Netflix will spend over $40 million this year on online movie delivery, including the “Watch Now” instant movie- streaming feature it launched last week, CFO Barry McCarthy told analysts Wed. in a Q4 earnings call. McCarthy wouldn’t breakdown the outlay, but said 2 “components” will include content procurement and higher employee head count.
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.
A bill by House Republicans that would educate the public about the DTV transition (CED Jan 23 p7) seems designed to retain the new minority’s influence over the DTV issue as the Democrats take control. Commerce Committee Ranking Member Barton (R-Tex.), Rep. Upton (R-Mich.) and former Speaker Hastert (R-Ill.) -- who Tues. announced he has joined Mitt Romney’s exploratory presidential committee -- are sponsoring a bill that would boost consumer outreach through the FCC, broadcasters, cable, satellite and CE retailers about the Feb. 2009 analog cutoff.
Philips expects Q1 to be “a challenging quarter” because margin pressures will continue from an oversupply in flat- panel TVs, the company said Mon., releasing Q4 results. Still, LCD TV inventory levels in the retail pipeline are among the lowest CE has seen, CFO Pierre-Jean Sivignon told analysts in an earnings call.
Replicator Technicolor is experienced in all the “process steps and elements” to manufacture all variations of Warner’s THD dual-format flipper disc (CED Jan 10 p1). So Technicolor “will be prepared to develop and offer solutions should pilot testing prove that cost profiles of the THD discs meet market requirements,” said Tom Bracken, the company’s vp-worldwide mktg. & communications.
RIAA hailed Fri.’s ruling by U.S. Dist. Judge Deborah Batts, Manhattan, denying XM’s bid to dismiss a record industry lawsuit alleging that devices such as Pioneer’s Inno violate Sec. 114 of the Copyright Act with their recording functions. XM called the rejection only the first step in the case and said the company still believes the suit lacks merit. RIAA is pleased the court rejected XM’s attempt to “misuse” the Audio Home Recording Act (AHRA) “as a legal loophole for distributing sound recordings to its subscribers,” said Gen. Counsel Steven Marks. “The AHRA was never intended to allow a service offering distributions of music to duck paying creators what they are due.” In declaring that XM both broadcaster and distributor, the court is saying XM “directly competes with other distribution services like Rhapsody, Napster and iTunes,” Marks said: “It only follows that they should to obtain distribution licenses just as those services have. Parity among digital music services is a key issue in today’s marketplace… We hope this decision paves the way for resolving this case in the marketplace.” However, XM is confident the record labels’ suit is “without merit and that we will prevail,” a spokesman said: “At this stage of the proceeding, the court’s ruling is required to be based on the false characterizations set forth in the plaintiff’s complaint. The real facts strongly support our view that the lawsuit is barred by the Audio Home Recording Act. We look forward to making our case in court.” With the rejection of XM’s motion to dismiss, CEA said it “would be premature for Congress to act on this issue while the judicial process moves forward. Music lovers across the country are adopting innovative digital technologies to enjoy their lawfully acquired content where and when they want. We urge that they won’t be disenfranchised and business models will adapt to better serve today’s digital customers.”
Some analysts and even Toshiba say rear-projection TV shipments may have peaked last year at 2.2 million sets, falling this year to 2 million, but CEA data show higher volumes for 2006 and 2007, said a CE maker executive not authorized to speak to media and so seeking anonymity in responding to our report (CED Jan 10 p3). CEA said 3.2 million rear-projection TVs were shipped to retail last year, forecasting shipment of 2.5 million in 2007. The executive fears our report citing the lower figures might lead many retailers to believe projection TV’s demise is closer than it is, he said: “Projection TV in 2007 is still a very healthy business.”
CE products in 2006 used about 11% of U.S. residential electricity, accounting for about 4% of total consumption, said a report commissioned by CEA for release Wed. at CES. CEA has said it financed the study to amass “high-quality research” for honing policies on CE energy consumption, after seeing too much energy policymaking based on faulty data (CED Oct 31 p5). The report’s biggest caveat: It doesn’t include data on DTV power use. The report will be updated in spring to include those data, said author Tiax LLC, a consulting firm in Cambridge, Mass. DTV test procedures are being developed and the scant DTV data available are on sets sold in 2004, Tiax has said. A holdup: The International Electrotechnical Commission (IEC) is writing standardized methods for measuring DTV energy consumption, but there has been “much disagreement” in that body due to geographic variations in TV set use, CEA has said. Average annual unit energy consumption (UEC) varied widely by device, the study found. Products with the highest UEC -- desktop PCs, stand- alone PVRs, analog TV sets -- used an order of magnitude more electricity per product than those with the lowest UEC -- cordless phones -- the study said. In 2006 analog TVs accounted for 36% of total CE energy use, the report said. In active mode, analog TV power draw has grown with screen size, the report said. Desktop and notebook PC power draw also has grown, it said. But the UEC of all PC and monitors has fallen over time because notebook PCs and LCD monitors make up more of the mix, the report said.
Factory DVD software shipment growth was flat for the first time in 2006, but hardware penetration reached 88 million homes, the Digital Entertainment Group (DEG) said in its year-end review report released Mon. Software shipments in Q4 were 6% higher than a year earlier, and the 2006 total was 1.66 billion, DEG said. Over 7.2 billion DVD software units have been shipped since DVD’s 1997 launch, the group said. Consumers have bought 194.4 million DVD players, DEG said. But sales in 2006 fell for the 3rd straight year, to 32.7 million units from 34.4 million in 2005, DEG said. Q4 sales fell, also for the 3rd straight year, to 11.3 million from 14.3 million.
It’s unclear when NTIA will release final rules on the DTV converter box coupon program, but a request for proposals (RFP) seeking a vendor for the program is due Jan. 26. Final rules are subject to OMB review that can take 45 days, an NTIA spokesman told us, adding that the rules haven’t been sent to OMB. NTIA said the RFP will require services in “broad functional areas": consumer education and communications, systems processing and financial processing. NTIA plans to award a contract for an “end-to-end” approach, it said. The contract is expected to last 27 months, NTIA said. It said it expects to hold a “bidder’s conference” once the RFP is out.
A year before NTIA’s DTV converter box coupon program takes effect Thomson is using CES to arouse retailer interest in its DTAA800 set-top that would be coupon- eligible. The DTAA800 has a remote control, a smart antenna interface and displays on-screen program information transmitted by the broadcaster. It conforms to energy efficiency standards likely to be adopted by NTIA. On the CES floor, Thomson is demonstrating the DTAA800 on a 40-year- old TV set, to help commemorate the 40th anniversary of CES. The first OCAP-based MPEG-4 HD DVR cable set-top is being introduced at CES by Thomson’s Premises Systems division. The DCI9000 has an embedded DOCSIS 2.0 and DSG cable modem, enabling IP communication directly to the set-top. “This architecture facilitates the deployment of services requiring 2-way communication like switched broadcast or VoD, as well as bandwidth-intensive IP services,” Thomson said. A new modem version supporting downstream channel bonding will be introduced by the end of the year, enabling download speeds of over 100 Mbps. “With this new set-top box, cable operators can gradually introduce IPTV services on top of their existing broadcast and VoD services,” it said. The DCI900 supports single-stream and multistream CableCARDs, Thomson said. Thomson’s effort to sell its AV business “hasn’t stopped us from innovating,” COO Dan Collishaw said. Thomson doubled its DVD market share in 2006 and had a successful year with its RCA Small Wonder digital camcorder, he said: “In fact, Small Wonder will redefine the camcorder business.” It’s introducing a 3rd-generation Small Wonder, the EZ201 $129, with SD Memory Card slot and flip-out display. It runs on 2 AA batteries. A companion to Small Wonder, the RCA MemoryMaker docking station, is due in fall, for burning DVDs of one’s favorite homemade videos.