News summary for 8/09/07

Thu, 08/09/2007 - 9:20am

Motorola wins HBO’s MPEG-4 encoding business
By Brian Santo

At Cable-Tec Expo, HBO announced it would transmit all 26 of its high-def channels in MPEG-4 starting next year; today, Motorola announced it will be providing the encoding system that will enable HBO to do it.

HBO will use the HD MPEG-4 AVC encoding system from Motorola’s Home and Networks Mobility Business. The system compresses, encrypts, modulates, and receives HD signals.

Motorola said its new multi-format integrated receiver/decoder (IRD) will deliver HD channels in both MPEG-4/AVC and MPEG-2 formats.

DirecTV U.S. wins in Q2, loses TWC lawsuit
By Traci Patterson

The DirecTV Group Inc. reported a 17 percent increase in worldwide revenues year-on-year, to more than $4.1 billion, with U.S. revenues up 12 percent, to $3.7 billion, in the second quarter. The DirecTV Group’s net income of $448 million was down from $459 million a year ago.

U.S. revenues were fueled by average monthly revenue per subscriber (ARPU) growth of 6.8 percent, to $76.43, “due in large part to approximately 50 percent more high-definition and digital video recorder customers in the quarter,” said Chase Carey, DirecTV’s president and CEO.

DirecTV U.S. added 128,000 net subscribers and 900,000 gross subscriber additions in the quarter, for a total of 16.3 million.

"In light of the rapidly growing demand for advanced services in the United States, it is particularly exciting to look ahead a couple of months when we leapfrog the competition by offering up to 100 national HD channels," Carey said.

And today, the U.S. Court of Appeals for the Second Circuit upheld a lower court's decision that prohibits DirecTV from airing ads that claimed superior HD service in markets where Time Warner Cable operates, Reuters reported.
The ads, which featured William Shatner and Jessica Simpson, aired in December and January. They ended with the tag line: "For an HD picture that can't be beat, get DirecTV."

TWC filed the lawsuit in December, saying the DirecTV campaign asserted "false advertising and deceptive business practices," Reuters reported. DirecTV was also ordered to take down similar ads on its Web site or other sites.

Additionally, Carey has signed a new three-year employment contract, effective through Dec. 31, 2010. He joined the company as its president and CEO in 2003.

Vonage continued to narrow loss in Q2
By Traci Patterson

Vonage’s second quarter revenues soared 43 percent, to $206 million, from $144 million in the year-ago quarter.

Adjusted loss from operations narrowed dramatically, to $18 million, a 70 percent improvement from $60 million in the year-ago quarter. The company's net loss narrowed to $34 million, or $0.22 per share, from a net loss of $74 million a year ago.

Vonage added approximately 57,000 net subscriber lines during the quarter and finished with 2.45 million lines in service.

"We made significant strides this quarter in reducing costs and narrowing our losses,” said Vonage Chairman Jeffrey Citron. “Despite the continued challenges associated with the Verizon litigation, the company maintained its focus on achieving adjusted operating profitability.”

Blockbuster snaps up movie download site
By Mike Robuck

In order to better compete against NetFlixBlockbuster said on Wednesday that it was buying Movielink.

Movielink offers a digital-movie download service, and while Blockbuster said Movielink will continue to operate as a separate service, the deal allows Blockbuster to match Netflix’s download service that was launched earlier this year.

The acquisition, the terms of which weren’t disclosed, gives Blockbuster access to a large library of downloadable movies and a large array of television content. The service was created in 2002 by Movielink LLC, a joint venture of Metro-Goldwyn-Mayer Studios Inc., Paramount Pictures, Sony Pictures Entertainment, Universal Pictures and Warner Bros. Studios.

The acquisition of Movielink, based in Santa Monica, Calif., lets Blockbuster offer customers downloadable entertainment content via their PCs, portable devices, television-connected home networks and approved set-top boxes.

"Blockbuster is committed to keeping pace with the changing needs of customers by offering them an expanding array of convenient ways to access entertainment content," said Jim Keyes, Blockbuster chairman and CEO, in a prepared statement. "Our acquisition of Movielink, with its associated digital content, is the next logical step in our planned transformation of Blockbuster. Now, in addition to the entertainment content we provide through our stores and by mail, we have taken an important step toward being able to make movie downloading conveniently available to computers, portable devices and ultimately to the television at home.”

ADB rolls IPTV set-top boxes into Chile, North America
By Mike Robuck

Advanced Digital Broadcast (ADB) rolled out its first commercial deployment in North America of the company’s HD IPTV set-top box.

The ADB-3800W set-top box, featuring Minerva Networks iTVManager software, has been deployed in North Dakota Telephone Company’s network for a new service that will use SD and HD, as well as both MPEG-2 and MPEG-4 formats.

The units have also been launched on more than 30 Independent Operating Company (IOC) networks throughout North America. The company said it will further expand its product portfolio later this year with the launch of an IPTV DVR.

“We are delighted to make such an announcement so shortly after receiving certification for the ADB-3800W,” commented Philippe Lambinet, CEO of ADB, in a prepared statement. “We believe that this endorses our very competitive and state-of-the-art solution which telcos are eager to deploy to maximize revenues, through new IPTV centric applications, and to increase the efficiency of their networks through applications such as Advanced Video Encoding.”

ADB also announced that its ADB-3800SD IPTV set-top box has been selected by Telefónica Chile. According to a press release, Telefónica Chile is the first telecommunications company to deploy television over broadband (IPTV) services in Latin America. The ADB set-top boxes are integrated with Telefonica’s Imagenio middleware.

Vodafone keeps stake in Verizon Wireless, joins WiMAX Forum
By Mike Robuck

British mobile phone operator Vodafone said on Wednesday it will hold on to its 45 percent stake in Verizon Wireless in order to keep a presence in the U.S. mobile phone market.

Vodafone’s minority stake in Verizon Wireless is valued at $50 billion. Verizon Communications owns 55 percent of Verizon Wireless and reportedly wanted to gain full control of Verizon Wireless. Vodafone exercised its option to keep its stake in Verizon Wireless a day before the deadline.

Vodafone also announced that it has joined the WiMAX Forum. The WiMAX Forum is an industry-led non-profit organization that is comprised of more than 470 companies, including 141 operators that are committed to promoting and certifying interoperable WiMAX products. WiMAX products are designed to deliver wireless broadband services to both residential customers and businesses.

“Our membership of the WiMAX Forum will complement our existing memberships of other key industry bodies such as the GSMA, 3GPP and the Next Generation Mobile Network initiative,” said Steve Pusey, Vodafone’s global chief technology officer, in a prepared statement. "Vodafone remains technology neutral as far as our future network options are concerned, and joining the WiMAX Forum is a logical step as we seek to evaluate the full capabilities and potential of this technology."

RCN arranges to offer SIP VoIP; reports Q2 loss
By Brian Santo

RCN will begin offering SIP-based voice-over-Internet Protocol (VoIP) service through an agreement with deltathree. Separately, the company reported second quarter results that included revenue that is growing, but not nearly enough to keep losses from mounting, too.

deltathree will provide RCN with its private-label consumer VoIP solution, enabling RCN to expand its phone service well beyond its service areas in New York, Boston, Chicago, Eastern Pennsylvania and metro Washington, D.C. RCN plans to begin marketing VoIP in nearby areas, however.

RCN said the VoIP services will not replace but rather will supplement the switch-based services it currently provides. 

The company is trying to expand out of the residential market into the commercial market. Being able to offer SIP-based VoIP outside its traditional footprint will help. The company’s pending acquisition of Neon Communications will also help; Neon runs an optical network in the Northeast and Mid-Atlantic.

RCN’s Q2 suggests the strategy is beginning to pay off. Commercial revenue was up 13 percent from a year ago, growing from $20.2 million to $22.7 million. 

RCN’s revenue grew to $159 million, up from $149 million a year ago, and up from $153 million in Q1. The company’s loss widened from $25.3 million a year ago to $79.7 million in the quarter just completed. A big expense was an increase in capex.

The company added 2,000 customers in Q2, to reach 409,000. Over the last year, RCN tallied 10,000 customer adds – and 27,000 RGUs - yet more evidence of the value of bundling, if any, was still needed.

RCN chairman James F. Mooney stressed the positive. "Revenue from our core operations, which includes both our core residential and commercial businesses, grew five percent from last year as we further strengthened operating metrics, including higher residential ARPC, strong bundle rate and lower churn, and expanded our commercial business,” he said. He added, “RCN's progressive execution of our strategy positions us very well to capture revenue and profit growth opportunities in both our residential and commercial businesses and deliver another strong year.”

Broadband Briefs for 8/09/07

* OmniBus opens new testing facility in Denver
By Mike Robuck

OmniBus Systems, a provider of broadcast automation and content management solutions, recently opened the doors on a new support and quality assurance center in Denver. Technical support for the Americas will be centered at the OmniBus Denver facility. OmniBus’ iTX software broadcast automation and playout system will be supported at the new facility where key iTX customer sites will be replicated.

The Denver-based group will also undertake a quality assurance and testing program for the complete OmniBus product line, and initiate a dedicated testing program for mobile TV applications.

* Genesis appoints VP of Asia-Pacific region
By Traci Patterson

Genesis Networks has appointed Doug Triblehorn as VP of the Asia-Pacific region.

Triblehorn has held senior-level positions at Keystone Communications, GlobeCast and Intelsat, and he was founder and president of Zap Media Advisers, a consulting firm that advised U.S. and international broadcasters on the management of worldwide business operations.


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