As the year approaches the end, let’s look back and review some of the impactful events in the digital media business in 2010. Many of those events generated substantial buzz when they just happened, but quickly people forget about them and move their attention on to new things. As a year-end review, this summery is intended to help us relearn these events and gauge their impact on the industry and companies in the future. Events about Google:

Google claimed it was threatened by cyber attacks originated from China in January. Following the event, Google decided to stop censoring search results in China, which put themselves in a direct confronting position with the Chinese government. As the conflict between Google and the Chinese government deepened, Google had to redirect the traffic on its China site to the Hong Kong homepage. Google had not only lost market share to its competitors in China but also lost plenty of talent due to the uncertainty of its business in China. With only a constrained access to the largest Internet market in terms of users, now Google’s growth solely relies on the expansion to other business lines, such as display advertising, Android platform and TV business.

Google’s social network initiatives remained unsuccessful. Google Buzz was introduced in the year, but even with the Gmail integration the service has been forgotten by the public. The once highly buzzed Google Wave was terminated by Google, as most people cannot figure out how to use the innovative service. Despite the popularity of Gmail, the dominant Facebook and the growing Twittier and LinkedIn will only make Google’s future in social media gloomier.

Google unveiled Google TV with its partners Sony, Intel and Logitech. While Google had depicted a splendid picture for the Google TV when it introduced the product, its lack of premium content support and the severe competition from Apple, Microsoft and Amazon already led many to question the feasibility of the product. Sony’s slash on the price in the holiday season for Google TV-embedded TVs magnified the concerns on the product’s outlook. 2011 will be the key year for Google TV’s success. And if Google could build healthy relationship with Hollywood studios for the platform, it would still gain some ground in the new TV business.

Events about Apple:

Apple’s introduction of iPad has clearly changed many aspects of digital media consumption. Publishing and news industry has found a new and more versatile content distribution platform, which seems could further offset the decline of traditional revenue streams. With a bigger screen compared to smart phones, iPad is a better device for mobile video consumption. Movie studios and pay TV companies started to put strong focus on distributing their content through iPads. We expect the iPad to continue its robust growth in the next year, along with its importance to premium content distribution.

Games have always been top-selling apps in Apple’s app store. The introduction of Game Center on iPhones and iPads makes Apple a formidable player in the social game distribution business. Going forward, the gaming piece will continue to augment the appeal of Apple’s platform.

Events about others:

Microsoft’s Kinect has shown signs of good reception in the holiday season. With the tremendous investment put in the project, it finally delivered quality gaming experience to casual gamers, dwarfing Wii’s motion censor device. Although Xbox only accounts for a relatively small portion of Microsoft’s total revenue, the success of the device could pave the way for its home entertainment strategy if implemented correctly. The solid experience of Kinect also counters the argument that Microsoft has lost the innovation capability. In addition, Microsoft struck a deal with ESPN to provide ESPN programs to Xbox Live users.

Netflix keeps up its growth and now has 16 million subscription members. Given its expansion to other devices and other countries, we expect the service to maintain the growth momentum in the coming year. On the other hand, Hulu also adopted a paid revenue model with the introduction of Hulu Plus. But given the limited content catalog, Hulu Plus faces challenges to grow its paid users.

Facebook keeps the ball rolling by introducing a number of new features and services on the platform. Meanwhile, social games gained attraction with their virtual currency revenue model. Games from Zynga and Playdom have gained millions of users, most of which are based on social networks. As the ad rates on social networks remain low, the social gaming business could help Facebook break through its profitability challenge. And the social gaming companies will surely benefit from the secular growth of social networks.

A lot of the analysts that follow Google have been recently focusing on Google’s intention to acquire Groupon, an Internet collective purchasing site. While the talk between Google and Groupon has stalled with Google’s bid being rejected, the Internet search giant still managed to do some shopping for the holiday season. It has grabbed Widevine for an undisclosed amount, a Digital Management Rights (DRM) solution provider which has been on Strategy Analytics radar for a long time. As DRM business isn’t something that is interesting to consumer media, the discussion on media about this acquisition is far less than that about the Groupon deal. But as important as Widevine’s role in the premium content distribution value chain, this acquisition isn’t just discretionary spending for Google and it demonstrates Google’s dedication to be involved in the premium video content business. Widevine explains itself to be capable of doing three things: Multiplatform DRM, Enabling TV Everywhere and video optimization. These are all of great importance for Google in relations to premium video business. YouTube has been growing as the bellwether in the user generated content (UCG) business in terms of video views, while the profitability issue of UGC is still something that YouTube needs to overcome. With the DRM capability provided by Widevine, YouTube is more likely to obtain serious premium content which could markedly beef up the money-generating capability of the popular web video site. And given Widevine’s credibility for helping pretect content for Hollywood studios, it makes studios more eased to partner with Google in the video business, which has been regarded as the major disruptor for the traditional media businesses. The more premium content availability will also enhance Google TV’s competitiveness in the market, which has been reported having trouble to get deals with major Hollywood studios and being forced to cut the price for the new Google TV-embedded gadgets. Moreover, Widevine’s know-how in delivering video content to multiple platforms will benefit its Android system as well, by enabling the Android phones more securely and easily getting access to premium videos. While these implications are all positive, the acquisition of Widevine is far from a home-run for Google to succeed in the premium video distribution business. Significant challenges lie ahead that seem quite unaddressable for Google in the short term. From a revenue perspective, Google is a advertising driven company that controls online content distribution and ad distribution. Small online content creators are in a weak position to negotiate ad revenue terms with Google, whereas Hollywood studios mandate a close supervision on their ad operations. Even Hulu, the joint venture by the three major networks, has to compromise to the networks’ own sales operation when it comes to premium ad inventory sales and management. The fight over control of ad operation will be a key obstacle for Google and Hollywood to overcome before a long-term solid partnership being established. In addition, some analysts speculate that Google might be planning to offer Widevine service for free to content providers. This idea is pretty in line with Google’s Everything-free strategy, from online search to smartphone to TV strategy. It clearly will lure many content providers at least to try to start relationship with Google and potentially will shake up the entire industry. But such a drastic shake-up could result in backlash from industry incumbents and arouse anti-competition concerns. It would also be expected for Google to introduce a Google-branded video store or service in the future, armoring the tech giant in the battle with Apple, Amazon and Netflix. -Jia Wu

Over-the-top video services have been putting mounting pressure to pay TV providers. Apple TV is well received by the reviewers, even though nobody has used the real product. Netflix's stock price just hit a new 52-week high as it expands its streaming service into Canada and its long-time competitor Blockbuster filed for chapter 11 bankruptcy. Amazon is preparing its own streaming service, so does Sony. Everything together depicts the picture that pay TV companies are doomed. The prices for pay TVs' current plans have long been perceived as ripoffs. According to Strategy Analytics recent consumer survey, only 20% respondents say that the value-for-money of their pay TV services exceed their expectations. This is clearly a vital weakness of current pay TV services. But on the other hand, because of the overpricing pay TV providers are able to pay media companies big checks for their content. Everyone loves money. This is the reason why media companies and content producers have been reluctant to give their content to the new online distributors, such as Netflix. The advent of Apple TV seems to have taken a big step in the direction of solving this problem, offering a pretty cheap price for the content to consumers, i.e. $3.99 per movie rental and $0.99 per TV show episode. And because of its power in the consumer electronics and media industry, a lot of the major media companies are willing to participate in the deal in the hope of generating incremental revenues in addition to existing distribution channels. But today Viacom has said that the price for content on Apple TV is too low and they will not participate in the service. Other national broadcast networks owned by NBC Universal and CBS Corp. and all cable networks chose not to participate due to pricing and other strategic concerns. It is a big blow to the fledgling Apple TV service. Fundamentally, it is a confrontation between media companies and consumers, with content distributors being as the intermediary to alleviate the tense. Content owners want more money for their content, whereas consumers want to save money from their entertainment spending. As a result, a lot of consumers flock to Netflix due to its low pricing. But media companies tend to favor pay TV services for their content access, as they pay more. The end of the story is that consumers are not completely happy with Netflix as they don't get new content from it, but pay TV services suffer too, witnessing their subscribers eroding. From economics standpoint, it is not maximizing the social benefit as media companies are leaving the money on the table by sticking with overpriced pay TV services. It is clear though that anyone who can address the $64 million question in the video entertainment industry will lead itself to prosperous growth. And the industry needs a compromise. - Jia Wu

Two months ago, when the Hulu Plus rumor came out in the industry, we did a comparison between between Netflix and Hulu Plus here. Now that Hulu Plus is officially introduced, let’s take a further look at the new service. According to Hulu, Hulu Plus is not a replacement for Hulu.com. Hulu Plus is a new, revolutionary ad-supported subscription product that is incremental and complementary to the existing Hulu service. For almost all of the current broadcast shows on our service, Hulu Plus offers the full season. Every single episode of the current season will be available, not just a handful of trailing episodes. Moreover, Hulu Plus subscribers can now watch their favorites through more than just the browser on their Mac or PC. Hulu Plus subscribers will be able to watch all the Hulu shows on Internet connected TVs, iPhones, iPads and game consoles. In short, Hulu Plus offers a deep catalogue of TV shows and a wide range of content distribution channels. It is the TV Everywhere by broadcasters. So will consumers be willing to pay for the service? Without statistical evidence yet, a qualitative comparison among online premium video offerings could shed some light on the future of Hulu Plus. Netflix is a similar service which we’ve already compared with Hulu Plus in the previous post. As Hulu Plus has made it universally accessible, Netflix on iPhone is also coming soon. Both services are going the video everywhere approach. From the content distribution portfolio perspective, Hulu Plus is on par with Netflix streaming service. With $1 price advantage, Netflix could gain a slight edge over Hulu Plus, although a minor one. The key difference between the two services come down to content selection. While Netflix is a back-catalogue movie service, Hulu Plus is a back-catalogue TV show service, as all consumers can watch recent TV shows on regular Hulu service. So the competition could be somewhat simplified to TV shows VS movies. Netflix again has an edge over Hulu, with some of the TV shows such as Lost, 24 and Prison Break, also being included in its catalogue. Going forward, Hulu Plus could grow its catalogue significantly, but Netflix’s big user base makes it hard for broadcasters to ignore and not to sign deals with. Cable companies’ TV Everywhere is definitely a competing service to Hulu Plus. With similar content distribution portfolio in which users can access content on TVs, PCs and mobile phones, TV Everywhere could have better content selection than Hulu Plus. And for current cable subscribers, there is no incremental expense to enjoy TV Everywhere programs. But the speed of rolling out TV Everywhere service is questionable so far. Hulu Plus is clearly an experiment by the broadcasters in the hope of generating revenues by distributing content on their own. If Hulu Plus could prove its viability on profitability, there will be more content providers joining the game. And cable companies would inevitably lose their leverage in the negotiation. It is foreseeable that Hulu Plus could potentially become a formidable over-the-top TV service provider that rivals Comcast and Time Warner Cable, once all the major content providers join Hulu Plus. This could lead to the failure of cable companies’ TV Everywhere and eventually the distinction of cable companies. But right now it is still too early to tell. -Jia Wu

We've published an in-depth analysis last year examining the competition between free online video services YouTube and Hulu. We believed that Hulu was in a better position than YouTube when it comes to profitability outlook, as Hulu's premium content could charge higher ad CPM and it's lower cost for carrying User Generated Content (UGC). But apparently a pure advertising model is not the best way to maximize profit, not even sufficient for the publishing industry, let alone the TV programming and filmed entertainment industry, which carries extravagant production cost. So quite expectedly, Hulu is going to put up its pay wall as soon as May 24, according to a couple of news source. The new subscription service, Hulu Plus, would continue to provide for free the most recent episodes of shows. But viewers who want to see old episodes would have to pay $9.95 a month. $9.95? Yes, just one dollar more than the cheapest streaming plan from Netflix. We believe that it is not a coincidence for Hulu to set the price so close to Netflix. With the new subscription service, Hulu is now in head-to-head competition with Netflix. Driven by its outstanding performance in the last quarter, Netflix's stock price has surged almost by 100% since January this year. Now Netflix is one of the leading US companies in the media sector that show robust growth, primarily due to its attractive streaming service. Given Hulu's entry in the market, is Netflix going to maintain its edge in the competition? Early evidence shows that Netflix is in a strong position which might be hard for Hulu to catch up. As the subscription services from the two are mainly providing back-catalog of shows and movies, the services look almost identical, except that Netflix might sometimes have new movies for DVD rental. Although Hulu offers for free recent shows, they are also available for Netflix users. Netflix's advantages of being slightly cheaper and offering DVDs are not significant, but this could still make consumers somewhat favor Netflix over Hulu. Furthermore, Netflix has ample distribution portfolio including all major game consoles, iPad, set-top-boxes, computers and TV services such as Boxee. Netflix app on iphone is also believed to be released soon. In contrast, Hulu only distributes content through PCs despite some early attempt of multiple device access. But its owners do not want Hulu's content to be accessed on big screen TV sets at this moment, which would cannibalize their existing revenues. In addition, it is not costless for existing Netflix users to switch services, as Netflix's rating and recommendation system knows ours taste well, while switching to Hulu might require us to build up our profiles once again from scratch. Looking at users numbers, Netflix has 14 million subscribers as of Q1 2010, while Hulu has about 40 million unique viewers in February 2010 according to comScore. Industry consensus for digital media freemium model is that about 5%-10% of total users could be converted to paying users, which leads to Hulu's potential high-end subscriber number to 4 million.Based on this assumption, Hulu's annual subscription revenue could reach 4 x 10 x 12=$480 million. But of course, Netflix's competition would put pressure on Hulu's acquisition of subscribers. So maybe $200-$300 million is more realistic, if not too optimistic, number for Hulu to generate. It almost doubles Hulu's current revenue size, but is still far from people's original expectation on the company. We are sure that Hulu will eventually improve its service, distribution outlet and increase the size of catalog, while with the pressure from Netflix and its investors, Hulu has a lot to work on right now. Jia Wu

The depth of the recession in the US consumer electronics market was highlighted today by CEA data which confirmed a decline in dollar revenues in 2009 of 12%. The outlook for 2010 improves but only in the sense that the rate of decline falls to 3%. In the meantime we're hearing news of new 3D TV channels already, with both ESPN and Discovery throwing their hats into the ring. This is great, if expected, news for the many 3D-ready TVs we expect to see over the next few days. At this evening's CES Unveiled event Sensio were showing their passive 3DTV, even though the company today announced its partnership with Visio to launch an active 3DTV later this year. Mitsubishi was also showing its laser 3DTV with the adaptor which will be necessary for compatibility with Blu-ray 3D players when they are lauinched. Logitech was showing its new Lapdesk N700, a laptop “cushion” with in-built speakers designed for enhanced laptop usage in the comfort of the armchair. The peripheral retails at $89.99 and also features an in-built cooling fan to prevent over-hearing, a familiar problem for those many TV viewers who now sit with a laptop on their knees. Logitech have thoughtfully added a grip to help keep the laptop steady, but unfortunately in my case it failed to prevent the Macpro falling to the floor. No damage done, luckily, but perhaps evidence of a need for further improvement in design. Logitech was also demonstrating the fruits of its recently closed acquisition of Lifesize Communications, a videoconferencing specialist. On display was its Passport set-top videoconferencing device. This retails at $2500 and allows anyone with a minimum 2-way 1Mbps broadband connection to communicate using HD video (720p). The service downscales to lower resolutions for slower bandwidth connections. Logitech claims that this device is a third of the price of any other similar product on the market. That may be true today but is unlikely to remain so for much longer. Videoconferencing and telepresence are shaping up to be one of the emerging trends of this CES and we will hear a lot more over the next few days, in addition to the Skype/Panasonic/LG announcement today. Yet another OTT video set-top box was being demonstrated by Syabas with its Popbox product. This grew out of the company’s Popcorn Hour device. The Popbox has been designed to be especially user-friendly, and the user interface does appear attractive and accessible. The service integrates currently 20 “content application channels”, which means things like Netflix, and is working with 200 application developers. It will launch in March 2010 and retail at $129, plus $20 for the optional WiFi module. The Popbox is 1080p-capable, although the only 1080p content was demonstration material. If Syabas manages to sign 1080p deals with content providers it will certainly be a step ahead of most competitors. ProVision CEO Steve Cliffe was confident enough in his company’s wireless HD technology to carry a laptop across the show floor while it streamed 1080i HD content, and there was no loss or deterioration in signal. This UK firm was founded by professors at Bristol University, and uses proprietary error correction and RF management techniques to improve HD video streaming over 802.11n. The company is talking to set-top box and TV manufacturers looking to support HD distribution to multiple home devices. Another UK firm, Imagination Technologies, was launching its Pure digital radio products for the US market. Pure is the leader in the UK but virtually unknown overseas. It will, rightly, tread carefully as it enters the notoriously challenging US market, and will obviously (since the standard is not used) drop DAB from its US product line-up, instead concentrating purely (sorry) on internet radio. Its Sensia product is the highlight of the range and features a full-colour touch screen LCD display as well as additional interactive capabilities like Twitter and Facebook. Pure confirmed to us that video-capable devices are a natural step forward and can be expected in the next year or so. Client Reading: HDTV: Standards Muddle Clouds Outlook For Wireless Displays

Microsoft has announced that NBC Universal will provide movies to its growing catalogue of titles available for download through the Xbox Live service in France, Germany, Spain and the UK. The newcomer joins existing studios Warner, Paramount and MGM. The movie library will now total nearly 300 titles, and Microsoft claims that movie sales have doubled since the introduction of the new Xbox interface (NXE) late last year. Microsoft has brought over a team from the US to build up the Xbox Live activities in Europe, which are tracking somewhat behind what’s going on in the US. As I mentioned recently Netflix has had tremendous success with its movie rental service through the Xbox Live service in the US. Unfortunately Netflix doesn’t have a European activity yet, so until a deal with a European aggregator (Lovefilm?) can be signed, Microsoft is having to pull together its own movie deals. As with everything else in Europe, that’s no easy matter as rights have to be cleared in each country separately. Italy had to be excluded for the moment from the NBC Universal deal, for example, because of local exclusivity clauses. The Xbox Live library offers a mix of SD and HD movies, the latter in 720p. We are still waiting for the arrival of 1080p movies, both in the US and Europe. That will be a significant moment, because it will justify what Microsoft has claimed all along: that it doesn’t need to add Blu-ray capability in a world of online video. 1080p movies would obviously be a challenge in terms of file size, in terms of storage and network access, but it’s something Microsoft will have to address sooner or later, in spite of its claims that users can’t tell the difference between 720p and 1080p. Twitter: twitter.com/dmercer15 Client Reading: Digital Media Survey: An analysis of US Online Premium Video Users

After commenting on Netflix’s online TV performance last week, Microsoft released further data confirming the popularity of online movies delivered to Xbox 360 users. More than 1 million US-based XBox Live Gold members (ie those who choose to pay the $50 a year fee) have downloaded and activated the Netflix service since it was launched in November 2008. Collectively these users (who subscribe to one of Neflix’s unlimited rental plans) have streamed the equivalent of 12.5 million 2 hour movies during the past three months; that’s one movie per user every week. Of course we’re not just talking about movies: the service also offers shorter TV episodes, so the actual number of programmes watched is even higher. Cold hard facts are always a useful guide to market trends ;-) Anecdotes can be dangerous indicators, but may also support or cast doubt on statistics. Two stories have come my way in the last few days on the subject of connected TV that suggest major shifts are beginning to happen in the real world rather than on tech vendor powerpoint slides. Firstly, a colleague in the US has recently bought an Xbox 360 primarily to watch Netflix online videos. He doesn’t play many games, and he wasn’t an existing Netflix customer, so both Microsoft and Netflix have benefited from this online video partnership to the tune of some $150/year combined. There was no obvious alternative as he doesn’t get cable service, but this seems to be a case where a potential traditional “pay TV” provider (cable, Fios) lost out by not having the right content package and service available. Secondly, a friend in the UK told me he has been using his broadband-enabled PS3 to watch live Premiership football on a large screen LCD TV from unauthorised websites. The quality is apparently quite acceptable if not impressive at times, with occasional breakup but nothing that detracts significantly from the enjoyment. Again, it may be the case that this was not a serious potential Sky Sports pay TV customer, since he might never spend that much on Sky’s service in any case, but Sky will be fully aware of the threat from these over the top (OTT) sources. So the internet has become a direct competitor to traditional pay television and VOD services on both sides of the Atlantic. The broadband service provider in each case receives no additional revenue; instead new OTT service providers are emerging to meet consumer demand. The sports streaming sites, admittedly, would appear to be in breach of content rights laws, but their revenues are presumably derived primarily from advertising. With current broadband networks there has to be a question as to how many concurrent users of these OTT TV services the networks can sustain. Judging from what’s going on out there, it may not be too long before we find out just how far today’s internet, and the patience of BSPs, will stretch. Twitter: twitter.com/dmercer15 Client Reading: Digital Media Survey: An analysis of US Online Premium Video Users

Much has been written in recent days about the rosy financials released by Netflix earlier this week. While most digital consumer companies are reporting collapsing profits or flattening revenues, Netflix certainly stands out from the crowd. Several commentators have pointed to the recession as a direct cause for Netflix’s current success. But I agree with Netflix CEO Reed Hastings: “There’s no way for us to tell”. There is a lot of speculation at the moment in general about the recession’s positive impact on spending on home entertainment, such as pay TV, DVDs and digital music. I’ve heard this argument during previous recessions and I’ve never seen convincing data that proves it one way or the other. It’s tempting to point towards one set of data in isolation – the Netflix story is a good example – and draw this conclusion, but there is really no evidence of cause and effect. Netflix’s growth is just as likely, in fact more likely in my view, to be a result of customers simply adding their service to what they already get, or switching from alternative sources. It is not clear at all that the overall market for home entertainment is benefiting from a direct switch away from out-of-home spending. Netflix’s story is strong evidence that premium online video is taking off in a big way, and the company confirms that it has underestimated the positive impact of having its technology integrated in connected TV devices such as flat panel TVs, Blu-ray players and Xbox 360s (a trend we noted as a key theme at CES). Even though the installed base of these devices is relatively low, they are already driving new customers towards the Netflix service, not least because the partners receive payments from Netflix whenever that happens. It would be dangerous to assume that Netflix’s success can be replicated easily in European markets. Even in the US, connected TV content is in its infancy and Netflix is investing significant sums in building online content libraries. In Europe this process would inevitably be much more expensive on a per-user basis because of the fragmentation of the European content market. Rights would need to be negotiated on a country-by-country basis, and within a single country the costs per user relative to the US would inevitably be much higher. Europe’s Netflix equivalents, such as Lovefilm in Germany and the UK, are currently nowhere near the same scale. Lovefilm is estimated to have revenues in the region of $60m compared to Netflix’s $1.36bn, and Netflix is clear that this scale is a key factor in allowing it to invest in new distribution technologies. In case Netflix does eventually look at the European market, these considerations should be made alongside the fact that European interest in home video has never been anywhere near the levels of the US. On a per-head basis spending on VHS and DVD rentals, as well as purchases, have historically been much lower. One way or another the Americans just love movies more than Europeans. Twitter: twitter.com/dmercer15 Client Reading: Digital Media Survey: An analysis of US Online Premium Video Users

LG kicked us off this morning with a bullish presentation after announcing 16% US revenue growth in 2008. A variety of new technologies were confirmed, including 60GHz WirelessHD connectivity, 3D processing chips that will be ready for future 3D formats, TruMotion 240Hz (which combines 120Hz with backlight switching to create a 240Hz effect), LED backlighting (which gives a 2,000,000:1 contrast ratio), and 25mm thin LCD TVs. The hot LG story is around its deals with internet content providers. Netflix, Youtube, Yahoo and other providers will appear as menu options on a range of connected devices, including TVs. LG also introduced an 802.11n BD player, one of the few integrated wireless enabled BD players on the market. Netgear also gave a strong performance, centered around its ITV2000 internet TV player, launching in summer 2009 at $199. This is a compact, pocket-sized set-top box which will give access to web content, including the inevitable Youtube, without the need for PC connectivity. Netgear also introduced its Digital Entertainer Elite, priced at $399 and available in February. This device incorporates a 500GB HDD and plays HD video at “up to Blu-ray quality”. I suppose that means something close to Blu-ray if the wind is blowing in the right direction. Toshiba, rather strangely, began their press conference by highlighting their leadership in “TV combos”, ie combined TV/DVD players. Not exactly technology innovation, but I suppose they had to find a market leadership story to start with. The new stuff focused on the introduction of internet widgets in TVs and other devices from the likes of Intel, Yahoo and Microsoft. Toshiba highlighted a number of content service providers on their presentation material, including Myspace, CinemaNow, Yahoo and CBS, but the fine print indicated that these names were shown “for demonstration purposes only”, suggesting that partnership deals are still at the negotiation stage. Toshiba’s approach to internet content is based on Microsoft platforms such as the Media Center PC, which is not surprising given its stronghold in the PC market. In the TV space, Toshiba announced the introduction of Dolby Volume, which balances volume levels across different TV channels so that viewers don’t have to keep adjusting volume levels. Dolby told me the technology has been a success in Japan for the past year and is now making its way to the US and Europe. Toshiba also indicated that the long-awaited Cell TV is on the horizon. Using the Cell processor at the heart of the PS3, this will be launched in 2009. Cell TV could allow 6 simultaneous HD streams to be recorded, support the next generation of 4k x 2k panels and allow for 3D graphical interfaces. Client Reading: IFA 2008: Internet and 3D Offer Hope During Europe's CE Recession