A Missed Deadline?

Monday January 26, 2009 – Myra Moore

With the “date certain” for ending analog terrestrial TV transmissions officially uncertain, the person in charge of inventory management for an electronics retailer or a converter-box maker is probably flipping a coin to decide whether or not to order or to make more digital-to-analog converter boxes.

Those inventory managers may have to wait until Congress votes on pending bills that specify the analog TV shut-off date be moved from February 17 to June 12 to know if they made the right decision. The good news is that many retailers prepared for the expected high demand for boxes in January and February by stocking up in the fourth quarter of 2008. The bad news is that theNTIA announced on January 5 that the converter box coupon program had been exhausted at that time and that consumers would be placed on a waiting list as more coupons become available.

Digital Tech Consulting (DTC), which has been conducting research on the digital-to-analog converter-box sales for nine months, recently completed work on estimating fourth quarter shipments of converter boxes and found that retailers are well prepared for expected demand.

DTC estimates that 33.5 million converter boxes have shipped into the U.S. marketplace with about 9 million of those boxes still available for those who had not purchased a box by the end of December, 2008.

Of course, the estimated existence of 9 million boxes in the pipeline doesn’t have anything to do with whether or not all the consumers who want to buy them will be able to do so with a coupon (DTC’s research finds that nearly 4 million boxes have been purchased without coupons). We don’t know if the NTIA coupon availability problem can be solved within the nearly three weeks before analog TV transmissions are scheduled to end, but if it can be, there should be plenty of boxes for which those coupons can be redeemed.

Source: DTC

CES 2009 Brings the Internet and TV Closer Than Ever

Monday January 19, 2009 – Antonette Goroch

The wide array of Internet to TV products at this year’s Consumer Electronics Show in Las Vegas made it evident that the link between TV and Internet is only getting stronger. How this trend will ultimately reshape the landscape of television content is unclear, but some effects can already be seen in a variety of new services and products from existing players.

On the one hand, there were a number of products that enable direct connectivity between Web content and televisions. Internet connected TVs were all the rage, with new models from Sharp, Samsung and LG, among others, that allow consumers to access Internet and video content, such as that made available by Yahoo or YouTube, directly to their TVs. Meanwhile, Internet-PC-TV connected products also gained momentum with new products like D-Link’s PC-on-TV player or Buffalo’s LinkTheater, which wirelessly stream Internet content from a users PC to the TV via a home network with unprecedented ease of use. Buffalo’s products allow remote access to one’s home network content via the Internet, and the ability to automatically queue BitTorrent files.

Additionally, existing TV related products continue to evolve to incorporate more Internet-like features, such as search and personalization. Tivo, for instance, unveiled a new software release for its set-top boxes which integrates new search functionality that not only lets users search for programs from their cable listings, but also brings in content from Amazon, CinemaNow, Jaman and YouTube. Fee-based content can automatically be purchased directly from this interface and added to the DVR.

Another example, which more clearly reveals how these trends might shake up the traditional pay TV business, is Macrovision’s radical change in product offerings. Once solely a content protection business, building its success around scrambling and encrypting content for pay-per-view and premium cable TV, Macrovision is now focusing on its more recent intellectual property acquisitions that create extensive program guides and search.

The move is telling, for Macrovision and others, because it foreshadows a TV landscape where value is created not so much by owning and restricting content, but rather better enabling navigation through vast quantities of content available through a multitude of sources.

More Proof that Optical Discs Aren’t Going Anywhere Yet

Monday January 12, 2009

Despite the slowing sales of DVD devices in major markets, the video optical disc device market is forecasted to sustain its current rates of annual shipments for the next few years. The last big jump in shipments occurred between 2007 and 2008, after which the market dropped a bit due to a decline in DVD device shipments, but now that Blu-ray has begun to catch on the shipments are on a slight rise again. Just don’t expect to see the Blu-ray market produce the kinds of shipment volume that characterized the DVD industry.

DTC has been tracking the optical disc device and pre-recorded disc market for years and puts out an annual data-rich report. For information about this report please visithttp://dtcreports.com/report_optdisc.aspx

Source: DTC

U.S. Economic Woes May Bring Unlikely Winners to Pay TV

Monday January 5, 2009 - Antonette Goroch

Pay TV has traditionally been a recession proof industry, steadily growing through the economic turmoil seen in both the late eighties and the early nineties. But competition is set to be far more fierce in US digital pay TV during 2009 than in previous recessions, and this new climate may bring some unlikely beneficiaries.

Despite economic downturn, digital pay TV subscriptions are not likely to stop growing during 2009, particularly in light of the digital broadcast transition in February. In this atmosphere, though, consumers will be keen on finding the best value in their spending decisions—even in pay TV. Consequently, bundled services will become more attractive than ever—offering both added financial value to consumers in multiple services, as well as the perceived value of savings through one bill.

Ironically, telcos, the newest and smallest of the U.S. pay TV pipelines, may be the best suited for offering the most advanced package of bundled services. While not yet widely deployed compared to their DTH satellite and digital cable competitors, both AT&T and Verizon have the ability to offer the coveted “quad play” of mobile/phone/broadband/advanced TV—indeed Verizon began offering such services earlier this year in certain markets. Additionally, their IP based architecture adds to their ability to offer new cross-platform and “over the top” content.

FiosTV by Verizon and U-Verse from AT&T both hit important milestones this year, reaching 1.4 mil and 1 mil subscribers during December, respectively, signifying they are in this game for the long haul. Equally significant, both are aggressively rolling out pay TV in major markets. This will pose a clear challenge to incumbent cable and DTH satellite providers, as the major telco/IPTV operators attempt to cherry-pick the most high-ARPU subscribers through advanced bundles of HDTV, broadband, mobile and mobile TV, and may foreshadow rapid growth—despite economic slowdown--for this new generation of IPTV service.

Source: DTC