Every consumer who wants to buy a coupon-eligible DTV converter box under NTIA’s program “will have access to a range of retail options,” CEA Pres. Gary Shapiro assured NAB Pres. David Rehr in a reply letter Tues. A day earlier, Rehr had written CEA and the CE Retailers Coalition, saying it’s “critical” to the DTV transition’s success that converter boxes be for sale in all stores by Jan. 1 (CED May 15 p5) OR (CD May 15 p9). Shapiro wrote back to say at least 3 CEA member companies -- LG, Samsung and Thomson -- have announced they will produce coupon-eligible boxes. “And the nation’s consumer electronics retailers will ensure that all Americans have ready access -- via retail stores, online, and telephone -- to these devices,” Shapiro said. He cautioned Rehr that “certain boutique, custom installation and high-end stores may choose not to sell the coupon-eligible boxes.” Still, he told Rehr to “rest assured any American who wants to purchase a coupon-eligible box will have a wide variety of convenient retail sources from which to choose.” Though NTIA’s coupon program won’t launch to consumers until 2008, “we will continue to promote the upcoming availability of converter boxes and would welcome the initiation of broadcaster support for the CEA programs promoting free, over-the-air broadcasting,” Shapiro said.
Paul Gluckman
Paul Gluckman, Executive Senior Editor, is a 30-year Warren Communications News veteran having joined the company in May 1989 to launch its Audio Week publication. In his long career, Paul has chronicled the rise and fall of physical entertainment media like the CD, DVD and Blu-ray and the advent of ATSC 3.0 broadcast technology from its rudimentary standardization roots to its anticipated 2020 commercial launch.
It’s “critical to our collective success” that CE makers build and CE retailers stock DTV converter boxes in all stores by Jan. 1, 2008, NAB Pres. David Rehr said in a letter Mon. to CEA Pres. Gary Shapiro and Marc Pearl, exec. dir., CE Retailers Coalition (CERC). If boxes aren’t produced and on store shelves by then, “significant consumer confusion will result and could negatively impact the overall success of the transition,” Rehr said. He asked for CEA and CERC suggestions on how broadcasters can help make the Jan. 1, 2008, “deadline work for your companies and America’s consumers.” But CE makers and retailers face no such formal deadline for delivering DTV converter boxes to store shelves. The date’s only legal significance is that it’s when NTIA must be ready to begin accepting consumers’ requests for DTV box coupons. Participation in NTIA’s coupon program is voluntary for CE makers and retailers. LG and Thomson have promised to ship coupon-eligible converter boxes (CECBs) by Jan. 2008. Retailers aren’t required to seek participation in the program until March 31, 2008. They can apply certification starting next month. CEA’s Shapiro wasn’t available for comment. But CERC’s Pearl said his group’s members “have taken an active interest in the NTIA CECB program and CERC has worked with NTIA to educate other retailers about the program.” CERC has promised to post “program registration guidance for all retailers” -- including nonmembers -- on the CERC site as soon as NTIA makes it available, Pearl said. “The next key point will be NTIA’s naming of a program contractor” about Aug. 15, he said. The vendor will be responsible for running the coupon program, he said: “CERC very much appreciates NAB’s offer of assistance in assuring the earliest feasible implementation of the contractor’s program in matching it technologically to the varied retailer and commercial point of sale and payment systems and has confidence that NTIA will make an appropriate choice.” Meanwhile, House Commerce Committee Chmn. Dingell (D-Mich.) has begun polling constituents about their readiness for the 2009 analog cutoff. “Legislation passed by the Majority in the previous Congress could force you to buy new equipment for your television or it will no longer work,” Dingell said in a question posted on his website. “Do you know if your television will work after the change from analog technology to digital?”
Microsoft isn’t financing Meridian’s development of an HD DVD player, DVD Evangelist Kevin Collins told us. That contradicts Meridian Product Mgr. Luke Rawls’s statement to us at last week’s Home Entertainment Show that Microsoft is paying for some HD DVD development work at Meridian (CED May 14 p1). Collins did confirm that Microsoft is working with Meridian “on the development side to bring an HD DVD player to market utilizing the Broadcom/Microsoft reference board.”
DTS in Q1 recorded its first royalty revenue on Blu-ray and HD DVD, accounting for just over 5% of total revenue, CEO Jon Kirchner told analysts in a quarterly earnings call. The total came mainly from shipments of PS3 and Xbox 360 consoles, he said. “We expect to see increasing HD-related unit volumes from players, PCs and game consoles as we progress through 2007,” Kirchner said. In Q&A, CFO Mel Flanigan said royalties from next-generation formats could bring 20% of this year’s total DTS revenue. DTS licensees “have been preparing a new generation of products to support this transition,” Kirchner said. For example, Onkyo is bringing out AV receivers that support “the full suite of DTS HD technologies,” he said. “We expect a number of other player and receiver announcements over the coming weeks and months as the transition gets into full swing.” More Blu-ray and HD DVD hardware models are due this year at lower prices, “and the number of manufacturers who have announced their intentions to support dual format players is growing” with the addition of Samsung and Onkyo, he said. These introductions, coupled with a rise in Blu-ray and HD DVD titles “being readied and released, will positively impact the pace and timing of the market’s development” -- and that all bodes well for DTS, Kirchner said: “We are very optimistic about the potential of the high definition product cycle, particularly in the AV, PC, and game console markets. We expect to see increasing revenue contributions in the latter part of 2007 and more substantially in 2008. However, we remain cautious about timing as the market transitions.” In Q&A, Kirchner wouldn’t bite when an analyst tried to get him to say Blu-ray is ahead in the format war. “No comment specifically” about market share having tipped in Blu-ray’s favor, “other than obviously there’s a lot of activity in both camps,” Kirchner replied. “The one thing that’s important is that with all the activity, with more hardware and with more content… and lower price points, that ultimately is going to help build the formats,” he said. He suggested that the industry will know soon “whether we live in a single-format or a dual-format world. But we are not naturally in the business of projecting who ultimately will win this battle.” DTS is “supportive equally” of both Blu- ray and HD DVD, Kirchner said. The “opportunity is huge” for DTS to build a “meaningful” presence in broadcast and IPTV, Kirchner said. “As we get a better handle” on possibilities in the next year, “we will probably be in a better position to say just how big it could be for us,” he said. Broadcasters are evaluating and choosing DTS, he said: “We have the ability to deliver more efficiently data across their broadcast channels using a coding technology solution and then transcoding that solution at the set-top box level into DTS to connect to home AV equipment -- which obviously already has DTS technology into it, so it is kind of the best of both worlds. You've got a very highly efficient way of delivering data for broadcasters, which obviously saves them money because it uses less bandwidth. And then when it hits the home, you've got the highest quality delivery format available there, in terms of DTS.”
Tweeter, which lacks capital “to fund all of our immediate needs,” may file for Chapter 11 protection, senior executives told analysts in a Q2 earnings call Thurs.
“If we want to grow and if we want to be the company we want to be in 5 years and in 10 years, we must maintain the R&D spending and the R&D investment,” Texas Instruments CEO Rich Templeton told the company’s financial analyst meeting Wed. in Frisco, Tex. “People get excited about margins -- especially in this room -- but if we're going to [increase] our earnings over time, we're going to build with top-line [revenue] growth in the right markets with the right products,” Templeton said. An idea that today “sounds like science fiction is potentially a new business within 2 or 3 years,” he said. “There’s not a lot of other industries like that -- that have that type of creativity, that have that type of impact. And that’s what makes this job really so fascinating.” TI has spent over $2 billion a year on R&D since 2004, Templeton said. Its payoff has been an “onslaught” of new analog, DSP and DLP products “really just showing up in the marketplace,” he said. “Couple that with the fact that I think we have a sales force and a sales footprint that is just starting to figure it out -- great product that gets even greater with a sales force that really does understand how to take these products to market in the near term.” Templeton advised analysts to “start counting how many semiconductors are appearing your life. Whether you see them, as in the case of a cellphone or a music player, or if you don’t see them -- because they're embedded in a motor control, or because they're controlling a solar panel, because they're running the video pachinko game -- semiconductors are embedding around us every day and it’s increasing on a global basis.” Some growth opportunities, like cellphones and TVs, are “obvious,” others less so, Templeton said. High-performance analog “is a unique opportunity for Texas Instruments” and can be the company’s “core financial engine,” he said. “We love the analog market for a number of reasons,” Templeton said. At $35 billion a year, it’s the world’s largest semiconductor market, he said. “We're number one in it,” but with only a 13% share, he said. “It’s an opportunity to grow faster, as we have done over the last 4 or 5 years. It is highly diversified, which has great economics.” That’s why companies “that have been good at analog have typically done well in terms and in terms of cash flow,” he said. “We're building our skills and our competency in analog, and I think it’s an opportunity that we can continue to build on and put together the most unique semiconductor company in the world as we go into the next decade.”
FRISCO, Tex. -- Though flat-panel TV grabs many of the headlines, DLP still garners the most momentum in HDTV screens 40W and larger, Texas Instruments executives told the company’s financial analyst meeting here Tues. DLP is the best-selling big-screen 1080p technology, has maintained share despite severe flat-panel price declines, still boasts the best price-per-inch of any major display technology and touts more game console attachments than flat-panel, the executives said.
Evidence that CE makers and retailers have failed to adopt the CE industry’s July 2006 voluntary TV labeling program “on a widespread basis” persuaded the FCC last week to order mandatory analog-cutoff labeling at the point of sale on analog-only TVs, VCRs and DVD recorders (CED April 26 p1), the Commission said in the text of its order released Thurs. The FCC has solid jurisdictional authority to impose the rules, the order said.
Blockbuster’s Q1 bottom line took a heavy hit from its investments in Total Access, but as its payoff, Blockbuster has grabbed significant market share from Netflix in online DVD rentals, CEO John Antioco told analysts Wed. in a quarterly earnings call.
The FCC should reject temporary waivers of the DTV tuner mandate sought by 2 companies that want to continue making bathroom mirrors with analog-only TVs built in (CED April 2 p1), several commenters told the Commission. Kohler wants until Jan. 1 to build DTV tuners into a line of bathroom mirrors with optional integrated TV receivers. Electric Mirror makes mirrors with built-in TVs for use by hotels with closed-circuit video systems. It seeks a 6-month waiver. But neither Kohler nor Electric Mirror meets “the significant burden of proof need to justify granting a waiver,” Philips said. LG and MSTV-NAB also filed oppositions. “The fact that both petitioners waited until the eve of the March 1, 2007, deadline before seeking administrative relief suggests that [it’s the] petitioners rather than the DTV transition that should suffer any adverse consequences of questionable planning,” Philips said. LG said that “given the fact that the DTV tuner requirement has been known to manufacturers and their suppliers for almost 5 years, the companies’ excuses are unconvincing.” Any waivers to Kohler and Electric Mirror would “undermine the federally mandated digital transition,” MSTV-NAB said.