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SCRI International, Inc. Market & Technology Information
For The Broadcast And Professional Video Sectors, since 1984 |

Driven mainly by mobile TV, it will reach a total market value of $3 billion. By comparison, online Internet TV is expected to reach $2.7 billion by 2010. Musical content will follow a similar trend, the CISAC study said: with a projected 4.2 billion mobile subscribers worldwide by 2010 - up from 3.3 billion in 2007 - the global market value of the mobile consumption of digital music content is expected to reach $6 billion while online delivery will reach $5 billion.
The study said the mobile surge will be driven by the Asia-Pacific region, which will generate more than half of the total global income from mobile music downloads by 2010, surpassing both North America and Europe.
While many of these game console IP interfaces remain unconnected, the enormous developing installed base represents a ‘Trojan Horse’ with potential for online gaming, music and video downloads, as well as a variety of internet-based value-added services. Already, in late 2007 Activision announced that more than 2 million songs associated with the ‘Guitar Hero’ video game were accessed through Xbox live alone over the previous five months.
"An increasing variety of TV-centric consumer electronics devices with IP interfaces is developing. Manufacturers are adding IP interfaces across TVs, DVD equipment, as well as cable, telco, and satellite set top boxes," according to Mark Kirstein, President of MultiMedia Intelligence. "While manufacturers and operators are gradually adding IP connectivity, the IP-Enabled Consumer Electronics market has not reached a true inflection point beyond game consoles for hyper-growth. However, this growing installed base of CE devices with dormant IP ports could quickly become active with a simple network connection or software upgrade."
"Mobile operators’ sustained investment in video delivery will continue to be rewarded by subscribers’ growing adoption rates, particularly as they upgrade to new video-capable handsets," says research director Mike Wolf. "Consumers are being increasingly enticed by better experiences through more powerful and larger screens as well as by a widening array of subscription options."
ABI sees the Asia-Pacific region as the overall leader in the adoption of mobile video services. The number of subscribers to mobile video services in Asia-Pacific will grow from 24 million in 2007 to more than 260 million by 2012. High levels of penetration will occur in both Japan and South Korea while China and India will both contribute significantly to the overall total due to very large subscriber populations, even though the overall penetration of video services will remain much lower than in more technologically advanced countries.
"South Korea and Japan will continue to lead worldwide, while some countries in Western Europe will also continue to see strong growth," notes Wolf. "North America will also see some strong uptake as more services become available in 2008 with the launch of AT&T’s MediaFLO service, the continued expansion of Verizon Wireless’ MediaFLO subscriber base, and the growth of on-demand mobile video services."
A strong performance in the second half of 2005 has shown that attractive films can still drive record numbers of people to the cinema. Film producers now recognise that only the most compelling slate of films can attract people away from alternative entertainment sources - and are raising their game accordingly, according to the study.
We have worked diligently to license Virgin Media for their distribution of various set-top boxes that contain IPGs covered by our patents, but negotiations did not lead to a resolution," said Samir Armaly, executive vice president, intellectual property and licensing, Gemstar-TV Guide.
"The substantial value of our European patent portfolio has been recognizsd by leading service providers as well as leading consumer electronics manufacturers in the UK and throughout Europe. While we would have preferred to reach a commercial solution with Virgin Media, we ultimately have a responsibility to our shareholders, licensees, and other stakeholders to protect the value of our intellectual property.
For the fourth quarter of 2007, the Company reported net sales of $88.4 million, up 17% from $75.3 million in the fourth quarter of 2006. For the full year 2007, net sales were $312.2 million, up 26% from $247.7 million in 2006. The Company saw revenue growth in both domestic and international markets, with international sales representing 43% and 44% of revenue for the fourth quarter and for the full year of 2007, respectively. The strong revenue growth reflects sales to an expanding range of cable, satellite, telco and other customers that are deploying a growing array of new video products and solutions.
Gross margins increased sequentially from the third quarter of 2007, principally as a result of a larger than expected proportion of revenue from higher margin video processing solutions and software and services.
“2007 was an outstanding year for Harmonic,” said Patrick Harshman, President and Chief Executive Officer. “We are very pleased with our success in extending our product portfolio and expanding our global customer base. Our powerful new video encoding, video processing, video-on-demand and edge and access solutions have strengthened our technology leadership and driven our strong sales growth, improved gross margins and increased profitability. We have also improved the efficiency of our operations and our inventory management and strengthened our balance sheet. Our successful public offering during the fourth quarter provides us with a strong financial foundation to further grow the business, as well as to continue to pursue selective acquisitions to enhance our technology and market reach.”
“We enter 2008 with a very strong competitive position in cable, satellite and telco markets worldwide, and a growing position in new broadcast and Internet video delivery markets. The powerful trends toward more high-definition, on-demand and anytime, anywhere video continue to intensify and reshape the video delivery marketplace. Going forward, we expect to continue to extend the breadth and depth of our product solutions to address these major trends, and intend to continue working with our expanding global customer base to take their video services in exciting new directions. We are very encouraged about our opportunities for growth in 2008 and beyond.”
Fourth quarter 2007 revenue was $27.0 million, at the high end of management guidance, reflecting strength in the Company’s core projector and advanced television businesses as well as sales of legacy products. Revenue for the fourth quarter represented a 4% sequential decrease from $28.1 million in the third quarter of 2007 and a decrease of 10% from $29.8 million in the fourth quarter of 2006.
Fourth quarter 2007 GAAP gross profit margin was 48.7 percent, compared to 43.0 percent in the third quarter of 2007 and 31.5 percent in the fourth quarter of 2006. Cost of sales included restructuring charges and non-cash expenses totaling $0.8 million in the fourth quarter of 2007, $0.7 million in the third quarter of 2007 and $2.9 million in the fourth quarter of 2006. Fourth quarter 2007 non-GAAP gross profit margin was 51.5 percent, compared with 45.7 percent in the third quarter of 2007 and 41.1 percent in the fourth quarter of 2006. Higher GAAP and non-GAAP gross profit margin in the fourth quarter of 2007 was the result of a favorable mix of products sold, as well as continued improvements in material pricing and production yields.
“Pixelworks exits 2007 with a solidly profitable final quarter on a non-GAAP basis, a significantly lower expense base and the recent introduction of two important new products,” said Bruce Walicek, Acting President and CEO of Pixelworks. “The restructuring initiatives that we executed in 2007 have created a sound financial foundation from which to return the Company to growth and profitability. In addition to reshaping the Company’s expense base, the Pixelworks team was able to bring new solutions to market within a more restricted spending environment. Our primary focus over the next year will be to maintain the strength of our financial model, aggressively market our new products, and continue to leverage our core technology into emerging growth markets. While there is still plenty of work to do, we enter 2008 with a streamlined business model, renewed focus on our core markets and a portfolio of innovative, next generation video processing products.”
For its part, Autodesk has pumped ongoing R&D into its flagship products, including a complete migration from the SGI to the PC platform. This advanced systems family also includes Flint, Inferno and Fire, but in the past there was a differentiation based on the specific SGI workstation used for each product. Smoke or Flame had been sold with an SGI Tezro, while Inferno and Fire used an Onyx computer. Today that line has disappeared, because all of these products are configured to run on top-of-the-line HP workstations. As a result, Inferno and Fire are generally sold only in regions of the world where that name holds a greater brand recognition than Smoke or Flame, which are the dominant products in the U.S. and European markets. You can now purchase a Smoke system for as low as $100,000, putting it into the same budget range as an Avid DS or Symphony Nitris and under that of competing Quantel products.
Instead of software version numbers, Autodesk now numbers its updates by the year, like automobile models. Autodesk targets a major release once each year, followed by an "extension" to be released midway through the year. An "extension" would be the equivalent of a point-release by another manufacturer.
This new affordability of Autodesk products comes at the time when high-definition video is hitting the mainstream. Even medium-market television stations are converting some local programming, like newscasts, to HD. Many broadcasters have dabbled with desktop tools and find that there is still room for true "heavy lifting" if you intend to crank out layered HD station promos, which opens new doors for Smoke and Flame.
Aside from the issue of cost, Autodesk's code was based on SGI's IRIX OS and has been ported over to Linux for the HP workstations. This gives Smoke and Flame an edge over the competition--and certainly over low-cost desktop tools--because the code is already optimized for a 64-bit OS, multi-processing, multi-threading, OpenGL and efficient memory allocation. This translates into better system response for the operator and faster render times when working with HD content.
Autodesk has made a lot of changes for 2008. Along with the total changeover to HP workstations, Smoke and Flame are now configured with video I/O cards that are OEM components supplied by AJA Video. These cards provide uncompressed 4:4:4 RGB throughput at up to 1920x1080. Internally, the systems can operate in real time at up to 2K film resolution and offer the ability to process even 4K content for final film output. The HP stations are augmented by the latest Nvidia graphics display cards.
A key new feature is improved openness of these systems. In the past, Smoke and Flame were dependent on using Autodesk's proprietary Stone storage running the Stone File System for optimum performance. Smoke and Flame 2008 now permit direct writing to other standard file formats, such as CXFS (a clustered file system developed by SGI for shared storage) and NTFS (the standard Windows file system). Although having some local Stone storage is recommended by Autodesk for performance and interactivity reasons, it is possible to configure a workstation without it and suffer only a minor performance hit with most standard- and high-definition footage. In Flame and Smoke, this support means that they can optionally work off of storage configured with a standard file system (as well as Stone) and work natively with certain standard file format sequences such as DPX and TIF. In addition, there's finally support for industry standards like QuickTime. Up until now, this support had been lagging on Linux-based systems. QuickTime files can be imported and exported but aren't native files for Smoke and Flame.
Across the board, Autodesk is adopting the InfiniBand networking topology for use with the Systems products (Smoke, Flame, Inferno, Flint, Lustre). InfiniBand, a technology similar to Fibre Channel, permits Autodesk products to share media from a central storage location using Wire, Autodesk's proprietary networking architecture. Through a combination of Gigabit Ethernet and InfiniBand, several Smoke editors and Flame artists, as well as Lustre colorists, can work concurrently on the same project, accessing the same media. In fact, even without centralized storage, networked workstations can access local media and project information in each other's media libraries with very little performance impact. There is now 100 percent clip and metadata compatibility between Flame and Smoke, thus enabling improved round-tripping between visual effects artists and editors.
Flame gained editorial features, such as new audio tools. Other improvements include a new multi-layered, Smoke-style timeline--handy when importing edit lists from offline edit systems. Flame and Smoke support AAF, OMF, EDL and XML list formats. Multi-layered timeline support lets the Flame artist open these lists and maintain the vertical clip hierarchy started by the offline editor. High-end systems like Flame and Smoke might seem the antithesis of low-cost competition from Apple's Final Cut Pro. In fact, this sort of list and timeline compatibility becomes very attractive for editorial shops that might install several Final Cut bays for creative offline editing and then augment those suites with several advanced Smoke and/or Flame rooms for an equally creative but superior finishing option. Finally, there is OpenEXR and enhanced Autodesk FBX support for better interoperability between Flame and Autodesk Maya software. Artists can now match their compositions with the 3D department through the exchange of camera data, axis positions and 3D point clouds.
Optibase advanced IPTV solution combines Optibase EZ TV portal and PC player with Optibase Telco-grade Media Gateway (MGW) 5100 streaming platform. Optibase IPTV solution replaced the Network’s previous analog cable-based system.
Leveraging the Network’s existing IP infrastructure, Optibase H.264 video delivery solution offers display of up to 16 live video channels simultaneously on users PC’s and Mac’s. This eliminates the previous analog system’s display requirement which called for dedicated TV sets. Furthermore, in areas where large screen plasmas or TV sets are needed, such as in the case of the studio MCR, Optibase solution offered the EZ TV portal with Amino Set Top Box control module.
“We are excited to be deployed by a major TV network,” said Tom Wyler, chief executive officer at Optibase. “This installation strengthens our continuous commitment to provide state-of-the-art IPTV solutions to enterprises wanting to take full advantage of IPTV services in their corporate PC environment. Optibase’s H.264 encoding products like the one deployed at this network, combine a high level or reliability with easy deployment and maintenance.”
"The DR-1 is the portable recorder that everyone's been waiting for," said Paul Jenkins, Director of Sales and Marketing for TASCAM. "It's the first to include a card big enough for serious recording, and the price point is a wake-up call for the entire industry. TASCAM has a thirty-year history of creating the recorders that musicians want, and the DR-1 is sure to be our latest hit recorder."
Sexton comes to Avid with more than 30 years of business leadership experience, primarily in the technology sector. Prior to joining Avid, Ken served as EVP and chief financial officer (CFO) for webMethods, Inc., a provider of business integration software solutions. Before that, he was EVP and CFO for Infor, Inc., one of the world’s largest enterprise software companies, where he played an integral part in multiple business acquisitions. From 1991 through 2004, Ken served in key executive positions at several major enterprise software companies, including Peregrine Systems, Merant and Intersolv.
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