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

News in Brief - july 2004


ScreenSelect.co.uk has agreed a one-year partnership deal with ISP Wanadoo, as the UK DVD rental firm attempts to expand its presence in the increasingly online crowded market. As part of the deal, ScreenSelect will be the exclusive partner on Wanadoo UK's Entertainment and Shopping channels, with a free 14-day trial being offered to all Wanadoo users. Earlier the compoany signed a two-year partnership agreement with electrical retailer Dixons, with 200 UK stores across the UK.

Victor Co. of Japan (JVC) stopped shipments when it found a glitch in its new DVD recorder model DR-MX1, released to the Japanese market late July. The trouble in the product, which features "three-in-one" device combining a DVD recorder with a VCR and a hard disc drive, is expected to be corrected shortly.

THX Ltd., which provides technologies, certification programmes and quality assurance standards for the entertainment industry, says that four THX Certified DVDs received technical honours from the Video Software Dealers Association (VSDA) at their annual Home Entertainment Awards in July. The THX winners were: The Adventures Of Indiana Jones from Paramount Home Entertainment; Alien Quadrilogy from Twentieth Century Fox Home Entertainment; and Finding Nemo and Japan-based Ebistrade Inc, said it will start marketing August 4 bargain-priced DVD software that can be played only for a week. Ebistrade said its DVD movies and other software cost only 525 yen, compared with 2,000 yen-3,000 yen for conventional DVD products.

NEC Electronics, Japan's third-largest chip maker, saw net profits rise 44% in its first quarter as the company sold more semiconductors used in products ranging from DVD recorders to personal computers. Sales rose in almost all categories of chips that NEC makes, the company said.

The double-sided hybrid disc format DualDisc, which carries regular CD audio tracks on one side and DVD Audio or video on the other, has received approval from the DVD Forum as an official DVD format. This means consumers can play a movie on DVD and then flip the disc over to listen to the soundtrack on a stereo set up – or have the high-fidelity surround sound DVD-Audio version of an album on one side and the regular CD version on the other. The leading US record labels test marketed DualDiscs in Boston and Seattle, but a full launch is not expected until 2005.

Lite-On IT will begin volume production of its DVD recorder with a 40-120GB built-in hard drive at the end of July. Other Taiwanese manufacturers, including BenQ, Mustek Systems, MET Technology and Tatung will introduce their machines between August and October. Taiwanese makers began offering DVD recorders in the third quarter of 2003 but OEM quotations for entry-level DVD recorders have dropped to $250. Quotations for 40GB HDD+DVD recorders begin at $350, with the HDD costing $70-80. Currently Pioneer, Panasonic and JVC dominate the global market for 80-120GB HDD+DVD recorders, with Taiwan retail prices ranging from NT$34,900-44,900. Taiwanese competitors claim that their domestic retail prices will be 30%-40% lower.

Siemens Business Services has been selected as the preferred bidder for the BBC's new Technology Framework Contract (TFC) and as the new owner of BBC Technology, which handled the BBC's DVD production activity. The deal, worth up to £2 billion and valid for 10 years, is subject to approval from the BBC Governors, the Secretary of State for Culture, Media and Sport and the European Commission. It is expected to be complete by the fall. The BBC made the decision to offload its technology division and outsource those services following an internal review that found that it could save at least £20 million to £30 million.

Taiwan's MediaTek Inc., the world's largest designer of chips for DVD players and the first company to make a DVD player chip that combines functions of several chips into one, has paid $16.4 million for a 19% stake in Ali Corp. The company faces price competition from rivals in Taiwan and California and it aims to use Ali's technology to help offer new products more quickly, analysts said. MediaTek had its smallest quarterly profit gain on record in the first three months of this year as intensifying competition squeezed margins. First-quarter net income rose 10% to NT$4.2 billion from NT$3.8 billion, a year earlier. Multi-function chips to compete with those produced by MediaTek were introduced last year by competitors and have eroded the company's market share and prices, analysts said.

Scuba Schools International (SSI), the education and business support organization, announces the launch of the diving industry's first Total Teaching System with interactive DVD. The DVDs are to be used in conjunction with each of the eight specialty manuals released this year. The DVDs were designed to help a student learn the core components of the course in a fun interactive setting. The first available manual and DVD is Deep Diving. The rest will follow throughout 2004. This creation follows SSI's Total Teaching System concept.

Imagination, a DVD games company based in Australia, has secured a European licensing partnership deal. The company says the 10-year link up will generate $100 million in revenue over a three-year period. The European end of the partnership is Hasbro Europe which will licence Imagination's "DVD Game" titles which, as the name suggests, can be played on a DVD player. Imagination chief executive Shane Yeend, who says DVD games are becoming popular, noted: "Since our first shipment to the USA in 2003 the world market has embraced DVD games. "In 2004 total DVD game sales in the USA will exceed 10% of the USA's total board game sales, making the category worth more than US$100 million on just a small selection of titles."

The Modern Times Group has sold the dubbing/subtitling firm SDI Media to private equity group Warburg Pincus for $60 million in cash. SDI will continue to provide subtitling and dubbing services. The move reflects MTG's new strategy of focusing on its core broadcasting assets in Scandinavia and Central Europe.

Memorex will ship its new Double-Layer DVD+R discs this month. The discs, priced at $13 each, will be packaged in a "movie box" case. Allowing for 80% more recording capacity than current single layer discs. DL discs offer DVD-quality picture resolution with four hours of recording time. Double-layer DVD+R discs, which record at 2.4x speed, require a double-layer burner for recording, but are playback-compatible with most standard computer and home DVD players on the market. They conform to the DVD9 commercial standard.

Expansion of production capacity by Taiwanese and Chinese manufacturers in the second half of 2003 has caused the oversupply of DVD+R/-R discs, according to local sources. This has had the effect of pushing OEM quotations from $1-1.20 per disc in the fourth quarter of last year to $0.50 for leading makers and $0.30 for second-tier and smaller makers. The steep drop in prices has forced Taiwanese companies to suspend capacity expansions while China macroeconomic policy is expected to further limit capacity expansion plans of Chinese companies in the field. Manufacturers believe DVD+R/-R OEM price levels should level out or even rebound by the end of the next quarter.

Las Vegas-based computer trade show Comdex, once the biggest event on the tech calendar, has been cancelled this year, a victim of the growing interest in shows emphasizing consumer electronics and specialist IT gear.

Despite slimmed-down budgets, Germans consumers are still investing in entertainment software. In 2003, suppliers recorded growth of 8.1% over the previous year. Total market volume accounted for 1.13 billion Euro in 2003, according to consumer research agency, GfK. A total of 52.6 million programmes were sold over the counter. In addition to entertainment software for PCs and game consoles, information and edutainment programs were also taken into consideration in the figures.

LG Electronics said June 17 that its DVD recorder was chosen as the best product in Europe. The company said that its LG4810S model won the "Best Buy Award" in Poland and Belgium in March and that its RH4820 model was chosen as the best product by France and Hungary.

According to a recent study by Deloitte Telecommunications, the number of electronic gaming consoles is set to surge to a total of 2.6 billion units by the year 2010. The current market volume stands at around 415 million units, which means that the figure will increase five times over the next six years. In six years some 450 million households are expected to have broadband, while one billion subscribers will be using multimedia mobile handsets on which mobile games can be downloaded and played. What is more, by the year 2010 the storage capacity of a typical home PC will be in the 1,000 gigabyte region. According to this recent study conducted by Deloitte these handsets will also be able to handle longer and more complex games with even higher resolutions than today's counterparts.

Sharp has unveiled a new DVD recorder that supports high-definition video and comes with a 400GB hard drive. The device, currently available in Japan only, will be deployed July 30 at a retail price of about 210,000 yen. The DV-HRD200 can hold up to 34 hours of high-definition video – around 13 more hours than the machines currently on the market. It comes with tuners for terrestrial and satellite high-definition broadcasts.

More than 80% of DVD players produced in 2003 came from China. The country produced some 82 million players, a 46.4% jump compared to 2002, according to the Taiwan-based Industrial Economics and Knowledge Center (IEK) of the government-sponsored Industrial Technology Research Institute (ITRI). There are currently more than 600 manufacturers of DVD players in China and intense price competition has resulted in very thin margins, according to IEK. As a result, Chinese manufacturers are upgrading product lines toward OEM production of DVD recorders, IEK indicated.

Walt Disney is to launch a low-cost service called Moviebeam that will reach movie consumers directly in a bid to grab market share from video rental companies. Moviebeam, a set-top box that connects to a television and stores, would show movies like a DVD player. Its hard drive can store 100 titles, and an antenna receives new films via broadcast airwaves. For consumers, there are two claimed advantages – direct delivery to a TV set and immediate availability. By abandoning its position as a wholesaler that packages films on DVDs, Disney stands reap all the rental revenue instead of sharing it with retail outlets.