Wednesday, 10th January 2007

HEADLINES OF THE DAY

WTA Tour Extends Scott's Contract but Rift with USTA Remains

The board of directors of women’s tennis’ WTA Tour has extended the contract of chairman and chief executive Larry Scott by five years until 2011. Scott was appointed in April 2003 and has helped drive significant growth, particularly in the areas of sponsorship, television, marketing and media coverage during which the WTA has signed the largest sponsorship deal in the history of women’s sport, a six-year agreement with mobile phone giant Sony Ericsson worth $88 million, and the largest television deal in the history of women’s tennis with pan-European sports channel Eurosport.

Meanwhile, the tour has announced that 57 tournaments are bidding for the 48 available slots on the 2009 schedule. Some 25 tournaments have applied for the top 14 events planned under the Roadmap 2010 plan. However, the plans have run into opposition at the United States Tennis Association and tournaments have refused to submit applications which would force them to choose between ‘A’ and ‘B’ level status.

The USTA is anxious about the ramifications for its US Open Series, which comprises 10 major men’s ATP and women’s WTA Tour events, culminating with the US Open and is seeking a compromise with tour organisers. If an agreement is not reached, the USTA could carry out its threat to organise women’s events separately having already set aside $10 million to establish a rival tennis circuit to the WTA Tour. Source: Sportcal, 9th January 2007

See also Interview with Jane Brown-Grimes, the new USTA Chairwoman with ESPN USA, 8th January 2006


INFO DIGEST

Info Box – General Internet Statistics
* US$4.2 billion spent on Internet ads in Q3 2006
* 13.7% of Internet users find it hard to stay offline for a few days in a row
* 15% of consumers receive 1.5 billion brand impressions daily
* 5% of Internet video viewers have paid for a movie download
* 75% of adults prefer e-mail to IM, 75% of teens prefer IM to e-mail
* Mobile advertising to generate US$1.9 billion in 2006
Source: Info IQ


SPORTS SHORTS

* The South American Football Confederation (CONMEBOL) has reiterated its support for Brazil to host the 2014 World Cup. Despite Colombia’s plans for a rival bid, led by President Alvaro Uribe, CONMEBOL has already decided to back Brazil for the tournament. FIFA is expected to name the 2014 World Cup host nation in November this year. Brazil will be hoping to stage the tournament for a second time, after hosting the showpiece event in 1950. Source: Football Insider, 9th January 2007

* Motorola said it is developing, Motorola ‘Sling STB’, which are set top boxes that can send home television to phones. Chief Executive Ed Zander also unveiled plans to put Microsoft's Windows Media digital rights management in a music playing phone model in the first half of this year, with other models to follow. Source: Advanced Television, 10th January 2007

* The Breeders’ Cup is to undergo its most significant expansion since it began 24 years ago. Three new races, each worth $1 million, have been added to the programme and a two-day format will be introduced this year. Prize money for the 11 races will total $23 million and cable sports broadcaster ESPN will provide television coverage of the meeting, which takes place on October 26 and 27. Source: Sportcal, 9th January 2007

* Apple announced today that 50 million television episodes have been bought from the iTunes Store, along with 1.3 million movies and more than 2 billion songs. The iTunes Store now boasts over 4 million songs, 250 feature films, 350 television shows and over 100,000 podcasts. iTunes today added more than 100 movies from Paramount Pictures. Source: Worldscreen, 9th January 2007


MORE NEWS

Asia/New Media: IPTV Subscribers in Asia Pacific to Reach 27.4 million by 2013

The Frost and Sullivan research service titled Asia Pacific IPTV Market provides an in-depth analysis of IPTV scenario in 12 markets across Asia Pacific. The research service identifies the market demand, competitive landscape, key drivers and restraints for the IPTV market. The study also presents forecast patterns for revenues and ARPU trends for the markets of Australia, China, Hong Kong, India, Indonesia, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Taiwan, and Thailand.

The deployment of IPTV in the region has been further hastened by the explosion of broadband in various high growth markets across Asia Pacific, even as service providers across the region have invested heavily in the network infrastructure required for offering these services. IPTV has generated a new revenue stream, amidst dwindling fixed line revenues. Advancements in compression, transmission, and watermarking technologies have enabled more service providers to jump onto the IPTV bandwagon.

In line with these trends, the Asia Pacific IPTV market is set for considerable growth over the forecast period, with the number of IPTV subscribers expected to increase from the existing 1,47,000 to 27.4 million by 2013.

However, poor infrastructure in key growth markets of China, India, and the Philippines coupled with lack of quality content have restrained the growth of IPTV in the region. Furthermore, access to quality content has been a common challenge for service providers. The analyst of this research said, "Cable TV providers or the IPTV market leaders already have exclusive access to this content. This arrangement makes it difficult for other service providers to scale their service to meet the users' requirements."

With respect to individual regional markets, Hong Kong is already a mature market for IPTV services, and is expected to be heading toward saturation by 2009. China and India are perceived as high growth markets for IPTV by 2009. By 2013, China along with Hong Kong is expected to contribute nearly 60 per cent of the total Asia Pacific IPTV revenues. With 47.8 million subscribers, China has the largest broadband subscriber base in Asia Pacific in 2006, out of which nearly 70 per cent are residential subscribers.

In Australia, IPTV is entering a crucial stage in its development, moving away from a technology under trial, into full commercial deployment. While it could take another three years for IPTV to enter the growth stage, service providers' early adoption of IPTV services and aggressive pricing strategies are expected to contribute to the success of the technology in Australia.

Presently, IPTV is deployed in China, Hong Kong, Malaysia, Singapore, South Korea, Taiwan, and Thailand. The service is expected to be introduced in India and the Philippines in 2007, and despite the lack of bandwidth in most markets, the demand for interactive entertainment has lured service providers to offer IPTV-based content in the form of video-on-demand (VoD) and channel-based offerings. Source: Indian Television, 9th January 2007

Japan/Business: NTT DoCoMo Buys Into Nippon TV

Japanese mobile operator NTT DoCoMo acquired a 3% stake in Japanese broadcaster Nippon Television Network for about $112 million, in a move designed to strengthen its content offerings for mobile and DTT. The move is the latest example of companies expanding their content investments in the intensely competitive Japanese mobile and broadband sectors.

Last spring, NTT DoCoMo, which serves about 50 million customers worldwide, and Nippon TV announced that they would spend $85 million to set up a joint venture to create content for mobile devises and DTT. The two companies also agreed to explore a wide variety of other possible partnerships.

In early 2006, NTT DoCoMo also acquired a 2.6% stake in broadcaster Fuji Television and in December it acquired a stake in film company Kadodawa Group Holdings. NTT DoCoMo had been accumulating Nippon shares through December and announced the stake last week. The deal makes it Nippon’s sixth largest shareholder.

Also last week, Japanese newspaper Nikkei reported that NTT DoCoMo is planning to spend $1.7 billion to upgrade its wireless network between now and 2010 so that it could provide Internet speeds of up to 100Mbs. NTT’s recent investments in television and production companies would provide it with a wide variety of compelling content for the so-called Super 3G service.

Faced with increased competition from mobile and fixed-line operators, Japanese cable operators have also been boosting access speeds and rolling out quad plays. Just last week, Japan’s largest cable operator J:Com announced that in April it would launch a high speed Internet product with speeds up to 160Mbs. J:Com, which rolled out its own mobile phone product in 2006, will charge about 6,000 yen ($50.61) per month for the service. Source: Multi-Channel News, 10th January 2007

Pakistan/General: Pakistanis Do Well in World Ranking Junior Tennis

Two girls and a boy from Pakistan won their respective singles matches in the opening round of Sheikh Zayed ITF World Ranking Junior Tennis Championships at Abu Dhabi (UAE) reported by Pakistani contingent's Manager-cum-coach, Mehboob Khan. Sarah Mahboob, Pakistan's 15-year-old sensation, beat Isabella Aumuller of Austria 6-4, 6-2. Sarah is now scheduled to play against seed no. 8 Klaudia Mansfeldova of Slovakia.

Natasha Afridi of Pakistan played the match of her life as she didn't drop a single game in beating Violetta Nosareva of Russia 6-0, 6-0. Natasha will now face top seed from Oman, world no. 150 junior Fatima Al-Nabhani.

Zinelabidine Jouni of Tunisia beat a fighting Tanvir Ashiq of Pakistan in a boys' singles match. Pakistan No. 2 Junior player Yasir Khan made amends for Tanvir Ashiq's loss by beating Dominique Chaftari of Lebanon, 6-2, 6-0.In the pre-quarter finals. Yasir will now play against seed No. 4, Mohammed Alissawi of Jordan.

Tanvir Ashiq and Yasir Khan also teamed up to beat a strong pair of Hassan Ibrahim (Egypt) and Alem Tleshov (Kazakhastan) 6-2, 6-2 in a boys doubles match. In the Girl’s Doubles, Sarah Mahboob Khan and Jithmie Jayawickrema of Sri Lanka, are seeded 3 in the main draw. They had a bye in the first round and will play their quarter-final match against an all-Slovak pair of Ivana Krommelova and Klaudia Mansfeldova. Source: Associated Press of Pakistan, 9th January 2007

China/New Media: Mobile Phone Films Becoming a New Trend

China is estimated to have a little over 449 million mobile phone users at the end of 2006, the world’s largest user base, and the market is expected to continue its rapid growth well into 2010, according to the Ministry of Information Industry (MII) in China. This large user base has made the mobile phone a significant “fourth screen” medium to watch entertainment content and media in China, traditionally viewed on the movie screen, television or computer.

With the advancement of 3G technology in the near future, industry experts believe that the Chinese will increasingly view films, television shows, or other forms of media on their mobile phones as the screens are able to support higher resolution video and as wireless broadband speeds and storage capacities increase.

Currently, mobile phone film operations in China are primarily carried out through downloads in the form of streaming web-based viewing or direct downloads distributed through websites or Internet cafes. Users can either transfer them into their mobile phones via a USB cable or download them directly into their phones using their mobile service providers.

Netease’s recent research on mobile phone channels of distribution revealed that 54% of the people surfing the Internet in China download films onto their mobile phones regularly while another 27% do so occasionally. Mobile film can generate about $2,500 to $3,800 a month at Internet cafés that charge about $0.13 per download. This could mean that production costs are recouped in approximately 2 to 3 weeks. Source: Entertainment Asia, 8th January 2007

China/New Media: Internet User Base Reaches 132 Million

In 2004, China had 94 million internet users. The user base continued to grow to reach 100 million users in the first half of 2005. According to the Ministry of Information Industry, China’s internet user base continues to rapidly grow and has reached 132 million at the end of 2006, now second only to the US in the world. Broadband service subscriber total has also exceeded 52 million in 2006.

Accompanying this fast development of internet service in China, related industries have further explored and extended the technology’s applications in various business operation models. Emails, search engines, online banking and trading, online advertising, online news, online gaming and other businesses have advanced at breakneck speeds.

Xudong Wang, Minister of the Ministry of Information Industry in China, also enlightened the public of the nation’s goal in 2007, which is to enhance and upgrade existing internet services in urban areas and to promote information platforms to rural areas with focus on east and central China. Source: Entertainment Asia, 8th January 2007

China/New Media: 3G Cell Phone Entertainment Services to Gain Popularity

A leading information technology research company CCID revealed in its recent research report on 3G cell phones in 2006 that more than 77% of cell phone owners are willing to buy cell phones with third generation technology, and about 17% would consider it. Less than 6% clearly indicated their indifference to purchase one with 3G technologies.

The majority, an overwhelming 76%, would only accept medium to low end 3G models with prices less than $320, among which 25% will be interested in those low end models that are less than $128. No more than 24% of the consumers surveyed would consider high-end models more than $320, when making the purchase decision.

Function-wise, consumers expressed keen interest in many 3G services such as cell phone TV, video calling, high speed internet access, music downloads, multi-media transferring, and wireless positioning. The most anticipated feature is to watch TV and films on cell phones by utilizing 3G based high-speed data transferring capability.

CCID believed that 3G cell phone services would have quite a promising future in the Chinese market, but pricing could be a key factor affecting its extensive promotion. In the early development stage among commercial users, the average 3G cell phones will definitely cost more than 2G models currently out in the market. This will be a major bottleneck to 3G services’ promotion in China, which many cell phone terminal manufacturers would want to look into. Source: Entertainment Asia, 8th January 2007

China/New Media: Chelsea Looks East With Chinese Language Website

Chelsea has furthered its presence in the Far East by officially launching the Chinese language version of its website. The site has been launched in partnership with SINA, whose website, with 230 million registered users worldwide, is the most recognised Internet brand name in China, boasting the highest daily page views of 500 million.

Chelsea.SINA.com.cn is the Premiership's first Mandarin language website launched out of mainland China. SINA.com's sports site registers average daily traffic of more than 40 million, three times that of its nearest competitor, giving it a market share of more than 50%. Chelsea will have a prominent position on the SINA.com sport home page that will link to the new club site. Chelsea’s group business affairs director Paul Smith negotiated and concluded the deal.

The site will carry translated content from the site, as well as exclusive content for the Chinese market. The site also has rights for official Chelsea photography, mobile, wireless, SMS downloads and Chelsea TV Online. SINA will be the official and exclusive online partner of a Chelsea tour to China, which is currently being planned. Source: Football Insider, Sportcal, 9th January 2007

Elsewhere/Rights: Tender Launched for French Rugby's Top League

The Ligue Nationale de Rugby, organiser of French rugby’s Top 14 championship, launched a tender for its TV rights in France. The tender offers the rights for both the top and second divisions, Pro D2 leagues, for the 2007-08 to 2010-11 seasons. It also includes the live free-to-air rights for 2006-07 season final on June 9, 2007. Under French listed events law, the final must be broadcast free-to-air.

Incumbent Canal Plus' existing €19-million ($24.7 million) -a-season deal expires in June and the broadcaster, which recently merged with its rival TPS, is said to be interested in bidding once more, as is telecoms firm Orange. The tender document was issued to television, broadband and mobile operators. Bids for the rights must be received by February 6. Source: Sportcal, Sport Business, 9th January 2007


ARTICLES, COMMENTS & OPINIONS

South Korea Casts Dark Shadow Over Mobile Broadcast TV Model

Doubts about the long-term sustainability of mobile broadcast TV emerged in South Korea with news that the advertising-funded free T-DMB service is losing a significant amount of money and rival service satellite-DMB is falling short of subscriber expectations. Even though there are more than 2.1 million mobile broadcast TV subscribers in South Korea, the business model for both services remains far from convincing.

The search for mobile TV business models is beginning to look a bit like the quest for the mythical Holy Grail. In recent months, the business model for DVB-H and 3G streaming has come under increasing scrutiny, suggesting that the only viable revenue-generating audiovisual service is video-on-demand. So will mobile TV providers ever find a profitable way to operate?

According to predictions released by the MIC last year, there will be 12.3 billion DMB subscribers in 2010 and 20.5 billion in 2012. Also, the Electronic Information Center forecast in 2005 that the revenue opportunities for DMB would top US$1.37 billion in 2010.

Simon Bureau, CEO of South Korean consulting firm Vectis said, "T-DMB services are losing money even though it has over 1 million subscribers. Advertising revenues are still not high enough, and all are losing money." Just how much money the service is hemorrhaging remains unknown. Part of the problem, Bureau says, is that the number of ads on the T-DMB offering is being capped to entice users to use the service. That practice, he says, is stifling revenues.

But some insight into revenues generated by T-DMB was provided by Il Taek Lim, CEO of Nextreaming, provider of mobile multimedia products to operator KTFreetel. Lim says that broadcasters are receiving only US$2 million annually from advertising because of the revenue-share business model adopted for T-DMB. He has called for a major overhaul of the model while it is still relatively fresh.

The story for satellite-DMB is not much brighter. In September, the subscription-based service topped 750,000 subscribers but lower than its original launch target of over 1 million by that point.

The long-term target for operator TU Media is to have 6.6 million subscribers generating revenues of US$1.1 billion by 2010. Based on a monthly fee of US$13, TU is generating US$9.75 million a month, though the company offers long-term subscribers a 10-20% monthly discount. The company needs 2.2 million subscribers to become profitable and that he expects to have reached that figure by the end of 2007 or early 2008.

It is not all doom and gloom for mobile broadcast TV. Figures released by TU reveal that the average daily use of the service per customer in June and July was 59.8 minutes, with consumption peaking during commuter times. Furthermore, four-fifths of mobile phones are expected to include mobile TV functionality by 2008, increasing the reach of the service.

It is doubtful whether the promise of mobile broadcast TV in South Korea is enough to persuade companies in other markets to launch the service.
Considering South Korea is heralded as the industry test bed for new technology and services, the latest evidence will not lessen the mounting concern for mobile broadcast TV. Nick Lane comments on Informa Telecoms & Media, 14th November 2006