Overseas Media and Telecommunications Industry Trends 12/11-12/17
Our institute conducts research and analysis on overseas trends in broadcasting, telecommunications, media, and more from the unique perspective of the cable industry. In this note, we introduce interesting information based primarily on news publicly released overseas and information disseminated by companies.
◆ Key Topics of the Week
Warner to spin off its broadcasting division by mid-2025
Warner's major businesses include the broadcasting business, such as channels for cable operators; the studio business, which handles movies and other content; and the streaming business, represented by Max. Of these, the broadcasting business will be spun off as "Global Linear Networks" (a tentative company name). The remaining two will become "Streaming & Studios," and Warner appears to be positioned as the parent company for these. HBO, which produces and owns many popular programs at Warner, originally has its roots as a broadcast channel but will belong to "Streaming & Studios." This move is clearly similar to Comcast spinning off its cable broadcast networks, and it is thought that the "Global Linear Networks," which face a difficult outlook, have been separated from the "Streaming & Studios," which are expected to grow.
Paramount to integrate its broadcasting and streaming divisions and implement small-scale staff reductions
The company will integrate the streaming division, which handles Paramount+ and Pluto TV, with the division that handles broadcast networks in the U.S. Ray Hopkins, the executive in charge of these businesses, sent a message to staff stating that this is "to optimize Paramount's overall portfolio." Hopkins was originally the head of the broadcasting division but has also been in charge of the streaming division since October.
Nielsen's U.S. TV viewing share shows growth in streaming services
The target period is from October 28 to November 24. Total TV usage time increased by 5% compared to October. By distribution method, the share of streaming services increased from 40.5% in October to 41.6%, cable TV decreased from 26.3% to 25%, and broadcasting saw a slight decrease from 24% to 23.7%. The expansion of streaming service share was driven by YouTube, Prime Video, and Roku, all three of which achieved record-high shares.
YouTube viewing on TV grows to over 1 billion hours daily
This is the total worldwide viewing time using a TV rather than a smartphone or tablet. It appears to be used for watching with family and friends, or for "passive viewing" while doing chores. Popular categories are sports and children's entertainment, with sports viewing time increasing by 30% since 2023. Among creators posting videos to YouTube, those earning the majority of their revenue from TV viewing increased by 30% year-over-year, and 4K video uploads increased by 35%, even excluding short-form content.
CNBC plans standalone streaming service "CNBC+" for Q1 2025
Although not yet officially announced, it has been reported based on information from two people familiar with the matter. Comcast has announced the spin-off of the cable broadcast networks (channels) under NBCUniversal, and CNBC is included in that. With the cable TV broadcasting business in a difficult situation, it seems they are considering ways to provide programs outside of cable. Note that NBCUniversal operates the streaming service Peacock, and other individual channel-related services include NBC News Now, Today, and Fox News Channel. CNBC+ appears to have a policy of only streaming broadcast programs and not creating streaming-exclusive content.
Popular UK broadcaster partners with YouTube to put all programs on YouTube
The UK commercial network "ITV" has announced a partnership with YouTube regarding program provision. First, they will make hundreds of hours of programming available for viewing on YouTube. All genres, including sports, documentaries, and news, are covered. In addition, they will deploy the same advertisements handled on ITV (broadcast) on YouTube as well. Ultimately, the plan is to distribute all of ITV's programs on YouTube. The CEO of ITV clearly stated their stance of no longer being bound by broadcasting despite being a broadcaster, saying, "This is part of a strategic approach to maximize viewing opportunities regardless of where the viewer is watching."
Video viewing on mobile devices such as smartphones to grow significantly through 2032
This is according to the research report "The Mobile TV Market Size" by SNS Insider. According to this, the market size for mobile TV (video viewing on mobile) was $13.26 billion in 2023, and it is projected to grow at an annual rate of 8.53% from 2024 to reach $27.7 billion in 2032. Currently, VOD and free services including ad-supported ones are mainstream, but they expect live and paid services to grow in the future.
◆ Industry Trends
Comcast Q4 fixed internet subscribers to drop by over 100,000 households?
Comcast's CEO himself commented on this outlook. Analysts had expected a decrease of 64,400 households, so this would be a significant worsening. Factors cited include the impact of the hurricane that hit Florida, competition with FWA, and the end of the government's broadband support program "ACP" for low-income households.
Charter CEO reveals the severity of the battle with FWA, emphasizes the need for breakthroughs in price, reliability, and performance
They commented that they are exploring new ways to overcome competition with FWA and are not resting on their laurels. They mentioned a "multi-phased cable network plan" that focuses on symmetrical gigabit (fixed net) with equal upload and download speeds, reviewing pricing and packages, and creating bundled packages of fixed net, mobile, and video.
Canada's Rogers launches "Xfinity Storm-Ready WiFi" to handle fixed net outages caused by disasters and other events
This is a Wi-Fi 6 access point (device) that uses Rogers' fixed net for normal internet connectivity. If an outage occurs due to a disaster or other event, it automatically switches to Rogers' mobile service. It also includes a rechargeable battery that can run for up to 4 hours as a backup for power outages. It is being launched first in British Columbia as an additional (optional) service for fixed net at $10.50 (15 Canadian dollars) per month, with plans to expand across Canada by February. The equipment used was developed by Comcast, which has been offering it since August 2023. Rogers and Comcast have a 10-year agreement regarding technology and products.
The US 8K Association launches an 8K TV certification program
The specifications required in the certification process include not only 8K resolution but also contrast, color gamut, HDR, algorithms for upscaling from HD or 4K to 8K, and audio.
Alaska cable operator GCI begins offering the Xumo Stream Box
It is sold for free to fixed net subscribers and for $59.99 to others. GCI will terminate all TV services, including IPTV, by mid-2025. It appears they have started offering Xumo as a replacement for this. In North America, Comcast, Cox, and Mediacom recommend the Xumo Stream Box for their fixed net-only subscribers. Meanwhile, Charter recommends it for new TV subscribers. Canada's Rogers does not use Xumo, but uses its own IP STB equipped with the same Entertainment OS as Xumo.
Vecima cuts 12% of its workforce to clarify investment priorities
Although Vecima has rapidly increased its presence as a vendor for the cable industry by expanding its scale through business acquisitions and other means, it now appears to be moving toward workforce reductions to cut costs. The COO commented that they will focus investments on virtual CMTS, next-generation PON technology including 50G (gigabit), and DOCSIS and PON upgrades.
Smartphone production volume increased by 7% quarter-on-quarter in the third quarter to 310 million units
This is according to TrendForce. While it is at the same level as the same period last year, it has still not returned to pre-COVID levels. They expect a 7% increase in the fourth quarter as well, similar to this quarter. The top six companies in production volume are, in descending order, Samsung, Apple, Xiaomi, Oppo, Vivo, and Transsion, and these six companies account for 80% of the market share. Top-ranked Samsung saw a 9% increase from the previous quarter to 59 million units. It seems this was driven by foldable models and the mid-to-low price range A-series. Second-ranked Apple saw a 15% increase from the previous quarter to 51 million units. They expect Apple to take the top market share in the fourth quarter, when production of the iPhone 16 series peaks.
◆ Media
Nielsen launches "Gracenote On Sports" to search for live sports broadcasts
It contains data for over 150 professional and collegiate leagues and competitions, allowing users to search for streaming services or broadcasts that are airing the games of the teams they want to watch live. In addition, they plan to provide related information such as live scores and league standings. In the US, the channels and streaming services that carry live sports are complex. For example, even for games in the same league, the broadcaster may differ depending on the day of the week, which has created a need for such search services. Gracenote On Sports is also provided via API, allowing for integration with program guides, apps, TVOS, and more.
Netflix's live boxing broadcast draws 108 million viewers, the most in the world
This refers to the Tyson vs. Paul match streamed on November 15. Co-CEO Ted Sarandos commented on this. The peak of concurrent viewership was 65 million streams, with 38 million streams in the US alone.
◆ Infrastructure
Italian government to verify the use of satellite internet such as Starlink for broadband expansion measures
Verification will begin in January 2025, and conclusions are expected as early as March, with multiple companies including Starlink being targeted. They are considering not only the form of installing satellite internet antennas in homes, but also forms such as installing connection points (gateways) with satellite internet for small residential areas and connecting to each dwelling from there via fiber.
Will there be a sudden surge in internet traffic due to AI? Ciena's CEO gives a warning
It is said that the pace of traffic growth in the telecom industry is slowing down for both fixed-line and mobile networks. For example, the average monthly traffic as of the third quarter surveyed by OpenVault increased by 7.2%. This is the lowest growth rate since the company began its surveys in 2012. The CFO of major CDN vendor Akamai also stated, "Traffic growth rates are very moderate. I have never seen such a low growth rate." Ciena's CEO flatly denied these claims. He argues that AI-related traffic will be generated in addition to normal traffic growth in the future. He claims that this traffic is still in its early stages and that major changes will occur over the next few years.
Spending on broadband equipment increased for the second consecutive quarter
This is the result of a survey by the Dell'Oro Group. Total global revenue in the third quarter was $4.6 billion, up 1% from the previous quarter and 5% from the same period last year. FWA CPE (equipment installed in user homes) increased by 19% year-on-year, and ONTs used for FTTH and other services increased by 11%. The number of ONT shipments exceeded 2 million for the first time. DOCSIS (CPE and overall infrastructure) also performed well, up 26%. This seems to have been contributed to by a significant increase in Remote PHY equipment and virtual CMTS. Furthermore, shipments of Wi-Fi 7 equipment among Wi-Fi devices increased by 5935% year-on-year. This indicates that Wi-Fi 7 has rapidly taken off in the past year, likely driven by low-cost dual-band units in China.
Harmonic and Sercomm sign exclusive technical partnership for the deployment of integrated DOCSIS 4.0
Competition in the sale of DOCSIS 4.0-related products is intensifying, and there are also predictions that demand will temporarily decrease, so the two companies seem to have teamed up to strengthen their competitiveness. DOCSIS 4.0 consists of CMTS, amplifiers, nodes, and modems, and Harmonic has overwhelming competitiveness in virtual CMTS. Sercomm announced its entry into amplifiers at SCTE. By jointly proposing to cable operators, the two companies will be able to streamline the transition to DOCSIS 4.0.
◆ Industry Consolidation (M&A)
Indonesia sees the birth of a massive telecom giant with 100 million subscribers and a corporate value of $6.5 billion through business integration
Malaysia-based Axiata Group Bhd and Indonesian conglomerate Sinar Mas have agreed to merge XL Axiata (PT XL Axiata) and Smartfren (PT Smartfren Telecom), which handle their Indonesian telecom businesses. The new company will be XLSmart (PT XLSmart Telecom Sejahtera), accounting for 94.5 million subscribers and a 27% share of the Indonesian market. Through the integration, 20-30% of overlapping bases can be closed, and cost reductions of $300 million to $400 million per year are expected. Mergers of telecom and other business entities are occurring one after another in Southeast Asia. In Malaysia, Celcom and Digi merged to become the largest mobile operator, while in Sri Lanka, Dialog Axiata and Airtel merged, and in Bangladesh, Robi and Airtel merged.
◆ New Technology
OpenAI releases the official version of its video generation AI "Sora"
A beta version was released in February. The official version is available to OpenAI's paid ChatGPT Plus or Pro users. The generated video is 1080p and up to 20 seconds long. The resolution and number of videos that can be generated differ between Plus and Pro. To prevent the generation of illegal videos, all videos are embedded with metadata, making it possible to identify that they were generated by Sora and which account generated them. It appears that the prompts (instructions) used for video generation also block the generation of illegal content.
Supervisors/Authors: J:COM Ashita e Tsunagu Research Institute Editorial Department Members
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