I’ve been a bit bemused by one of the more recent hype phrases that has come to dominate discussions in the media technology industry: “three screens”. It’s as though for the first time since the 1920s people are now able to choose the size of display on which they watch TV… What the phrase is intended to encapsulate, I think, is “three platforms”. In other words, the “broadcast” platform delivers to “TV”, the “wireless” platform to “mobile phones”, and the “internet” (or broadband) platform to “PCs”. Sorry for all the inverted commas, but the fact is that “screen” is becoming ever more divorced from “platform”, and that’s why the three-screen analogy just doesn’t stack up. In fact, all of these delivery platforms can be used to deliver video to any size of screen. For the last 80 years or more the broadcast industry has been delivering TV to small, and, yes, even handheld, displays. The earliest TVs were indeed only a few inches in diagonal, because the technology behind the cathode ray tube was in its infancy and extremely expensive to execute. And ever since LCD displays were commercialised in the 1980s we’ve been able to buy small, portable handheld TVs which receive broadcast TV. Not many people did buy them, but that’s another story. So “screens” have come in all shapes and sizes ever since the dawn of the technology, and for many years households have typically owned two or more screens for watching TV. What’s changing is how content is delivered to those screens, and for most sizes of screen people now have several choices in how they access content. Broadcasting still dominates for “big screen” TV, but I can buy broadcast DTV tuner cards and USB sticks for my PC, and I can access broadcast services on mobile phones in many countries. IP broadband dominates for PC “screens”, but that’s because IP connectivity became de facto in the PC market more than a decade ago. If I was brave enough I could install connected devices to bring “TV” via IP to my big screen TV, and the process will surely become easier over the coming years. To watch TV on my mobile phone I can use the broadcast (see above) or the cellular networks (combined with IP in some cases). Today’s 3G networks don’t tick all the boxes for delivering TV and video, but that may change as 4G comes along. Mobile operators will certainly be targeting users of other “screens” with TV and video services, though they will have a tough job competing with alternative platforms. So to understand the trends more precisely, media companies really need to think in terms of multiple screens aimed at different user segments and different behaviours. We will all have access to several screens during a typical day, each one is potentially a TV and video display, and each one might be supported by more than one platform. It may not be as neat and simple as the three-screen hype but it does better reflect the complexities, and the opportunities, of the emerging digital media environment. Twitter: twitter.com/DavidMercer_SA Client Reading: Digital Media Survey: Italy Country Profile

The good news for 3D TV proponents, in spite of the technical, business and creative challenges that lie ahead, is that they won’t have to worry about holographic technologies as a competitor for quite some time. Judging by the world’s first public demonstration at NAB by Japan’s NCIT (National Institute of Information and Communications Technology) of its electronic holograph, we will be lucky to see any consumer implementations of holographs in my lifetime, and possibly in my children’s as well. The demonstration involved an installation of multiple beams and reflectors across an area the size of a small room, the results of which bleeding edge technology were to produce a tiny holographic image of perhaps a couple of inches across. The image was a poorly defined representation of a revolving cube, and was only visible within a carefully designated viewing angle; any slight deviation meant that it disappeared from view. This is not intended to diminish the efforts of the Japanese researchers, who clearly have a very long term perspective as they evolve advanced technologies for the century ahead. But the NCIT spokesmen were happy to admit that holographs were unlikely to become commercially viable within the next ten years, and then only for limited applications. A major challenge for this technology, as well as for other advanced display techniques, appears to be the lack of ultra high resolution display technologies. It looks like the flat panel display, whether 2D or 3D, is here to stay for many years to come. Twitter: twitter.com/DavidMercer_SA Client Reading: Western Europe Digital Television Forecast: 1H'09

The standards battle in 3DTV for home applications has already begun, and it’s not just between competing systems. There is also a division in the industry between those who believe new standards are necessary, and those who don’t. BskyB’s Director of Strategic Product Development, Gerry O’Sullivan, stunned NAB conference attendees by claiming that no new standards were needed to get home 3D off the ground. He claimed simply that the standard already exists, “and it’s called HD”. Sky has already trialled several 3D broadcasts in the UK and is satisfied that the technology works today and can be deployed to customers of its existing HDTV service using HD PVRs already in the field. For what it’s worth, I thought Sky gave some of the most impressive of the many 3DTV demonstrations I have seen at NAB. O’Sullivan played clips of a Liverpool football game broadcast in 3D at the end of last year. One particular shot, taken at pitch level behind Stephen Gerrard as he fired a corner away from the viewer and towards the penalty area, demonstrated how much more effective 3D can be compared to 2D. This was the best example I have seen so far of a 3D production offering an experience that came close to being a spectator at the game. It also illustrates some of the creative challenges involved in developing compelling 3D material compared to traditional 2D approaches. O’Sullivan concluded his speech by hinting strongly that Sky would forge ahead with its own approach to 3D programme creation and broadcasting, regardless of the intentions of other industry players. This strategy would continue Sky’s long tradition of innovation in new services and ensure that, as other broadcasters begin to follow Sky by rolling out HDTV, Sky stays one step ahead by introducing the next technology. If Sky does begin to offer 3DTV without consulting on standards, it is likely to create divisions and disharmony across the industry value chain. As we heard in other presentations, there are multiple alternative technical approaches to creating, delivering and displaying 3D TV and video to the home environment, and universal compatibility across these approaches does not exist. In fact, according to Brad Hunt of Digital Media Directions “no single 3D format is supported by all the 3D-ready TVs currently available on the market”. That analysis applies largely to the US market, where a few 3D-ready TVs from a handful of manufacturers have been sold in the last few years. In the UK, Sky may be able to get away with driving its preferred approach because few if any 3D-ready TVs have been sold. But we can be sure that other broadcasters and technology vendors will kick up a fuss if Sky appears to be getting its own way without wider consultation. It is unlikely they can do anything to stop Sky launching 3DTV services, in which case customer confusion and standards wars seem inevitable. Twitter: twitter.com/DavidMercer_SA Client Reading: Western Europe Digital Television Forecast: 1H'09 Buzz up!vote now

Most of the discussion and presentations on the question of 3DTV here at NAB seem to start with the assumption that the vast majority of consumers will prefer 3D to 2D, but that’s not clear to me from some of the data presented. CEA research of US viewers presented by David Wertheimer, CEO of the Entertainment Technology Center at USC, suggests that, of people who have seen a 3D movie at the cinema, only 38% say they prefer 3D to 2D of the same presentation. In other words, nearly two thirds of people who have seen 3D are neutral or actually prefer 2D. The impact on home viewing is even less marked: Of 3D movie cinema viewers, only 1 in 5 say they want to watch 3D at home. Much of this may have to do with the fact that consumers simply see the theatre/cinema experience as completely different from anything they watch on TV at home, or that they see movies as different to much of the content they would normally see at home, such as documentaries, news or sports. Once they see those in 3D as well, the interest levels in home 3D viewing may rise. But it doesn’t seem to me like a very good start for 3D at home. As I reported recently, my own anecdotal evidence suggests that people can easily be nonplussed by the 3D cinema experience. NAB conference attendees who applaud clever creative and technical cinematic presentations are not typical of the wider public. I’m sure home 3D television and movies will come one day, and some consumers will be prepared to spend money on it. But apart from the user experience challenges, there are serious business model hurdles to overcome. Don’t be fooled by the fact that 3D theatre presentations may be outgunning the equivalent 2D shows at the box office. Theatre/cinema receipts alone are nowhere near enough for the studios to recoup their investments. Until there is a viable home 3D delivery channel the 3D movie explosion we are currently seeing is simply a loss-leader for Hollywood studios hoping to recoup those investments over the much longer term. Buzz up!vote now

We have arrived at the NAB Show, the National Association of Broadcasters convention in Las Vegas, in the middle of the worst downturn this industry has ever seen. Most technology sectors are suffering from the global crisis, of course, and the media production sector is no different. Since the last major international get-together at IBC in Amsterdam last September http://www.strategyanalytics.com/blogs/326/ the environment has changed dramatically. My colleague, Doug Sheer at D. I. S. Consulting, tracks the key segments on a regular basis and noticed a sharp decline in sentiment almost immediately following IBC. That was, as many will remember, the time when Lehmann Brothers collapsed. The effect seemed to be instantaneous: broadcasters around the world took fright and postponed any and every expenditure they possible could in order to prepare themselves for the storm ahead. That situation of stalled spending continues more than six months later. Anecdotal evidence suggests that broadcasters have torn up previously prepared budgets and some are telling managers they have to make do with one year’s spending for the next three. Most notably, the industry association, the IABM has refused to give any industry forecasts since last September. It was particularly unfortunate in having completed a survey just prior to IBC, when the severity of the downturn had yet to hit home. The results from that project are, according to IABM’s director Roger Stanwell “not worth the paper they were written on”. And believe me, they were written on a lot of paper. The industry clearly needs independent guidance at a time of crisis, and that’s one of the reasons why Strategy Analytics has partnered with D. I. S. Consulting, the global leaders in research in the media production sector. We will be publishing latest estimates of the scale of the downturn shortly, but it is certainly severe, so there will clearly be many painful budget decisions to be made by the major vendors, and some players are sure to find it tough to survive. At the same time, we note that certain segments are performing relatively well at the moment. In particular, demand for professional camcorders, video encoders and media storage continues to increase. This is at least in part a reflection of the industry’s continued transition towards an all-digital workflow and infrastructure. It it sectors like servers which are really suffering from budget cuts. So we look to NAB, as with every major event, for signs that renewed growth can be driven by innovation. 3D will of course be a major theme, as well as further progress towards next generation video standards such as 1080p. I’ll be reporting regularly over the next few days. Twitter: twitter.com/DavidMercer_SA Client Reading: Cisco's Consumer Strategy: Will the Network Transform the Digital Home?

Much of the commentary around Cisco’s push into consumer devices has focused on its wireless audio system, home media hub and, most recently, the newly acquired Flip Video business. But as we discuss in our new report published today - Cisco's Consumer Strategy: Will the Network Transform the Digital Home?  – the company’s long term success is likely to depend as much, if not more, on the less high profile media strategy as on its forays into consumer electronics. Cisco’s Media Solutions Group (MSG) was formed more than two years ago but only came out into the open at the beginning of this year. Its objective is to sell the benefits of network-based internet media delivery platforms to content owners. It claims to save content owners from a great deal of the pain usually associated with establishing and maintaining content-focused websites. Critically, it also intends to be synergetic with Cisco’s consumer devices so that problems associated with content re-purposing and re-formatting across multiple devices, something which is a real cost concern to media companies, can be minimised. MSG’s core offer is the Eos platform, and you can see it in action at allseanpaul.com. Our report finds that Cisco has a good opportunity of reaching annual revenues from consumer activities that will put the company in a league similar to some of today’s leading technology brands. It will surprise some that the company already does business in the region of $4bn in consumer related sectors through its set-top box and home networking operations. With a substantial cash pile to support further acquisitions, and with the rest of the consumer electronics industry suffering from the global economic turmoil, it is much too soon to write off Cisco’s chances of sustaining an assault on the market leaders over the coming years. Twitter: twitter.com/DavidMercer_SA Client Reading: Cisco's Consumer Strategy: Will the Network Transform the Digital Home? Buzz up!vote now

AT&T and Verizon both posted strong broadband numbers in Q4 on the back of their rollout of fiber-based broadband services, according to Strategy Analytics’ latest broadband benchmarking report. In terms of quarterly net new additions, Comcast and Time Warner Cable were pushed into 3rd and 4th place. AT&T took the number one spot with 242k additions, followed by Verizon with 212k. Behind the telcos’ numbers is the story that their next generation access platforms, U-Verse and Fios, are gaining ground at the expense of “legacy” ADSL services, for which subscriptions are in decline. Neither AT&T nor Verizon will confirm how many “fiber” customers previously were existing customers to their own basic ADSL services, but we can assume that they represent a fair proportion of the total. Of course, the term “fiber” is used fairly loosely in the case of both companies. Fios is a true fiber-to-the-home broadband service, although the Fios TV service is delivered over coax. And U-Verse actually uses VDSL technology. In spite of the telcos’ strong Q4 performance, our 2009 forecasts suggest that Comcast will again be the leading broadband provider this year, in terms of new additions, followed by AT&T and Verizon. But we again see a trend towards the fiber based services, and predict that AT&T’s U-Verse will be the fastest growing service in 2009 if seen in isolation from the overall AT&T broadband operation. Twitter: twitter.com/DavidMercer_SA Client Reading: Broadband Service Provider Performance Benchmarking: North America Q4 2008

Strategy Analytics today announces a partnership with D. I. S. Consulting Corporation to offer industry research and advisory services in media technology, distribution, production and content management industries. D. I. S. Consulting is the global leader in research and consulting to the professional media production and broadcast industries. Doug Sheer, DIS’s CEO, is an industry veteran with a background in the creative industry (as camera person, editor, graphics designer, and animator) as well as research and consulting. One of his claims to fame is to have shared an Oscar (with Dan Perri Productions) for motion picture titles for “The Exorcist”. He currently serves as Chair of the New York Section of the SMPTE (Society of Motion Picture & Television Engineers), and founded and chairs Artists Talk On Art, one of the longest running arts discussion forums in the US. Strategy Analytics will combine its existing leadership in consumer media and technology markets with DIS’s expertise in media production and technologies at a time when the traditional broadcast and professional industry is going through a period of some turmoil. The economic downturn hit vendors like a tidal wave in Q4 last year, and companies are in urgent need of clarity and direction as they re-group in preparation for the hoped-for upturn. Apart from the economy, the transition to internet media is also looming in the background. While no one is pretending that the broadcast sector will die a rapid death, neither can it afford to ignore the potential impact of web-based media consumption on traditional industries. We are excited to be working with Doug and his team to assess the scale of these challenges and to help the industry prepare for the opportunities that lie ahead. Twitter: twitter.com/DavidMercer_SA