Insider Report

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Consumer Reports' Initial 3D TV Tests

The results of Consumer Reports' tests of two Samsung LCD sets and a Panasonic plasma TV with 3D capability are impressive. Full results are published in the June issue on newsstands May 4 and online at www.ConsumerReports.org. The 3D images had excellent depth, color, and high-def details, creating a compelling 3D picture as good as a movie theater.

However, for consumers who are satisfied with their current HDTV and aren't burning to have the latest technology, Consumer Reports recommends waiting to buy. The price of 3DTVs and Blu-ray players is likely to drop, and there should be more 3D content to watch in time.

"Blu-ray discs with 3D content are just arriving, and while 3D broadcasts are starting up it will be a while before there are many of them," said Paul Reynolds, electronics editor, Consumer Reports. "Though there isn't a huge price premium for the TVs, a 3D setup isn't inexpensive. For the sets we tested, you should figure on paying about $3,000 for the TV, Blu-ray player, and glasses for a family of four."

Consumer Reports evaluated two 46-inch Samsung LCD sets with edge LED backlighting, the UN46C7000, $2,600, and the UN46C8000, $2,800, and the 50-inch Panasonic TC-P50VT20 plasma set, $2,500.

The sets were connected to each company's new 3D Blu-ray player, the Samsung BD-C6900 and Panasonic DMP-BDT300, each $400. Both Blu-ray players worked on all of the sets, but the glasses are brand-specific, and don't work with other TVs. Consumer Reports testers watched the same Blu-ray 3D disc on all three TVs.

All three sets delivered eye-catching three dimensional effects in full 1080p resolution and they also provided an acceptably bright picture, important because 3D glasses can make images appear dimmer. The Samsung LCD TVs displayed subtle ghosting of 3D images to varying degrees in different scenes. Such ghosting, technically called "crosstalk," indicates that the images for each eye aren't being kept completely separate, as they should be. The ghosting was distracting when visible and it detracted from the 3D effect. Also, when testers tilted their heads, as if lying on the couch, the picture dimmed a bit on both Samsungs.

On the Samsung 7000 model, testers also noticed some cloudiness caused by uneven backlighting in darker scenes, which was a bit distracting. Testers were able to minimize cloudiness on the 8000 by lowering the backlight and using the "smart LED" dimming feature. Like most LCD sets, both sets have a fairly narrow viewing angle, so picture quality degraded as the viewer moved off center.

Despite these minor glitches, Consumer Reports found that the Samsung sets provided excellent picture detail and satisfying colors and contrast with 3D and regular HD content. The glasses were lighter and more comfortable to wear than the Panasonic's.

The Panasonic plasma displayed negligible crosstalk and no cloudiness, adding to the realism of the 3D effect. The viewing angle is virtually unlimited and testers saw no change in image brightness when they tilted their heads. Picture detail and black levels were excellent. The Panasonic model might have the best motion resolution of any flat-panel TV CR has ever tested. Detail remained sharp and clear even in test patterns designed to reveal blur in fast-moving images.

Google to Introduce TV Software

The technology—designed to open set-top boxes, TVs and other devices to more content from the Internet—is attracting interest from partners that include Sony Corp., Intel Corp. and Logitech International SA, which are expected to offer products that support the software. None have so far discussed the efforts publicly.

Google, of Mountain View, Calif., is currently planning on sharing some details about the technology with more than 3,000 developers expected to attend its Google I/O conference in San Francisco May 19 and 20. One person familiar with the matter cautioned the company could also decide to delay discussing it until the technology is more mature. Google uses the annual conference to showcase a range of technologies of interest to developers. WSJ Professional

The decision to address developers suggests that the Internet giant may be hoping to kick-start a race to build applications for its TV platform, much in the same way that Google, Apple Inc. and others have courted developers for smartphones. The app-store approach has already begun to gain traction among some players in the TV market, too, aided by the advent of TVs, Blu-ray players and other hardware with Internet connections.

But before developers invest in TV apps from Google, they'll want to see significant adoption of the software among hardware makers. Intel, the dominant player in chips for PCs, has been trying for years to play a bigger role in set-top boxes, with its efforts focusing lately around a chip called Atom that is used in low-end laptop PCs called netbooks.

People familiar with the matter said Sony has agreed to use a version of Atom in forthcoming products that include TVs and a set-top box. One of them said that while many of the company's product roadmaps will include Google software based on Android, Sony is not betting exclusively on the technology.

Bloomberg reported that Sony is planning to announce devices using the Google software and Intel chips at the Google conference.

Meanwhile, Google is continuing a very limited test of a television search service with Dish Network Corp, according to people familiar with the matter. The service, which uses the new Google technology, allows users to access and search across programming from the Internet as well as Dish's conventional programming, these people said. The test, which began last year, is still limited to a very small number of the company's employees and their families.

Sinclair Broadcast Group Q1 Posts Profit After Prior Losses

Diluted earnings per share were 14 cents in 1Q10 versus $1.06 a year ago. TV station revenues were $147.9 million, up nearly 13 percent over last year. Operating income was $46.2 million compared to an operating loss of $106.7 million a year ago.

“The automotive category showed the largest growth, increasing 35.6 percent in the first quarter as compared to the same period last year,” Sinclair chief David Smith said. “This was a stronger performance than the approximate 20 percent growth we estimated.”

Of Sinclair’s top 10 categories representing about 77 percent of time sales, only telecommunications and paid programming were down, he said.

Deal activity in the quarter included an extension of Sinclair’s outsourcing agreements on WYZZ-TV in Peoria, Ill., and WUHF-TV in ;Rochester, N.Y.,with Nexstar Broadcasting, through until Dec. 31, 2013. It also cut a multicast deal with TheCoolTV music diginet for stations in 34 markets. Retrans was extended for a year with Mediacom, and Sinclair’s affiliation agreement with ABC was renewed through Aug. 31. 2015. Cash and equivalents were $90.2 million as of March 31; long-term debt was $1.28 billion. Anticipating the second quarter, Smith said the recovery would likely continue. “As consumer confidence improves and corporate profits increase, we believe they will have a positive impact on businesses marketing budgets and ultimately broadcast revenues,” he said. “For the second quarter, we continue to see strong growth as both the majority of our advertising categories pace positive and the number of new advertisers increases.” Sinclair expects 2Q10 station net broadcast revenues from to total more than $156 million, compared to $133 million in 2Q09. Political is expected to contributed $3.1 million versus $700,000 last year. The company expects to spend approximately $8 million in capital expenditures in the second quarter and approximately& $19 million in 2010.

Discovery Communications Q1 Revenue Up 8%

First quarter revenues of $879 million increased $64 million, or 8%, over the first quarter a year ago led by 16% growth at International Networks and 5% growth at U.S. Networks. Adjusted Operating Income Before Depreciation and Amortization(1) ("OIBDA") grew 10% to $367 million, driven by a 29% increase at International Networks and a 4% increase at U.S. Networks despite increased content write-offs of $13 million. Total company Adjusted OIBDA margin increased to 42% for the first quarter from 41% for the same period a year ago.

Chyron Q1 Revenue Up but Net Loss Remains

Net loss for the first quarter of 2010 was $0.7 million after a net income tax provision of $0.2 million, an improvement of 26% as compared to the $0.9 million net loss after a net income tax benefit of $0.2 million, for the first quarter of 2009.

Michael Wellesley-Wesley, Chyron President and CEO, commented, "After spending the recessionary period developing our technology and putting into place the means to drive future growth, we believe that revenue and earnings bottomed out in 2009 and we expect to see both begin to climb this year. While traditionally the weakest quarter, the first quarter of 2010 has been satisfactory. We surpassed our internal projections and are on track to achieve, if not surpass, our projections for the second quarter.

Our goals for the remainder of the year are twofold: build growth and continue investing in our future. Toward the first objective, we are ramping up our sales and marketing efforts. On the second goal, even though we have increased our R&D spend in each of the last three years, we are not done innovating. We continue to make significant enhancements to our Axis suite of cloud based services, and we are investing more in 3D graphics technology and in Virtual Set technology where we recently announced a partnership with NeuroTV.

The investments that we made and continue to make in our products have had measurable success. We are seeing increased adoption of Axis and interest from large station groups. By combining the agility and light touch inherent in a web–based approach with our best of breed systems on the ground, we offer our media customers highly responsive software solutions that speed the easy creation, management and delivery of graphics from desktop to display."

Dolby Labs Q2 Revenue up 19%

“We continued to benefit from the inclusion of our technologies in many of the world’s most popular entertainment devices while making significant progress in our mobile initiative. This week Nokia announced that it will begin adopting Dolby Digital Plus in certain handset models.”

For the second quarter, Dolby reported total revenue of $243.4 million, compared to $204.1 million for the second quarter of fiscal 2009, an increase of 19 percent.

Second quarter GAAP net income was $85.9 million, or $0.74 per diluted share, compared to $69.5 million, or $0.60 per diluted share, for the second quarter of fiscal 2009. On a non-GAAP basis, second quarter net income was $93.1 million, or $0.80 per diluted share, compared to $76.1 million, or $0.66 per diluted share, for the second quarter of fiscal 2009. Dolby’s non-GAAP measures exclude expenses related to stock-based compensation, the amortization of intangibles from business combinations, restructuring charges, a gain from an amended patent licensing agreement, and the related tax impact of these items.

“We had a strong second quarter,” said Kevin Yeaman, President and Chief Executive Officer, Dolby Laboratories. “We continued to benefit from the inclusion of our technologies in many of the world’s most popular entertainment devices while making significant progress in our mobile initiative. This week Nokia announced that it will begin adopting Dolby Digital Plus in certain handset models.”

Miranda Q1 Sales Down 13%

"Removing unfavourable movements in foreign exchange, sales volume was as we expected," commented Strath Goodship, Miranda's President and Chief Executive Officer. "International sales are becoming increasingly robust and we saw a sharp improvement in sales in Canada this quarter. As well, the gross margin came in at the highest level seen in recent quarters, driven by favourable product and customer mix. As the year progresses, we expect to see improvements in demand."

QuStream Q1 Revenue Down 29%

Net loss for the first quarter of fiscal 2010 was US $1.0 million or ($0.04) per share compared to a net loss of US $4.6 million or ($0.20) per share for the same period last year.

"The Company continues to work hard to provide quality products and exceptional service to meet our customers' needs while focusing on executing its strategic initiatives to return to growth and profitability," stated QuStream's Executive Chairman, Howard Sutton.

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