AFI Digital Content Lab to Hold "AFI DigiFest" November 8th and 9th

The American Film Institute Digital Content Lab (AFI DCL) has announced plans to hold its annual interactive media showcase on November 8th and 9th (note: tickets for the event go on sale October 12th, and can be ordered on the AFI's Web site, or by calling 1.866.AFI.FEST). Renamed the AFI DigiFest (it was formerly known as the AFI Digital Content Festival), and taking place this year at the Academy of Motion Picture Arts and Sciences' Linwood-Dunn Theater in Hollywood (1313 N. Vine), the event will showcase new digital and interactive content created for television, mobiles, broadband and gaming environments and will, the AFI DCL says, highlight both innovation and real-world applicability. A featured component of the AFI's AFI Fest event, the showcase has been sponsored by the Corporation for Public Broadcasting (CPB), Adobe, IBM, Microsoft, and AOL.

The first day of the DigiFest will see the Digital Content Lab hosting a series of curated presentations that highlight noteworthy digital productions from around the world that debuted over the past year. The presentations will include a preview of "Quarterlife," a new broadband video series from "thirtysomething" creators, Edward Zwick and Marshall Herskovitz that will premiere on MySpace.com on November 11th. The preview will be presented by Herskovitz himself. Other presenters will include winners of the 2007 Primetime Emmy Awards for Interactive Television, Current TV's president of new media, Joanna Drake Earl (who will provide a preview of the channel's new online interface), and "Fallen Alternate Reality Game" creator, Matt Wolf (who will explain how the game, which attracted around 2.8 million visitors and 250,000 players, served as a promotional vehicle for the ABC Family TV movie, "Fallen").

The DigiFest's second day will feature five new prototypes that have been incubated in the Digital Content Lab (note: the prototypes were all conceived and produced at the Lab in collaboration with mentors drawn from high-profile interactive design and production companies): an online video platform and citizen journalist toolkit for PBS's weekly investigative news program, "NOW"; a strategy for retaining viewer interest during ads in a DVR environment, that was developed for Bravo's "Top Chef"; a multiplatform, interactive social network for "Players," a new documentary about video game fans that is being produced by MTV, EA and Mekanism; a pilot for an original dramatic machinima series, created within a 3D game engine; and a user-generated film contest, dubbed "Filmocracy," that was developed for ITVS.

Alcatel-Lucent Acquires UK-Based Interactive TV Company, Tamblin

Privately held UK-based interactive TV technology provider, Tamblin, has been acquired by Alcatel-Lucent. The latter says that Tamblin's applications and toolkits--which it praised as, among other things, facilitating the development and tracking of interactive TV advertising campaigns, by allowing broadcasters or brands to create one campaign that runs across multiple operators--will enhance its solutions for "enabling IPTV users to easily find, connect and interact with brands and entertainment they care about" (note: Tamblin's software has already been integrated with Alcatel-Lucent's AmigoTV and MyOwnTV products; the software also happens to be integrated with Microsoft's Mediaroom platform). Financial terms of the deal have not been disclosed; the companies say that Tamblin's 13-person staff will join Alcatel-Lucent's "convergence business activities" within its multimedia and payment team. "The experienced and talented team at Tamblin have developed a powerful set of applications and tools that are being used by clients such as the BBC, BSkyB, ITV, Channel Five and Central Office of Information," Marc Rouanne, president of Alcatel-Lucent's convergence business activities, said in a prepared statement. "We look forward to leveraging their expertise and integrating them into a wider team dedicated to identifying ways to help IPTV service providers deliver a unique, interactive TV experience for their subscribers." Added Tamblin CEO, Stuart Waite: "We have the opportunity to bring our media and broadcast clients together with the outstanding Alcatel-Lucent IPTV operator customers to deliver leading interactive TV services to the market."

Tamblin's products include its i-ZoneTV software, which it describes as "a dynamic publishing, template management and churn tool that allows for content within pre-designed templates to be updated across multiple platforms." Among other things, the software powers BSkyB's interactive TV portal, Sky Active, and is also used to create and manage interactive TV content for other major UK broadcasters, including Channel 4, ITV, Five, and Flextech, as well as the BBC. Tamblin also recently announced that Directgov, a UK government office that provides information on government services, is using the i-ZoneTV software to create and manage the interactive TV version of its service on digital satellite, digital cable and IPTV. Earlier this year, Tamblin announced that it had been chosen by BSkyB's advertising sales arm, Sky Media, to provide an SMS return-path solution for commercials on Sky-owned and third-party channels. The solution, which Tamblin dubs MiAds (short for "mobile interactive advertising"), allows clients to overlay TV commercials with an SMS call-to-action graphic (note: the call-to-action graphic can be modified during the life of a campaign). It is offered to advertisers by Sky Media as part of an integrated, multiplatform campaign offering, and is available for implementation across all digital television platforms.

NPTV Sells Interactive TV Assets to Netgem

NPTV, a French developer of software for interactive TV, video analysis and mobile services, has signed a deal with Netgem, a French provider of television hardware and software technologies, to sell to the latter its interactive TV and video analysis assets. In the interactive TV space, NPTV is best known for its Bando development platform, which consists of set-top and PC-based editing tools and which the company says has been deployed on over 8 million set-tops and is compatible with most commonly used middleware platforms. Bando-powered services have been launched on France's CanalSat and Malaysia's Astro MeaSat. (Note: for an in-depth overview of Bando, see [itvt]'s interview with NPTV co-founder and CEO, Etienne Grange, in Issue 5.68 Part 2.) According to NPTV, its agreement with Netgem provides the latter with a number of interactive TV-related patents, with NPTV's contracts with various digital TV operators, and with "know-how through the transfer of the whole team dedicated to [interactive TV] activities." NPTV will now focus on its MOB-IT platform, which automates the creation of mobile services and applications from existing content on the Web.

US Cable Industry's "Canoe" Project Seeks to Standardize ITV Advertising

US cable industry research-and-development organization, CableLabs, is working on an initiative to standardize interactive TV advertising on cable systems throughout the US (presumably using such standards as OCAP and ETV), and has quietly issued an RFI to technology vendors, seeking help with and feedback on the project. The existence of the initiative--dubbed "Canoe," and led by Comcast COO, Steve Burke, and Time Warner Cable COO, Landel Hobbs--was confirmed by Comcast CEO, Brian Roberts, at the Merrill Lynch Media and Entertainment conference in Marina Del Ray, Calif. last month. If the initiative is successful, Roberts told attendees, "we can have the aggregation effect, whatever our video marketshare is, the way that Google does in [Web] search. We can go to broadcasters and say, 'Would you like to use this interactive platform?' We can go to our competitors, if we so choose, and offer the same. If it's a great monetization machine, the value is going to inure the cable operator who has this technology."

According to the Wall Street Journal, the Canoe initiative is also exploring whether the cable industry should establish a national advertising sales organization, or rely on existing sales channels. The Journal also reported that the cable industry is planning to showcase interactive advertising at a number of large television events next year, including the Olympics and the national elections; and that cable executives recently traveled to Washington, DC to meet with ad-buyers from the Democratic and Republican parties and show them the kinds of advertising that interactive TV makes possible. According to the Journal, one strategy being considered by the Canoe initiative is to create a VOD channel that would be devoted to election coverage and that would let advertisers test out ads that offer such features as interactive voting and the ability to request political brochures.

TMG Files for Chapter 11 Bankruptcy Protection

The Media Group (note: the latter, which is generally known by the acronym, "TMG," was formerly called Turner Media Group; as the once-exclusive ad-sales representative for EchoStar's DISH Network, it created ITV advertising campaigns for such companies as Ford, Mercedes, Chrysler, Land Rover, and HP; it also developed a number of transactional interactive TV channels, including the popular Men's Outdoors & Recreation channel) has filed for Chapter 11 bankruptcy protection, after EchoStar dropped the eight channels the company offered on DISH Network. In its bankruptcy filing, the company blamed EchoStar, which earlier this year entered an advertising-sales partnership with Google, for its financial problems: "Up until January of 2007, TMG was a thriving business with annual billings in 2006 of approximately $200 million dollars and ZERO debt," the filing read. "In late 2006, despite a long-term preceding relationship of nearly a decade absent any failure or default on the part of TMG and during which TMG generated and delivered to EchoStar nearly $1 billion in revenue, TMG's largest client, EchoStar, demanded that TMG amend its network carriage agreement, only one year into its five-year term and enter into certain written agreements imposing numerous onerous and burdensome terms and conditions upon TMG."

Bluestreak Technology Raises $20 Million in Series D Funding Round

Bluestreak Technology--which was founded in spring 2002, when John Reed and Tom Peters used their own financial resources to purchase the interactive TV assets of Montreal-based software company, ZAQ, and the streaming-media assets of networking company, Source Media (note: Bluestreak's flagship MachBlue platform is based on patented technologies from both of those forbears; in digital TV environments, the platform enables access to Web services--including Flash video--directly from the set-top box, and also enables the creation in Flash of rich media services for set-tops)--said Thursday that it has raised $20 million in Series D financing. The funding round was led by new investor, Iris Capital (France), and saw the participation of internal investors, Solidarity Fund QFL, BDC Venture Capital and First Capital Group, as well as new investor, Tomorrow Group (Korea). Bluestreak, which says that it has signed "numerous" deals over the past few months, says that the proceeds will be used to expand development of the MachBlue platform and to consolidate its presence in the European and Asian markets. "This has been a breakout year for Bluestreak," Bluestreak CEO, Paul Forostowsky, said in a prepared statement. "Since the beginning of 2007, we've announced JAVA and BREW versions of MachBlue Mobile and new partners in Dutch operator KPN and Thomson on the DVB-H side. Our digital TV business has also been growing substantially, with great strides in the IPTV sector. This latest round of financing, propelled by geographically diverse investors, will allow Bluestreak to further consolidate our position in the fast-growing rich media market and to continue winning major accounts worldwide including in the Chinese and Korean markets."

In other Bluestreak news:

• The company's MachBlue Mobile solution is powering a new mobile TV service, dubbed MobielTV, from Dutch telecommunications operator, KPN. According to Bluestreak, MachBlue Mobile allows operators to offer a consistent, customized and branded interface across multiple different mobile devices.
• At the IBC show in Amsterdam last month, the company demo'd the MachBlue platform running on STMicroelectronics' STi710x family of decoder chips. "The integration of MachBlue into our industry-leading STi710x single-chip HDTV decoder at IBC 2007 will demonstrate the possibilities to leading consumer manufacturers of offering viewers increased levels of Web content via set-top boxes, and a richer TV experience through the use of enhanced user interfaces," Stefano Groppetti, director of the cable and IP business unit of STMicroelectronics' Home Video division, said in a prepared statement.

EchoStar to Buy TV Place-Shifting Company, Sling Media, for $380 Million

EchoStar (note: the company, which operates the interactive TV-enabled DISH Network US satellite-TV service, recently revealed that it is contemplating splitting into two new public companies: one devoted to its consumer business and the other to its wholesale business) has announced plans to acquire privately held TV place-shifting company, Sling Media. EchoStar was an early investor in the company. The transaction, which values Sling Media at approximately $380 million, and which is payable in cash and EchoStar options, is expected to close in the fourth quarter.

Sling Media, which was founded in 2004, is best known for its flagship Slingbox device and SlingPlayer software, which allow end-users to access their home television service remotely over broadband. According to the company, the Slingbox is distributed in over 5,000 retail stores in 11 countries. In 2006, Sling Media created the Sling Entertainment Group (headed up by MTV's former digital media guru, Jason Hirschhorn) with the goal of developing entertainment services and business models that build upon and reach beyond the Slingbox. The group is also tasked with building and maintaining relationships with content creators and owners. Its first initiative was Clip+Sling, a service that allows users to clip and share short segments of TV shows, and that is expected to launch early next year. "As an early investor in Sling Media, EchoStar has been pleased with the progress and commitment the company has made establishing Sling Media and the Slingbox as powerful and beloved digital media brands," EchoStar co-founder and CEO, Charlie Ergen, said in a prepared statement. "With today's increasingly mobile lifestyle, EchoStar's acquisition of Sling Media will allow us to offer innovative and convenient ways for our customers to enjoy their programming on more displays and locations, including TV's, computers and mobile phones, both inside and outside of the home. This combination paves the way for the development of a host of new, innovative products and services for our subscribers, new digital media consumers and strategic partners." Added Sling Media co-founder, chairman and CEO, Blake Krikorian (note: for an in-depth interview with Krikorian, see [itvt] Issue 7.21): "We are psyched to make this announcement. We have worked closely with EchoStar for more than two years, and have come to realize that both companies have similar entrepreneurial cultures and mutual dedication and passion for creating empowering experiences that benefit the consumer and the media industry. By combining strategies, resources and technologies with EchoStar, Sling Media will be able to rapidly expand our open multiplatform product offerings, not only for DISH Network subscribers, but for digital media enthusiasts around the globe."

Revver Says it has Paid over $1 Million to Video Creators

Revver--a video-sharing site that allows end-users to monetize their videos through advertising--announced last month that it had paid a million dollars to a total of approximately 25,000 video creators and sharers since the launch of its service a year ago. To celebrate the milestone, the company presented "an honorary check for the millionth dollar earned" to Doug Bresler, creator of the animated series, "Dogtoons." "The time and place to be an independent creator is right now, online," Revver co-founder and chairman, Steven Starr, said in a prepared statement. "Smart advertisers are financing an online economy that supports these creators, and the top talent will build fortunes. This is historic: It is the birth of a sustainable art form, and it's happening before our eyes."

Revver matches every video uploaded with an ad, and then splits the "net" revenue generated by the video 50/50 with its creator, and shares 20% off the top with the video's distributor (note: the company claims to screen uploaded content for copyright violations). According to Revver, since the introduction of pre-roll ads as an option on its service this summer, some videos are earning "four to seven times" more revenue than before.

AFDESI to Hold Awards Ceremony at Interactive TV Show Europe

AFDESI, the French professional organization for interactive television, says that it will hold its International ITV Awards ceremony at the Interactive TV Show Europe on the evening of October 30th at the Hotel Rey Juan Carlos in Barcelona Spain. The awards ceremony was previously held at the annual MILIA/MIPTV show in Cannes.

Interactive TV Games Company, PixelPlay, Acquired by Oberon Media

PixelPlay, the interactive TV games and portal-development company which was formed in 2005 via the merger of Pixel Technologies and PlayTV, and which has a longstanding relationship with US satellite TV provider, EchoStar, has been acquired by multiplatform casual games company, Oberon Media. Oberon says that the acquisition is a key element of a strategy that calls for it to offer so-called "triple-play gaming" (i.e. to offer games across online, mobile and now interactive TV platforms). It secured the mobile element of that strategy via its recent acquisition of I-play, a developer of casual mobile games. According to the company, the combined Oberon/I-play/PixelPlay offering will be targeted at telecommunications, cable and satellite operators looking to launch multiplatform game services. The company--which says that it decided to enter the ITV market because "after several years of infrastructure investment, operators and telecommunication companies are poised to release the next generation of interactive TV applications"--says that advertisers will now be able to launch interactive campaigns on its games on all three screens, and that game developers and licensors will be able to work with a "one-stop-shop" to increase their brand presence on multiple platforms. Following the acquisition, PixelPlay CEO, Ron Chaimowitz, has joined Oberon and is now heading up its interactive TV efforts. "PixelPlay brings to the table a portfolio of industry-leading brands and unparalleled leadership and technology expertise in interactive TV," Chaimowitz said in a prepared statement. "With the interactive TV portion in place, Oberon Media becomes the ideal solution for companies that want to tap into the fast-growing casual-games market." Added Oberon co-founder and head of business development, Ofer Leidner: "This acquisition advances Oberon Media's triple-play strategy and positions us to reach players across three platforms, thereby increasing game service stickiness and subscriber retention. This increases the appeal of Oberon's white-label services to all our partners, from cable and satellite operators to telcos and game developers."

Oberon claims to be the world's fastest-growing casual-games company, with revenues growing over 100% year-over-year. It claims to have over a thousand titles in its portfolio and distribution partnerships with around 350 wireless carriers and online providers, including Microsoft, Comcast, BSkyB, Sprint, AT&T, Yahoo! Games, Verizon, Electronic Arts, AOL Games, France Telecom and NHN. PixelPlay, meanwhile, claims to have a portfolio of several hundred games, including titles licensed from Hasbro, Atari, WPT Enterprises and the Learning Company. Its line-up of branded casual games includes "Scrabble," "Yahtzee," "Monopoly," "World Poker Tour," "Asteroids," and "Slingo." Cable and satellite operators that carry its games include (in addition to EchoStar) Cablevision, DirecTV, Bell ExpressVu, MultiChoice, HOT and YES.

Two Way TV Names New Head of Production, New Non-Exec Chairman

--Secures Deal with Mobile Interactive Group

Ingenious Media Active Capital, which earlier this year acquired a controlling equity stake (approximately 84%) in UK interactive TV company, Two Way TV, for £5.34 million, and which at the time promised to build up the latter's creative and production capabilities in order to develop "mass participation" interactive programming for mainstream broadcast (note: shortly before announcing its acquisition by Ingenious, Two Way TV sold off its Ark interactive TV technology platform to Virgin Media--see [itvt] Issue 7.32 Part 3), appears to be following up on that promise: the Ingenious-owned Two Way TV is staffing up its production team with the appointment of Sarah Winstanley as head of production. She will be responsible for coordinating all Two Way TV's future production activity, and will report to the company's creative director, Liz Chandler.

Winstanley, who, according to Two Way TV has nine years of programming and production experience, joins the company from Optimistic Media (note: the latter is currently in administration--see [itvt] Issue 7.36 Part 1), where she was head of production for four years. "Sarah's experience of working in live TV, alongside her strong production credentials gained through working for Optimistic Media and E4, will make her a real asset to Two Way TV," Two Way TV's Chandler said in a prepared statement. "We have a number of new projects which have been commissioned which we will announce shortly." Two Way TV says that it is also seeking to appoint a managing director to oversee its production business.

Winstanley's appointment is, of course, not the first example of Ingenious putting its stamp on Two Way TV: earlier this summer, Ingenious announced that it had appointed Clive Jones CBE as the latter's non-executive chairman. Jones has an extensive line-up of contacts in the traditional broadcast television industry: he also serves as non-executive director of GMTV and of Welsh public service broadcaster, S4C; and was formerly chief executive of ITV News and Regions, CEO of Carlton Television, and managing director of Central Television and the London News Network. According to Ingenious, his new role at Two Way TV will see him working alongside the company's CEO, Jean de Fougerolles. "I am very much looking forward to working with Two Way TV, a company that has a genuine pedigree in delivering innovative interactive TV products," Jones said in a prepared statement. "I believe that Two Way TV's success can be replicated in a number of new markets, particularly the US, while the continued interest in participation TV in the UK suggests real opportunity for growth here too. The invitation to work alongside Ingenious was also too good an opportunity to pass: their reputation and contacts are second-to-none." Added Ingenious director, Patrick McKenna: "I'm delighted that Clive has joined Two Way TV as chairman. He has an outstanding track record in the commercial TV sector. Clive is the perfect person to help Two Way TV expand its creative and production teams to develop the next generation of skill- and gaming-based entertainment shows as it enters new markets."

In other Two Way TV news: the company has signed an exclusive partnership deal with multimedia mobile interactive services provider, Mobile Interactive Group (MIG), that will see it supplying its Simcast SMS- and MMS-to-TV technology for The O2, which is billed as "the world's first fully integrated mobile interactive entertainment venue" (note: the Simcast platform, which Two Way TV acquired through its purchase of the company of the same name in 2004, has also been used by, among others, Emap, ITV, Turner, Optimistic Entertainment and iPlay in the UK, Star TV Asia, Hong Kong's ATV, and Sky New Zealand). According to Two Way TV, the technology will enable visitors to The O2 to send pictures and messages to giant screens located in the venue's various bars, cafes and pedestrian areas, and in its 20,000-capacity arena. The company says that the technology will also be used to provide The O2 with interactive marketing tools and templates "to engage consumers in an immersive mobile experience and promote other mobile services at the venue." "We have worked with Two Way TV on various projects in the past, including ITV Play where the company delivered an excellent service," Anthony Nelson, business development director at MIG, said in a prepared statement. "Its track record and ongoing relationship with MIG makes the company an ideal partner."

TiVo News:

--Appeals Court Appears to Lean Towards TiVo in "Time Warp" Patent Case
--Company to Offer Content from Rhapsody, Players Network
--Comcast to Fund Development of TiVo Service on S-A Set-Tops
--New Deals with Cablevision Mexico, Crispin Porter + Bogusky, DirecTV
--Launches Low-Cost HD DVR, "Top Commercial Rankings" Reports, DR Group

A three-judge appeals court panel appears to be leaning towards TiVo's side in the company's ongoing patent dispute with satellite-TV provider, EchoStar, the Associated Press reported last week. (Note: in 2004, TiVo sued EchoStar, alleging that it was violating its US patent, number 6,233,389; the so-called "Time Warp" patent, which was granted to the company in May, 2001, describes methods for recording one program while playing back another, and for watching a show as it is recording, as well as a storage format that supports "trick-play" capabilities, such as pause-live-TV, fast-forward, rewind, instant replays, and slow motion. Last year, TiVo was awarded $89.6 million in damages, a judgment that is now being appealed by EchoStar.) According to the AP, Judge S. Jay Plager "appeared unconvinced" by an argument by EchoStar's attorney, Donald Dunner, that the lower court that delivered the judgment against the satellite TV provider had construed the TiVo patent too broadly and that EchoStar's technology differs from TiVo's in several significant ways: if the jury believed TiVo's description of the scope of its patent, wouldn't that be "the end of the case?" Plager asked Dunner. The AP also reported that Plager and a second judge on the appeals panel, William Bryson, asked TiVo's and EchoStar's lawyers what the consequences would be if they were to uphold only the parts of the lower court ruling dealing with the software aspects of the TiVo patent. TiVo's attorney, Seth Waxman, argued that if any ruling of infringement by EchoStar were upheld, that would be enough to uphold the lower court's decision; while Dunner argued that such a decision could impact the size of the damages awarded to TiVo, and that the case would have to be sent back to the lower court. According to the AP, a ruling in the case is not expected for about six months.

In other TiVo news:

• Players Network, which offers programming dedicated to "Las Vegas Entertainment and the Gaming Lifestyle," has launched two free, advertising-supported VOD channels--dubbed "Gaming Lifestyle" and "Vegas On Demand" respectively--on the company's broadband content service, TiVoCast. If TiVo subscribers choose to receive programming from either channel, it will be automatically downloaded to their DVR. According to Players Network, the deal gives it access to around 725,000 TiVo set-top boxes. At launch, the two channels will provide TiVo subs with four shows per week, from a library of nearly 1,000 shows.
• The company has signed a deal with Rhapsody, the digital-music joint-venture between RealNetworks and MTV, that will make Rhapsody's service available on broadband-connected TiVo DVR's. According to the companies, the deal will give TiVo subscribers access to thousands of Internet radio stations and to a catalog of around 4 million songs. Those subscribers will be able to search for music directly from their TV, using TiVo's search interface; browse charts of Rhapsody's most popular artists, albums and songs; and view weekly lists of new releases. They will also be able to use the TiVo remote's "Thumbs Up" and "Thumbs Down" buttons to rate Rhapsody's music offerings, allowing Rhapsody to provide them with recommendations based on their ratings, in addition to recommendations based on their listening habits. "By adding music to our portfolio of broadband offerings, TiVo is the only universal entertainment provider in the living room," TiVo president and CEO, Tom Rogers, said in a prepared statement. "Since the beginning, TiVo has been focused on the principle of choice and control, giving our users the ability to experience TV on their terms. Together, TiVo and Rhapsody have extended the personal viewing experience on TiVo into music, providing consumers with an incredibly easy way to access their favorite artists from their television set. Our customers can not only navigate through hundreds of TV channels and thousands of movie downloads, they now have access to millions of songs all on their television set." A Rhapsody subscription will cost TiVo subscribers $12.99 per month, though they will be offered a free, 30-day trial of the service (note: existing Rhapsody subscribers will be able to access the service via TiVo at no extra charge).
• The company said last week that it has formed an Interactive Direct Response Advertising Group that will be tasked with helping "the DR community better understand the advertising challenges they face in the age of the DVR, while educating them about the benefits of TiVo's innovative Interactive Advertising Platform." The new group is headed up by 25-year industry veteran, Robert Barnett, who joins TiVo as a senior director and who will be responsible for managing the company's relationship with Worldlink Ventures, its direct response advertising sales representative. He will report to Karen Bressner, TiVo's SVP of advertising sales. "A major paradigm shift is underway in the television viewing habits of households with DVRs," Bressner said in a prepared statement. "As viewers increasingly embrace TiVo to record, time-shift and fast-forward their favorite television programs and commercials, the amount of time spent channel surfing has significantly diminished, directly impacting viewership numbers for infomercials and other direct response advertisements...according to [the] TiVo StopWatch service [note: for more on the latter, see below], approximately a third of all DVR users are watching television on a time-shifted basis at any given moment. We believe that our Interactive Direct Response Ad Group presents valuable, timely solutions for the direct response market impacted by this growing trend." According to TiVo, the new Direct Response Advertising Group has already added a number of high-profile agencies and brands to its client roster, including Mercury Media, Carat and Basco.
• The company says that Mexico's largest digital cable operator, Cablevision Mexico, has begun offering its DVR's and its DVR service to subscribers in Mexico City. The service is being offered to Cablevision subscribers as a package, with a monthly charge that covers both service and box rental. To support the deployment, TiVo has develop a Spanish-language version of its interface. Cablevision is launching TiVo service with a media campaign that includes multichannel and broadcast television, print, online, radio and outdoor advertising; according to TiVo, the operator also plans to leverage its extensive programming assets and its stable of celebrity spokespeople to promote TiVo service on the air. "TiVo continues to make sustained progress across international markets and Cablevision in Mexico is another example," TiVo president and CEO, Tom Rogers, said in a prepared statement. "Growing our business with the right partners is critical and our strategic distribution relationship with Cablevision, and its parent Televisa, is proof of that. TiVo will enable Cablevision to further differentiate its pay television service and maximize its programming packages. The combination of TiVo and Cablevision will offer the best entertainment experience for subscribers in Mexico."
• In its Q2 earnings release, the company revealed that Comcast, which is expected to shortly begin rolling out TiVo service on its Motorola-manufactured DVR's (note: the long-delayed roll-out will begin on Comcast's New England networks, including metropolitan Boston, Southeast Massachusetts, and New Hampshire), "has agreed to fund substantial development work to bring the TiVo service on Comcast to additional platforms, including Scientific-Atlanta set-top boxes." Scientific-Atlanta set-tops currently account for around a quarter of Comcast's digital cable footprint.
• The company says that advertising agency, Crispin Porter + Bogusky, whose clients include Burger King and Volkswagen, has subscribed to its StopWatch ratings service (note: other companies that have subscribed to the service include Starcom USA, Interpublic, Media IQ and MPMA). StopWatch is designed to provide second-by-second program and commercial ratings. The service, which launched in February, is operated by TiVo's Audience Research & Measurement unit, which derives data from a daily, random, anonymous, stratified sample of 20,000 TiVo set-tops, from which a second-by-second "clickstream" of behavior and viewership is collected and assessed. The service offers monthly primetime and daytime viewership reports for nationally broadcast programs and commercials, dating back to September, 2006. The reports break down key data for total viewing, live viewing, time-shifted viewing (less than an hour; 1-6 hours; 6-24 hours; 24-48 hours; 2-7 days; and 7-14 days), program ratings, and commercial ratings; and provide a commercial viewership index. The service uses ad occurrence data from TNS Media Intelligence to identify commercial spots. "In this highly competitive industry, it is imperative that we are able to identify new trends and recognize which commercials pique viewer interest, in which programming, and at what point in the programming," Jim Poh of Crispin Porter + Bogusky said in a prepared statement. "TiVo StopWatch ratings service provides invaluable information that enables us to better understand DVR viewing behavior, timeshifting, and fast-forwarding and how they impact commercial ratings. Having the ability to gauge what viewers are watching, or not watching, on a second-by-second basis is invaluable in a changing media landscape. This service will undoubtedly provide insight into the future of TV viewing and give us a better way to track our schedules with more immediacy, ultimately, delivering better results for our clients." According to Poh, one of the reasons that Crispin Porter + Bogusky decided to subscribe to TiVo StopWatch is that 20% of homes now have DVR's, and that, unless agencies can understand the viewing habits of DVR owners, they will be "left behind by the competition."
• The company is drawing on data generated by the StopWatch service to publish monthly "Top Commercial Rankings" reports, listing the most-viewed commercials on US television. Categories of data tracked in these new reports include "Total Viewing of Top Commercials Compared with Total Viewing of Top Programs"; "Timeshifted Commercials Compared with Timeshifted Programs"; and "Least Fast-Forwarded Brand Campaigns." The reports will also track other categories of interest, TiVo says, including performance of advertising on DVR's in key advertising categories. "For many years, various sources have provided rankings of top programs," Todd Juenger, VP and general manager of TiVo Audience Research & Measurement, said in a prepared statement. "But nobody has ever provided the same type of information for commercials. And this is what marketers really care about--especially with the proliferation of DVR's. We believe these monthly reports will be both fun and informative, and provide just a small taste of the type of insight into DVR viewing behavior, timeshifting, and specific commercial ratings available to subscribers of TiVo's StopWatch service."
• The company has launched a new, low-cost high-definition DVR, dubbed simply the TiVo HD, which is priced at $299.99, compared to the company's original HD DVR, the Series3, priced at $799.99. The new box--which is digital cable-ready (i.e. will function as a digital set-top box with any cable system in the US), and analog cable and digital antenna (ATSC) compatible, and which features a built-in Ethernet jack (enabling it to support the various broadband services TiVo now offers, such as home movie sharing, and movie and TV downloads from Amazon.com), two CableCARD slots and two USB ports--offers 20 hours of HD and 180 hours of SD recording capacity. It allows end-users to record two HD channels simultaneously, while watching a third previously recorded show.
• DirecTV, which used to market TiVo service to its subscribers, but which subsequently ceased marketing the service in favor of a DVR service based on technology from NDS (note: customers of the "DirecTV with TiVo" service still make up the bulk of TiVo's subscriber base), has tapped TiVo to develop a software upgrade for customers who still have TiVo DVR service as part of their satellite TV service. The upgrade, which will launch early next year, will support various service enhancements, including a "recently deleted" folder, "overlap protection," and DirecTV's "remote booking" feature. In addition, TiVo and DirecTV say they plan to continue to explore ways to develop service enhancements for DirecTV customers with TiVo-enabled receivers.

TiVo Names New CMO and New SVP of Advertising Sales

--Promotes Joshua Danovitz to VP and GM of International

DVR vendor/service provider, TiVo, has appointed a new chief marketing officer and a new SVP of advertising sales:

• The new CMO, Clent Richardson, was previously CMO of telecommunications equipment giant, Nortel, in which role he led that company's worldwide rebranding. Prior to that, he was chief sales and marketing officer for T-Mobile UK. His resume also includes stints as VP of worldwide developer relations and worldwide solutions marketing at Apple, and as a strategy consultant for AOL. According to TiVo, Richardson, who will report directly to its president and CEO, Tom Rogers, has directed campaigns that "transformed high-profile consumer and technology brands" in North America, Europe and Asia; and has a particularly strong background "at the intersection where hardware and subscription services come together." "I am delighted to welcome Clent to TiVo's senior leadership team," Rogers said in a prepared statement. "His achievements, global-branding insights and marketing expertise will strengthen TiVo's ability to drive greater distribution in both its standalone and mass distribution efforts. We look forward to having Clent's energy, enthusiasm and focus brought to bear on our business."
• The new SVP of advertising sales, Karen Bressner, was previously SVP of national advertising sales at Viacom, running ad sales for such brands as Nick at Nite, TV Land and TVland.com. Prior to that, she was VP of eastern region sales for Discovery Communications; her resume also includes stints at Young & Rubicam and Foote, Cone & Belding. According to TiVo, she has over 25 years of experience in developing strategies for integrated sales efforts across national cable TV, broadcast and online, and was responsible for significant increases in revenues and advertiser bases in her previous positions. She will also report to Tom Rogers.

In other TiVo personnel news: the company has promoted Joshua Danovitz to VP and general manager of international. He joined the company in 2004 as general manager of TiVo International, developing the company's overseas strategy and partnerships; however, he worked closely with the company for around three years prior to that, in his capacity as a VP at Global Alliance Partners, a consulting firm that specializes in assisting US companies to enter the Asian market (his work with the company resulted in contracts with Toshiba and Pioneer). "Joshua has played a critical role in the development and execution of our international strategy, initially forging our partnerships in Mexico and Australia," TiVo's Rogers said in a prepared statement. "This strategy creates a clear path to develop opportunities with international service providers and broadcasters to extend TiVo's reach into key markets around the world." Danovitz, who holds degrees in political science and Japanese from the University of California, Santa Barbara, is fluent in Japanese.

NTN Buzztime Appoints Two New EVP's

Interactive TV games company, NTN Buzztime (note: the company offers its games on a network of TV screens in restaurants and bars, on cable and satellite TV platforms, and on mobile phones), has appointed a new EVP of content and programming and a new EVP of business development:

• The new EVP of content and programming is Jake Tauber, who, according to the company, has over a quarter century of experience in TV programming, production, marketing and management. He most recently operated his own consulting firm; prior to that, he was EVP of the Game Show Network (now GSN). He holds a BA in mass communications, radio and television from Wayne State University. His role at NTN Buzztime will be "to grow the number of players and viewers for Buzztime games," the company says; he will also be charged with 1) broadening the company's content offering, in order to grow ad revenues and increase distribution, both in restaurants and bars and on pay-TV platforms; and 2) with leading the development of a new on-air look-and-feel. "NTN Buzztime is committed to growing our core business, and increasing the number of Buzztime players by introducing compelling new content is a major component of our aggressive growth plan," Buzztime CEO Dario Santana, said in a prepared statement. "Jake Tauber's expertise and proven track record in developing fresh, engaging and relevant content and programming will be instrumental in expanding our reach to new player groups and demographics."
• The new EVP of business development is Mariana Danilovic, who according to the company, has over 15 years' experience in digital media content development. She was previously VP of business development at MediaZone, overseeing content acquisition and programming. She holds an MBA from UCLA and a BA in mathematics from the University of California, San Diego. At Buzztime, she will be tasked with developing new growth initiatives and partnerships, and with pursuing acquisitions that "broaden Buzztime's interactive entertainment business into diverse media channels," the company says; according to the company, those channels include social networking and mobile platforms. "With a number of initiatives now in place aimed at solidifying and growing our core business, it is now time to increase our efforts and our investment in new growth platforms such as Internet, mobile and new content categories and partnerships that complement our current offering," Buzztime CEO, Santana, said in a prepared statement. "Mariana will focus on adding new content and interactive entertainment initiatives to Buzztime, in addition to developing more access points for a new generation of players. Ultimately, her work will expand our reach by distributing Buzztime's unique and engaging content across platforms beyond our network of bars and restaurants."

Alan Guggenheim Resigns as OpenTV President and CEO

--Ben Bennett Named COO and Acting CEO

Alan Guggenheim has resigned as president and CEO of interactive TV software provider, OpenTV, after less than a year on the job, for what the company describes as "personal reasons" (note: OpenTV's SVP of advanced advertising, Ed Knudson, also recently left the company; he is now VP of sales and marketing at WildBlue Communications). Guggenheim, 57, who was formerly CEO of NagraStar, a joint venture between the Kudelski Group and EchoStar, took the company's helm following its acquisition by Kudelski. He has been replaced on an interim basis by Ben Bennett, 45, who, in addition to being named acting CEO has been appointed to the newly created role of COO. Bennett was formerly the company's SVP of customer operations. "OpenTV is strongly positioned as the worldwide leader in middleware for television network operators, providing a customer-focused, solutions-based approach to the market," OpenTV's executive chairman, Andre Kudelski, said in a prepared statement issued by the company following the announcement of Guggenheim's resignation. "As we move forward, we believe OpenTV enjoys the opportunity to embrace a broader vision that includes continuing to grow its middleware position around the world, while also fully capitalizing on the opportunities it is developing in the US cable market and in high-potential technology solutions like advanced advertising. The elevation of Ben Bennett...strengthen[s] OpenTV as it pursues this vision. Ben is a highly regarded and experienced OpenTV executive who has a clear view of the company's potential, as well as outstanding relationships both within OpenTV and externally with customers and partners around the world. We look forward to Ben's contributions as he steps into this expanded role."

Bennett has worked at OpenTV since March, 2000, previously serving as managing director of its European operations, in which role he oversaw the company's relationships with European network operators, broadcasters and set-top box and conditional access technology vendors. According to OpenTV he has overseen a number of its customer deployments. He also served as SVP and general manager of the company's Worldwide Professional Services, Consulting and Support Group, managing product deployment and integration teams in the US, Europe and Asia Pacific.

In related news: Mauro Saladini has been appointed to OpenTV's board of directors. He currently serves as EVP and CFO of the Kudelski Group and, according to OpenTV, has extensive experience in the media and advertising industries.

Swisscom Relocates Betty TV Operations from Switzerland to Germany

Swiss incumbent telco, Swisscom, has announced plans to relocate the operations of its Betty TV service from Switzerland to Germany, effective November 30th. (Note: Betty TV is a remote control-based two-screen interactive TV service, which requires no set-top box and which can thus be used with an analog TV. It employs a special remote control--dubbed "Betty"--with a small integrated screen and a backchannel consisting of a wireless connection to a household's phoneline, that can be used to deliver broadcast-synchronized content, such as quizzes, votes, advertising, and tcommerce, to the end-user. Swisscom also offers a set-top-based interactive TV service based on Microsoft IPTV software.) The telco, which says that a "social plan" has been worked out with the unions representing the 35 Betty TV employees who are based in Switzerland, says that it is currently exploring different strategic options for Betty TV, whose business performance, it concedes, has been "below expectations." According to Swisscom, Betty TV Germany will be able to integrate care of the service's Swiss customers into its existing organization, and those customers will therefore be able to continue to access the service. The telco says that it is also "examining a variety of strategic options" for Betty TV Germany.

Narrowstep Raises $10.5 Million via Private Placement

--Reports Higher Revenues, Losses

Broadband TV infrastructure company, Narrowstep (note: the company's flagship telvOS technology powers a number of high-profile broadband TV services, including the ITV Local service of UK commercial terrestrial broadcaster, the Independent Television Network), says that it has raised $10.5 million via a private placement of its common stock and warrants. The placement saw the company issuing 42,040,000 shares of common stock and five-year warrants to purchase an additional 21,020,000 shares of common stock at an exercise price of $0.50 per share. As part of the transaction, the company's convertible note issued earlier this year, will also convert into shares of common stock. The lead investor in the new placement was RENN Capital Group; other investors included David C. McCourt, the company's chairman and CEO, who also happens to be its largest shareholder. Earlier this year (see [itvt] Issue 7.26 Part 1), Narrowstep raised $7.1 million via a private placement of convertible notes and warrants. Investors in that placement included Granahan McCourt Capital, which is owned by McCourt and Roger L. Werner, who is a Narrowstep director.

In other Narrowstep news: the company has released financial results for its fiscal first quarter (2008), ended May 31st:

• Revenues totaled $1.6 million, compared to $1.1 million for the year- ago quarter. Narrowcasting sales totaled $1.4 million, compared to $0.8 million for the year-ago quarter (note: the company also has a production business, which is becoming less and less important to its business model--see below).
• Losses totaled $3.3 million, or $0.07 per share, compared to losses of $1.2 million, or $0.03 per share, for the year-ago quarter.
• At the end of the quarter, the company's cash reserves totaled $4.3 million.

In a prepared statement issued with the company's earnings release, Narrowstep's McCourt sounded an optimistic note: "The future of television is largely dependent on the Internet, and television on the Internet is an area where Narrowstep has a distinct advantage. We continue to see tremendous demand for Narrowstep's technology and tools for monetizing video content. During the first quarter, we launched a number of exciting channels for industry leaders such as Virgin Media, the Sci Fi Channel and award-winning film company, BreakThru Films. We also entered into exclusive partnerships with the William Morris Agency, the world's largest talent and literary agency, as well as with Telefonica, the third largest telecommunications company in the world. As we discussed last quarter, Narrowstep is focused on capitalizing on the high growth, high margin narrowcasting segment of our business. As such, we have moved away from the lower-margin production business in order to focus on the higher-margin channel-building and channel-development segment, which plays to the strength of our telvOS platform, and where I believe we have a real advantage both in the US and abroad." (Note: for an exhaustive round-up of recent Narrowstep deployments, see article in this issue.)

Gemstar-TV Guide Reports Higher Revenues, Higher Income

Interactive TV technology and entertainment company, Gemstar-TV Guide (note: the company, which is 42% owned by News Corp., and which is best known for its widely deployed EPG products, also operates two interactive TV channels, TV Guide Network and TVG; it recently announced that its board of directors has authorized it to "explore strategic alternatives intended to maximize shareholder value," including selling the company--see [itvt] Issue 7.36 Part 1), has released its second-quarter financial results:

• Overall revenues totaled $155.6 million, compared to $133.3 million for the year-ago quarter.
• Revenues from the company's Guidance Technology and Solutions segment totaled $70.7 million, up 40% from the year-ago quarter, and representing 45% of the company's overall revenue. According to the company, the growth came largely from its EPG patent licensing operations, which saw revenues increase by 55% over the year-ago quarter, due primarily to 1) new international and online EPG patent license agreements signed during the second half of 2006; 2) an increase in the subscriber counts of its US cable and satellite licensees; and 3) a $6.3 million catch-up payment from a consumer electronics licensee for previously unreported deployments of its EPG's. In addition, the company's IPG Products and Services operation saw a 21% increase in revenues from the year-ago quarter, primarily due to the inclusion of revenue from Aptiv Digital (acquired by Gemstar in March).
• Revenues from the company's Media Networks segment totaled $49.9 million, up 3% from the year-ago quarter, and representing 32% of the company's total revenue. The company said that the increase was driven by a 3% increase in revenues from its flagship channel, TV Guide Network, and by a 42% increase in revenue from its online networks.
• Operating income totaled $24.7 million, compared to $15.2 million for the year-ago quarter. The company said that the increase was driven by the 40% increase in revenues from its Guidance Technology and Solutions segment.
• Net income totaled $20.8 million, or $0.05 per share, compared to $14.6 million, or $0.03 per share, for the year-ago quarter.
• At the end of the quarter, the company's cash, cash-equivalents and marketable securities totaled $514.8 million (excluding restricted cash of $32.2 million), an increase of $1.2 million compared to the end of 2006.

In a prepared statement issued with Gemstar's financial results, CEO Rich Battista struck an optimistic note: "The second quarter was once again a period of significant progress across the company's businesses and we are pleased with the results. Much of our increased revenue and operating income can be attributed to growth in our IPG businesses, particularly the expansion of IPG patent licensing both internationally and to new media platforms. As we continue to focus on this area, we recently signed strategically important new agreements with SKY Italia, MeeVee Inc., and Titan TV. We also saw strong growth trends in our Media Networks and Publishing segments this quarter including increased distribution for our television networks, significant traffic growth in our online business, and increased ad paging and ad revenue at TV Guide magazine. We continue to enhance and market My TV Guide, our suite of personalized cross-platform guidance products and services, which we introduced in May. We continue to focus on executing on our strategic plan and further improving both our operational and financial results, while we are reviewing strategic alternatives for the company with the goal of maximizing value for our shareholders."

TiVo Reports Higher Revenues

--Write-Down of Standard-Definition Inventory Results in Larger Losses

DVR vendor/service provider, TiVo, has released financial results and subscriber totals for its fiscal second quarter, ended July 31st:

• Combined service and technology revenues totaled $56.5 million, compared to $52.8 million for the year-ago quarter. Service revenues totaled $53.4 million, compared to $49.4 million for the year-ago quarter; while technology revenues totaled $3.1 million, compared to $3.4 million for the year-ago quarter. TiVo blamed the decline in technology revenues on "timing of development work related primarily to DirecTV and international opportunities."
• Net losses totaled $17.7 million, or $0.18 per share, compared to $6.4 million, or $0.07 per share, for the year-ago quarter. The losses included a combined inventory write-down and inventory purchase commitment charge of $11.2 million that hadn't been included in the company's previously issued guidance, which had called for losses of between $5 million and $8 million. The company said that its guidance had not anticipated the inventory-related write-down, which it said related primarily to "long-lead time dual-tuner Series2 standard-definition DVR inventory." Adjusted EBITDA, meanwhile, was a loss of $11.2 million, compared to a loss of $2 million for the year-ago quarter, and compared to the company's previously issued guidance of breakeven to a loss of $3 million. The company said that, despite the unanticipated $11.2 write-down of its standard-definition inventory, it expects that "a shift away from hardware subsidies towards a more advertising-centric marketing approach will continue to have a positive impact on [its] financial profile as compared to last year, as it has over the past two quarters." In a prepared statement, TiVo president and CEO, Tom Rogers, explained why the company had been forced to write down such a large sum of money: "Increased consumer demand for high-definition products, which accelerated retailers' movement toward high-definition sales, resulted in a continuation of the tepid trend in standard-definition sales," the statement read. "Consequently, we ended the quarter with higher than anticipated inventory levels of long-lead time components and parts related to our standard-definition product. Because of the continuing HD trend, it was prudent to reserve against this long-lead time inventory. It is noteworthy that the analog basic cable market, as well as homes currently not looking to upgrade to high-definition television, present an opportunity for us, as the TiVo standard-definition product is the only option for the these approximately 30 million homes where DVR's are desirable. We are not abandoning this space, but have to re-focus our marketing efforts to reach this consumer since retailers are now fully focused on HD."
• TiVo-owned subscription gross additions (i.e. new TiVo subscriptions generated by the company directly, rather than through partnerships with operators) totaled 41,000, compared to 74,000 for the year-ago quarter. The company blamed the decline on "the pace at which retailers moved to a high-definition sales focus." Overall, TiVo-owned subscriptions totaled 1.71 million at the end of the quarter, up 136,000 on an annual basis compared to the year-ago period. There was a net decline in TiVo subscriptions through the company's partnership with DirecTV, as the satellite TV provider is no longer deploying new TiVo boxes. Cumulative total subscriptions as of July 31st were 4.2 million; and monthly churn rate was 1.2%, compared to 1.1% in the prior quarter (the company ascribed the increase to "subscribers seeking HD DVR alternatives").

The company also provided some guidance for the current quarter: it expects service and technology revenues to range between $56 million and $57 million, generating net losses of between $14 million and $17 million, and adjusted EBITDA losses of between $5 million and $8 million.

OpenTV Reports Higher Revenues, Losses

Interactive TV software provider, OpenTV (note: voting control of the company was acquired earlier this year by content-protection specialist, the Kudelski Group--see [itvt] Issue 7.16 Part 1), has released its second-quarter financial results:

• Combined revenues totaled $24.3 million, up 3% from the year-ago quarter, but down 8% from the preceding quarter.
• Revenues from royalties and licenses totaled $14.1 million, down 4% from the year-ago quarter.
• Revenues from services and other operations totaled $10.2 million, up 13% from the year-ago quarter.
• Revenues from the company's Middleware and Integrated Technologies segment totaled $20 million, compared to $18.3 million for the year-ago quarter, an increase of 9%. Contribution margin for the segment was $4.6 million, compared to $6.7 million for the year-ago quarter.
• Revenues from the company's Applications segment totaled $4.2 million, compared to $4.7 million for the year-ago quarter, a decline of 11%. Contribution margin for the segment was $0.3 million, compared to a loss of $0.2 million for the year-ago quarter.
• Revenues from the company's BettingCorp segment totaled $0.1 million, compared to $0.7 million for the year-ago quarter, a decline of 86%. Contribution margin for the segment was a loss of $0.8 million, compared to a loss of $0.9 million for the year-ago quarter.
• Adjusted EBITDA, before unusual items, was a loss of $1.1 million, compared to a profit of $0.4 million for the year-ago quarter.
• Net losses totaled $4.9 million, or $0.04 per share, compared to net losses of $2.5 million, or $0.02 per share, for the year-ago quarter.
• As of June 30th, the company had $32.8 million in deferred revenue, compared to $25.6 million at the end of 2006.
• As of June 30th, the company's cash, cash-equivalents and short- and long-term marketable debt securities totaled $74.1 million, compared to $65.2 million at the end of 2006.

In a prepared statement released with the company's earnings announcement, then-CEO, Alan Guggenheim (who has since resigned for what the company says are "personal reasons"--see article in this issue), struck an optimistic note: "We continued our trend of improved operating cash flows this quarter generating $4.8 million in net cash during the first six months of this year and we remain on track with our financial goals for the full year. Our goal is to move expeditiously to generate sustainable growth and profitability as we realize our vision of becoming a leading provider of end-to-end solutions for the delivery of convergent media experiences."

Concurrent Reports Higher Fiscal Q4 Revenues, Lower Losses

--VOD Revenues Increase Significantly

VOD technology provider, Concurrent, has released financial results for its fiscal fourth quarter and year, ended June 30th:

• Overall Q4 revenues totaled $21.1 million, compared to $15.9 million for the year-ago quarter and $16.1 million for the prior quarter.
• Q4 VOD revenues totaled $14 million, compared to $8.9 million for the year-ago quarter and $10.3 million for the prior quarter.
• Q4 net losses totaled $712,000, or $0.01 per fully diluted share, compared to net losses of $4.5 million, or $0.06 per fully diluted share, for the year-ago quarter, and net losses of $3.1 million, or $0.04 per fully diluted share, for the prior quarter.
• Q4 consolidated gross margins were 48%, compared to 45% for the year-ago quarter, and to 49% for the prior quarter. According to the company, the sequential decline was due to "additional severance charges recorded to service cost sales."
• Overall annual revenues totaled $69.1 million, compared to $71.6 million for the prior year.
• Annual revenues from the company's VOD product line totaled $43.2 million, compared to $37.6 million for the prior year.
• Annual net losses totaled $12.2 million, or $0.17 per share, compared to net losses of $9.3 million, or $0.14 per fully diluted share, for the prior year.
• At the end of the fiscal year, the company's cash reserves totaled $20.4 million, compared to $14.4 million at the end of the prior year. Much of the increase was due to a private placement of 11.2 million Concurrent shares in May.

In a prepared statement issued with the company's earnings release, Concurrent president and CEO, Gary Trimm, trumpeted the improvements in its financial results: "We shored up our balance sheet with total assets now over $74.1 million and we had very strong sales growth. Our real-time business improved significantly in the quarter, including over $1 million in sales of real-time operating system software. Our on-demand business continued a string of improving quarterly results fueled, in large part, by the success of the new MediaHawk 4500 System. The net loss of $712,000 includes a charge for $750,000 in severance pay, over $1.2 million of depreciation and amortization expense, and $240,000 of share-based compensation expense. Considering these factors, we believe we've built a strong foundation for fiscal year 2008 and I am encouraged by our opportunities."

SeaChange Reports Lower Revenues, Swings to a Loss

--Lays off 30 Employees

VOD and interactive TV technology provider, SeaChange International, has released financial results for its fiscal second quarter (2008), ended July 31st:

• Revenues totaled $44.2 million, compared to $45.8 million for the year-ago quarter, and $38.8 million for the preceding quarter.
• Revenues from the company's Broadband segment, which includes its VOD and advertising insertion hardware and software offerings, totaled $22.9 million, down $1.2 million from the year-ago quarter, but up $3.9 million from the prior quarter. The company said that the sequential revenue growth was driven primarily by "a more than doubling of VOD systems revenue from $5.4 million in the first quarter of fiscal 2008 to $12.4 million in the second quarter." It attributed this significant VOD revenue increase to 1) "increased order activity from North American cable customers that the company had seen much of last year, but not in the year's first quarter"; 2) "substantive order activity from a North American telephony customer; and 3) significant VOD systems revenue from Latin American customers. Meanwhile, the Broadband segment saw a $1.5 million sequential decline in advertising insertion revenue, which the company blamed on lower revenues from North American cable customers; and a $1.7 million sequential decline in VOD software development revenue, which it blamed on "a large percentage of this year's Comcast software subscription revenue being recognized in the first quarter, based on a significant proportion of the company's efforts to achieve customer requirements being expended in the first quarter."
• Net losses totaled $8 million, or $0.27 per share, compared to net income of $1 million, or $0.03 per share, for the year-ago quarter. According to the company, the latest quarterly loss included $6 million, or $0.20 per share, of expenses, comprised of $1.1 million "related to severance charges in connection with headcount reductions" and $4.9 million of impairment charges "related primarily to capitalized software licenses." The headcount reductions--by 30 employees or 4%--were incurred primarily by the VOD server portion of the company's Broadband segment. The company claims that these actions will generate quarterly savings of around $1.5 million, beginning with the third quarter.
• Adjusted EBITDA totaled $0.1 million, compared to $5.4 million for the year-ago quarter. The company said that the cost-reduction actions it implemented in Q2 reduced its adjusted EBITDA by $1.5 million.
• At the end of the quarter, the company's cash, cash-equivalents and marketable securities totaled $55.8 million (and no debt), compared to $57.9 million at the end of the prior quarter. The company said that reductions in inventory and increases in accrued liabilities during the quarter were "more than offset" by a reduction in cash deposits from its customers.

Espial Reports Lower Revenues, Swings to a Loss

Canadian IPTV middleware and applications provider, Espial, which recently went public, has issued its second-quarter financial results:

• Revenues totaled $2 million, compared to $2.7 million for the year-ago quarter and $2.2 million for the preceding quarter. The company blamed the decline on "delays associated with the completion of a number of new client contracts."
• Gross margin was $1.4 million, compared to $2 million for the year-ago quarter.
• Net losses totaled $4.8 million, or $1.79 per share, compared to a profit of $0.1 million, or $0.35 per share, for the year-ago quarter. Excluding a one-time non-cash expense of $4.1 million for stock-based compensation associated with the company's IPO, its net losses totaled $0.7 million, or $0.24 per share.

In a prepared statement, Espial president and CEO, Jaison Dolvane, struck an optimistic note: "In the first half of 2007, we made substantial progress in terms of customer acquisition and channel partnering. However, the process of closing certain significant new contracts, and completing the related customer integrations is taking longer than we have previously experienced. Industry consolidation in Europe and Japan has also delayed the deployments of some of our existing customers. We believe both of these factors can be expected from an industry at the early stages of its expected growth cycle. Nonetheless, we remain optimistic about our business and the underlying drivers in the IPTV industry. Our progress in this past quarter positions us well to secure key customer and distribution contracts and solidify the foundation for our future growth."

INDUSTRY

BBC's BBC Vision Unit Unveils Multiplatform Strategy
Arris to Acquire C-COR for $730 Million
Metacafe Raises $30 Million
Channel 4 Drops Nearly All Phone-In Competitions
RawFlow Buys Aggregator TV
Blockbuster Acquires Movielink
MobiTV Names Charlie Nooney CEO
--Launches NBC Universal's "Access Hollywood"
Move Networks Adds CTO, SVP of Operations, West and East Coast VP's
--Company Powers Full-Episode Players for ABC.com, Discovery
Current TV, Disney-ABC Win Interactive TV Emmys
-- ABC's "Fallen Alternate Reality Game" to be Featured at AFI DigiFest

TECHNOLOGY

BBC Backstage to Support Interactive TV Developers
Facebook in Broadband Video Deal with Vibe Solutions
Orange to Launch IPTV in the UK
Microsoft Approves "Extender" Devices for Windows Media Center
--Beta-Tests Tuner-Free "Windows Media Center Internet TV"
Joost to Stream Live TV
Concurrent, C-COR in VOD Patent-License Deal
Harmonic Launches MediaPrism Tool Suite for Creating VOD Assets
--Can Source Content from Tapes, DVD, Broadcast, Web, UGC
--[itvt] to Publish in-Depth Feature on Harmonic Shortly
NHL Taps Neulion to Power Broadband Video Service
ExtendMedia Launches New Version of its OpenCase Software
--Hires New Sales & Mktg Execs, Expands Presence in UK, Western Europe
TV-Card Launches Smart Card Technology for Audience-Measurement
ClipBlast Launches Video Search Widget, Partners with MSN Video
Packet Vision Joins Juniper Networks' J-Partner Solutions Alliance Program
--Company's Technology Enables Interactive, Targeted IPTV Advertising
IP Set-Top Start-Up, AccessKey IP, Claims Multi-Million-Dollar US Deal
IMAKE Launches OpenVision Edge Resource Management Software for VOD
--Software Lets Cable Ops Dynamically Assign Services to QAM's
--Company in New IPTV Partnerships with EDS, Tech Mahindra
4oD Extends Show-Download Window
--Downloaded Shows to Feature Interactive Ads
New Blinkx Technology Remunerates Consumers for Embedding Video
Sony PlayStation 3 to Offer PVR Capabilities Next Year
Azureus' Vuze Opens Up its Publishing Platform
Tilgin, Ericsson in Partnership for End-to-End IPTV
ITV Taps Limelight for Live-Streaming and on-Demand Video on ITV.com
--Site Offers ITV's Four Broadcast Channels, Free "Catch-Up" VOD
Time Warner Cable to Offer Free nPVR Service, "Look Back"
--Service will Prevent Ad-Skipping
--Shows will be Available only during the Day of their Broadcast

CONTENT

ESPN's Monday Night Football Featuring User-Generated Videos
"thirtysomething" Creators to Launch Broadband TV Series, "Quarterlife"
--Show to Offer 36 Eight-Minute Episodes on MySpace, other Sites
CenterStaging Launches "rehearsals TV" VOD Service on Comcast
--Service Features Footage of Rock Stars' Rehearsals
USA Network to Launch Free Online Archive of TV Commercials, Didja.com
Bebo Partners with Sony Pictures Television on Broadband Drama Series
--"Sofia's Diary" Heroine to Interact with Viewers via Video, Text
My Damn Channel Launches Branded Broadband TV Service on MySpace
Warner Bros Distributing "The Secret" on VOD
PorchLight Launches KidVideos.com
--Describes Service as "YouTube for Kids"
Maven in Deals with Fox, Adobe, Sony, FT.com, Alliance Atlantis, Keynote
--[itvt] to Publish in-Depth Feature on Maven Shortly
JumpTV in Broadband Video Deal with Tiscali
FremantleMedia Launches Broadband Video Site, TVComedyClassics.com
--"Long-Tail" Site Features Classic British Sitcoms
Current TV Set to Relaunch its Web Site
CBS Launches Full-Length "Late Show," "Late Late Show" Episodes on V CAST
NBC Universal Launches VOD on V CAST
AETN Launches Mobile Video Services for A&E, History Channel
Spain's Maat Media Consortium to Develop MHP-Based DTT Apps
Brightline Develops US Interactive TV Campaigns for Unilever




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ABOUT [itvt]

*Founded by Tracy Swedlow in November 1997
*Began Publishing June 1998
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*Demographics are provided upon request from qualified persons

[itvt] is an ITV/broadband advisory and media company which identifies new trends, business opportunities, and relationships within the interactive television broadband space. [itvt] offers professional services, products, and programs to clients. These include our free email newsletter, focused analysis and advice sessions, in-depth research reports, a B2B portal Web site, networking and workshop events, dynamic online discussion groups, and interactive database resources.

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Tracy Swedlow
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