Insider Reporter


Insider Report

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

w/e November 4, 2007 SCRI International, Inc © 1984 - 2007

INDEX

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

TECHNOLOGY NEWS

Will Warner Bros. Endorse Blu-ray? This report is by Phillip Swan, publisher of SCRI's online partner TV Predictions.

Warner Bros. has been neutral in the Blu-ray-HD DVD disc war, releasing movies in both high-def formats.

However, that policy may be changing, says a top Warner executive.

Dan Silverberg, Warner's vice president of High-Definition media, hinted Monday at a Blu-ray briefing for the media that the studio might soon endorse Blu-ray.

Warner is now the only major studio that releases movies in both formats; two support HD DVD exclusively while four have endorsed Blu-ray.

Warner films like 300 could soon be Blu-ray exclusives.

But Home Media Magazine reports that Silverberg believes that Blu-ray may be winning the format war and, consequently, it may be time for the studio to pick one over the other.

“One thing that may be changing is our strategy,” he said. “When both formats launched and hardware prices were high, we made a decision to support both formats and let the consumer decide. But now that hardware pricing is affordable for both Blu-ray and HD DVD, it appears consumers no longer want to decide — so the notion of staying in two formats for the duration is something we are re-evaluating now that we are in the fourth quarter.”

The Warner executive noted that Blu-ray sales have topped HD DVD by a 2-1 margin over the last nine months.

While he didn't come out and endorse Blu-ray, it sounded like the studio had a clear favorite if it decides to endorse one format.

“We can definitely talk Blu-ray,” he said. “We are committed to the format.”

Warner's decision to support Blu-ray over HD DVD could have a major impact on the high-def disc format war. Without Warner, HD DVD's catalogue would only include titles from two studios.

Interest in Mobile TV continues to wane

Interest in mobile TV remains very low, with just 1 per cent using it in the past 12 months and only 3 per cent saying they were likely to try it in the next year, according to Continental Research’s Autumn 2007 Mobile Report.

Mobile phone owners were asked whether they would prefer to have an ad-free package that required a relatively high subscription fee for the TV service, or have a free service that would have a considerable amount of advertising within the programming, or somewhere in between. Over half (53 per cent) didn’t express an opinion, reinforcing the view that the mobile TV is currently of relatively low interest. The most popular choice was the completely free option, favoured by over a quarter (27 per cent).

Asia-Pacific accounts for 3 out of 4 mobile TV viewers

The Asia-Pacific region is leading the adoption of mobile TV broadcasting. according to a new report from analyst firm Berg Insight. About 38 million viewers – almost 78 per cent of the total mobile TV audience – was found in Japan and South Korea in mid-2007.

Berg suggests that these markets are several years ahead of Europe and North America where the development in most cases has been very slow. "We believe that regular mobile networks will remain the dominant carrier for mobile video, at least for the next couple of years", said Sabine Ehlers, associate analyst, Berg Insight.

The report contends that significant costs involved in establishing the infrastructure needed for dedicated mobile broadcast networks are expected to hold back large-scale launches in the greater part of Europe for number of years.

Berg Insight plays down the relevance of the current mobile TV standards war, predicting that multi-standard handsets and chips will eventually reduce choice of underlying network to a technical consideration only concerning the manufacturers and network operators. Additionally, the analyst firm foresees the possibility that in the long term, all technologies providing mobile TV and other video services, as well as radio services, will be IP-based.

Akamai HD showcase online

Akamai Technologies, global service provider for accelerating content and applications online, has launched TheHDWeb, a ‘proof-of-concept’ portal designed to showcase the experience consumers can have with high definition (HD) content online. The Website showcases content from a variety of industries including music, movies, professional sports, games and news.

Companies providing HD content for the initiative include Apple, BBC Motion Gallery, CBS, Gannett, MTV Networks, NBA and more.

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INDUSTRY NEWS

Sinclair Broadcast Group Reports Q3

Sinclair Broadcast Group, Inc. reported financial results for the three months and nine months ended September 30, 2007.

Commenting on the quarter, David Smith, President and CEO of Sinclair, stated, "Our announcement today regarding our Board of Directors' decision to increase our common stock dividend once again represents our commitment to growing cash flow and creating value for our shareholders. This is the sixth time in the past three years we have increased the dividend, which is now at a $0.70 per common share dividend rate, on an annualized basis. At a $12.00 stock price, this represents a 5.8% dividend yield, one of the highest in the broadcast sector.

In addition to returning some of our cash flow to our shareholders, we have been evaluating other ways to put our capital to work. As discussed below, we have made investments in non-television assets, such as commercial real estate, that we expect to be accretive. We expect to close on our previously announced sale of WGGB-TV in Springfield, MA on November 1, 2007, which will generate approximately $21.2 million in proceeds. Our ability to successfully negotiate retransmission consent agreements resulted in additional revenues which more than offset the loss of political advertising spending in the third quarter. Operationally, we are seeing some positive ratings trends on the MyNetworkTV stations and success selling the commercial inventory locally."

Net broadcast revenues from continuing operations were $149.4 million for the three months ended September 30, 2007, a decrease of 0.6% versus the prior year period result of $150.3 million. Operating income was $32.9 million in the three-month period as compared to $38.0 million in the prior year period, a decrease of 13.4%. The Company had net income available to common shareholders of $9.9 million in the three-month period versus net income available to common shareholders of $22.6 million in the prior year period. The Company reported diluted earnings per common share of $0.11 for the three-month period versus diluted earnings per common share of $0.25 in the prior year period.

Net broadcast revenues from continuing operations were $457.0 million for the nine months ended September 30, 2007, down 0.2% versus the prior year period result of $457.9 million. Operating income was $112.2 million in the nine-month period, a decrease of 6.9% versus the prior year period result of $120.5 million. The Company had net income available to common shareholders of $9.7 million in the nine-month period, which included a $30.7 million extinguishment of debt charge associated with the partial call of the Company's 8% senior subordinated notes due 2012 and full redemption of the Company's 8.75% senior subordinated notes due 2011. The Company had net income available to common shareholders of $42.9 million in the nine-month period ended September 30, 2006. Diluted earnings per common share were $0.11 in the nine-month period versus diluted earnings per common share of $0.50 in the prior year period.

Hulu to release TV premieres globally

The head of Hulu, the new online video joint venture between NBC Universal and News Corp has predicted that television companies will follow the film industry’s lead, by releasing programs simultaneously around the world.

Jason Kilar, chief executive of Hulu, which launches in a test phase this week, said the explosion of online video made it inevitable the TV industry would also move towards simultaneous global distribution. Hollywood studios are releasing films at the same time in different markets to fight piracy. "Television is heading in the same direction. At the end of the day, the users will win and will get access to content on their own terms."

Providence, the private equity group, has invested $100 million in Hulu, which is a free, advertising-supported service. Unlike YouTube, Hulu will shun user-generated content in favour of programs from NBC and News Corp-owned Fox. Hulu has also struck content deals with MGM and Sony.

Yahoo, Microsoft’s MSN network, Comcast, AOL and MySpace will also distribute content from Hulu on their own sites to ensure it reaches as broad an audience as possible.

Google seeking partner for spectrum bid?

Google is reported to be considering seeking a partner to bid for US wireless spectrum in the forthcoming auction. The Internet giant said it may commit more than $4 billion of its own money to any acquisition, with CEO Eric Schmidt describing the planned creation of a platform to run new digital services as the ‘Holy Grail’.

Analysts have speculated that a partnership with a company that has experience managing a telecom network would be a smart move for Google, if it does bid at the auction. Schmidt noted that there is an encroaching deadline to put a partnership together. "We won't make our final decision until the last minute," he said.

The auction is key to Google's general strategy of pushing for more open access to wireless airwaves, outside of the rigid control of the telecom and cable companies who traditionally bid on spectrum.

Court TV Changes Name

One of the best-known cable networks in the US is demolishing a 16-year-old brand in a bold bid to become even bigger. Court TV will become "truTV" in one of the biggest marketing makeovers in cable history. The network will abandon Court’s logo and its primetime "Seriously Entertaining" tag line in favour of a new insignia -- the word "tru" in bold ("true" didn’t test as well) attached to an encircled "TV" and the tag line, "Not Reality. Actuality."

During the third quarter, Court was up 39 per cent year to year in total primetime viewing, from 873,000 to 1.22 million viewers. That ranked it as the 15th-most-viewed cable network for the quarter. It was up 25 per cent in weekday daytime viewing, although daytime skewed about six years older and its audience was about one-sixth the size of primetime.

Media General Exploring Sale of Five TV Stations

Media General, Inc. announced that it is exploring the potential sale of five broadcast television stations in mid-sized markets in the Southeastern U.S. Marshall N. Morton, president and chief executive officer, said, "The decision to explore the potential sale of five stations is a result of our ongoing analysis of our portfolio. Any sales would enable Media General to use the proceeds to reduce debt and strengthen our balance sheet. Divestitures also would help position our Broadcast Division to pursue future growth opportunities.

"We believe these stations will be viewed as welcome additions to the portfolios of one or more buyers. They are all good performers in strong markets," said Mr. Morton.

Media General said that there can be no assurance that any transaction will take place. Additional information will be provided when and if the company enters into a transaction.

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COMPANY NEWS

Avid Q3 Revenue Down, Losses up

Avid Technology, Inc. reported revenue of $226.8 million for the three-month period ended September 30, 2007, compared to $231.2 million for the same period in 2006. GAAP net loss for the quarter was $5.9 million, or $.14 per share, compared to GAAP net income of $3.6 million, or $.08 per diluted share, in the third quarter of 2006.

GAAP net loss in the third quarter of 2007 includes $21.0 million of amortization, stock-based compensation, restructuring costs, other costs and related tax adjustments. Excluding these items, non-GAAP earnings per diluted share were $.37. For the third quarter of 2006, there was $14.3 million of amortization, stock-based compensation, restructuring recoveries, in-process research and development, and related tax adjustments included in GAAP net income. Excluding these items, non-GAAP earnings per diluted share were $.42 in the third quarter of 2006.

“Given the initiatives we have undertaken, we are pleased with this quarter’s results,” said Nancy Hawthorne, Avid’s interim chief executive officer. “We remain focused on enhancing Avid’s profitability by improving all aspects of the company’s operations.

“Our professional video business had a solid quarter with stable revenue and improved profitability sequentially as we recognized some large deals from our backlog and had a modest increase in our run rate business,” continued Hawthorne. “Audio performed well as strength in studio and live mixing consoles and products serving the home/hobbyist studio market offset weakness in core Pro Tools|HD upgrades and M-Audio. Finally, in consumer the PC-based TV viewing products were strong and the launch of the Studio 11 consumer video editor continued to go well.”

Revenue for the nine-month period ended September 30, 2007 was $671.1 million, compared to revenue of $671.5 million for the same period in 2006. GAAP net loss for the first nine months of 2007 was $11.8 million, or $.29 per share, compared to GAAP net income of $9.6 million, or $.22 per diluted share, for the same period in 2006. GAAP net loss for the nine-month period ended September 30, 2007 includes $45.8 million of amortization, stock-based compensation, restructuring costs, other costs and related tax adjustments. Excluding these items, non-GAAP earnings per share were $.82 per diluted share for the first nine months of 2007. GAAP net income for the nine-month period ended September 30, 2006 includes $38.9 million of amortization, stock-based compensation, restructuring costs, in-process research and development, and related tax adjustments. Excluding these items, non-GAAP earnings per diluted share were $1.13 for the first nine months of 2006.

blinkx reports strong growth

Video search engine blinkx has reported positive financial results for the period ended 30 September 2007. Gross profit for the first half of 2008 was $2.2 million, with a gross margin of 74 per cent and daily searches have grown by 280 per cent.

Suranga Chandratillake, founder and CEO of blinkx, said: "We are pleased to report a strong performance throughout our initial reporting period, with revenues 23 per cent ahead of the top analyst forecast driven by significant growth in daily searches… The popularity of online video is at an all time high, and we are seeing the proliferation of not only user-generated content, but also professionally-produced, high-value programming from established media companies, such as CBS, NBC and News Corp."

Scopus Q3 Conference Call

Scopus Video Networks announced that it will be releasing its third quarter 2007 results on Wednesday, November 7, 2007. The Company will also be hosting a conference call later that same day at 11:00am EST. On the call, management will review and discuss the results, and will be available to answer investor questions.

To participate, call one of the following teleconferencing numbers. Begin placing your calls at least 10 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, try the international dial-in number.

US Dial-in Number: 1-888-407-2553; UK Dial-in Number: 0-800-917-5108; Israel Dial-in Number: 03-918-0692; International Dial-in Number: +972-3-918-0692; At: 11:00am Eastern Time, 08:00am Pacific Time, 4:00pm UK Time, 6:00pm Israel Time

For those unable to listen to the live call, a replay of the call will be available from the day after the call in the investor relations section of Scopus's website, at: http://www.scopus.net .

Optibase Q3 Webcast

Optibase, Ltd. announced that it will report third quarter 2007 earnings results on Wednesday, November 7, 2007 during pre-market hours.

The Company will hold a conference call at 9:00 a.m. EST on Wednesday, November 7, 2007 for interested investors, analysts and portfolio managers. The conference call will be broadcast live as a listen-only webcast. To listen live, go to www.kcsa.com approximately twenty minutes before the conference call is scheduled to begin. You will need to register as well as download and install any necessary audio software. The webcast will be archived for 90 days.

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PRODUCT NEWS

Avid and Masstech Group Enter Into Product Licensing Agreement

Masstech Group, Inc. a leader in media lifecycle management announced that it has entered into a license agreement with Avid Technology Inc. The agreement, which covers the integration of Masstech’s SAvISM (Smart Avid Interface) and Avid Transfer Manager server, delivers significant improvements in workflow productivity to broadcasters.

“Avid has clearly established itself as a world leader in video editing and we are pleased to be working closely with them to deliver greater workflow efficiencies through the tight integration of our products,” said Sudy Shen, president and CEO, Masstech Group Inc. “We look forward to continuing our strong relationship with Avid and working together to make digital file based workflows - from ingest, to editing, to playout - a reality for all broadcasters.”

The collaboration between the two companies allows users of Masstech’s SAvI to streamline workflow processes throughout the on-air environment. Broadcasters can automate the movement of content across a number of concurrent workflows which can include ingest, archive, automation, editing, news and playout systems.

Johnathon Howard, Director, Broadcast & Media Publishing at Avid “We are pleased that Masstech is solving customer problems by integrating with our solution. No one vendor can do everything and Avid is dedicated to keeping our system open so that companies like Masstech can continue to add unique value to the workflow.”

Masstech’s powerful MassStore™ media lifecycle management solution provides the backbone content lifecycle management and productivity enhancements for today's most advanced digital television broadcast and production environments. Masstech Group's powerful SAvI supports both Avid Interplay™ and Avid Unity™ environments, to provide a powerful platform for facility content management and storage. Masstech Group's industry leading MassStore media lifecycle management solution and transcoding platform combined with Avid's production environments put content storage, archiving and repurposing at the editors' fingertips.

Product Review: Canon HG-10 AVCHD camcorder

This report is by John Virata at SCRI's online partner Digital Media Net.

The consumer video camcorder market resembles that of the Blu-Ray/HD DVD market in that there are choices to be made. There are many different camcorders available that capture to all kinds of media, including DVD, hard disk, media card, and the old standby, video tape. On the positive side, there are a lot of offerings to choose from in a variety of formats. On the negative side, there are a lot of offerings to choose from in a variety of formats. DVD, miniDV, HDV, AVCHD, hard disk, are all formats vying for your dollars. Even analog 8mm tape formats are still available. It seems that the big consumer electronics manufacturers are hedging their bets, offering new technologies on the one hand while still relying on the old standbys on the other. Canon offers several different consumer camcorders that capture to DVD, hard disk, and miniDV tape. All in HDV, AVCHD, and miniDV.

One such offering is the Canon HG-10. The HG-10 is a hard disk-based camcorder that captures to the AVCHD format. Based on MPEG-4 compression, the Advanced Video Codec High Definition is a high definition format that records at 1080i/720p onto 8cm DVD media, SD memory card, Memory Stick, and built in hard drives. Within the scope of this review, we'll take a look at some of the features and how it performs.

The HG-10 is a small, palm-sized camcorder that is small enough to carry and shoot in a variety of situations. It features a Canon 10X Zoom 6.1-61mm 1:1.8 HD video lens that features a built in lens cover. It captures video to a built in 40GB hard disk drive and is rated to capture 15 hours at LP recording, 11.5 hours at SP recording, 9 hours 30 minutes at XP, and 5 hours 30 minutes at XP+. Images are framed via a 2.7-inch multi-angle Vivid Widescreen LCD display or an optical viewfinder.

With most household computers capable of editing video, and more people creating content, a good camcorder must have some decent software to help those who want to edit video, to edit it. The HG 10 ships with consumer software that will get your video into your computer, including InterVideo WinDVD SE, Ulead DVD Movie Factory SE, and DVD Movie Writer SE 2.0. The HG 10 also ships with Canon's ZoomBrowser EX 5.8 and DV TWAIN driver for Windows, and ImageBrowser 5.8 for Macintosh. For those who wish to edit video from the HG10 with your favorite video editor, take note; Not all video editing applications can edit AVCHD. For example, if you have Sony Vegas Movie Studio, it supports Sony AVCHD video cameras but not Canon cameras. Pinnacle Studio supports most AVCHD camcorders, but Adobe Premiere Elements 4 does not yet support editing AVCHD.

The Canon HG10 is small and unobtrusive enough to shoot in most situations. There is no big lens or battery pack protruding from the camera body and it weighs in just over 1lb. The camera fits snugly into your right hand and features an adjustable strap for a custom fit. The telephoto/wide buttons are accessed via your index and middle fingers as well as the photo button. The start/stop button is accessed with your thumb. Flip out the LCD and you have access to the controls to change the white balance, video quality, effects, etc. Everything is accessed via a toggle wheel that enables you to make adjustments to the camera's various features.

When in playback mode, you have controls to start/stop the video, play, and advance and reverse the video. You also have access to the camera's setup and all its various functions such as zoom speed, AF mode, frame rate, shutter, the drop sensor, Brightness, date/time format options, and more. Another notable feature is Focus Assist. This enables you to zoom in on an aspect of an image to focus close up on that object, keeping everything sharp. There is also a QuickStart button that enables you to set the camera in standby mode, and when you wish to shoot again, press the button and it is available for shooting almost instantaneously.

Like with Blu Ray versus HD DVD, the HG10 presents a choice. Do you go with what is arguably the future of video camcorders with its built in hard disk drive and CMOS sensor, or do you wait to see how things shake out? Canon has hedged its bets and offers cameras that capture video to tape, DVD, and hard disk drive. In my opinion, the HG 10 represents the future in consumer video cameras. It is minuscule enough to fit in the palm of your hand, it captures a very beautiful HD image, and it can capture hours of video without ever having to change out a tape. It has some nice features, including the QuickStart button, which enables you to put the camera in a low power state and whenever you want to shoot quickly, just press that button and you are back in business. The Canon HG 10 is the perfect solution for those who want to embrace the future of capturing video without using videotape. For more information, visit www.usa.canon.com It captures images via a 1920x1080 Full HD CMOS sensor, and features SuperRange Optical image Stabilization. Other features include Instant AF autofocus, 24p Cinema mode, and a DIGIC DV II processor that the company says improves continuous shooting of digital photographs, of which the HG-10 captures 3.1 megapixel images. It also features an HDMI connection for displaying your movies on an HDMI display or TV set, and an Advanced Accessory shoe for attaching external mics and flash devices.

FORA.tv Closes Seed Round of Financing with Investment from Adobe

FORA.tv, a provider of online video content focused on discourse, discussion and debates surrounding political, social and cultural issues, announced the closing of its seed round of financing with an investment from Adobe Systems Incorporated. Adobe joins noted investor and venture capitalist Will Hearst who has invested personally in the seed round.

In addition to leveraging Adobe Flash(R) Player compatible video technology as its content delivery platform, FORA.tv is distributing video content via the new Adobe(R) Media Player. The Player offers high quality video and allows users to view their favorite content both online and offline via IPTV.

"Given Adobe's rich history of innovation and technology leadership, its investment is clearly the 'good housekeeping seal of approval' for FORA.tv," said Brian Gruber, founder and CEO of FORA.tv. "As FORA.tv breaks ground in new areas of video content delivery, we could not have found a more ideal investor and collaborator than we have in Adobe."

"Adobe's investment in FORA.tv signifies our belief in the company's great opportunity to deliver a rich online media experience to consumers worldwide," added John Leckrone, director of Venture Development for Adobe. "FORA.tv is making innovative use of Adobe's Flash(R) Player compatible video technology. The fact that our shared vision for richer content delivery comes to life via the Adobe(R) Media Player is a win-win for us all."

FORA.tv joins a noteworthy group of content publishers distributing video content via the Adobe(R) Media Player. Content available from FORA.tv includes each of FORA.tv's channels as well as FORA Casts, representing featured content produced specifically for IPTV.

FORA.tv is based in San Francisco, California.

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PEOPLE IN THE NEWS

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RESEARCH NEWS

SCRI RESEARCH NEWS

  • NEW: 2007-2009 HDTV / Digital Trends Report This extensive 75 page report includes an Executive Summary, followed by an analysis, charts and tables of how the broadcast / professional video marketplace equipment endusers respond to the key HDTV / Digital Video Trends -- click to view table of contents

  • IPTV / Mobile TV Report: now available, 14 page Executive Summary and Analysis, with over 120 pages of articles and reports from online sources as well as SCRI Insider Reports. Cost is $995, or $695 for current SCRI Insider Report subscribers and clients. Contactdes_chas@scri.com for more info.

  • Broadcast/Pro Video Product Reports. Tracking purchase history (2006), purchase plans (2007 & 2008), brand shares, etc. for each of twenty five specific product types, from Camcorders to VTRs.

  • Broadcast/Pro Video Macro Industry Overview Report. Over 50 pages of analysis and information on the state-of-the-industry compiled from secondary online research sources including industry news sites, manufacturers sites, as well as SCRI's own weekly online News Briefs and Insider Reports.

  • Broadcast/Pro Video Micro Quantitative Product Data Report. 23-page report containing quantitative data tables, for all six verical end-user markets, and all of the 25 Product categories, as well as in total, with summary tables from 2002- 2008.

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