As I said a few days ago, it's great fun watching these two slug it out. Today, each side has a different story (see the Guardian's excellent coverage): negotiations have collapsed, or they continue; audiences for Sky's TV shows are declining, or they're rising; Sky is doubling its prices, or it isn't. Fantastic! If they turned this almighty row into a TV reality show and split the rights both sides would be more than happy. Let me see, Branson in one corner, Murdoch (senior, naturally - he does like to keep fit) in the other; seconds out... round one. There's enough animosity for a good dozen or so episodes I should think. Of course it's typical media brinkmanship. Carriage rights negotations are often fraught affairs, especially when there is a major player of equal weight on each side of the table. These sorts of arguments are familiar territory for the cable industry and premium channels in the US, for example. They are usually resolved at the 59th minute of the 11th hour, because each side wants to extract the last cent of value from the deal, but neither side can really afford for the screens to go blank. So my bet is Virgin Media's Simpsons fans needn't fret. Just enjoy the show while it lasts!

I mentioned attending John Chambers' keynote at CES in January. We've just published an in-depth analysis of Cisco's consumer strategy following other interviews and discussions with Cisco personnel. Of course one can always be cynical about the real intentions of any CEO speech. Boosting the share price is usually fairly high on the priority list; in this case rallying the many Cisco troops in the audience also seemed to be an objective. But one way or another a company is reflected in the leadership that comes from the top, so Chambers' vision, while it may not be shared to the last letter by every one of his employees, is worth listening to for a statement of where the company might be heading over the longer term. Our analysis (published to clients here) suggests one major disconnect in the open standards vision offered by the CEO and the reality of one of his key consumer division's long-time business model. Scientific-Atlanta (S-A) has always pursued a vertical strategy in the best interests of its core client base, the cable industry. So it is not quite clear how a world of open IP-based consumer technologies will match with S-A's traditional business model. Nevertheless the Cisco perspective is a compelling one and major CE players should watch the company closely for any signs that it is making progress. Current industry leaders like Sony, Panasonic, Samsung and Apple would be the first to suffer if Cisco turns its Human Network vision into commercial reality.

In sharp contrast to the UK, France has laid down new laws concerning the transition from analogue to digital terrestrial television. It is the first country in Europe to mandate digital tuners in TV sets. It also has one of the most ambitious migration schedules, given the present low penetration of digital TV; analogue switch-off will begin in 2008 and end in late 2011. France is also one of the first European countries to confirm that HD (high definition) channels will be available on the DTT platform. These will be licensed this year and could be on the air before the end of 2007. They are likely to be based on MPEG4 technology. France's traditional dirigiste approach to industrial technology policy making for once appears to be well-timed. The new broadcast laws seem at first sight to be in sharp contrast to the disarray besetting the UK's DTT platform, where commercial players are driving the introduction of new technologies while the regulator tries to make peace with warring factions. Ultimately it will make sense for all digital TV platforms around the world to move towards more advanced technologies, including codecs like MPEG4 and improvements like HD. But how each country moves in that direction is clearly going to vary enormously. Right now we suspect that industry players and consumers alike would rather have the relative certainty of the French market than the instability that seems to lie ahead in the UK. (Strategy Analytics clients will receive a more detailed assessment of recent developments in France shortly.)

Watching punch and counterpunch in the Murdoch/Branson battle is tremendous fun, but their private war is beginning to suck in reluctant bystanders. Sky's announcement of its own pay digital terrestrial service has serious implications of the potential of the UK's Freeview platform and its various partners. Sky plans to switch off its current three Freeview channels and use the capacity to launch four pay channels instead. To get the new channels viewers will have to install a Sky DTT box (based on different conditional access and codec technologies to those already deployed) - they will not be available through any existing Freeview box or IDTV, or through other Freeview-compatible devices like BT Vision. The UK's regulator, Ofcom, will investigate Sky's proposals to establish whether the variations in licences necessary for Sky to launch its new service should be permitted. One key concern is that the introduction of MPEG4 technology on the DTT platform will begin to make legacy DTT equipment redundant and could reduce consumer confidence in DTT in general. This is particularly important given that the switch-off of analogue terrestrial services begins in 2008. On balance we believe that the introduction of MPEG4 in itself will not be seen as a disadvantage, but that Ofcom should encourage a consensus approach from all DTT partners towards its introduction in order to minimise consumer concerns and ensure a smooth transition. The most contentious issue is likely to focus on establishing an appropriate balance between the number of free-to-air and pay channels across the DTT platform. The key to Freeview's success (apart from the massive investment of licence fee money in digital channels by the BBC) has been that it requires no contract between the viewer and a service provider. Plug-and-play access via a low-cost device, as well as confidence in platform stability, have ensured rapid consumer take-up. If "Freeview" in fact becomes dominated by pay services, this model is disrupted. Ofcom's challenge is to accurately predict the market impact of alternative packages of pay and free channels so that overall policy goals are achieved. It will face considerable pressure from vested interests on both sides of the "pay" and "free" divide and its perceived independence is likely to be severely tested by this dispute.

Here is the side-by-side comparison in an Akihabara store of a 65" PDP from Panasonic and the same size LCD from Sharp:

Sharp Corporation is one of Japan's unsung heros of the technology sector and a perfect if somewhat extreme illustration of the value of long-term investment decisions. Sharp was one of the earliest pioneers in LCD technology, with R&D beginning some 40 years or so ago. It is not clear what the business plan projections for flat panel TV were at that time, but I have no doubt that the company and its investors were happy to take a long term view on the market's potential.

Sharp recently reported rising profits and sales on the back of LCD TV performance, one of the few major players that is avoiding the impact of rapidly declining prices. Sharp's strategy is to continue to push LCD into ever larger screen sizes, and this is evident in Akihabara's electronics department stores, where the company's 65" LCD TV are on display next to the equivalent plasma model from Panasonic (I'll post the photograph once I restore my PC-camera connectivity). The demonstration highlighted Sharp's next challenge: to improve picture quality at these sizes - the plasma set outclassed the LCD, and this was reflected in a sharp (pardon the pun) price discount on the Sharp model.

Nevertheless, I have no doubt technology improvements will continue and we can expect to see LCD and PDP fighting it out in the 50-60" battleground over the next couple of years.