Projection Monthly - October 2005

Dear Readers,

The October issue of Projection Monthly is now in the hands of our subscribers with broad coverage in key focus areas that reflect our new coverage format-targeting more depth and analysis to enhance the value added for our readers, with a focus on quality over quantity. From the 100 pages of coverage this month, we decided to highlight three news stories including a milestone development in 3D displays, an update on the HD-DVD roll out and some comments on the growing reality of IPTV.

The IFA trade show in Berlin in many ways is Europe's answer to CES. One of the more interesting demos was a live broadcast of 3D video. For this, Newsight (New York, NY), 3D-IP (Augsburg, Germany), Grundig and Cobalt Entertainment (North Hollywood, CA) teamed up to deliver a new 3D camera, image processing technology and a stereoscopic display system. The demonstration marked a milestone in the continuing evolution and acceptance of 3D displays. Now, content can be captured and transmitted in real time in eight-zone stereoscopic 3D.

The new camera, developed by Cobalt, uses twin HDTV cameras with novel lenses designed to mimic human vision in their ability to not only change focus, but to converge on an image. That means that the lenses are parallel to each other when viewing distant objects, but will "toe in" like human eyes as objects get closer to the viewer. Each camera, with its slightly different perspective, then outputs a very high-quality HD video stream at 1.485 Gbits/second.

The image processing system, developed by 3D-IP (Augsburg, Germany), uses hardware code-named "Black Betty." The idea here is to create eight stereoscopic views from the primary image pairs, look for the slight differences in these views and then encode them very efficiently for transmission/reception. Decoding is done in the TV, which is an eight-zone autostereoscopic display (developed by Newsight and Grundig). All this can be done in real time - a job that has historically been done only in a post-production environment.

Moving on to the CE space, we reported this month on the status of HD-DVD, one of the competing next generation high-definition media formats, the other being Blue-ray Disc. The application driving this technology is, of course, movie playback in high definition (1080i). At CEDIA, Toshiba had a demonstration of the HD-DVD player running in its booth, where it was used to provide 1080i content to a Toshiba DLP-RPTV, which de-interlaces and scales the content for display on the 1080p TV.

Mark Knox, the HD-DVD spokesperson told Insight Media that the company is "on-target for a Q4 launch." That probably translates into manufacturing beginning by then, with sales starting in Japan by the end of the year. Rollout in the US has not been announced, but is likely to be shortly thereafter. The unit will carry the HD-AX1 model number and is expected to sell for about $1,000.

But the major concern is when Hollywood studios will begin releasing movies in the new format. Some studios have been silent so far, but Knox hinted that negotiations are well advanced and there would be announcements coming soon. One hang-up may be the copy protection schemes. Both formats use the AACS copy protection system, but Blue-ray has added additional ROM-Mark and BD+ content protection schemes. While some in the industry believe this may be overkill, the added security is helping to sway Hollywood, as FOX and Lions Gate Entertainment both recently announced support for Blue-ray, with Paramount announcing days ago it would also now support both formats . In the HD-DVD camp are Paramount Pictures, Universal Pictures, HBO, New Line Cinema, Walt Disney Pictures and Television and Warner Brothers Studios. Intel and Microsoft have also just declared their support for HD-DVD.

It came as no surprise in May of this year when device manufacturer, Sony announced that its PlayStation 3 would include a new Blu-ray drive. This may be helping to gain support among other hardware manufacturers like Panasonic, Philips, Samsung, Sharp, Pioneer and LG Electronics, as well as PC makers like HP, Dell and Apple. But, it may have also been a factor in Paramount's recent decision to support the format, too. In all, there are more than 78 companies behind Blue-ray.

We are currently at CEATEC in Japan where there are large booths supporting both the HD-DVD and Blue-Ray Disc formats with lots of prototype hardware and chatter about all aspects of this looming battle. A unified format does not seem in the cards and developments are happening quickly. We will have more on this next month after we've had some time to reflect on all the news and rhetoric.

Changing gears to DTV, we also reported this month that despite the entrenched broadcast industry's best efforts, IPTV is coming our way. For instance, according to a report published by Informa Telecoms & Media (www.informatm.com) the number of IPTV subscribers will jump tenfold by 2010. The report covered 50 countries and found that although there are only 2.5M IPTV subscribers globally today, there will be 25M subscribers in five years. " IPTV is entering a crucial stage in its development," said report author, Adam Thomas. "It is moving away from a technology under trial, into full commercial deployment." We agree but think the market potential here is much, much higher.

We believe this is because IPTV holds the power to reshape how television is viewed. The old "one to many" content-push model is giving way to individualized "content pull." But it doesn't stop there. The content itself is changing from a select (exclusive) number of regional broadcasters pushing content on their schedules, to customized "anytime" programming from a virtually endless supply of worldwide content sources.

As technology continues to develop, we begin to see hints of IPTV showing up in the mainstream. For example, TiVo recently announced plans to allow subscribers to be able to download TV shows to their set-top boxes via the Internet (even before they air). So far, no one has been able to convince Hollywood that Internet broadcasting could be profitable. But TiVo has struck a deal with IFC (Independent Film Channel) (www.ifctv.com) to transmit several of the net's shows through a broadband connection as part of a trial program. "The future of television will include an explosion of consumer choice, including programming options from both traditional broadcast and broadband Internet channels and sources," said Brodie Keast, Executive Vice President and General Manager of TiVo's Consumer Division.

On October 4th, Comcast, a leading provider of cable service, decided to stream NHL (National Hockey League) games over the Internet, providing this option to its 7.7M high-speed Internet subscribers. This exclusive agreement gives Comcast customers access to up to two live games daily, for a total of up to 300 throughout the season, up through the Stanley Cup playoffs.

Truth be told, when it's all said and done, technology can only play an empowering part in the IPTV transition. What's really going to motivate broadcasters to evolve in this direction or "die," is the power behind TV - ad dollars. The on-demand environment brings together the worlds of advertising and direct marketing in whole new ways, and requires major shifts in long-standing approaches to entertainment, advertising and marketing. Shifts that we believe will, sooner or later, play no small part in moving traditional broadcasters in the direction of IPTV.

You'll find more details on these companies as well as our regular coverage of 100+ timely stories, all organized into over 30 sub-sections for easy review and reference, in this month's issue of Projection Monthly. If you are a subscriber, you can build a library of past issues that is "key word" searchable - a very valuable business intelligence reference tool.

Projection Monthly is a subscription-based newsletter that covers the entire big-screen display industry, including all technologies, markets and applications - from the supply chain through the distribution channel. If you would like to evaluate a sample copy of Projection Monthly, please reply to: info@insightmedia.info

See the Table of Contents for the October issue of Projection Monthly by clicking here. http://www.insightmedia.info/archive/10-05PMTOC.php

Until next time,
Steve Sechrist
Insight Media
steve@insightmedia.info

About Insight Media

Insight Media (www.insightmedia.info) provides a full array of market research, news, analysis and consulting services for the microdisplay industry, with special attention to projection and near-to-eye products. Tracking the complete supply chain from finished products and distribution to components, microdisplay-based products, technologies, trends and analysis is delivered through newsletters, technology reports, forecasts, conferences and custom consulting activities. Insight Media has developed a world-class team of industry analysts and associates to provide the most comprehensive coverage and analysis of the microdisplay industry has to offer.

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