Daniel Eran Dilger takes a while to get to his point (though along the way you get a very good education about consumer video), but that point is a very interesting one about the video marketplace today. He writes:
... Apple happens to be positioned to ride the sweet spot of LD/SD content right
now, and has the infrastructure and hardware to deliver HD content using the
same iTunes ecosystem with Apple TV in the future. Apple has bet on the
mainstream 720p HD format as the best balance between high quality content and
downloadable file sizes. ¶ That will enable the company to transition to offering HD programming from
iTunes as consumer’s bandwidth availability increases and the demand for HD
expands. Until that happens on a large scale, Apple will continues to sell the
most content because it has targeted what consumers want–convenient
downloads–not what other vendors are all trying to sell: high end, high priced
... Estimates suggest that by the end of the year, there will be an installed
base of about a million standalone HD-DVD and Blu-Ray disc players, besides the
7-8 million PlayStation 3 consoles that can also play Blu-Ray discs. That makes
less than ten million HD players in total, compared to around 40 million video
playing iPods, and hundreds of millions of iTunes installations capable of
playing back iTunes content directly from a computer or through an Apple TV. ...
Deep in the Googleplex there is an engineering team thinking about how
to extend Google’s reach into your TV. Its work goes way beyond the
Google TV ads currently being tested by EchoStar (and targeted with help from Nielsen). It even goes way beyond the development of a Google set-top box, which has been hinted at in the past. In fact, Google may very well want to do to the set-top box what it is trying to do to the mobile phone with its Android operating system—create
an open-source hardware platform and attract developers to build
applications on top of it. At least that is the unconfirmed rumor I’ve
heard from two knowledgeable industry sources. ...
Things seem to be turning around for TiVo. I have used both a Series 2 TiVo and a DirecTV TiVo though recently replaced the Series 2 TiVo with one of the newer DirecTV proprietary ones when I upgraded DirecTV to its HD service. The latter is not nearly as easy to use as the TiVo models, so I've been rooting for them.
It has been a good week for TiVo. The company won a major victory from the US Patent and Trademark Office when a key patent was upheld, signed a deal to bring the TiVo experience to the PC desktop starting some time next year, and announced better-than-expected
quarterly earnings. The DVR maker has revealed more details about its
future plans, including pricing for TiVo-flavored Comcast service and a
two-way cable DVR. ...
Bangeman also reports that TiVo has also made a deal with Nero:
TiVo is poised to break out from the confines of the set-top box and
into the PC. The DVR maker and Nero, creators of the popular CD- and
DVD-burning software, are partnering to bring TiVo to upcoming versions
of Nero. The newly announced agreement means that TiVo's much-loved
interface and ease of use will be available to owners of any PC with a
TV tuner card or USB dongle. ...
In his 1995 book, Being Digital, Nicholas Negroponte (who is now trying to bring affordable computing to the third world) framed the change then ahead as replacing atoms (e.g., books) with bits (digital information). There have been a number of digital readers introduced, the latest being Amazon's Kindle. I read a fair amount of things on my HP PDA. Amazon's is coupled with an enormous number of digitized books and other reading matter. Available readers haven't done well in the consumer marketplace, but the relatively small first run of Kindles sold out quickly. Steven Levy wrote a lengthy and laudatory article on it for Newsweek:
... Books have been very good to Jeff Bezos. When he sought to make his
mark in the nascent days of the Web, he chose to open an online store
for books, a decision that led to billionaire status for him, dotcom
glory for his company and countless hours wasted by authors checking
their Amazon sales ratings. But as much as Bezos loves books
professionally and personally—he's a big reader, and his wife is a
novelist—he also understands that the surge of technology will engulf
all media. "Books are the last bastion of analog," he says, in a
conference room overlooking the Seattle skyline. We're in the former VA
hospital that is the physical headquarters for the world's largest
virtual store. "Music and video have been digital for a long time, and
short-form reading has been digitized, beginning with the early Web.
But long-form reading really hasn't." Yet. This week Bezos is releasing
the Amazon Kindle, an electronic device that he hopes will leapfrog
over previous attempts at e-readers and become the turning point in a
transformation toward Book 2.0. That's shorthand for a revolution
(already in progress) that will change the way readers read, writers
write and publishers publish. The Kindle represents a milestone in a
time of transition, when a challenged publishing industry is competing
with television, Guitar Hero and time burned on the BlackBerry;
literary critics are bemoaning a possible demise of print culture, and
Norman Mailer's recent death underlined the dearth of novelists who
cast giant shadows. On the other hand, there are vibrant pockets of
book lovers on the Internet who are waiting for a chance to refurbish
the dusty halls of literacy. ...
Link: Newsweek. Thanks to Karen Olstad for the link.
Wall Street Journal technology guru Walt Mossberg is less positive. He has been testing the Kindle, and writes:
.... I’ve been testing the Kindle for about a week, and I love the shopping
and downloading experience. But the Kindle device itself is just
mediocre. While it has good readability, battery life and storage
capacity, both its hardware design and its software user interface are
marred by annoying flaws. It is bigger and clunkier to use than the
Sony Reader, whose second version has just come out at $300. ...
... asks Celeste Headlee for National Public Radio's Day to Day program. Here's the set-up:
The Federal Communications Commission is expected to decide next week whether
satellite radio companies Sirius and X-M can merge. Satellite radio has roughly
20 million listeners, but new technologies are posing a challenge to market
shares. ¶ Celeste Headlee reports on the development of portable Internet radio. Then
NPR's Alex Cohen gets a primer from Wilson Rothman, an editor at
Gizmodo.com on the difference between leading radio technologies and
Madeleine Brand talks with Mark Ramsey, president of Mercury Radio Research,
about why the emergence of new technologies won't spell the end for terrestrial
And you can listen to the audio at this NPR link (0:12:24). The interview with Ramsey is particularly good. Thanks to Roger Johnson for the heads up. --Dennis
The FCC is out with its annual report on video competition (news release with thanks to Bert Manfredi on the OpenDTV list). I'll link to the full report when it's posted. --Dennis
Here are specific findings from the news release:
The number of TV households and the number of MVPD subscribers increased since the FCC released its last report. As of June 2006, there were 110.2 million TV households, compared to 109.6 million in June 2005. Of that number, approximately 95.8 million TV households subscribe to an MVPD service, versus 94.2 million as of June 2005.
Section 612(g) of the Act states that: (1) “at such time as cable systems with 36 or more activated channels are available to 70 percent of households within the United States” and (2) “are subscribed to by 70 percent of the households to which such systems are available, the Commission may promulgate any additional rules necessary to provide diversity of information sources.” According to Warren Communications News, a source on which we have traditionally relied, 71.4 percent of households passed by cable systems offering 36 or more channels subscribe to these systems. However, other data sources do not demonstrate that the second prong has been met. As a result, we conclude that the only way to accurately measure the 70/70 test is to collect data directly from the cable industry. Therefore, the Commission requires each cable operator to submit the following information for 2006 within 60 days under penalty of perjury: 1) the total number of homes the cable operator currently passes; 2) the total number of homes the cable operator currently passes with 36 or more activated channels; 3) the total number of subscribers; and 4) the total number of subscribers with 36 or more activated channels.
Cable continues to serve the largest percentage of MVPD subscribers. The Report finds that as of June 2006, approximately 68.2 percent of MVPD subscribers received video programming from a franchised cable operator.
DBS subscribers comprise the second largest group of MVPD households, representing 29 percent of total MVPD subscribers as of June 2006. DBS operators continue to add local-into-local broadcast television service. In approximately 175 of the 210 television markets, at least one DBS provider offers the signals of local broadcast stations.
The number of MVPD subscribers choosing all other delivery technologies represented 2.6 percent of all subscribers in June 2006.
The Nielsen Company estimated that, as of January 2007, 15.5 million households, or about 14 percent of all television households rely on over-the air television broadcasts for video programming. In addition, many households that subscribe to an MVPD also rely on over-the-air signals to receive broadcast programming on some of their television sets.
From June 30, 2005 to June 30, 2006, the number of commercial and noncommercial television stations rose from 1,747 to 1,753. As of January 2007, approximately 1,600 stations nationwide were on the air with DTV operations, including all 119 stations affiliated with the top-four network affiliates in the top 30 television markets.
Incumbent local exchange carriers also are providing video service. At the end of 2006, Verizon reported that it offered video programming via FiOS TV to more than 2.4 million households in 200 cities in 10 states and served 207,000 subscribers. At the end of 2006, AT&T served approximately 11 cities through U-verse TV. In addition, Qwest has taken steps to provide IPTV service in its service area.
As of June 2006, Broadband Service Providers (“BSPs”) served approximately 1.4 million subscribers, representing 1.5 percent of all MVPD households.
Electric and gas utilities also provide MVPD and other services on a limited basis. The American Public Power Association, which represents more than 20,000 not-for-profit community and state-owned electric utilities, reports that the average subscriber penetration rate for its members offering video service was 50 percent of the homes passed by utility video services, and that 40 percent of these subscribers purchase a combination of video and high-speed Internet access service.
The number of subscribers to private cable operator systems, also known as satellite master antenna systems, has declined to 900,000 subscribers as of 2006, a decrease of ten percent from last year’s one million subscribers.
The number of wireless cable subscribers has declined steadily from a peak of 1.2 million in 1996 to approximately 100,000 as of June 2006, unchanged from a year earlier.
In recent years, major commercial mobile radio service and other wireless providers have begun offering services that allow subscribers to access video programming through handheld devices, such as mobile telephones.
The amount of web-based video provided over the Internet continues to increase significantly each year. In July 2006, 107 million Americans, three out of every five Internet users, viewed video online. In July 2006, about 60 percent of U.S. Internet users downloaded videos. More than 7 billion videos were downloaded that month.
Between July 2005 and June 2006, a total of 28 MVPD transactions were announced. Together these transactions were valued at approximately $5.3 billion and affected approximately 1.8 million subscribers.
In 2006 we identified 565 satellite-delivered national programming networks, an increase of 34 networks over the 2005 total of 531 networks. Of the 565 networks, 84 (14.9 percent) were vertically integrated, or affiliated, with at least one cable operator. Five of the top seven cable operators own, in whole or in part, all of the networks that are affiliated with any cable operator.
In 2006, we identified 101 regional networks, an increase of six over those identified in 2005. These networks provide programming of local or regional interest and are distributed to subscribers of one or more MVPDs in an area. Of these, 57 networks, or 56.4 percent, were vertically integrated with at least one multi-system cable operator (“MSO”). There are 43 regional sports networks, representing 42.6 percent of all regional networks, as compared to the 37 we reported last year. Of the 43 regional sports networks, 19, or 44.2 percent, are vertically integrated with a cable MSO.
The sale of DTV consumer electronics continues to accelerate. The Consumer Electronics Association (“CEA”) estimates that, in 2006, digital televisions (“DTVs”) will have outsold analog televisions by 66 percent.
The development and deployment of CableCARDs continued in 2006. CableCARDs permit the reception of secured digital cable services without the addition of a set-top box. As of December 22, 2006, more than 216,000 CableCARDs had been deployed by cable operators, up from 90,000 the previous year.
The Report also surveyed developments in foreign markets. MVPDs in a number of countries provide programming on an a la carte basis or in mixed bundles, themed tiers, and subscriber-selected tiers. For example, in Hong Kong, consumers receive a free basic package and also can subscribe to more programming for an additional charge per channel. In Canada, the largest cable operators offer a la carte services. In the United Kingdom, consumers may select additional programming services they want, either on a subscription or pay-as-you-go basis, without first purchasing a monthly basic-tier package. In India, as of January 1, 2007, consumers in certain cities can subscribe to programming on a per channel basis.
Steven Sande reports that Best Buy may not be ready to accept the $40 government coupons for DTV converter boxes until April 1st:
... The cutover to digital TV, with its myriad
details, is difficult enough to explain to consumers. For months, Congress has
been urging broadcasters to promote the change to DTV early and often. But if
viewers cannot use their coupons at what is, for many households, the default
store for electronics purchases, it undercuts the coupon program’s
credibility. ¶ The retailer told Congress this week that its computers and cash registers
will not be ready to handle the government coupons on January 1. The National
Telecommunications and Information Administration (NTIA) released the
government’s rules for the coupon program in March, so it’s not as if Best Buy
hasn’t had enough time to prepare for the necessary changes to its systems. ...
And that the NTIA has known this all along:
... The Bush administration may have even signaled to retailers that if they
weren’t ready in time, no big deal. Indeed, earlier this year the Commerce
Department suggested as much, in the discussion section of its converter box
The [Digital TV] Act requires NTIA to accept requests for coupons between
January 1, 2008 and March 31, 2009, and thus, it proposed that retailers be
ready to redeem coupons starting January 1, 2008, consistent with the statutory
guidance. NTIA expects widespread retailer POS system modifications to occur in
the first quarter of 2008.
In other words, the news that stores may not be ready until April 1 is not
really news to NTIA.
This comes as it's announced that NTIA head John Kneuer is stepping down "to pursue new opportunities." Link: AP. For those caught in television's coming Katrina, we can paraphrase our president: "You've done a heckuva job, Johnnie." --Dennis
Most pundits (e.g., Phillip Swann) have been saying that Blu-ray will beat out HD DVD in the high definition disc format wars, but don't count the latter out just yet. Matthew Moskovciak from CNET reports that Wal-Mart and Best Buy are offering the Toshiba HD-A2 for sale at $99 while quantities last, one-fourth the cost of the cheapest Blu-ray player. To sweeten this sweet deal, Toshiba is offering five free movies. I bought the HD DVD format when it reached $300 at Costco a few months ago -- but then I owned two Betamax VCRs by the time I realized that VHS was going to win. Link: CNET. --Dennis
The October issue of Wired tests four HD Radio models, the Cambridge SoundWorks 820HD (8 of 10 dots), the Polk Audio Designs HDX3 (7 dots), the Sangean HDR-1 (6 dots), and the Radiosophy HD100 (4 dots). Note that the tests seem to have been for usability and sound only, not how well the radios actually pick up the HD Radio signal and, with HD Radio, that's important. The inexpensive Radiosophy unit and the two I mention below all test well in that area. Link: Wired.
Note that there are many other HD Radio models on the market. For example, at the lower price range there is the Boston Acoustics Receptor Radio HD that I have on my desk at the office and the Accurian Tabletop HD Radio sold by RadioShack. --Dennis