A roundup of recent news from the Consumer Electronics Show in Las Vegas:
Cablevision's (NYSE:CVC) VOOM could be worth more than we thought. Accelerated flat panel HDTV means greater demand for HD content, which should help VOOM grow distribution. Comments that DirecTV and EchoStar may work together on HD indicate joint content investments rather than shared space segment. We would not be surprised if DirecTV and/or Liberty are interested in acquiring all, or part, of Cablevision's interest in these assets. Comcast's (NASDAQ:CMCSA) consumer offering will get even stronger in 2007. At CES we saw a strong set-top box [STB] and device convergence strategy in the Motorola booth where it was showing a new line of STB built to Comcast's specs, which will enable a myriad of new services including networking multiple TVs to one HD DVR. We would also expect Comcast and Sprint to launch dual function Wi-Fi/cellular phones in 2007. DirecTV's (NASDAQ:DTV) pitch at CES was eerily similar to last year's. DirecTV said that it will have over 100 national HD channels by year end, that it would have a VOD service launched in 2007, and highlighted mobile devices, which will interface with its DVR. Much of this was shown in less developed form at CES last year with talk of late 2006 launches. DirecTV also highlighted the launch of a video gaming network. EchoStar (NASDAQ:DISH) highlighted several technological innovations at CES. EchoStar was at CES in force reminding us that it is not just a DBS company, but also a major provider of STB and technology for satellite TV platforms. The DISH Network is fielding a very compelling consumer proposition and announced that it would be launching its own VOD service in 2007. DISH is also the first to commercially launch powerline technology. Gemstar (GMST) should benefit from the introduction of mobile video service. The proliferation of mobile video services should benefit Gemstar by licensing its wireless IPG. Neither of the premier service providers are currently using Gemstar's IPG, but the executives we talked to about this were circumspect enough to make us believe they are thinking about it. Strong flat panel sales and the launch of broadcast digital services in Europe will serve as a catalyst for CE licensing. NDS (NNDS) is spurring convergence with its content protection technology. NDS' focus was on CA and DRM for mobile devices. It also showed CA for multiple types of mobile video services, including WiMax, and a low-cost flash memory card with its CA embedded that Disney is using for a child's video player. The telcos will look to provision new services through a residential gateway justifying the recent acquisition of Jungo. OpenTV's (OPTV) middleware will enable the launch of new services. OpenTV had no actual presence at show, but its STB customers only had good things to say. The transition to digital and flat panel upgrade cycle sets the stage for middleware and application growth. We asked EchoStar about its relationship with OpenTV and were told it had facilitated the Kudelski deal and are looking into several new interactive services. TiVo (NASDAQ:TIVO) was able to showcase its new DVR software for Comcast. TiVo has arguably made technical progress toward transitioning its business model, but it has yet to launch these new services, and their financial contribution remains unclear. TiVo's application for Comcast is admittedly a big improvement, but we feel it is not that revolutionary when compared to next-generation IPGs.
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