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w/e November 23, 2008 SCRI International, Inc © 1984 - 2008
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Mobile TV to generate $10bn in 2013
Mobile TV services will generate $1.5 billion in revenues in 2008, rising to over $10 billion in 2013. At present the revenues are predominantly from subscription fees but this is expected to change over time as the advertising business model starts to gain prominence. Informa Telecoms & Media believes that by 2013 nearly half of the revenues will come from advertising.
In the next two years, growth is anticipated to be strongest in the pioneering markets of South Korea and Japan before the rest of the world starts to catch up around 2010/2011. Despite isolated success stories in places like Italy and Austria, Europe is not expected to see rapid growth in Mobile TV until 2009. The US is expected to take even longer as confusion over standards prevents growth. Eventually, concerted momentum behind ATSC-MH is expected to boost the market for mobile TV in North America.
"As the owner of the marketing and billing relationship with subscribers, operators are in the best position to offer mobile TV services", comments Shailendra Pandey, Senior Analyst. "It seems that a good approach for mobile operators will be to start with a free-to-air business model which also involves minimum capital investmen. Once user uptake of services starts to grow, operators can then think of developing new revenue models that can be established on top of the free-to-air content platform", adds Pandey.
China terrestrial DTV draft standard completed
Assistant director Bai Weimin of the Ministry of Industry and Information Technology's (MIIT) Electronic and IT Product department in China has revealed that the draft specification for terrestrial DTV has been completed. The draft will be instituted early next year, with full DTV coverage throughout the country to be completed within the next three to five years.
Nationwide terrestrial DTV coverage will be split into two stages: first, simultaneous high-definition and standard definition broadcasts of CCTV in 37 major cities and municipalities; second, SD broadcasts in 333 cities and 2,861 counties
SMPTE Forms New Committee on Broadband Applications
The Society of Motion Picture and Television Engineers (SMPTE) has recently established a new technology committee on Broadband Applications (TC 23B) under the chairmanship of Birney Dayton of NVISION. The inaugural meeting was held on October 27 in Hollywood, CA attended by about 85 representatives from content producers, manufacturers of broadcast, IT, and consumer equipment, cable networks, broadcasters, and others. The need and basis for this activity was set out in the SMPTE meeting notice as follows.
"A growing volume of content is flowing to consumers in methods other than the traditional television and cinema channels. This new Committee addresses the need for interoperable content mastering and packaging standards that can enhance the rapid adoption of these new business models. The scope of this new TC 23B includes the application of mastered essence to electronic Broadband distribution; including compression, encryption, wrapping, marking, packaging, tracking/control, presentation, reproduction, and related topics. For the purpose of their initial work, such distribution is generally considered to be interactively requested and may include both download and streaming distribution models. Such distribution may occur over wired or wireless transports and may include large, medium, and small packages dependent upon receiving device."
These topics will become increasingly relevant to broadcast networks and stations as they look to maximize the opportunities and revenue potentials from distributing content on multiple platforms. In addition to Internet-based video streaming, already used by some broadcasters, it is expected that local stations will in the future have the capability for distributing content in non-real-time (NRT) over broadcast DTV channels, both to mobile/handheld (M/H) devices and to fixed receivers. Standards for these services are now in development in the Advanced Television Systems Committee (ATSC), and the ATSC M/H standard is now at Candidate Standard ballot stage. The desirability of interoperability and harmonization between content prepared for broadcast distribution and distribution over broadband networks has been acknowledged in setting up the SMPTE committee.
While most of the major broadcast networks and NAB are represented on the TC 23B committee, participation by other broadcasters is encouraged, both for this committee and in other SMPTE standards work. Information on SPTE standards work is available at: http://www.smpte.org/standards. For more information on participation please contact SMPTE Director of Engineering and Standards Peter Symes, email@example.com.
STB market solid, TV sets slump
As economic woes increase, suppliers in the consumer electronics and digital TV markets are expecting a difficult 2009. IMS Research is forecasting that, setting aside the US DTV converter box program, that set-top box revenues in the region will decline 5 per cent from 2008 to 2009 and that volumes will actually rise, albeit at a relatively weak 9.3 per cent annual rate over the same period. Globally, IMS Research is forecasting a 2 per cent decline in revenues from 2008 to 2009 on 5 per cent volume growth.
Anna Hunt, IMS‚ Consumer Electronics Research Director, states, "While many consumers will very likely cut back on their entertainment budgets, TV remains a relatively cheap form of entertainment. Nonetheless, we are expecting ARPU growth to slow or even decline during the period. As a result, set-top suppliers are expecting considerable pressure on pricing in 2009, and low-cost segments such as cable DTA adapters could see considerable growth during the next two years."
However, according to Stephen Froehlich, a senior analyst in IMS‚ Consumer Electronics group, "The assumed recession hits the TV set market at a particularly critical juncture, destroying a major profit opportunity for TV manufacturers. By the time the economy recovers in 2010 or 2011 and consumers are willing to buy more expensive sets, the high-performance (120 Hz, high contrast ratio), LCD TV market will be much more commoditised than it is now, removing a major profit opportunity for competitors in the luxury TV segment."
IMS Research expects global TV set revenues to be off by 11 per cent in 2009, down to $90 billion from $101 billion in 2008 on a volume decline of just 2 per cent.
Froehlich continues, "TV suppliers are cutting costs in their designs for now but are also working feverishly to find ways to add new value to their sets, exploring features such as Internet video and 3D goggle support. However, our current analysis is that neither of these are likely to be major profit generators for anyone except the studios."
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Telco TV Headend Market Growth Linked to HD
The telco TV headend equipment is expected to grow substantially over the next five years, reports In-Stat. This growth, driven by the expansion of video channels, the introduction of high-definition (HD) content, and the continued adoption of on-demand services will position telco operators to pursue highly-profitable personalized advertising and converged services business models.
“For operators to generate significant profitability from telco TV and related video services, they must find ways for the network to add value,” says Keith Nissen, In-Stat analyst. “This will dictate finding solutions to the challenges faced with personalized advertising, converged video services, and ultimately the integration of network and Web-based applications.”
Recent research by In-Stat found the following:
The telco TV headend equipment market will grow to over US$ 700 million by 2012.
The upgrade to MPEG-4 encoding was strong during 2007 and 2008.
Increasingly, headend functionality will be distributed to the edge and access network.
Univision Q3 Net Revenue Down
Univision Communications Inc., the leading Spanish-language media company in the United States, announced financial results for the third quarter and nine months ended September 30, 2008. For the 2008 third quarter, net revenue declined 2.4% to $511.3 million from $524.0 million in 2007 and adjusted operating income before depreciation and amortization1 decreased 2.7% to $213.7 million in 2008 from $219.7 million in 2007. Excluding incremental revenue from major soccer tournaments2 that aired in the third quarter of 2007 and 2008 and political advertising revenue in the third quarter of 2007 and 2008, third quarter net revenue increased 0.3% and OIBDA increased 0.1%. For the nine months ended September 30, 2008, net revenue decreased 0.8% to $1,503.2 million in 2008 from $1,514.9 million in 2007 and OIBDA decreased 4.6% to $584.8 million in 2008 from $613.1 million in 2007. Excluding incremental revenue from major soccer tournaments that aired in the nine months ended September 30, 2008 and 2007 and political advertising revenue in the nine months ended September 30, 2008 and 2007, net revenue for the nine months ended September 30, 2008 increased 1.5% and OIBDA decreased 1.8%.
Joe Uva, Chief Executive Officer, said, “Despite continuing pressure on the advertising market as a result of the current economic conditions, Univision’s net revenue excluding incremental revenue from major soccer and political increased 0.3% in the third quarter, whereas the television industry decreased 9.4%3 and the radio industry decreased by 8.6%.4 The Univision Network is currently boasting its best season start ever with Univision seeing year-to-year audience growth among all major demographics for the first several weeks of the new season. All of the other major networks, ABC, CBS, FOX, NBC and CW, have seen their own audiences dwindle. Going forward, Univision’s unique ability to consistently out deliver our peers and connect with our audience will position us for continued growth.”
Verizon: Telcos can reinvent video viewing
During his TelcoTV keynote address, Verizon’s John Harrobin, senior vice president of marketing and digital media, said that the current model of watching linear broadcast TV "lacks intimacy and control" for the viewers. While the number of linear channels has increased dramatically, the TV audience is more fragmented. Harrobin said telcos have the best opportunity to reinvent the video-viewing experience.
Harrobin talked about Verizon’s ability to offer video content across the three screens of TVs, PCs and mobile devices. For example, both Verizon and AT&T had distribution deals in place for the Summer Olympics in Beijing that allowed them to present live event coverage on linear TV, broadband Internet and mobile device platforms.
Harrobin said the telcos can do a better job of delivering content where viewers want it and when they want it. "Our job is to determine the right technology for the right trends," he said. "The magic happens when we connect all of those platforms, and the customers decide how they use it," he said. "TV is far from dead, but it’s in desperate need of revitalisation. No one is in a better position to reinvent television than telcos."
Hulu success emphasises YouTube ad struggle
YouTube is in danger of being upstaged commercially by Hulu - backed by News Corporation and NBC Universal - as the video-sharing site struggles to make its massive global audience appeal to advertisers.
Hulu, a video site showing only professional TV shows and movies, is forecast to draw level with Google’s YouTube in US advertising revenues next year.
The feat suggests traditional media companies can make money online without having to cede control to Google, as the music industry did to Apple, whose iTunes music store dominates the digital music market. It also shows the difficulties other social networks might have in generating revenues from their amateur content.
YouTube, for which Google paid $1.65bn two years ago, is by some distance the most popular online video destination, with 83m unique viewers in the US in September, compared to Hulu’s 6m, according to market researcher Nielsen.
But Hulu’s advertising revenues are growing more quickly, according to Screen Digest. Neither company breaks out its advertising revenues but the researchers forecast that in 2008 YouTube will generate about $100 million in the US, compared with about $70 million at Hulu. Next year both sites will generate about $180 million in the US, they say. YouTube currently earns around half of its revenues in the US, while Hulu has not yet launched internationally.
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Claratech Acquires BAL Broadcast & Faraday Technology
Claratech Ltd a UK company specialising in the design and manufacture of high end, modular, video and audio fibre optic products announced today the acquisition of BAL Broadcast Limited. BAL, designs and manufacturers portable interface, multiviewer and specialist products for the professional broadcast market.
"The integration of the well established BAL product line, which will continue, with the Claratech range will increase our product offering to the global broadcast market, and will benefit our existing and new customers." Maurice de Jonghe Chief Operating Officer of Claratech explained, "Both companies have strong design capabilities and together we can leverage new technologies and market products, to further improve the efficiency and workflow, not only of the established broadcast market but also new and adjacent markets."
Claratech Ltd. announced earlier the acquisition of Faraday Technology Ltd. a UK based company who custom design and manufacture filters, equalizers and pre-distortion networks, cable clones and specialised products for some of the most demanding applications in both commercial and industrial fields including broadcasting.
Steve Farmer, Chief Executive Officer of Claratech explained, "The experience and expertise of staff from both companies will allow the company to continuously improve and provide their customers with new solutions for the rapidly changing technology in the industry."
Scopus drops acquisition of Optibase business
The negotiations between video solutions companies Scopus Video Networks Ltd. and Optibase Ltd. has taken another turn. Scopus announced that it was abandoning talks to acquire the business of Optibase. For its part, Optibase said the decision had been taken by the Scopus board and that it was "currently examining its alternatives, together with its legal advisors." Optibase is the largest shareholder in Scopus with a 36.5% stake.
Optibase, mounted a failed attempt to take over Scopus. The two companies later reached a settlement, and signed an agreement under which Scopus would acquire Optibase's digital video business in return for a share allocation, in a deal worth roughly $12 million.
GE on look out for buys, sticks with NBC
GE has declared its interest in buying media assets in a sign that a slumping economy has not shaken General Electric’s confidence in its television and film business, NBC Universal. Jerry Immelt, GE chief executive, told the FT the company had the resources to capitalise on bargains as it wades through the downturn.
"There are going to be some opportunities in media consolidation, in infrastructure, oil and gas, aviation," Immelt said. "And my hope is that we can play in some of those as time goes on." Immelt’s stated willingness to expand his media business comes as Vivendi, which owns 20 per cent of NBCU, neared its annual window to exercise a put option that would force GE to buy back the stake.
In spite of repeated statements by GE executives that they would not sell NBCU, some investors and industry insiders remain convinced that Vivendi might trigger the put just to force GE’s hand on its commitment to the media company. They reason that GE would rather sell all of NBCU than tie up cash to a business that does not fit within the conglomerate’s sprawling portfolio of industrial and financial businesses.
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Adobe Unveils Flash Media Server 3.5
Adobe Systems announced Adobe® Flash® Media Interactive Server 3.5 software and Adobe Flash Media Streaming Server 3.5 software, two key components of the Adobe Flash Platform, the de facto standard for delivering breakthrough interactive content, applications, and video on the Web. The new servers include new media delivery options, such as: dynamic streaming; enhanced H.264 video and High Efficiency AAC (HE-AAC) audio support; and the ability to pause and seek within a live stream. These innovations improve the quality of video delivered over the Web and offer richer interactive experiences for users. The new versions, which are being showcased at Adobe MAX North America in San Francisco, advance the company’s leadership in rich media and open significant new opportunities for content owners delivering interactive and social media applications.
“The Adobe Flash Platform is taking the media world by storm and transforming the way content is delivered and consumed,” said Jim Guerard, vice president and general manager of Dynamic Media at Adobe. “Immersive user experiences attract new audiences and help publishers to more effectively build businesses around their unique content. Thanks to the Flash Platform, viewers worldwide can look forward to even more content coming online and being able to view it across different browsers, operating systems and devices.”
The Adobe Flash Media Server family of solutions enables instant-on, seamless viewer experiences, extending average viewing times so that companies can boost brand awareness and more effectively monetize their content. According to the independent research firm comScore, 81 percent of worldwide online videos are viewed using Adobe Flash technology, making it the number one format for video on the Web. Adobe Flash Player software is already installed on 98 percent of Internet-connected desktops and a growing number of mobile devices, enabling publishers to rest assured that content will reliably reach audiences on the platform of their choice.
Adobe Flash Media Streaming Server 3.5 is offered at US$995. The upgrade from Adobe Flash Media Streaming Server 3.0 is available for US$249. Adobe Flash Media Interactive Server 3.5 is offered at US$4,500. An upgrade from Adobe Flash Media Interactive Server 3.0 is available for US$349. Both products can be pre-ordered today at www.adobe.com/go/fms and are expected to be available in early 2009.
Thompson launches new SmartVision VOD server
Thomson has launched the latest version of its SmartVision VOD server. Version 6 introduces a new family of streaming accelerators that double the capacity of the previous generation of VOD servers. With a total streaming capacity of up to 16Gb/s, each video server unit is now able to record more than 200 TV channels, which can be time shifted to a large number of subscribers. Farms of NDVR servers can be stacked to deliver unlimited streaming performance.
Integration of Thomson’s SmartVision VOD servers into existing architectures can be achieved either through ISA/ADI interfaces for cable networks or by interfacing with Thomson’s SmartVision CDN via Web services. The server solution further supports advanced content distribution models such as HTTP progressive download, rate limited or burst distribution to support over-the-top business models, in addition to managed network playout.
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PEOPLE IN THE NEWS
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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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