Europe's online source of news, data & analysis for professionals involved in packaged media and new delivery technologies

News in Brief - april 2007


APPLE is to launch its online video sales business in Europe, some 15 months after the US debut of the store. Confirmation came from the Luxembourg finance minister Jeannot Krecke, who confirmed that Apple had been in talks with the Luxembourg authorities “for several months”. Krecke said that Apple would offer full length TV series in various European countries, extending the arrangement that began when Apple established its European music store in Europe in 2005. The Grand Dutchy boasts one of the lowest VAT rates in Europe, which is favourable towards online stores.

SONIC Solutions announced its Roxio-branded applications were number one in U.S. retail in 2006. According to NPD Group figures, which track retail sell-through in North America, Roxio applications led the category in terms of both units and revenue with 28% and 42% market share respectively. Roxio Toast led the way as the premier CD and DVD creation suite on the Mac, while Roxio Easy Media Creator was the clear digital media software choice for Windows users.

DISNEY has announced that its sold more than 1.3m films via Apple's iTunes Store in the first three months of being available. The news, which is likely to put immense pressure on other Hollywood studios to follow suit comes as rumours build that Apple is about to launch the movie store in the UK to coincide with the launch of its Apple TV product. Bob Iger, Disney’s CEO, dismissed fears that digital downloads would cannibalise DVD sales. Disney claims it has sold more than 20m downloads of its TV programming on iTunes since it was first made available last year.

WAL-MART launched its long-awaited internet film service offering films from all of Hollywood's main studios in a move that could see the retailer challenge Apple's iTunes platform for supremacy in digital downloading.
Unlike iTunes, the Wal-Mart service has the backing of Warner Bros, Walt Disney, Paramount, Sony, 20th Century Fox and Universal. More than 3,000 film titles are being made available, including new releases, such as The Devil Wears Prada and Superman Returns. The service will offer movies for digital download the same day they are released on DVD. They will be priced similarly to the cost of buying a DVD, with prices ranging from $12.88- $19.88.

LG ELECTRONICS said the industry's first dual-format high-definition disc player is now available at retail stores with a price tag of about $1,200. The LG Super Multi Blue Player (LG BH100) was unveiled at the Consumer Electronics Show last month. Themachine – which can play both HD DVD and Blu-ray – is now available at national retailers, such as Best Buy, Circuit City and CompUSA, as well as regional retailers and local dealers.

UNABLE to define memory as a 'recording medium,' Canada's Private Copyright Collective goes directly after portable music player devices, memory cards, and anything else that can be used to make private copies. The PCC submitted a proposal to the country's Copyright Board that suggests levies of C$5 on devices with up to 1GB of memory, $25 for 1-10 GB, $50 for 10-30 GB, and $75 for over 30 GB. If approved, this proposal would increase the price of a 30-GB iPod by 26%. These collections are intended to compensate artists and labels for the losses they suffer when people 'illegally' copy or transfer music. The PCC is also seeking a new $2 to $10 tax on memory cards.

POLICE in Heywood, Greater Manchester hs raided a pirate DVD factory and arrested a 42 year-old
man. The factory was located in a private house and contained 40 DVD burners, three computers, printers
and over 6,000 counterfeit DVDs. In addition, £5,000 in cash was seized from the premises. The operation was part of an intelligence based operation by Greater Manchester Police, assisted by the local Trading Standard office. The man arrested has been bailed to return in September. The seized equipment and product has been taken by FACT to be examined at its Forensic facility. Due to the sophisticated nature of this operation, FACT will be taking over the prosecution of this case.

AFTER years of hesitation and half-starts, Internet distribution of short videos, TV programmes and even feature films is finally emerging as a legitimate and fast-growing segment of the $56 billion global home video market. While global revenue from online video sales, rentals or subscriptions will total just $298 million this year, Strategy Analytics projects that the market will grow to nearly $1.5 billion by the end of 2007. By 2010, global revenue will surge to $5.9 billion, and account for eight percent of total home video industry revenues.

WALT DISNEY's net income for the three months to 30 December rose to $1.7 billion from $734 million a year ago. Revenues increased 10% to $9.7 billion. DVD sales including Pirates of the Caribbean: Dead Man’s Chest and Cars lifted entertainment profits from $128 million to $604 million. Massive DVD sales helped more than double’s first-quarter profits.

A DVD showing footage of Saddam Hussein's hanging has been banned by Australia's Classification Board.
The Hanging was submitted for classification by the Eros Association, which represents adult retailers and entertainment companies. Before submitting the title to the board in January, Eros predicted that "the film depicting the hanging of the former Iraqi dictator … would receive an R rating if submitted for classification".
But last week the board defied Eros' prediction, giving The Hanging an RC (Refused Classification) rating, which effectively bans it.

SPURRED by high growth rates of over 20 per cent in a majority of segments, India's manufacturing sector has clocked a growth of 13 per cent during Apr-Dec period of 2006-07, a FICCI survey revealed. The sectors, which have recorded excellent growth during the nine-month period, are topped by DVD (50%) and flat TV (50%), followed by power cables (41%), commercial vehicles (37%), personal computers (30%), electrical equipment and machinery (25%), air conditioners (25%), textile machinery (25%), and others.

DIGITAL video processor vendor ESS Technology Inc. has sold its HD-DVD and Blu-ray Disc DVD technologies and related assets to SiS Holding Ltd., a Hong Kong-based electronics distributor, for $13.5 million. Fremont, California, ESS said it would cease operation of its camera phone business and pursue licensing of its image sensor technology and patents. The company said this action would reduce operating expenses by roughly $2 million per quarter.

HOLOGRAPHY solution developer InPhase has announced it will bring to market in July its first-generation HVD disc with a storage capacity of 300GB destined for high-definition applications. It is to be priced at $180. The company's roadmap includes a 800GB media then a 1.6TB unit for 2009.

AS PART of its ongoing environmental initiative with the Natural Resources Defense Council (NRDC), WEA Corp., the U.S. sales and distribution company of Warner Music Group Corp., announced that all of its standard CD and DVD products in the U.S. will use ecologically-enhanced paper packaging by the end of March 2007. With this, along with changes inside the company's offices that reduce paper use and promote recycling, the company successfully attains a goal toward which it has been steadily building.

APPLE TV streaming media device could be a DVD killer, according to one analyst. “It’s conceivable” that the device could carve out 20 to 30 percent of the $26 billion DVD market in a few years, said Deutsche Bank analyst Chris Whitmore. Annual consumer spending on movie and TV downloads will top $4 billion in 2011, up from $111 million last year, according to a study by Adams Media Research.

SLYSOFT launched the first version of its HD DVD cracking software designed to let consumers decrypt HD DVD movie discs and rip them to a hard drive. Specifically, the AnyDVD HD software cracks the Advanced Access Content System (AACS), a specification for managing content stored on the next generation HD DVDs. The Antiguan developer, which also produces several other copy protection cracking software tools, said it plans to develop a similar program to crack Blu-ray copy protection. Blu-ray discs have an added layer of protection beyond AACS. A beta version of the Blu-ray cracker will reportedly be available in the first quarter.

ADULT video publisher TightFit Productions has launched a new line of hybrid discs. The first title Punk Rock Punishment featuring Master Dominic is a double-sided DVD with a standard DVD on one side and HD DVD on the other.

NICHIA Corporation has developed high power blue-violet semiconductor laser diodes corresponding to a double-layer disc at more than 10 x record speed or a quad-layer disc at more than 2 x record speed applied for the next generation DVD recorders. The estimated life time exceeded 10,000 hours and stable operation was achieved for 1000 hours with the condition of 320 mW pulsed operation at 80°Ccase temperature. The laser diodes market is expected to be dramatically expanded with launching for the next generation DVD market, says Nichia.

STREAMLINING supply operations, Cinram International Inc. is eliminating 328 warehouse and distribution jobs at its Olyphant manufacturing plant. The Cinram restructuring will fold the eliminated positions into facilities in Illinois and Tennessee, where similar work is already being done, said Cinram spokeswoman Lyne Fisher. But the company plans to immediately rehire 140 senior employees for openings in manufacturing at the local plant and hopes to bring back the other 188 positions by Christmas after making big investments in high-definition DVDs, Fisher said. “We are going to be making some investments in high-definition discs – some significant investments in the next coming months,” she said. “There will be some skilled positions available as a result of that. We will try to minimize any impact we can on the community here.”

VERBATIM has added to its family of Hi-Speed Store 'n' Go USB 2.0 HD drives to include 12GB capacity. Weighing just 28 grams this new addition is ultra light with the capacity to carry large volumes of content from one system or location to another. The new HD drive is fully compatible with Windows 98SE, ME, 2000, XP, and Windows Vista as well as Mac OS 10 X and above and Linux 2.40 and above. The complete package includes a protective pouch, USB extension cable and a user quick start guide for a suggested retail price of £100 and is available now.

DUBLIN was hit with a new jobs blow as CD and DVD manufacturer Zomax/MPO announced it was to close its Blanchardstown facility, with the loss of 98 jobs. The company, which has another facility in Santry, is blaming competition from lower cost economies for the cutbacks. Last month, it put 100 staff at the Santry facility on protective notice, after it failed to secure the renewal of a major contract. Zomax/MPO managing director Paddy Burke commented: "The industry sector in which we operate has been in decline in this country in recent years as competition from lower cost Asian and Eastern Europe operators intensifies. It is indicative of the global competitive landscape in which Irish based manufacturing must now attempt to operate. Currently, Blanchardstown has no new customer orders and none in prospect. The business therefore has become unsustainable."

AN EBAY trader who was selling large quantities of pirate DVDs and making several thousand pounds sterling per month has been arrested following extensive work by FACT’s Internet Investigations Team. In a combined raid with the Metropolitan Police and Newham Council Trading Standards, a 22-year old man was arrested at an address in London and has been taken away for questioning. PC equipment found on the premises has been seized, along with several hundred discs ready to be shipped to potential buyers. These included counterfeit copies of TV and film titles such as The Sopranos, Harry Potter And The Goblet Of Fire, The Little Mermaid and 24.

TORRENTFREAK website has a short post up talking with a former physical data pirate, who sold his wares in flea markets and made a lot of money in the 90s. By the end of the last decade, his money flow had dried up, and he places the blame squarely on the shoulders of P2P file sharing. "Tony is very clear about why his rags to riches story has gone back to rags again. 'File-sharing, P2P - call it what you like. When you asked a customer why he wasn't buying anything, 9 times out of 10 it was BitTorrent this, LimeWire that ...' P2P is a very powerful machine and although Tony could see that his operation was feeling its effects, he admits that he sat back and did nothing about it and consequently, his business has paid the ultimate price.

ACCORDING to a news published at DigiTimes, 20x has a good probability to become the mainstream writing speed of DVD burners in the fourth quarter of 2007. There are already some DVD burners supporting this writing speed, like the latest Lite-On models, and 18x burners are becoming more common than 16x ones. Also other optical drive makers are planning to introduce 20x models. Currently available quality 16x certified media, i.e. Taiyo Yuden and Verbatim, can be burned with good results also @18x, but I wonder if also media producers will start to sell 20x certified media soon.

RESEARCH into release windows conducted jointly by the Bauhaus-University of Weimar (Germany), Cass Business School (London), the University of Hamburg (Germany) and the University of Missouri at Columbia (US) revealed that a simultaneous release at the cinema, rental and VOD would also damage rental revenues by nearly 15%. The research model, which kept a three-month DVD retail window in place, estimated that DVD sales would grow nearly 50%, giving studios and overall uplift in revenues of 16%. In both Germany and Japan, studios would need to release DVDs for retail three months after cinema distribution, and DVD rentals and VOD one year after screenings to maximise profits, the study found. Exhibitors would also benefit from the changes with revenue increases of 15% and 6% respectively. Video rental, however, would drop significantly.

2006 was the most successful in Bertelsmann’s history thanks to continued growth in the group’s revenues and operating results. The international media company announced that revenues rose by 7.9 percent, from €17.9 billion to €19.3 billion, reaching an historic high. The group’s net income more than doubled to €2,424 million (2005: €1,041 million). The international media and communications services provider Arvato, Sonopress’ parent group, recorded a notable increase in revenues. Operating profit also rose. The Arvato Storage Media group managed to gain market share in the CD and DVD segments, despite strong competitive pressure in 2006. A new distribution and service center for the US entertainment sector was opened in cooperation with Arvato Print in Louisville (Kentucky).

MEDIATEK Inc, the world's biggest maker of chips used in DVD players, planned to buy a major stake in Nucore Technology Inc for $37 million via share swapping to tap into the digital camera market. Handset chips are MediaTek's biggest source of revenue, accounting for about half of the chip designer's revenues, which totaled $456 million in Q4 2006. Chips for DVD players are the company's second largest source of revenues.

TOSHIBA is reportedly planning drastic cuts in the price of its HD-DVD players, with the low-end HD-A2 model now available (on www.onecall.com) for as little as $375, down from $500. The price of the high-end HDX-A2 machine is down by $200 to $600. Last week, Toshiba introduced the HD-A20 to Europe as the HD-EP10. The machine - launched in the US in January - adds support for the 1080p HD resolution to the HD-A2's feature set.

VENTURER, a company based in Canada with a Chinese partner Alco, has unveiled details of its Venture SDH7000 HD DVD player. A machine (prototype?) was on display at CeBIT. Few details are available above and beyond, Dolby Digital, an HDMI socket and delivery of 720p and 1080

HONG KONG digital media company Infosmart opened it first factory outside China – in Brazil – for manufacturing CDs and DVDs and has begun building a further two units to produce re-writable DVDs. With operations started in Brazil since the end of February, the new company known as Discobras, produces around 4 to 6 percent of the Brazilian demand for recordable DVDs and with a production increase plans to reach a third of the Brazilian market. Investment of $120 million are planned by the end of 2008.

DREAMWORKS CEO Jeffrey Katzenberg says the high-def DVD format between Blu-ray and HD-DVD will not have a winner. Katzenberg said at a Bank of America conference that only videophiles will buy the new high-def DVD players, according to Variety magazine."Blu-Ray and HD DVD are a niche business," Katzenberg said. "They're not going to become the next platform. "I think for the general consumer, there is not a big enough delta between the standard DVD in terms of where it is today and the next generation."

APRIL (Association pour la Promotion et la Recherche en Informatique Libre) has taken action before the French Supreme court. The action requests an annulment of a decree that "introduces a maximum €750 fine for possession and use of DRM circumvention technologies". The decree would otherwise be introduced into the French Copyright laws. APRIL argues that the fine for merely possessing an anti-DRM (Digital Rights Management) device/program "imposes an unfair and disproportionate threat on users of open source software and the whole movement of open source software."