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: DTC

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-tops Gain 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: DTC