Insider Report

FCC seeking to close programming access loophole

The Federal Communications Commission will consider an order to close to the so-called "terrestrial loophole," which allows cable companies to get around access requirements in a 1992 federal cable law by distributing programming over landlines rather than satellite connections.

Cable TV operators including Comcast Corp. and Cox Communications Inc. have relied on the loophole to deny programming to competitors such as DirecTV Inc., Echostar Corp.'s Dish Network and AT&T Inc. U-Verse video service.

Comcast, for instance, does not provide its satellite competitors with access to the SportsNet Philadelphia channel, which carries games by the Philadelphia Flyers, Phillies and Sixers. Comcast does provide the channel to RCN Corp., which offers competing cable services in some markets, and Verizon Communications Inc., which provides TV and Internet services through FiOS.

The FCC staff has prepared an order to eliminate the loophole and plans to send it to the agency's five commissioners on Wednesday. It was not immediately clear when the commissioners will vote on the order.

The order comes as the commission begins its regulatory review of Comcast's proposal to buy a controlling stake in NBC Universal from General Electric Co. Although the two matters are separate, some analysts expect the FCC to close the terrestrial loophole for Comcast as a condition of regulatory approval for that deal.

Comcast launches Web TV service

The newly christened Fancast Xfinity TV service allows subscribers to watch full-length television shows from 27 networks -- including pay cable offerings HBO, Cinemax and Starz -- on their computers. The cable giant is aggressively rolling out the online service, which it tested with 5,000 customers over the summer. It will be available immediately to most of Comcast's 15.7 million Internet service subscribers who also receive cable TV service.

Fancast Xfinity TV is part of a cable industry initiative called TV Everywhere that seeks to capitalize on the burgeoning Internet video phenomenon while at the same time protecting its lucrative subscription TV business.

Analysts hailed the Xfinity TV approach as the first viable business model for offering cable TV shows online because it preserves the dual revenue streams of fees and advertising that underwrite the cost of programming. The service is also a hedge against subscribers cutting the cord to take advantage of the proliferation of free, online content.

"It's a defensive move," said Bobby Tulsiani, a media analyst with Forrester Research. "The threat was not Comcast subscribers switching to Time Warner or to satellite; the threat was subscribers giving up pay TV subscriptions altogether and moving exclusively to the Internet."

In addition to the cable programming, Comcast's Web TV offering incorporates broadcast television shows from ABC, NBC and Fox, which are provided through a distribution agreement with the online video service Hulu. Comcast's bid to acquire a controlling stake of NBC Universal would also give it a 30% ownership of Hulu, a venture in which Walt Disney Co.'s ABC and News Corp.'s Fox are also partners. Xfinity also has CBS shows.

LG, Samsung, Sony launch home net HDBaseT Alliance

Working together, they will create a global standard for advanced digital media distribution. The Alliance’s standardisation activities will cover the entire value chain of the digital media ecosystem and the various market segments: TV sets, projectors, professional AV equipment, home theater, content providers, IT companies and more.

"As the demand for high-quality HD content distribution in the entire home is already huge, we are hoping that HDBaseT will play the trigger role in advancing this market, since HDBaseT enables simultaneous multi-room distribution of uncompressed HD Multimedia as well as data, control and power over a single CAT5e cable," said Byung Jin Kim, research fellow, LG Electronics.

"We firmly believe that in today’s industry a standard must have broad consensus and support from the major players in the industry. For this purpose, we are actively working with such leading companies across the value chain to assure broad support and active participation in the newly formed HDBaseT Alliance," said Dror Jerushalmi, CEO, Valens Semiconductor.

Harmonic rises as analyst upgrades stock on order growth

In a client note, CL King analyst Lawrence Harris raised his rating to "Accumulate" from "Neutral" and set a $7 price target for the stock, implying he expects the stock to rally 23 percent from Friday's close.

Harris said Harmonic's orders are growing in India and China, with increased business at Scopus, which is a broadcast company centered around emerging markets that Harmonic bought in March.

He also thinks Harmonic's encoder product orders are improving due to satellite cable operators offering more HD channels.

The analyst added that orders are starting to pick up for the company's access business, which had been "depressed" throughout this year. He said the change relates to a rise in video-on-demand and data traffic, which is leading cable operators to divide their fiber optic nodes.

Shares of the Sunnyvale, Calif., company rose 19 cents, or 3.3 percent, to $5.90 in afternoon trading. Over the past year, the company's shares have traded between $4.46 and $7.85.

Image Entertainment Defaults on Convertible Note

The Company was unable to make the Installment Payment on December 14, 2009. The failure to make the Installment Payment on December 14, 2009 constituted an event of default under the Note. As a result of the event of default, the Holder is entitled at any time to provide written notice requiring the Company to redeem all or any part of the principal amount of the Note. In addition, the Company must pay the default interest rate of 12% per annum and pay a late charge in an amount equal to interest on the Installment Amount at the rate of 15% per annum.

The Company does not currently have the funds, or access to the funds, necessary to repay all of its outstanding obligations to the Holder.

FTC Sues Intel's - Dominance of Worldwide Microprocessor Markets

In its complaint, the FTC alleges that Intel has waged a systematic campaign to shut out rivals’ competing microchips by cutting off their access to the marketplace. In the process, Intel deprived consumers of choice and innovation in the microchips that comprise the computers’ central processing unit, or CPU. These chips are critical components that often are referred to as the “brains” of a computer.

According to the FTC complaint, Intel’s anticompetitive tactics were designed to put the brakes on superior competitive products that threatened its monopoly in the CPU microchip market. Over the last decade, this strategy has succeeded in maintaining the Intel monopoly at the expense of consumers, who have been denied access to potentially superior, non-Intel CPU chips and lower prices, the complaint states.

Under the recently implemented rule expediting the Part 3 administrative hearing process, this matter is tentatively scheduled to be heard before an Administrative Law Judge on September 15, 2010, at 10:00 a.m.

Autodesk launches Smoke 2010 for Mac OS X

According to the company, Smoke features a powerful 64-bit architecture and industry-leading tools for conforming, editing, audio, paint, tracking, character generation, graphic design, and visual effects creation in the Action 3D compositing environment, as well as Master Keyer and Colour Warper technologies.

“The business of post-production is evolving. Post-production and broadcast facilities alike are seeking more affordable, integrated creative tools that can help them stand out from the crowd,” said Stig Gruman, Autodesk vice president o Autodesk digital entertainment.

“Smoke 2010 on the Mac has been designed to help editors increase creative output, project quality and turnaround times. It brings production-proven finishing capabilities to the extremely talented community of artists already using the Mac in broadcast and post-production.”

Snell Introduces CVR800 and TBS800 Standards & Format Converters

"The CVR800 and TBS800 are a direct response to customer input and requests. Not only do they offer Snell's state-of-the-art HD standards and format conversion at an extremely attractive price point and in a small footprint, but both products also provide a rich set of tools that give operators greater control over the final video output," said Paola Hobson, product manager. "These systems have features designed to help broadcasters get specific tasks done more easily and more efficiently. For instance, the products' range of vertical and horizontal enhancement options enables users to get the precise result they seek after conversion, and their provision of a wide range of audio and video inputs and outputs supports workflow flexibility."

LG sets 3D TV target

LG aims to sell 400,000 3D TVs in 2010 and 3.4 million in 2011, the South Korean company said. It plans to unveil a full line-up of 3D TV models with new technology improvement in the second half of next year, targeting retail consumers. LG currently offers one 47-inch 3D TV, which is sold mostly to businesses.

Sony is expected to leverage its strength in content when it launches its first 3D TVs next year. Sony said it expected 3D TVs to account for up to 50 per cent of its total TV shipments in the financial year to March 2013.

Paramount clips service

Users can log on to ParamountClips.com, search for the exact video wanted and press the checkout button. The price depends on the type of licensing required — Paramount will electronically deliver the selection in the format and resolution desired. Most scenes are available in multiple languages.

The site is powered by VideoSense, an automated indexing tool developed by the technology company Digitalsmiths. Using video interpretation systems, Digitalsmiths allows films to be quickly searched by specific actor, line of dialogue, location, genre or product, among other criteria.

Paramount will initially restrict use to business customers — advertising agencies, mobile carriers, foreign broadcasters — that want to license pieces of films for commercial use. The plan is to ultimately open the site to consumers. The service will initially allow users to search 80 films.

Fast Forward Video Launches Micron HD DVR

"The Micron HD is a direct response to many of our customers who requested an inexpensive, entry-level HD DVR that could still measure up to the superb picture quality of the Omega HD," said Harry Glass, vice president of sales for FFV. "The single-channel Micron HD is an ideal solution for broadcasters seeking to migrate to HD operations at a low cost per channel while maintaining SD capabilities."

It records using the high-quality JPEG2000 compression at speeds up to 100 Mbit/sec, making it an excellent replacement for SD-only DVRs and analog tape decks. The Micron HD offers up to five hours of record time, and its removable, non-proprietary 2.5-inch SATA drive is fully compatible with FFV's Elite HD camera-mounted DVR. Users can record, play, and store multiple SD and HD video files. With a simple machine controller, the user can access a larger set of functions and command multiple units with one key stroke. The suggested retail price is $4,995.

RESEARCH NEWS

Global IPTV Subscribers Will Grow From 28 Million In 2009 To 83 Million in 2013

"Now that the economy seems to be improving, and Service Providers are still reporting solid growth, this Fall edition has adjusted the forecast accordingly," stated Jose Alvear, MRG IPTV Analyst. "This was done in response to the better-than-expected growth exhibited by the major Service Providers around the world in 2009." Total service revenue for 2013 is projected at US$38 billion, also up sharply from the last forecast. The new report includes added information on strategies and new services being added to IPTV offerings. "Consumers are beginning to understand the advantages of IPTV," says Gary Schultz, MRG President. "Simultaneously, IPTV Operators are facing more competition, driving rapid investment in both infrastructure and new services."

SCRI RESEARCH NEWS

2009-2010 Broadcast Pro Video Marketplace Reports