officer, Stephane Rougeot, told The Wall Street Journal in October that the sale of Grass Valley was taking longer than expected “due to tough market conditions.” Thompson was said to be talking to “several interested parties” about divesting Grass Valley.

Avid signs new HQ leases

Just days after announcing plans to move its headquarters, Avid Technologies Inc. disclosed in a regulatory filing late last week the terms of its new leases for 206,926 square feet of space in Burlington, Mass.

The developer of digital-film editing systems said the three leases will cost it $4.88 million annually, or $23.59 per square foot, for the first nine years of the 10-year agreement. The agreement increases the company’s annual rent to $6.06 million, or $29.29 per square foot, in the final year of the contract.

Avid can extend the arrangement by exercising two, five-year options.

According to a regulatory filing, Avid has agreed to lease three locations under the following conditions:

• 76,953 square feet of research and development space will be leased at 65 Network Drive in Burlington at an initial rate of $26 per square foot. That rate will increase to $32.50 in year 10 of the agreement.

• 99,765 square feet of office and R&D space will be leased at 75 Network Drive in Burlington at an initial rate of $26 per square foot. That rate will increase to $32.50 in year 10 of the agreement.

• 30,208 square feet of office and R&D space will be leased at 10 North Avenue in Burlington at an initial rate of $9.50 per square foot. That rate will increase to $10.50 in year 10 of the agreement.

Avid said “substantial improvements” will be made to the new site, paid for by both the buildings’ landlord, the Nordblom Co. in Burlington, and the company. Avid’s current headquarters is in Tewksbury, Mass.

MGM Issues NDAs to Potential Suitors

Heavyweight movie studio Metro-Goldwyn-Mayer has sent out around 20 nondisclosure agreements to potential buyers, Reuters reports. Time Warner Inc. and News Corp. are said to be among the interested parties. Lions Gate and Sony were also on the list.

The studio has a reported $3.7 billion in debt from a 2005 buyout. It also has a $250 million loan payment due in April, 2010.

MGM is said to be considering an auction, though creditors would like to get some feedback on just how much potential buyers would be willing to pay. MGM is owned by private equity firms TPG and Providence Equity Partners, and Sony and Comcast. The group of four bought the studio out for $2.85 billion and the assumption of $2 billion in debt.

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Avid Now Supports Snow Leopard OS X

Avid announced that Media Composer and Symphony software now supports the new Snow Leopard OS X. This added support enables customers to upgrade to the latest operating system without worrying about Media Composer and Symphony compatibility. Furthermore, those purchasing a new Mac system for faster processing, reliability and ease-of-use (shipping with Snow Leopard) will now have support for Media Composer and Symphony software as well.

Here’s a rundown on pricing/availability:

  • Current Avid customers (version 4.0 and higher) can access the version update online at no additional cost. Additionally, any customer with a valid support contract also gets the free upgrade.
  • For new software licenses or to purchase upgrades, visit the Avid store or local reseller.

    Avid is also continuing to offer a 30-day trial version of Media Composer software for those interested in checking out the latest features in version 4.0.

    Sony unveils Vegas Pro 9.0c software

    Vegas Pro 9.0c software features Sony XDCAM EX MP4 file rendering and the ability to smart-render MPEG-2 video across different containers for faster, more seamless editing. New audio features, including élastique Pro time stretching and import stereo audio as dual mono, provide even more professional depth to this NLE.

    Additional support for media filmed with the RED ONE video camera streamlines file access and efficiency for editors working with footage up to 4K resolution. Vegas Pro 9.0c software also includes additional card support for capture and output via SDI, HD-SDI and HDMI.


    HDMI Adoption Climbs, while DVI Slides

    High-Definition Multimedia Interface (HDMI) adoption continues to gain ground across several segments. Meanwhile, the now legacy Digital Visual Interface (DVI) is gradually declining, reports In-Stat. Within the PC segment, HDMI made significant strides in 2008, doubling its penetration from 6.1% in 2007 to 12.3% in 2008. Mobile PC penetration increased 76% over the same period.

    “HDMI’s success continues to be led by the consumer electronics (CE) segment,” says Brian O’Rourke, In-Stat analyst. “HDMI has been adopted nearly universally in digital televisions (DTV), which account for the single largest HDMI application. The next big HDMI growth area is in portable CE devices, including digital camcorders, digital still cameras, and portable media players (PMPs). Vendors hope to drive adoption of HDMI into mobile phones, where the more than one billion annual shipments are a tempting target.”

    DVI and HDMI are related, high-bandwidth, unidirectional, uncompressed digital interface standards.

    Recent research by In-Stat found the following:

  • HDMI-enabled product shipments will increase at an annual rate of 20.3% through 2013.
  • DVI-enabled product shipments will decrease at an annual rate of 8.1% through 2013.
  • The industry has developed smaller connectors such as mini-HDMI and micro-HDMI to make the standard more attractive to mobile device makers.
  • The Mobile High-Definition Link (MHL), developed by HDMI chip vendor Silicon Image, is an attempt to create a standard to transmit HD video off mobile phones.

    VTechnology Display Revenues Soar

    This report is by Charles Annis - Vice President, Manufacturing Research, DisplaySearch.

    On November 26, Japanese FPD specialty equipment maker VTechnology announced that revenue for the first half of the Japanese fiscal year (April through September) was up 198.9% versus the previous year. Operating profit reached 20.2%, the best quarter on record since the company was founded. Plus the company still has a backlog of more than JPY 12.7 billion (US$146.8 million)! These are very impressive numbers, particularly when you consider that the rest of the TFT LCD equipment industry is suffering its worst contraction ever, with 2009 spending down 50% compared to last year.

    How is a small inspection and repair company bucking the trend in such a big way? The main reason is the first mass production design win for VTech’s EGIS (Exposure Guided by Inspection System) alternative lithography tool. VTech announced EGIS orders on May 7, 2009 for JPY 5 billion (US$57.8 million), on May 21 for JPY 4.5 billion (US$52.0 million) and October 13 for JPY 5 billion (US$57.8 million): totaling JPY 14.5 billion (US$167.6 million).

    Although it has not been publicly announced, it is widely known that Sharp adopted the EGIS platform for patterning the alignment layer of its proprietary new UV²A optical alignment process being applied at both the Kameyama Gen 8 line and the new Sakai Gen 10 line. EGIS uses a unique real-time imaging technology to align masks to actual features already patterned on the substrates. This offers good alignment performance and enables the use of multiple small low-cost masks and scanning architecture that minimizes exposure related defects. EGIS can offer the same benefits to multiple color filter exposure steps, and VTech is hoping the that during the next round of investment RGB patterning will prove as lucrative as the optical alignment segment has been.

    You have to give VTechnology a lot of credit for investing tens of millions of dollars and years of R&D into an unproven technology. The company’s core business of inspection and repair has increasingly come under heavy margin pressure as many local Korean and Taiwanese companies have entered the market. VTech took this as a challenge to use its core technology as a pole to vault out of the crowded inspection and repair market and over the high barrier to entry lithography market. It took on a high risk project to successfully develop an alternative, low-cost option to conventional high cost projection and proximity exposure. VTech’s current success proves that equipment companies that develop innovative technologies that help LCD makers improve performance, increase productivity or lower costs can still be highly successful even as the LCD matures-and even in a down year.


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