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Shelby Cunningham
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Myra Moore
Stewart Wolpin
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Not Tapped Out Yet
Monday June 29, 2009 - Shelby Cunningham
For some time, those smart engineers who tell us all about the technical intricacies of video compression technology told us that MPEG-2 had reached its efficiency peak some years ago. They said it was tapped out – no more improvements. But apparently technical breakthroughs for old technology happen, and broadcast encoder makers like Tandberg and Harmonic tell us that they have now managed to squeeze as much as a 20% gain in greater MPEG-2 efficiency, thus extending the life of this codec.
Even though MPEG-4 AVC usage is rapidly growing, it’s not doing it at the expense of MPEG-2 as STBs for digital cable, satellite, IPTV and terrestrial transmissions still decode MPEG-2. Even though a handful of services are only delivering programs in MPEG-4 AVC, the STBs and TVs are still capable of decoding both MPEG-2 and MPEG-4 AVC. Chip makers haven’t seen enough demand to efficiently make AVC-only chips, and media processors that decode MPEG-4 AVC still decode MPEG-2 at this point in time.
Including MPEG-2 in digital STBs and TVs seems to be a sure thing for a few more years thanks to the new greater efficiency, the need for backward compatibility and the current cost savings for chip suppliers to make hybrid chips. For now...
Source: Digital Tech Consulting
Diversification Key to STB Supplier Strength in Multiplatform Market
Monday June 22, 2009 – Antonette Goroch
While pay TV STB shipments were one of the few electronics segments to log growth in 2008, and are forecasted to continue their good fortune with gains again in 2009, the good times will not continue to roll for all STB suppliers.
Suppliers will have to diversify their customer bases – both by geography and delivery platforms -- to remain standing as the market matures in many areas.
DTC’s most recent research showed that STB shipments across pay TV platforms saw some 21% growth between 2008 and 2009, but only some suppliers saw shipments grow, and others even posted declines. Though some region specific factors (such as new sub growth in China or DTA adapters for cable in the U.S.) boosted shipments on a case by case basis, a key factor for success was the ability to serve multiple systems and regions.
Successful suppliers were those able to tap into multiple markets and platforms, rather than one region, platform or system. Pace, once a fairly niche player for the European market, is forecasted to realize 16% growth in pay TV STB shipments from 2008 to 2009, more than twice the overall market rate, due to its successful efforts to expand its tier one system customers across platform and regions. Similarly, ADB, which also employs a multiple platform/region strategy, is forecasted to see 26% growth in pay TV STB shipments in 2009.
Those suppliers serving a less-diversified customer base were far more susceptible to the competitive nature of the pay TV business on a system-by-system basis. EchoStar, for instance, generates the vast majority of its STB shipments from Dish Network, the second largest DTH satellite operator in the U.S. EchoStar is forecasted to see shipments fall 8% in pay TV STB shipments in 2009 due to increased competition from both digital cable and IPTV, along with a maturing subscriber base of 14 years. EchoStar has made several moves to combat the situation by penetrating the North American IPTV market through the ViP-TV service (serving customers of the now defunct IP-Prime), as well as its joint venture in the Mexican pay TV market with Mexican cable operator, MVS Communications.
This type of diversity will only become more important over coming years, as declining demand in the U.S. and other mature pay TV markets slow shipment growth overall. STB suppliers able to establish themselves now with a diversified customer base will have a far stronger position as the market peaks and slows.
Where in the World is Digital Terrestrial TV? Monday June 15, 2009 – Myra Moore Now that the world’s largest shut down of analog terrestrial TV transmissions has occurred in the U.S., what’s next? Plenty, it seems. With the exception of Germany, The Netherlands, and a handful of smaller Western European countries, the rest of the world has yet to pull the analog TV plug. In fact, 79% of the countries in the world haven’t even started commercial DTT transmissions, although 42% have pledged to do so in the near future. Not all countries will join the digital TV club as many need their limited resources devoted to more critical endeavors than building digital TV systems. 
Source: Digital Tech Consulting But companies selling infrastructure equipment or DTT receivers don’t have to worry about the well going dry just yet. From 2010 to 2013, some populous and/or prosperous countries are scheduled to shut off their analog systems – among them Canada, the U.K., France, Ireland, Italy, Spain, and South Korea. And there are a significant number of countries just now testing, building, or planning a system. They, of course, won’t be the gravy train that the U.S. has been with more than 1,000 terrestrial broadcasters building infrastructure and tens of millions of DTT receivers sold to consumers (including a forecasted 38 million D-t-A converter boxes). Equipment suppliers will just have to work a little harder to tailor solutions to individual countries that will likely make their jobs harder by building systems that will vary slightly from country to country. Plus, the transition has already been completed for the U.S., which has 100 million TV households. Not many of those kinds of TV household penetrations left in the world – oh, except for China.
MPEG-4 AVC Sitting Pretty
Monday June 8, 2009 – Maya Jasmin
Adoption of the MPEG-4 AVC codec is advancing nicely with only a few years having passed since the first Advanced Video Codec (AVC) products debuted. While crowned as the heir to the ubiquitous MPEG-2 codec, it will be a while before MPEG-4 AVC is sitting pretty and alone on the video codec throne. For now the two codecs work nicely together even providing MPEG-2 device shipments with a boost as digital set-top boxes, TVs and other devices donning the latest technical advances are also supporting the MPEG-2 standard. And even though MPEG-4 AVC won’t cannibalize MPEG-2 anytime in the near future, the newer codec has also done much for introducing the MPEG standard into non-traditional devices, like mobile handsets, personal media players, and handheld video game systems.
DTC expects shipments of MPEG-4 AVC mobile handsets to sustain healthy double digit yearly growth throughout 2013 and probably beyond. Shipments are expected to reach 118 million in 2009 catapulting to over 700 million by 2013. Personal Media Players will experience robust shipment numbers throughout the forecast period as well, and even with slight declines in yearly growth in the outer years, DTC still forecasts shipments of 73 million in 2013. DTC also expects handheld video game systems to contribute heavily to MPEG-4 AVC product shipments in the future, but with limited insight into next generation systems as our current forecast does not include next generation handhelds. For more information about the adoption and impact of MPEG-4 AVC in video devices and downloads, please visit http://dtcreports.com/report_avc.aspx.
Source: Digital Tech Consulting
The Next Video Marriage: Broadcasters and Mobile Service Providers
Monday June 1, 2009 – Antonette Goroch
Subscriptions for mobile TV services (data or content plans including video/TV services) are on the rise with 3G services delivering most of the subscribers. DTC estimates that mobile TV subscriptions grew 37% in 2008, reaching just shy of 100 million worldwide.
Source: Digital Tech Consulting
The majority of these subscribers, more than 95 million, were 3G unicast subscribers, compared with just 3.5 million subscribing to broadcast (as opposed to unicast) mobile TV services. Broadcast services, however, are reaching many more than the 3 million subscribers as most mobile broadcast TV services don’t require a subscription. 3G mobile TV pay services are outselling pay mobile broadcast TV services for a couple of reasons: One is just simple math – there are far more 3G services that offer video than there are mobile broadcast pay TV services. Also, consumers have warmed up to the unicast packages because they are perceived to have more value by providing both on-demand content, as well as cheaper pricing plans and more varied content.
Mobile broadcast subscriptions, conversely, have typically carried high price tags for fairly limited packages of rebroadcast TV channels. Consequently, there has been little traction with new fee-based broadcast services. In the U.S. for instance, there had been high hopes for MediaFlo services launched by both AT&T and Verizon during 2007/2008. High prices, and the lack of a clear value proposition for consumers, however, have left results far shy of expectations, with 2008 subscribers barely reaching 100,000. Pay DVB-H services in Europe haven’t fared a lot better. Only South Korea’s S-DMB service has met with any measurable success with about 1 million subscribers.
While broadcast mobile TV services have floundered as premium subscriptions, they have fared far better under the free, ad-supported model. Indeed, while premium broadcast subscriptions showed little growth in 2008, handsets that include mobile TV tuners that receive free channels grew 46% during the period, rising from 38 million in 2007 to more than 55 million. Japan and South Korea, two of the first regions to offer free mobile TV broadcast services in 2006, made up the vast majority of installed handsets, comprising more than 50 million combined.
The challenge for either model will be achieving profitability. Though 3G TV is racking up subscribers, it is far more expensive and network intensive to offer unicast TV services compared to broadcast, leaving its profitability in doubt. A likely future scenario for this emerging pipeline (already being experimented with some, such as Telecom Italia) will be hybrid models that combine both the network efficiencies of using broadcast for popular high-traffic content, with the on-demand specificity and niche capabilities of unicast services.
The Sky Is [Not] Falling (But PNDs Might Be)
Tuesday, May 26, 2009 – Stewart Wolpin
It's been reported that the U.S. GPS satellite constellation, maintained by the U.S. Air Force, is in danger of failure next year. While the author of said report exhibits a Chicken Little attitude toward the GPS guardians, it's hard to believe responsible parties would allow such a catastrophe to befall not only national security but to a critical consumer market.
How critical? CEA says in 2009, 17.4 million portable and transportable GPS navigation devices – in English that's GPS handhelds (Personal Navigation Devices (PNDs)) from folks like Garmin, Magellan and TomTom, as well as car-based GPS navigation systems – will be sold, more than twice as many as were sold just two years ago (8.75 million). According to CEA, GPS gadgets will be a $4-plus billion business this year.
Big business, right?
The Real GPS Business
Wrong. As the kids would say, BFD. This whole PND bubble may soon burst, even with a healthy economy and a healthy GPS satellite system.
Why? PNDs and car navigation systems represent a tiny fraction of the actual GPS navigation device market. Consumers are suddenly realizing their cellphone makes a better PND than a PND.
First, the statistical argument to support the first assertion.
Firm figures are hard to come by, but most if not all 3G smartphones include GPS capabilities (and most, if not all, new smartphones are 3G enabled), supported by subscription navigation services offered by Verizon, Sprint and AT&T.
According to our forecast, nearly 160 million smartphones were sold worldwide last year. Apple has sold more than 15 million iPhones, which may be more units than any single PND supplier, and which require no added GPS subscription – essentially, you get a free PND with every iPhone.
This also doesn't include 3G phones that aren't smart but still include GPS capabilities. AT&T says most if not all its 3G devices will include GPS capabilities this year, Verizon reports "most of our new feature phones and many smartphones (RIM, Windows Mobile devices) are VZ Nav[igator]-capable" and most of Sprint's phones are 3G/Sprint Navigation capable.
DTC estimates about 200 million cellphones will be sold in the U.S. in 2009, and about 91 million of these will be 3G.
Sort of makes those 17.4 million PNDs look as insignificant as an ant hill next to the Empire State Building, doesn't it?
It Makes A Nice PND
Now, to the second assertion – why cellphones are better PNDs than PNDs. Two reasons.
First, cellphones don't rely just on the GPS satellite system. Cellphones actually are equipped with assisted GPS (A-GPS), which means they use the cell network to assist the GPS system in locating you. A-GPS also means your location can be acquired in half the time than using just GPS, even indoors when your phone can't "see" the GPS satellites.
Second, cellphones are connected. Unlike most PNDs, cellphones can receive live traffic updates and up-to-date POIs (Points of Interest), including where to find the cheapest gas at any particular moment. And it could also mean that advertisers know where you’re located, which may not be a plus.
Yes, cell-based navigation services run around $10 a month (except for iPhone), but it'd take around three years before these fees would equal the price of a standalone – and not as well-endowed – PND.
So, why in this economy would a consumer with a GPS-equipped cellphone buy an additional slow, dumb traditional PND?
GPS satellites may come and go – but the halcyon days of the PND may already have come and gone.
VGS Media Center: How Will Version 2.0 Look?
Monday May 18, 2009 – Shelby Cunningham
Video game system (VGS) providers put their money on transforming their consoles into living-room media centers by building systems with internet connections and video optical disc drives in their latest devices. So far, so good. A percentage of gamers have embraced the online services, and DVD and Blu-ray Disc (BD) movies get played in the consoles.
The best strategy for a successful home media center is still being formulated, however. VGS makers will soon be giving us a glimpse of the next step in the media-hub strategy. Will they get it right?
All three console makers, with Xbox leading the pack, have had enough success with online services that offer games and video streams/downloads, that it’s certain that they will beef up these online offerings. So now that people have shown they want to sit on the couch and download games and media straight into their living room, will the next generation of consoles rely 100% on downloads and built-in memory and nix the optical disc drive all together? If rumors are correct, the first purely download-reliant VGS is right around the corner. The new PlayStation Portable (PSP) that many believe will be announced at E3 in early June will supposedly be sans optical disc drive and will rely on delivering all games digitally. Considering the unspectacular sales of UMD movie discs, this move isn’t surprising.
But let’s not stick a fork in the disc drive yet.
How will consumers react to not being able to play their last generation games on their new VGS if there is no receptacle for packaged media? Will they grudgingly accept that they will have to re-purchase the games as downloads? Or will Sony give PSP buyers a break and offer some free downloads with purchase? As for now, consumers aren’t ready to throw out their physical media. According to recent estimates from NPD, only 3% of home entertainment spending in March 2009 was on web-based downloads and online streaming. It also found that only 5% of consumers downloaded movies onto their video game consoles. Considering the relatively small uptake of game and movie downloads, console makers who choose to remove the disk drive altogether will have to risk alienating gamer enthusiasts.
How do we deliver this avalanche of content to all our gadgets? Monday May 11, 2009 – Antonette Goroch With a large amount of entertainment programming streaming to TVs, mobile devices, and PCs, the need for efficient content creation, management and distribution is more critical than ever. DTC’s most recent research estimates that there were more than 239 million worldwide pay TV subscribers , 99 million mobile TV/video subscribers, and just under 12 million Internet video subscribers in 2008. And that doesn’t include people who only view free content. With this many people watching over limited bandwidth, technical efficiency is the new brass ring. 
Source: Digital Tech Consulting One example of the quest for efficiency is greater use of IP to the contribution level of content production, rather than just distribution to the end user. Companies, such as T-VIPS and other “behind the scenes” content management players are helping providers move content to and from multiple points using IP networks. This is of fundamental importance with multiple platforms that must now be considered. These range from a patchwork of set-top boxes, PCs, and mobile devices to multiple audio and video codecs, transmission networks, and varying bandwidth capacities that each piece of content must be calibrated for. Larger infrastructure companies are feeding this trend as well. Cisco, for instance, managed NBC’s Olympics coverage from Beijing in 2008 using such an IP-based system. Although dabbling with new consumer distribution pipelines gets lots of attention, the more sophisticated use of IP technology to manage content before it gets to the consumer represents a dramatic – and likely permanent – shift in the business of content distribution.
Why Viewing Local TV on Mobile Phones isn’t DOA in the U.S. Monday May 4, 2009 - Myra Moore The naysayers are pronouncing local TV broadcasts to U.S. mobile phones dead on arrival because they say mobile phone service providers will never agree to let ATSC Mobile DTV receivers be built into service-provider handsets. The argument goes like this: In order for local broadcasters’ OTA services to be successful, consumers must be able to view the programming on their mobile phones. In other words, with the exception of portable TVs for automobiles, consumers won’t purchase (in meaningful numbers) separate devices to view local TV programming. So far, we’re in agreement. A frequent sentiment expressed among industry players at the recent National Association of Broadcasters (NAB) Show (April 20-23), is that mobile phone service providers will be perpetually unwilling to open the door to local TV broadcasters because free OTA broadcasts won’t deliver a direct revenue stream to service providers. Not surprisingly, no announcements have been made from providers like Verizon and AT&T to imbed OTA digital TV receivers in company-subsidized handsets when broadcasters begin the first transmissions later this year. ATSC Mobile DTV is new and commercially untested; it will increase handset costs; and if service providers are considering the eventual inclusion of ATSC receivers, they’re certainly not going to tip their hands now. But we think there are a couple of reasons why service providers won’t be hostile to the idea. · Free-to-air mobile TV reception can give consumers a “free” taste of receiving TV programming, which may lead to additional video snacking of premium content provided by the service provider. · As more and more features are added to our Swiss Army Knife phones, the inclusion of broadcast TV receivers may be like cameras in mobile phones – ubiquitous and necessary to be competitive. In Japan, the vast majority of mobile phones (whether acquired through the provider or independently) includes a broadcast mobile TV receiver. The country has an installed base of more than 20 million TV-capable handsets. Most mobile phone providers selling full-featured handsets and services willingly choose to include 1seg TV receivers because many consumers want to receive local TV programming on their handsets. Of course, it’s too early to know if the U.S. market will be similar to the Japanese (or Korean) market, but it seems premature to dismiss the idea that ATSC mobile TV receivers might someday make their way into phones.
One Device To Rule Them All Monday April 27, 2009 – Stewart Wolpin MP3 player. PND. digital camera. PMP. camcorder. E-book reader. mobile phone. All popular 21st Century gadgets. And all may be gone, at least in individual form, in five years. Where will they go? We'll get the first hint sometime in late June/early July when the third generation iPhone appears. If the varying reports are accurate, the new iPhone will have 32 GB of memory, a 3.2 MP camera and video recording capability, along with all the other promised iPhone OS 3.0 improvements and the functionality brought by the nearly 30,000 third-party iPhone apps. For years, the mobile phone has been absorbing other devices' capabilities, a digital version of the TV show Heroes' power-stealing character Sylar. First, they were just phones. Then they were PDA phones. Then they were camera phones. Then they were text messaging and email phones. Then they were music phones. Then they were Web browsing phones. Then they were multimedia viewing phones. Then they were GPS phones. Some say the iPhone maybe have been the first cellphone to be the true sum of these disparate capabilities that has conquered the market, but phones running Android, Palm's coming webOS, BlackBerry, Symbian and Windows Mobile "open" cell OSs are not far behind. Aside from the usual technological advancements and SoC developments, two trends are pushing us closer to one device to rule them all – cheap more copious flash memory and faster mobile networks. On a gut level you probably realize how cheap flash memory is. But nothing is as dramatic as cold, hard statistics. Kingston, which makes both flash memory cards and thumb drives, supplied me with its retail SD card pricing over the last few years:
Source: Kingston You read right. You can now buy a 16 GB high-capacity SD card for nearly half the price of a 2 GB SD card just three years ago. Memory built into devices also is getting cheaper. Nothing exemplifies this more storage/less money than the Apple iPod Classic. See how prices have remained nearly constant over the last five years while storage capacity has increased six fold: iPOD CLASSIC | 20 GB | 30 GB | 40 GB | 60 GB | 80 GB | 120 GB | 2004 | $299 | | $399 | | | | 2005 | | $299 | | $399 | | | 2006 | | $249 | | $349 | | | 2007 | | | | | $249 | | 2008 | | | | | | $249 |
So much more storage for so little money could soon make the hard drive extinct, which means cheaper, lighter, more reliable and less power-hungry laptop PCs in five years – or even sooner – and enable a continued condensing of capabilities into fewer portable devices. Then there's the coming of LTE (Long Term Evolution), a 4G network technology providing wireless mobile broadband speeds of 6-8 Mbps, 10 times faster than current 3G EV-DO and HSPA networks. Verizon will start offering LTE service sometime in the middle of next year in around a dozen or more markets, with AT&T likely to follow in 2011. Faster networks aren't just for faster uploads or downloads, although that will be an obvious way to transmit high-resolution geo-tagged photos and videos from cellcams and maybe juice up the early efforts to improve video telephony. Verizon is actually funding a program seeking innovative ways of talking advantage of the LTE's speedier and roomier wireless broadband Autobahn. What about Sprint's XOHM-branded WiMAX 4G service? After a year, it's available in only two markets, Baltimore and Portland, OR, and Nokia has discontinued the N810, its lone WiMAX handset. Only one new WiMAX handset, the Windows 6.1-powered Samsung Mondi, due in the next few months from Sprint, was announced at CTIA earlier this month. Five years from now, we may view today’s phones to be as quaint as an 8-track cassette. Future phones may operate on 4G LTE networks, have bright and power-efficient OLED screens, 120 GB flash drives, 8 MP cameras, HD video capture, geo-tagging, video GPS, video telephony and access to thousands of downloadable applications – all for less than $200 (with that pesky 2 year contract). If consumers want all those functions in one place, this will truly be one device to rule them all.
Internet Video Usage on the Rise Monday April 20, 2009 – Antonette Goroch Consumers have a voracious appetite for viewing video content on the Internet. No surprise there. Most of what they are consuming is free of charge, while the providers are supposed to be making money from selling advertising. But what happens when there aren’t enough advertising dollars to support on across-the-board “all you can eat for free” business model? According to comScore/Media Metrix, Google’s ad-supported YouTube alone generates from 70%-90% of traffic in all world regions. While this clearly has fueled usage, it has failed to generate profits. Indeed, because of the high costs of servicing this bandwidth, Google is consistently operating YouTube at a loss. YouTube’s recent announcement that they will carry full length TV shows and movies from big name studios is an obvious attempt at generating more revenue through advertising. DTC estimates nearly 400 million Internet viewers worldwide are streaming or downloading some 23 billion videos monthly. The largest concentration of viewers is in the U.S. with more than 150 million viewers. Not coincidentally, the U.S. also has the greatest number of content offerings available via ad supported, subscription and transactional business models. Usage in countries like the U.K., France, Italy, Spain, Japan and South Korea, is increasing exponentially. Most of that content is made available free to the consumer. Although less than 1% of video streams/downloads are purchased directly by the consumer, there is hope for pay business models as DTC estimates that there was 20% growth pay services in 2008. Apple is the undisputed leader worldwide in premium/pay video downloads, but has more recently been joined by others such as Xbox Live, Amazon, Blockbuster, Netflix, and blinkbox. It’s not clear how Internet video usage, free or premium, will affect the incumbent pay TV business. At the recent NCTA conference in Washington D.C., the largest cable operators seemed relatively complacent thinking of Internet video (i.e. over-the-top content) as a long term issue, rather than a near term threat. With Internet video providers already attracting hundreds of millions of viewers, pay TV operators may benefit from seeing the explosion of online video consumption as a near-term threat and/or opportunity. Anyone counting on a slowing of appetite for consuming TV and other online video entertainment might lose their seat at the dinner table.
Netbook or Bust? Monday April 13, 2009 – Maya Jasmin
With the troubled economy, rising unemployment, and uncertain futures weighing heavily on consumer’s purchasing decisions, once deemed recession proof markets are obviously feeling the current recessionary blow. PC is one such market feeling the pain and PC companies are adjusting sales and shipment forecasts down. DTC has revised its PC forecast to reflect the economic effects on the market and expects to see at least a 10% decrease in PC shipments in 2009 as compared to shipments in 2008. While forecasts may seem dim, a mini hero is emerging. The netbook, which comes with a cheap price tag and stylish design, is soaring in popularity and its sales are doing much to keep the personal computing market afloat. In addition to helping PC shipments remain robust, netbooks may be instrumental in changing how PCs are distributed. Until very recently, buying a computer at a store or online was the only way to acquire one. However, some internet service providers are now offering a new way to purchase hardware. Like cell phones, netbooks are offered for a very low cost (usually around $100) at say a Radio Shack or an AT&T store in select markets. But the purchaser is required to sign up for contracted internet service in exchange for the low-cost machine. The contract is generally for a two year period and service prices range anywhere from $49.99 to $69.99 a month. While this model has worked for the mobile phone market, is it really transferable to the PC market where consumers are used to buying their hardware in a traditional manner? A netbook for $100 sounds good, but what about being locked into a $60/month internet service contract for 24 months? At that rate your $100 netbook turns into a $1,500 purchase, excluding taxes, surcharges, and fees. Of course, a monthly internet service fee is required whether or not you get the service from the netbook provider, but with the netbook provider you lose the flexibility to shop for a better deal, or just change your mind, at a later date. It all comes down to the wallet, though. With tightened budgets, we’ll have to wait and see if consumers think the new business model represents a short-term good deal, or a long-term lousy deal.
The Ethernet Dilemma Monday April 6, 2009 – Stewart Wolpin It is rare that the major consumer electronics companies are so – well, to avoid being completely insulting, let's say short-sighted. Over the last few months, there have been many new HDTVs that include specialized Web surfing capabilities such as Sony's Bravia Link, Panasonic's Viera Cast, and the Yahoo! Widgets available on some Samsung and Sony models. All these connected HDTVs and Blu-ray players, however, require an Ethernet jack to connect them to the internet. Approximately 60 percent of U.S. homes have broadband, and therefore Ethernet, connections. But how many of these U.S. homes have an Ethernet jack in their living room? I've seen no data to answer this question. I've asked any number of people who would either be in a position to know or would need to know, but all I get is a shrug of the shoulders. My guess? Hardly any. And yet, there are no connected HDTVs and no Blu-ray Live decks that include Wi-Fi capabilities. How do these companies hope to sell any of these connected devices if consumers have no way to connect them? Why haven't these manufacturers included Wi-Fi connectivity? Good question. I don't think it's cost. Most of the current media streamers such as Apple TV ($230, $330), Myka ($280-$390), the Kodak Theatre HD Player ($300), and the varying streamers from Netgear such as the Digital Entertainer Elite EVA9150 ($400), are equipped with Wi-Fi connectivity. And TiVo offers Wi-Fi adapters for its HD DVRs. It seems Wi-Fi connectivity can be easily built into or included for a living room device without adding appreciably to the price. Perhaps there are issues with consistent quality and/or connectedness, or concerns about signal security that have kept suppliers from incorporating Wi-Fi? At least the Blu-ray Live deck makers are getting the message. Sony will start to sell its WiFi-enabled BDP-S560 ($350) in July; Samsung hasn't said when it will start selling its as-yet unpriced BD-P4600 and BD-P3600 Blu-ray decks, which will include Wi-Fi dongles. But that still leaves a lot of connected HDTVs and Blu-ray Live decks with no way to wirelessly connect them – and a lot of advanced products with limited constituency to sell them to. Device makers may have a perfectly good reason for leaving Wi-Fi out of their business plans, but they didn’t include me in on their plans.
IPTV Growth Continues Despite Economic Decline Monday March 30, 2009 – Antonette Goroch Like other pay TV platforms, IPTV has proven resilient in the face of global recession with STB shipments rising during 2008 and showing similar strength in the first months of 2009. By utilizing the ability to differentiate itself as a more advanced offering, as has been the case in the U.S., global IPTV growth will continue to come from a mix of tier two and three-tier launches. Indeed, DTC’s most recent survey of the market found shipments came in slightly higher than previously forecast, reaching just under 14 million units compared to our expectation of 13.5 million for the year. Some systems are beginning to show signs of maturity, with new subscriber growth slowing, but overall new systems are continuing to launch and the platform’s prospects remain strong. IPTV has found a strong foothold over the past five years, particularly in Europe and Asia, with France having emerged as a major hotspot. Though many of these early deployments have begun to slow and show signs of maturation, such as those in Hong Kong, France or Italy, new launches are continuing apace in the regions of Eastern Europe, the Middle East and Africa. 2008 deployments included new services launched in Montenegro, Macedonia, Croatia, Lithuania, the United Arab Emirates and Morocco. The U.S. market also showed unexpectedly strong growth during 2008, accounting for some 24% of all IPTV STBs shipped. Though the SES service IP-Prime ceased operations due to a lack of subscriber growth, both AT&T and Verizon experienced substantial subscriber gains, each passing the 1 million subscriber mark. This was no small feat for a market as competitive as the U.S. and demonstrated the power of an integrated, triple play advanced TV product, even in difficult market circumstances. Latin America has seen little in the way of IPTV to date, with only a few fledgling systems in Brazil and Colombia, but seems poised for growth with several announcements of new launches planned for 2009, including Brazil, Argentina and Uruguay. A large and influential Latin American market such as Brazil could boost market share if the services take.  Source: Digital Tech Consulting
What’s so Standard about Standards?
Monday March 23, 2009 – Myra Moore
A lively panel discussion of TV manufacturers that took place at the DVB World conference on March 10 put a hot light on the subject of standards and their limitations. Even if you specify a TV or a set-top box to comply with the world’s most frequently used transmission standards – say DVB and its multiple iterations – you can easily end up with receivers that can only work in a single territory. Despite all our talk about a global marketplace, there aren’t any truly international digital TV standards. A little DVB here, a little ATSC there and some T-DMB peppered around the world and you have a big pot of DTV gumbo.
But when you have a large region, such as Europe, where every digital terrestrial broadcasting country on the continent uses the same DVB-T standard, even those receivers can vary wildly depending upon the audio and video compression standards used, the presence and type of middleware, or the presence of a smart card reader if pay services are available (just to name a few options). Standards don’t quite live up to their promise when the set-top box you bought for use in Germany can’t fully function in Norway. Most consumers tend to take this in stride – it’s called conditioning.
But TV and STB makers get the vapors when every country rolls out its own interpretation of the “standard”. It requires manufacturers to make STBs and TVs that are different from the ones it built for that country’s neighbor. This is a rational complaint as it is a costly and inefficient practice. This is the point the TV makers made at DVB World and many attendees (including broadcasters that foster this practice when they specify DTT systems) had some sympathy for their plight.
Sympathy doesn’t really matter, however. Most agree that standards that allow some flexibility – which enable innovation and experimentation – are preferable to those that lock down every element in a system. TV makers will apparently continue to pay the price for flexibility. Perhaps hosting a lavish retreat where all DTV system decision makers get together and agree on common specifications for receivers would be a good investment for the world’s TV manufacturers (ignoring possible anti-trust issues for a moment). But in today’s climate where luxury perks are about as popular as credit default swaps at a support group for embattled investors, maybe cross-country cooperation will have to wait.
Will the Wii be Able to Compete?
Monday March 16, 2009 – Shelby Cunningham
As people increasingly use their video game consoles to stream movies and tv shows, will the Nintendo Wii fully step into the game? It has been announced that Nintendo will launch a video channel on the Wii in 2009, but only in Japan and it will only show Nintendo-produced content. While Xbox 360 owners can stream anything from Netflix, Japanese Wii owners will be able to watch cartoons and educational and lifestyle shows created by Nintendo. Some of the content will require payment, but other programs will be free with ads mixed in.
Nintendo hinted that it will offer video channel service overseas later in the year. When that service heads West to the U.S., will Wii owners receive only Nintendo-produced content just like the Japanese owners? If so, will the “walled garden” approach fly with U.S. Wii owers? Japan may embrace the Nintendo-provided content as the brand is wildly popular in Japan, but that brand loyalty may not be as strong in other countries. In the US, console owners have embraced watching hit Hollywood movies and popular TV shows on their video game consoles.
Sure Nintendo made up about 64% of the video game console market in 2008, but a lot of these owners are casual gamers who may not have any interest in streaming video through their Wii. If Nintendo creates original content for different worldwide markets then they will be investing a lot of money and time into something that may not be well received. Although by making some of the content free with advertising they are insuring that people will at least give it a shot. So now all that remains to be seen is what Nintendo will choose to show on this channel outside of Japan.
I suppose Nintendo could populate the US video channel with Pokémon and hope children will still flock to the cuddly Pikachu creature and collect all of the video downloads, but until the content is announced I remain wary of how well a channel full of purely original content will do outside of Japan.
Net-topsGain Momentum in 2008 Monday March 9, 2009 – Antonette Goroch Excitement about the application of Internet connectivity in STBs has grown immensely over the past year, leading to several important standalone product announcements in 2008, as well as stronger than expected shipments for the period. According to DTC’s most recent estimates, more than 1.1 million units of standalone Internet STBs shipped in 2008, nearly five times the roughly 200K that shipped in 2007. This jump in shipments was largely due to the success of the Netflix box by Roku, which achieved a compelling mix of low cost ($99) with an existing online content consuming base (Netflix subs), though Apple TV also performed slightly better than expected. This strength has led to a flurry of activity for the category, including both new products and expanded functionality for devices. The most notable of these is Blockbuster's recent entry into the market, challenging Netflix with a STB manufactured by 2Wire, now available free with purchase of $99 worth of rentals ($1.99 thereafter). Other notable announcements include Roku's expansion beyond just Netflix content into other sources, including the Amazon Unbox library, as well as a large expansion of VUDUs HD content library. But despite this relatively strong year, DTC believes standalone Internet STBs will ultimately be a small, early adopter/hobbyist product category. Indeed, while we believe that the next two years will see continued success from both the Netflix and Blockbuster offerings, for the long term, DTC expects the bulk of Web delivered TV content going to integrated devices, such as pay TV STBs, game boxes or Blu-ray players. These products will play an important role in the near term however, by establishing the viability of Internet-to-TV content delivery, and the conditions necessary for its success.
HD Camcorder + Digital Camera=??? Monday March 2, 2009 – Stewart Wolpin We're soon going to have to come up with a new name for a new type of digital imaging product that could dominate the still picture/video-taking business in short order. Digividicam? Camvid? Cameracam? Digicam? Why am I fussing with this silly nomenclature? In the last couple of months, most of the major digital camera makers – Sony, Kodak, Panasonic, Canon – have joined Casio in adding H.264 HD video recording capabilities to models priced around $250 and up. At the same time, a growing number of both familiar and unfamiliar camcorder manufacturers – Sony, Samsung, Sanyo, DXG – have introduced H.264 SD-based camcorders that also snap high megapixel (usually 5 MP or higher) digital stills, priced at around $250 or less. Many of both types offer minimal – 3x-5x – optical zoom lenses, 2.5-inch and larger LCD screens, USB and, sometimes, HDMI jacks. Exhibit A is the Sanyo Xacti VPC-GC10, due next month. It has a 5x optical zoom, offers 50-1600 ISO settings, a 285-degree swivel 3-inch widescreen LCD monitor, shoots 1280 x 720p H.264 video and snaps 10 MP digital stills via a CMOS sensor – for $199.99. Okay, no peeking at an online picture. Is it a digital camera or a camcorder? Sanyo has dubbed it and its other new merged-imaging models Dual Cameras. Nah, too many syllables. How about Dualcams? Yes, H.264-equipped digital cameras have a raft of digital photo specialty features – face detection, smile detection, panorama, et al – and processors designed to optimize digital stills. And high-megapixel-still-equipped H.264 camcorders have processors to optimize digital video. But there's no reason why these features can't and won't be merged. Yes, form factor is an issue. Is the rectangular shape of a digital camera to best way to shoot video? Is a vertical pistol-grip or a beer-can-shaped camcorder the best way to snap stills? For $200 to do both high-def video and high-megapixel stills, I'll bet consumers won't care how they're shaped. We just need to figure out what to call them. 
Source: Digital Tech Consulting
Old School Rules: OTA King of the Hill – For Now
Monday Feburary 23, 2009 – Myra Moore
Over-the-air TV obituaries have been so ubiquitous in recent years, you might think the grave diggers are about to shovel the final earth that will bury the old-school terrestrial TV model.
Granted, it’s not the mighty TV delivery giant it used to be, but an
examination of recent Digital TV receiver shipments
illustrates why “the reports of its demise are greatly exaggerated.” In 2008, more than 55 million digital terrestrial receivers (set-top boxes (STBs) and TVs) shipped in the United States, while almost the same number shipped into the European market.
Digital transitions are helping to propel Digital Terrestrial TV (DTT) receiver sales
above those for Internet Protocol TV (IPTV), digital cable, and Direct-to-Home (DTH) satellite reception. Naturally, the 2009 analog shut-off in the United States is a significant factor in those life-affirming sales. The U.S. and other ATSC standard countries, though, won’t carry the 17% CAGR that DTC projects for DTT receiver shipments through 2013. It will be the European-created Digital Video Broadcasting – Terrestrial (DVB-T) standard that will do the heavy lifting. The chart below depicts the (current) three major digital terrestrial transmission standards and their projected shares in receiver sales.
Source: Digital Tech Consulting
That’s a lot of OT |