Google Researchers Unveil Interactive TV System

Two research scientists from Google, Michele Covell and Shumeet Baluja, and Michael Fink of the Hebrew University of Jerusalem's Center for Neural Computation have co-authored a paper, entitled "Social- and Interactive-Television Applications Based on Real-Time Ambient-Audio Identification," which describes a system they have developed and tested for "mass personalization"--i.e. for supplementing the mass-media experience of television with a personalized Web-based experience: "Our goal is to combine the best of both worlds: integrating the relaxing and effortless experience of mass-media content with the interactive and personalized potential of the Web, providing mass personalization," the authors write. (Note: Google has posted several interactive TV-focused job openings on its site in recent months; it is currently seeking an interactive TV product manager, who will be tasked with identifying "areas where the use of Google's search and advertising technology can enhance the user's experience and define appropriate products to deliver user benefits.")

The paper--which won the award for best paper at the recent Euro ITV conference in Athens--describes a PC-based system (it would require no additional set-top hardware or software, nor would it require connectivity between the PC and the TV set) that would use a PC microphone to sample the ambient sound emitted by a television set and automatically determine what is being watched on that set from a small signature of that sound. The system would then use the data thus gathered to automatically present the viewer--in real time on his or her Web browser--with contextually relevant information, and with ad-hoc services that would enable social interaction around programming: thus, if the viewer were watching a sporting event, the system might present him or her with an ad-hoc fan forum; and if the viewer were to switch to a movie, it might present him or her with maps of the locales featured in the movie or with a bio of the actor currently appearing on the TV screen. "All of this would be done without users ever having to type or to even know the name of the program or channel being viewed," the two Google-based authors write on that company's blog.

The system is composed of three distinct components: "a client-side interface, an audio-database server (with mass-media audio statistics), and a social-application Web server," the three scientists write in the paper's introduction. "The client-side interface samples and irreversibly compresses the viewer's ambient audio to summary statistics. [Note: the authors note that this irreversible mapping would serve to protect the viewer's privacy.] These statistics are streamed from the viewer's personal computer to the audio-database server for identification of the background audio (e.g., 'Seinfeld' episode 6101, minute 3:03). The audio database transmits this information to the social-application server, which provides personalized and interactive content back to the viewer."

The authors explain in their paper that the system would feature four applications "to make TV more personalized, interactive and social": 1) personalized information layers, 2) ad hoc social peer communities, 3) real-time popularity ratings, and 4) TV-based bookmarks:

• The personalized information layers app would provide "additional layers of related information, such as fashion, politics, business, health, or traveling," the authors write. "For example, while watching a news segment on Tom Cruise, a fashion layer might provide information on what designer clothes and accessories the presented celebrities are wearing." The authors go on to caution that the "feasibility of providing the complementary layers of information is related to the cost of annotating the database of mass-media content and the number of times any given piece of content is retransmitted." The personalized information layers would thus not be as feasible for news content as they would be for syndicated TV shows such as "Seinfeld." The authors also point out that the personalized information layers would easily lend themselves to advertising: "In textual searches, complementary information providing relevant products and services is often associated via a bidding process (e.g., sponsored links on Web search sites such as Google.com)," they write. "A similar procedure could be adapted to mass personalization applications. Thus, content providers or advertisers might bid for specific television segments. For example, local theaters or DVD rental stores might bid on audio from a movie trailer." The personalized information layers app could also take advantage of closed captioning: "In many mass-media channels, textual information (closed captioning) accompanies the audio stream," the authors write. "In these cases, the closed captions provide keywords useful for searching for related material. The search results can be combined with a viewer's personal profile and preferences (ZIP code and 'fashion') in order to display a Web page with content automatically obtained from Web pages or advertisement repositories using the extracted keywords."
• The ad hoc social peer communities app would bring together groups of viewers who happen to be watching the same show: "We create this community from the set of viewers whose audio statistics matched the same content in our audio database," the authors write. "These viewers are automatically linked by the social-application server. Thus, a viewer who is watching the latest CNN headlines can chat, comment on, or read other people's responses to the ongoing broadcast. The group members can be further constrained to contain only people in the viewer's social network (i.e. online friend community) or to contain established experts on the topic." The ad hoc peer communities a viewer was participating in could change as he or she channel-surfed, the authors explain: "As the viewer's viewing context changes (by changing channels), the community is automatically changed by re- sampling the ambient audio. The viewer need never indicate what program is being watched; this is particularly helpful for the viewer who changes channels often, and is often not aware of the exact show or channel that is currently being viewed."
• The real-time popularity ratings app, the authors write, "is aimed at providing ratings information (similar to Nielsen's systems) but with low latency, easy adoption, and for presentation to the viewers as well as the content providers. For example, a viewer can instantaneously be provided with a real-time popularity rating of which channels are being watched by her social network or alternatively by people with similar demographics." The ratings would be generated "by simply maintaining counters on each of the shows being monitored" which "can be intersected with demographic group data or geographic group data." Viewers could use them simply to "'see what's hot' while it is still ongoing," the authors write; while advertisers and programmers could use them "to dynamically adjust what material is being shown to respond to drops in viewership. This," the authors argue, "is especially true for ads: the unit length is short, and unpopular ads are easily replaced by other versions from the same campaign, in response to viewer rating levels."
• The TV-based bookmarks app is designed to allow viewers to set up personalized libraries of their favorite broadcast content: "When a viewer sees a segment of interest on TV, she simply presses a button on her client machine [i.e. her PC or laptop], to 'bookmark' that point in that broadcast," the authors write. "The current snippet of the ambient audio is recorded, processed and saved. This snippet provides a unique signature into the program being watched. This bookmark can either be used to retrieve the program for later viewing or to mark that specific portion of the program as being of interest. As with other bookmarks, the reference can then be shared with friends or saved for future personal retrieval." Bookmarked programs could then be viewed on-demand via "a Web-based streaming application, among other access methods, according to the policies set by the content owner. Depending on these policies, the streaming service can provide free single-viewing playback, collect payments as the agent for the content owners, or insert advertisements that would provide payment to the content owners." (Note: the paper is available in full at this location.)

Nielsen Revamping Audience Measurement Techniques for Multiplatform Era

Responding to the recent explosive growth of multiplatform, time-shifted and interactive TV, Nielsen Media Research has unveiled an initiative under which it will aim to provide "integrated, all-electronic ratings for television, regardless of the platform on which it is viewed." The initiative, dubbed "Anytime Anywhere Media Measurement" (A2M2), will see the company developing and deploying technology for measuring TV viewing on the Internet and on mobiles, iPods and other devices. Key components of the initiative, according to Nielsen, include:

• A continued focus on providing accurate measurement of in-home TV viewing through its Active/Passive metering technology.
• Measurement of viewing of online streaming video, as well as the addition of Internet measurement in its People Meter samples.
• The addition of measurement of out-of-home viewing in its People Meter samples.
• The introduction of electronic measurement in all local markets by 2011.
• The development of new meters to measure video viewed on portable devices.
• The development of new research methodologies for measuring viewer "engagement" in TV programming.

Nielsen says that it is working with its sister company, NetRatings (which provides the Nielsen//NetRatings service), to introduce a number of services designed to measure viewing of broadband video content:

• Nielsen//NetRatings will integrate data from its SiteCensus service--which uses proprietary "ping back" technology to provide "accurate and granular" measurement of what is delivered online--with demographic data from its representative metered panels of Internet users. Local broadcast stations and cable operators will be able to take advantage of Nielsen//NetRatings' SiteCensus Market Intelligence service, which offers syndicated Internet audience measurement data.
• Nielsen will add Internet TV measurement to its People Meter samples next year, creating a single panel to measure the relationship between TV viewing, Web site usage and streaming video consumption. This summer, it will install and test software meters on the PC's and laptops of People Meter panelists exiting its panels, with the goal of fully deploying them during the 2007-8 broadcast season. It will use the testing to identify the potential impact of Internet measurement on panel-quality metrics.
• As a "springboard" to the introduction of this single-sample Internet-and-TV panel, beginning this summer, Nielsen and Nielsen//NetRatings will offer "fused" data, combining the viewing results from matching respondents in their TV and Internet panels. This is intended to make it possible to report the relationship between TV and Internet consumption, and to provide combined reporting of viewership of broadcast and cable networks and usage of their Web sites. Nielsen says that this fused data will allow agencies and advertisers to optimize their combined TV/Internet campaigns.

In an effort to measure viewing of traditional television outside the home, Nielsen is developing and testing two new personal meters, called "Go Meters," which it expects to introduce into its National and Local People Meter panels by the end of 2008 (it says that it will eventually add out-of-home viewing into its national and local television currencies). It will conduct a preliminary external test of the "Go Meters," starting this fall, and continuing until the beginning of next year. The new meters capture out-of-home viewing by collecting audio signatures: one device places metering technologies in mobile phones, while the other resembles an MP3 player, Nielsen says.

Nielsen says that, in response to the increase in the number of linear Channels available to consumers and to the growing availability of VOD and DVR's, it is also attempting to provide improved electronic measurement to local markets through a number of initiatives:

• It will expand its Local People Meter (LPM) service, which currently covers the 10 largest local TV markets, into the next 15 largest markets. Once this expansion is complete, local samples representing nearly half of the US population will be measured by LPM's.
• In existing Set-Meter markets (from the 26th-largest through the 60th-largest), it will introduce the A/P 3.0, a variation of the Active/Passive meter that will not need to be wired directly into a TV set. Information on who is watching a program will be collected through the same People Meter technology used in National and Local People Meters, which will be integrated into the A/P 3.0's design.
• Depending on test results, it plans to mail battery-powered meters to sample homes in markets that are currently Diary-only (i.e. the 61st-largest to the 125th-largest markets), initially supplementing them with simple viewing logs. The meters will be placed near TV sets to capture all programming on the set. At the end of the survey period, participants will mail back the meters and the logs.
• It says that it will "aggressively pursue" a full electronic measurement plan for smaller markets, currently served only by the paper Diary. It hopes to achieve this by 2011.
• It says that it will work on a parallel track to develop and test passive persons measurement, including wearable personal tags that let meters know when viewers are in direct line-of-sight of their TV sets. If they prove successful in tests, these tags may eventually replace button-pushing in People Meter homes.

Nielsen also says that it is "building the foundation to measure television content that is migrating to new portable media platforms--including cell phones, iPod, portable game players and handheld computers--in ways that clients can evaluate and monetize." Among other things, it is developing "Solo Meters" that can be used with any media system. For platforms that use a Bluetooth connection, it is developing a "very small" wireless meter that will passively listen to communication between mated devices. For wired systems, it is building a small, "in-line" meter that will be physically inserted between the device and its earphones. It says that both solutions will be "device-neutral" and that they will identify viewing by collecting audio signatures. Work on the solutions begins this summer, and Nielsen says that functional prototypes should be available within six to 12 months, so that testing can begin by the latter part of next year. It is also planning to set up a 400-person panel of iPod users by the end of 2006.

In order to measure engagement in television, Nielsen says it is conducting a detailed test to evaluate the strength of intrinsic and extrinsic measurements. A pilot program, which will help lay the groundwork for possible engagement metrics, is being undertaken in consultation with a 20-member client committee representing broadcast and cable networks, syndicators and agencies. National and Local People Meter households that are leaving the panel will be asked to maintain their meters for an additional six weeks, during which they will participate in phone surveys designed to measure commercial recall and qualitative engagement factors for the programs they watch. Nielsen says that the test will evaluate the strength of behavioral measures in predicting recall of commercials. It plans to publish the results of the survey in the fall, at which time it will decide whether additional research needs to be conducted or a specific engagement product can be launched.

2waytraffic to Acquire Mobile Solutions Provider, Emexus

2waytraffic, an interactive TV content developer that was formed in 2004 by three former Endemol executives and which recently floated on London's AIM, says that it is acquiring mobile solutions provider, Emexus, for an initial consideration of €8 million in cash and shares, and a deferred consideration of up to €3 million. According to the company, the acquisition, which is still subject to shareholder approval, will provide it with "a strong technology platform, enhanced mobile content applications, and a number of additional highly skilled, internationally experienced employees." Emexus, which has around 100 clients and operates in 18 countries, provides a technology platform for content aggregation and service and applications delivery in the fields of mobile marketing, mobile entertainment and mobile Internet. It is headquartered in The Netherlands, and has offices in New York City, Kuala Lumpur and Kiev. Last year, it generated unaudited net revenues of €2.7 million and net profits of €0.7 million; at the end of the year, its assets totaled €4.1 million. 2waytraffic says that the acquisition will be earnings-enhancing during the first full year after it takes place.

According to 2waytraffic, the acquisition of Emexus, which already supplies it with mobile services, reflects its strategy of "playing an active role in the consolidation of the interactive content value chain by extending its mobile offering vertically to ensure that the Group is well placed to exploit the interactive content opportunities that the next generation of mobile technology will provide." It says that Emexus' technical expertise and marketing and distribution platform will complement its own mobile content and entertainment services, and that the two companies also have complementary geographical footprints. "Emexus is highly complementary to our own business and will add a wealth of international expertise, experience and market knowledge in the mobile content space, as well as extending our international distribution network," 2waytraffic CEO, Kees Abrahams, said in a prepared statement. "2waytraffic specializes in providing high-quality interactive content. The Emexus team are experts in the enabling technology that not only delivers the mobile content but also enhances it by providing the interactivity that our subscribers want. The combination of content and technology will allow us to reach a worldwide mass audience in the rapidly developing mobile market."

Recreate Solutions Acquired by Corpus

London and Mumbai-based Recreate Solutions, a company that has provided outsourcing services to a number of well-known interactive TV companies (including YooMedia and Visiware), has been acquired by Dallas-based Corpus, a provider of specialized technology services to the banking, financial services and telecommunications industries. Corpus, which claims to have numerous Fortune 100 clients across the telecom, finance and media sectors, says that the acquisition is designed to expand its presence in the media and entertainment sector. "The interactive media industry is maturing across platforms," Recreate CEO, Bhaskar Majumdar, said in a prepared statement (note: for an in-depth interview with Majumdar, see [itvt] Issue 6.10 Part 2). "It is consolidating around companies that have viable cost structures and revenue streams that generate healthy margins. Outsourcing of non-core technology functions is a proven method to increase profitability. Recreate Solutions is focused on providing high-quality outsourced solutions that add value to clients in our service segment: Digital Interactive Content. Under the Corpus banner we will now be able to take our solutions to Corpus's Fortune 100 client base." Recreate, which is venture-backed, was founded in 2001 and now has clients in the US, the Americas and Asia.

NCTA Issues RFP for Broadband Home Exhibit

The National Cable & Telecommunications Association (NCTA), which is moving to a new facility in Washington DC's Capitol Hill, has issued (an RFP) for companies interested in contributing to a 1,000 square-foot "Broadband Home" exhibit in the new location. The organization says that the exhibit will "provide an opportunity to demonstrate to members of Congress and their staffs, public policy makers, and other opinion leaders, cable's advanced technology and programming offerings, as well as the industry's commitment to innovation, education, and value in serving customers." Technologies that the NCTA hopes to feature in the new exhibit include interactive TV applications (especially those based on the US cable industry's OCAP spec), VOD, DVR (including multi-room DVR), streaming media, whole-home networking and more. The organization says that proposals should address "the nature of the idea, its application in the home, the exact equipment involved, and any services or utilities required to demonstrate it." Proposals should be emailed to thebroadbandhome@ncta.com, faxed to 202-775-3692 or snail-mailed to 1724 Massachusetts Ave., NW, Washington, DC 20036. Questions about the exhibit should be directed to the NCTA's senior director of industry affairs, Mark Bell, at 202-775-3669.

USA Video Sues Cable MSO's over VOD Patent

--Loses Appeal in VOD Patent Suit against Movielink

USA Video Technology (note: the company is a subsidiary of digital watermarking technology provider, USA Video Interactive) has filed a suit in the US District Court for the Eastern District of Texas, alleging that the VOD services of a group of tier-one cable MSO's and subsidiaries--Time Warner, Cox Communications, Charter Communications, Comcast Cable Communications, Comcast of Richardson, Comcast of Plano, and Comcast of Dallas--are infringing on its US Patent No. 5,130,792. It says that it is seeking "fair compensation and a court injunction against further infringement."

The patent, which is entitled "Store and Forward Video System," describes "a system and method for a user to request, and have delivered over an electronic network, a digitized video program." (Note: unlike Acacia Media Technologies, which has met with some success in convincing VOD companies to license a series of VOD-related patents that it owns, USA Video actually developed the technologies described in its patent itself: it says that the technologies were developed and tested in partnership with Rochester Telephone Corp. It filed for the patent in 1990, was awarded it in 1992, and has since then succeeded in getting it approved in the UK, France, Germany, Italy, Spain, Canada, and Japan.)

USA Video previously filed a similar patent-infringement suit against Hollywood studio-backed Web-based VOD service, Movielink. In January, 2005, the US District Court for the District of Delaware ruled that Movielink's service is not willfully infringing upon USA Video's patent. USA Video subsequently filed an appeal with the Federal Circuit Court of Appeals in Washington DC. However, earlier this week the appeals court upheld the lower court's ruling in that case.

NTN Buzztime Names New CEO

Following a six-month board search, interactive TV games company, NTN Buzztime, has named Dario L. Santana as president and CEO. Santana, who will take up his new position on July 10th, succeeds Stanley Kinsey, who announced last December that he would not seek renewal of his employment contract, but that he would continue to run the company until a successor was found (he remains on the company's board of directors). Santana was most recently president of Tyco Fire & Security Latin America, a services and technology company with annual revenues of around $300 million. Prior to joining Tyco in 2002, he was president and COO of streaming media start-up, Aerocast. From 1992 until 2000, he worked at General Instrument/Motorola Broadband, leaving the company as VP and general manager of advanced network systems. He holds an MBA from the Harvard Business School and an engineering degree from Purdue University.

In related news: lead outside director, Barry Bergsman, will become NTN Buzztime's chairman on July 10th.

BBC Worldwide Names Simon Danker Director of Digital Media

The BBC's commercial arm, BBC Worldwide, has appointed Simon Danker as director of digital media. Danker, who will report to David Moody, BBC Worldwide's managing director of digital media and director of strategy, will lead a team tasked with looking at widening the availability of BBC programming on new platforms, such as the Internet and mobile phones. The team will also be responsible for developing a commercial version of the BBC's iPlayer, which will allow the downloading of BBC TV and radio programs via the Internet. In addition, Danker's responsibilities will include finding new commercial opportunities for BBC Worldwide's music rights, and developing partnerships with music and new media industry players both in the UK and internationally. "New distribution platforms will give audiences what they really want--access on-demand to an unprecedented choice of programming," Danker said in a prepared statement. "The quality and breadth of BBC Worldwide's catalog, and our global reputation as a distributor, means we are in a great position to work with platform owners and producers to generate new income streams in this space." Danker, who joined BBC Worldwide in 2000, was previously director of UK and Ireland TV within the unit's Global TV Sales division. Among other things, he managed and expanded program sales to VOD platforms, such as BT Vision and HomeChoice.

Lifetime Names Dan Suratt EVP of Digital Media and Business Development

Lifetime Networks, a US broadcaster that targets a female demographic, has named former NBC Universal executive and six-time Emmy winner, Dan Suratt, to the newly created position of EVP of digital media and business development. Suratt, who will be tasked with overseeing the expansion of Lifetime's digital media business, will be based in New York and will report to Lifetime's president and CEO, Betty Cohen. According to Lifetime, he will be responsible for the strategic, operational, and editorial functions, and for the business development efforts, of Lifetimetv.com, Lifetime Wireless Network and Lifetime Home Entertainment Network, as well as for the interactive elements of Lifetime Television, Lifetime Movie Network, and Lifetime Real Women. "We've all seen this year how our entertainment world has been forever changed by the explosion of new media with all its extraordinary possibilities for reaching more consumers," Cohen said in a prepared statement. "While at NBC Universal, Dan's outstanding record of creating innovative digital campaigns and forging partnerships with leading companies demonstrates the talent and experience required to harness all the components of the powerful Lifetime brand into a comprehensive multiplatform business that underscores our role as the leading integrated electronic media company for women."

Suratt was previously VP of business and new media development at NBC Olympics (he was named to that post in December, 2004), and, according to Lifetime, was responsible for the "explosive growth" of the NBCOlympics.com Web site. Among other things, he developed partnerships and pursued new media initiatives with ESPN.com, Google, About.com, DirecTV, EchoStar and TV Guide Channel, and also created both sponsored and non-sponsored programming and branding concepts for on-air execution for the Olympic sales team. He joined NBC in 1995 and, among other things, worked on three Summer Olympics and Two Winter Olympics. He holds a BA from Middlebury College in Vermont and an MBA from NYU's Stern School of Business.

Starz Promotes Bob Greene to EVP of Advanced Services

Premium programmer, Starz Entertainment Group (SEG), has promoted Bob Greene to the newly created position of EVP of advanced services. Greene, who was previously SVP of advanced services, reports to SEG president and CEO, Robert Clasen, and is responsible for all the company's new media and related businesses, including broadband (note: the company is now offering a full commercial version of Vongo, the broadband subscription VOD service it launched earlier this year--see article in this Issue) and mobile. "Since coming to Starz two years ago, Bob has led the team that developed a next-generation platform and the key content application for this new era of video and content delivery," Clasen said in a prepared statement. "Vongo was uniquely developed to support both a direct-to-consumer business model and to provide a new and engaging product for our distribution partners. This new platform allows SEG to extend its customer base into the broadband world and to develop new content specific to Vongo. In addition, the product his team created will work with many of the new portable media devices and on a range of different distribution platforms. He was also responsible for developing relationships with some of the best-known names in the industry, including AT&T, HP, Microsoft, Sony, and Toshiba. Together, this group and others will form the ecosystem of devices, content, delivery platforms and software that will spark the new era in video."

Greene joined SEG in 2003 to lead the development and launch of a broadband VOD service, called Starz Ticket on Real Networks, that the company launched prior to launching Vongo. According to the company, he used "lessons developed from 17 months of operating" the earlier service to develop Vongo with an improved user interface, a Microsoft-based DRM system, a larger selection of videos and a lower monthly subscription fee. He also built the team behind Vongo, hiring executives from such companies as RealNetworks and AOL Broadband. Prior to joining SEG, Greene was chairman and CEO of streaming media software and services company, Digital Lava, which was sold to Interactive Video Technologies in 2002. Prior to that, he was a senior executive at Lightspan, a developer of interactive educational software designed for delivery over cable and telephone networks. He also spent stints at MTV, Nickelodeon, The Movie Channel and Showtime (where he was SVP of sales and marketing). He graduated from the University of Virginia.

ITV Games Company, TVHead, Secures $11.5 Million in Series B Funding

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TVHead--an interactive TV games company which was founded in May, 2003 by a husband-and-wife team, Rob Craig and Sangita Verma (note: Craig was, among other things, the number three hire at Sony Computer Entertainment and helped launch that company's PlayStation platform, while Verma was previously general manager of the Handheld Business Unit and director of worldwide syndication at Midway Games), has raised $11.5 million in Series B funding. The new funding round was led by Bay Partners, with participation from Mitsui Incubase and funds advised by TVHead's Series A investor, Apax Partners. TVHead says that it will use the funding to expand consumer trials and to deploy to initial target markets in late 2006. "TVHead has figured out how to offer the cable and IPTV industries a compelling interactive games channel on TV without any new investments in technology," Chris Noble, general partner at Bay Partners, said in a prepared statement. "For operators, who are constantly seeking additional revenue streams, TVHead's offering is a no-brainer: it allows operators to participate in the lucrative games industry by delivering entertaining, family-friendly games and content to millions of homes."

Earlier this year, TVHead announced that it was now offering a games- on-demand TV "network" for cable and IPTV providers. The company said that the network, dubbed simply "TVHead," was the culmination of 18 months of stealth development. According to TVHead, the TVHead network integrates seamlessly into operators' existing VOD infrastructure, and its games can be accessed by end-users with low-end set-top boxes. TVHead's games include puzzle, arcade, card, word, trivia, sports and children's games: current offerings include "Space Invaders," "Bejeweled," "Diner Dash," "Zuma," "Texas Hold'em," "Solitaire," and "Backgammon." The service also offers various community features, such as leaderboards and multiplayer functionality. In addition, it allows end-users to use the Internet and wireless devices to check their statistics and interact with their opponents. The service is designed to enable a two-tier business model: it provides a basic, free, ad-supported offering that generates revenues through targeted advertising, and a premium offering that provides multiplayer functionality and other advanced community features, as well as special brand-name games. The service also features an impulse-subscription application that allows end-users to upgrade to the premium version using their remote controls.

IP Set-Top Vendor, Tilgin, Named Sweden's Fastest-Growing IT Company

Swedish IP set-top box manufacturer, Tilgin (note: the company was formerly known as i3 micro technology), says that it has been recognized as Sweden's fastest-growing IT company in business magazine Veckans Affärer's annual ranking of such companies. The company grew by over 300% in 2005 and generated a turnover of 208 million Swedish Kroners. It says that its revenue growth for the first quarter of this year was up 402% from the year-ago quarter, and that it delivered around 75,000 units of customer premises equipment during that period: product deliveries were split evenly between IPTV set-top boxes and residential gateways. Veckans Affärer's recognition of Tilgin's growth rate comes at an opportune time for the company: It is planning to list on the Stockholm Stock Exchange later this year, in order, it says, to secure funding for continued development of products and services and for further international expansion.

AT&T Recognizes Scientific-Atlanta as "Outstanding Supplier"

Scientific-Atlanta, the cable and telecommunications equipment giant that was recently acquired by Cisco Systems, has been recognized as an "outstanding supplier" by US incumbent telco, AT&T. Scientific-Atlanta, which was one of 49 companies to receive the award (note: recipients were listed in a half-page ad in the June 7th edition of the Wall Street Journal), was recognized in the "Teamwork" category, because of its work assisting AT&T in the launch of its Microsoft TV IPTV Edition-powered triple-play service, U-verse. "Scientific-Atlanta is honored to be working with AT&T to enable the delivery of Internet Protocol-based AT&T U-verse services, including video to the home," Scientific-Atlanta CEO, Jim McDonald, said in a prepared statement. "The state-of-the-art IP video super hub offices and IP video hubs we are building will provide AT&T with the performance needed to support services on one of the world's most advanced IP video networks. And receiving this award for teamwork is even a greater honor and confirms our core belief that our people are the best in the industry."

Cellcast Issues Profit Warning

Cellcast Group--a company which specializes in SMS- and IVR-based interactive TV and which recently floated on the London Stock Exchange's AIM market--has warned that it expects it will not meet market forecasts for the current financial year (ended December 31st, 2006). In a trading update issued earlier this month, the company said that recent changes to the order of channels on the Sky EPG, which have resulted in its channels having a less favorable position, coupled with a delay in revenues from certain of its international investments, have had a negative impact on its performance: it explained that the revenue delays will likely cause turnover for the year to be below expectations, and that, while "turnover in the UK is robust and is significantly ahead of the same period last year…profitability has been impacted by the EPG reorganization which has created scheduling inefficiencies and has made navigation difficult for the regular viewers of [its] programs." As a result, it expects to show a pre-tax loss for the current financial year. However, it says that the lowered expectations do not "take into account any possible earnings from its programs on the Freeview platform as it is too early in the implementation process to assess what these might be" (note: for more on Cellcast's recently launched offering on Freeview, see [itvt] Issue 6.75 Part 3).

Cellcast says that it has taken various steps to address the issues caused by Sky's EPG reorganization. The trading update states that the company has "introduced new formats, redeployed bandwidth and has increased marketing of all its channels to help viewers locate them on the EPG," and that it has also "reduced production costs as well as operating expenses which will provide significant cost savings going forward."

SeaChange Reports Higher Revenues, Higher Losses

--VOD Systems Revenue Up 71% Sequentially

VOD and interactive TV technology provider, SeaChange International, has released financial results for its fiscal first quarter (2007), ended April 30th:

• Overall revenues totaled $33.2 million, compared to $31.5 million for the year-ago quarter.
• Revenues from the company's Broadband segment (includes VOD and hardware and software for advertising insertion) totaled $16.3 million--up $2 million from the preceding quarter. The company said that the sequential growth in revenue for the segment was driven by a 71% increase in VOD systems revenue (i.e. from $6.3 million in fiscal Q4, 2006 to $10.8 million in fiscal Q1, 2007), the result of a "significant rise in VOD order activity and revenue from North American cable providers." The increase was partially offset by a $2 million sequential decline in revenue from the company's advertising insertion technologies, which it blamed on "delays in receiving customer acceptance for previously shipped product as well as a lower level of customer orders." Meanwhile, SeaChange's Broadcast and Services segments showed $1 million sequential declines in Q1, 2007.
• Net losses totaled $4.4 million, or $0.15 per share, compared to losses of $0.6 million, or $0.02 per share, for the year-ago quarter.
• EBITDA was a loss of $1.9 million, compared to a loss of $0.4 million for the year-ago quarter.
• At the end of the quarter, the company's cash, cash-equivalents and short- and long-term investments totaled $52.1 million (note: the company has no long-term debt), compared to $60.9 million at the end of the preceding quarter (i.e. January 31st, 2006). The company said that its use of cash during the most recent quarter included an $8 million payment related to the conclusion of its patent litigation with nCube/C-COR.

"Our VOD systems revenues in the first quarter nearly doubled from the fourth quarter of last year, and have reached their highest level since the second quarter of fiscal 2006," SeaChange president and CEO, Bill Styslinger, said in a prepared statement. "We expect to see VOD revenues continue to grow significantly in the second quarter, and we believe that SeaChange will have a strong second quarter with a return to positive EBITDA. We've seen a definite uptick in our North American VOD business evidenced by an increase in our VOD order rate. In fact, shipments and unfilled orders this quarter have already exceeded total VOD system revenue recorded in the fourth quarter of fiscal 2006. We are negotiating several, multi-year software, hardware and service purchase agreements that we believe we will be able to finalize over the remainder of this year. We have also closed a number of significant new international accounts in the first quarter. With our account growth outside of North America, as well as our success in cross-selling content services, middleware, network products and other products and services, we are beginning to see the benefit of our investments in diversifying from an historically North American VOD systems-driven revenue base. The strength of our VOD business and an anticipated pick-up in Broadcast product revenues supports our belief that the company will see significant revenue growth this quarter that will continue for the remainder of the year. We expect the first half of this year will be better than the second half of last year, and the second half of this year will be better still."

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