2. 2—CONSUMER ELECTRONICS DAILY WEDNESDAY, MARCH 25, 2009
No single factor contributed to his decision to leave, Pacor said, suggesting he had tired of spending so many hours
on airplanes traveling between the U.S. and D&M headquarters in Tokyo.
“We had a great run,” Pacor said of his five-year D&M stint, adding that he plans to move on next to
“something entrepreneurial” because it represents “the logical next chapter” in a long career. Asked whether he
plans a startup in the CE industry, Pacor said it would be in “an adjacent channel.” The “core business” of the
D&M he leaves behind has been “surprisingly resilient” amid the economic turbulence, he said. Still, “I don’t want
to understate anything,” he said. “It’s been a difficult period.”
D&M also planned to announce its choice of Eric Simonsen as its president, the job that Pacor left to be-
come the CEO. Simonsen used to be the chief financial officer at Nokia-Siemens Networks. D&M also has pro-
moted Masao Goto to executive vice president of the company, it will announce Wednesday. Goto, who’ll also be
appointed to the D&M Board, has recently managed the Marantz business in Japan for D&M.
As a company, D&M has “been holding its own” despite the economic crisis and has even picked up mar-
ket share, Weissburg told us. He thinks the CE industry is poised for a turnaround starting midyear, he said. Al-
ready, Weissburg has seen “upticks” in the business, he said. For example, Circuit City in its final weeks moved a
huge volume of product to the consumer, he said. A strong independent retailer must pick up the business left by
Circuit City’s demise, he said. -- Paul Gluckman
Back to Audio Roots
Pioneer Bracing BrandSource Dealers for Life After Plasma
DALLAS -- Pioneer is returning to its audio roots and will rely more heavily on independent dealers and
specialty retailers to sell products as it closes out plasma TVs by fall, Pioneer executives told us at the BrandSource
2009 Summit here Tuesday.
BrandSource's Home Entertainment Source division had a meeting Monday night with Russ Johnston, ex-
ecutive vice president of marketing and product planning at Pioneer, that it closed to the media. But dealers who
attended said Johnston was candid about Pioneer's future without plasma and underscored the company's plans to
remain in the CE business with Blu-ray players, AV receivers and speakers.
What remains to be seen is how many of the 1,200 Elite dealers Pioneer is able to retain, since many of
them conceded they relied on plasma TVs to help sell audio. There were another 200 or so retailers that carried
Pioneer plasma, said Kevin Doyle, who was recently named vice president of sales at Pioneer. "We may lose some
dealers who were just interested in Pioneer plasma TVs, but the reality is we're going to have to start selling audio
again," said Doyle, who has been with Pioneer since 1973. "I was selling audio when we were an audio-only com-
pany so I know what it's like to do this."
In shifting focus to audio, Pioneer will become a smaller company with about half the sales force it previ-
ously employed, Product Specialist Carl Tierney said. Pioneer trimmed the number of product specialists to three
from 20 and will back up three national product trainers, Tierney said. While a large number of product specialists
were once deployed for Best Buy stores -- Tierney was responsible for 32 locations in the Dallas area -- they will
add focus for independent dealers like those that populate HES, he said. Best Buy is expected to continue carrying
Pioneer audio and Blu-ray players, Pioneer executives said.
"Up until about five years ago product specialists provided training and support for local dealers and
then it shifted to Best Buy," said Tierney, who estimated specialists were calling on 30 to 100 Best Buy stores
3. WEDNESDAY, MARCH 25, 2009 CONSUMER ELECTRONICS DAILY—3
depending on the sales territory. "Now with the shift, our jobs are going to be the way they used to be with
training and support for independents."
Pioneer halted production of plasma TVs this month and is expected to sell off remaining inventory
during the next six to seven months, Doyle said. But some plasma sets are already sold out, company officials
said. The Pioneer Elite Pro 111 50W TV, which was promoted earlier this year with a $1,500 discount, has
sold through and is expected to be followed by the Pioneer Elite Pro 151FD 60W within two to three months,
Doyle said. Pioneer brand 50W and 60W sets are also selling quickly, while supply of Signature Elite series
50W and 60W plasma monitors is expected to last into September, Doyle said. The Signature monitors had
slightly tighter specs than other Elite models and let custom installers run diagnostic tests on the panels and
allowed finer steps of picture adjustment and gamma.
Despite some price moves to help ease closeouts of the plasma sets, Pioneer doesn't expect a firesale at re-
tail since some dealers have relied on them for a profit, Pioneer executives said. Pioneer sets might even fetch a
higher price because they will be available in limited quantities, dealers told us. "These dealers want to make as
much as they can," Tierney said. "On most TVs they make nothing, but with these they make money. These are
profitable for them and that's why they are really upset" about Pioneer getting out of the business.
Pioneer struggled with its plasma business for years. Pioneer bought NEC's plasma-making operations in
2004, but combining the businesses proved more challenging than either company had expected, company officials
have said. Pioneer, which long sought a 10 percent share of the worldwide plasma market, was expected to use part
of the $189 million net proceeds from Sharp's 2007 investment in the company to fund its plasma operations. It
had five plasma manufacturing lines, including one inherited with the NEC asset purchase.
In the rush to expand production, Pioneer "sacrificed" the picture quality and performance of its plasma
TVs, Paul Meyhoefer, vice president of display marketing and product planning, told us in 2007 (CED Oct 12/07
p1). But in launching the Kuro project in 2005, Pioneer refocused on improving its plasma technology and wasn't
worried as much about "where the market was going as far as price was concerned," Meyhoefer said.
Exiting the display business wound up being the major shoe that dropped in February. Pioneers had
signaled the move to skittish retailers when it dropped minimum-advertised-pricing on its Elite products and
began selling plasma TVs through Costco (CED Feb 10 p1). At the same time, Pioneer's global work force
will be cut by 16 percent, or 6,000 jobs, on top of the 5,900 positions it eliminated in 2008, the company said.
"We thought it would work and we gave it our best effort," Tierney said. "It was a success in many ways, but
it just wasn't economically viable."
While Pioneer won't continue with plans for introducing LCD TVs in the U.S. using Sharp-sourced
panels, it hasn't ruled out deploying its Kuro technology in flat-panel TVs in the future, executives said. The
fate of the Kuro technology is "the million dollar question that no one knows the answer to" yet, Tierney said.
For now, Pioneer will concentrate on audio and Blu-ray players, but "if a year from now things are looking
better, maybe we'll be back into" TVs, he said.
With the departure of plasma, Pioneer will shift to promoting about 20 SKUs of CST, Custom and Elite Ex
series speakers priced at $369 to $1,800, company officials said. At the high-end will be the Elite EX S-W1EX 12-
inch reference standard subwoofer and three-way 6.5-inch in-ceiling S-1C691A. Pioneer also expanded its line of
Technical Audio Devices-based speakers with three new in-wall models, including a three-way option and two an-
gled models that can be mounted in a ceiling. The speakers feature CST technology designed to expand a room's
"sweet spot" to provide uniform sound.
In Blu-ray, Pioneer will have an entry-level BDP-120 Blu-ray player ($249) that was jointly developed with
Sharp, Pioneer officials said. The player features BD-Live capability, add-on USB flash memory and an HDMI
4. 4—CONSUMER ELECTRONICS DAILY WEDNESDAY, MARCH 25, 2009
1.3a output. The device has a Pioneer drive but will be assembled by Sharp in China and use Sharp's decoder soft-
ware, Sharp officials said. The deck anchors a three-model line that also includes the 16-bit color capable BDP-
320 ($399) and the Elite brand BDP-23FD ($600). The line evolved from Sharp's $357 million investment in Pio-
neer in fall 2007 (CED Sept 24/07 p1). -- Mark Seavy.
Focus On 'The Unready'
NTIA Says It's Unlikely to Send Coupons Electronically
Though new rules give the NTIA "additional flexibility" to distribute DTV coupons other than
through the mail, it's doubtful those distribution methods will include sending coupons electronically,
agency officials told a media briefing Tuesday. However, the officials stopped short of saying electronic
coupons were completely off the table.
The rules changes give the NTIA the freedom, for example, to give away coupons to residents of single-
room-occupancy buildings, said Bernadette McGuire-Rivera, associate administrator of the NTIA's Office of Tele-
communications and Information Applications. "We're looking at a lot of alternative means like that," she said.
"Some of them ... are not necessarily, extraordinarily high-tech, but it's very effective."
The NTIA is "putting our focus on the unready households," which Nielsen says now number about 4 mil-
lion (CED March 23 p10), McGuire-Rivera said. "We also know from the Nielsen data that these groups are not
big Internet users," she said. "I know that there are a lot of people who are very interested in having a, quote,
downloadable coupon that someone could go to their computer and get that coupon. Based on our research so far,
that doesn't seem like a mechanism that would be widely used by these groups, so that might not justify whatever
cost it would be to set that up."
The unready are "this last bit of population that is completely unprepared, and we're trying to under-
stand what is underlying the fact that they're unprepared," acting NTIA Administrator Anna Gomez said. The
agency is conducting focus groups "to identify the reasons and try to target our assistance to those folks who
we call the most vulnerable populations," she said. "Those are ongoing right now. Moving forward, our focus
is on what we call our search and rescue, which is to find these populations, find why it is they're unprepared,
and then give them that technical assistance."
The NTIA spent just over $190 million of the $490 million allocated for new DTV coupons in the eco-
nomic stimulus package to clear its backlog of coupon requests and began processing the last orders from its
waiting list last Saturday, Gomez said. "You got to figure that by the end of next week, they should be getting
their coupons.” The $190 million equals about 4.75 million coupons, while the $490 million would pay for
12.25 million extras, bringing the total coupon count to 45.75 million if all were redeemed. That’s worth
about $1.83 billion in total coupon funding.
That the NTIA Tuesday began accepting orders for replacement coupons "is very good news for those who
lost their coupons or weren't able to redeem them before they expired," Gomez said. "It will be very easy for con-
sumers who have expired coupons to now receive another one," McGuire-Rivera said. "Basically they will simply
apply to the program as they did in the past." The NTIA will check to be sure that a household ordering replace-
ments has not previously redeemed coupons, she said. "Say, for example, you're in a situation where you had two
coupons. You were able to use one. You did not use the other one, and it then expired. Your household will only
be eligible to have one coupon reissued."
5. WEDNESDAY, MARCH 25, 2009 CONSUMER ELECTRONICS DAILY—5
Using service "improvements" paid for with economic stimulus money, including upgrading coupon
mailings to first class from standard bulk rate, the NTIA has reduced the average turnaround time for new
coupon orders to nine business days from 21, McGuire-Rivera said. Other service upgrades now enable the
NTIA to "prioritize" coupon orders to favor over-the-air homes "if God forbid we get into another situation
at the end" of again having to backorder applications, should orders surge as they did in early January, she
said. -- Paul Gluckman
Copyright Implications Fuzzy
China-Developed Home Networking System Raises Questions For Hollywood
Hollywood and CE companies were abuzz Tuesday about a China-developed proposal for home networking
of digital AV and PC devices. The key question among studios and others was about copy-protection provisions in
the Digital Interactive Interface for Video and Audio developed by nine Chinese companies.
Although the so-called DiiVA Consortium mentioned copy protection in passing, its proposal seemed to
provide no hard details. Content owners take a hard line on the distribution of copyrighted content even within a
home. Their concern is that premium content, from packaged media or service providers, might escape the home
and get distributed on the Internet or elsewhere without authorization.
The DiiVA Consortium is made up only of Chinese AV and IT companies, including Changhong, Haier,
Hisense, Konka, Panda, Skyworth, SVA, TCL and Synerchip. The consortium invited other companies to take part
in developing DiiVA and said it expects to publish a draft spec for DiiVA late this month.
Although the consortium said some Japanese and Korean CE companies and others had joined its steering
committee as contributing members, we could find none listed on DiiVA’s Web site Tuesday. New members
might be under a nondisclosure agreement, or the site may be outdated. Its latest news release was dated February
23. Still, companies we polled seemed surprised about DiiVA. Although the consortium said the system was an-
nounced at CES in January, any event there seems to have been below the radar.
DiiVA is a high-speed, hard-wired conduit for uncompressed video and audio with a bidirectional data
channel, the consortium said. It has a maximum bandwidth of 13.5 Gbps. Uncompressed signals can be sent
through the network from any DiiVA-enabled source to any DiiVA-enabled TV display. The bidirectional data
channel can send multiple protocols like HD video and audio, USB, Ethernet, commands “and content protection”
at the same time, the consortium said. It didn’t identify the copy protection supported.
DiiVA would use “cost-effective transmitters on source devices such as DVD players, PCs and mobile
phones,” the consortium said. “Display devices will incorporate DiiVA receivers. DiiVA switches can be inte-
grated into AV receivers or source devices to enable DiiVA to work in a daisy chain configuration.” The consor-
tium called DiiVA “a complementary technology to emerging wireless video/data standards such as Wireless High
Definition Interface, which the DiiVA promoters plan to collaborate with in order to bring consumers seamless in-
teroperability between the standards.”
The first DiiVA-enabled products are expected to be released late this year, the consortium said.
How that’s possible without cooperation from content owners and other CE makers wasn’t clear Tuesday. --
Stephen A. Booth
6. 6—CONSUMER ELECTRONICS DAILY WEDNESDAY, MARCH 25, 2009
EA, Warner Backers
Questions Linger About Perlman’s New OnLive Game Service
SAN FRANCISCO -- Questions lingered at our Tuesday deadline about the new OnLive Game Service un-
veiled by WebTV founder Steve Perlman here Tuesday. They include where Perlman’s company is sourcing the
“MicroConsole” hardware that’s to ship when the service starts next winter.
Game makers planning to support the platform with content include Electronic Arts, Warner Bros. Interac-
tive Entertainment, Take-Two Interactive, THQ, Ubisoft, Epic Games, Atari Interactive and Codemasters, OnLive
said. The platform was developed under the incubator program of Perlman’s company Rearden (CED March 6 p4).
The service was in development for seven years, OnLive said Tuesday. Perlman is CEO of both companies.
The MicroConsole will be as “small as a deck of cards” and “easily connects any TV and home broad-
band connection to the OnLive Game Service,” OnLive said. Operation will be performed by an OnLive wire-
less controller, it said. Not immediately clear was what company will manufacture the controller or if it will
be sold separately. The company didn’t immediately respond to a request for comment. OnLive said only the
service will operate under a monthly subscription plan and be available “in a variety of different pricing pack-
ages and tiers, competitively priced to retail.”
OnLive will be “the most powerful game system in the world,” Perlman said Tuesday. There will be
“no high-end hardware, no upgrades, no endless downloads, no discs, no recalls, no obsolescence,” he said.
The service was “designed for gamers of all skills and ages,” and gamers “can enjoy the same experience on
almost any Internet-connected PC or Mac via a small browser plug-in,” the company said. Multiplayer and
solo gaming will be possible, it said.
The platform “combines the successful components of video games, online distribution and social network-
ing into one affordable, flexible platform that offers a new way for game fans to access and enjoy content,” said
Mike McGarvey, OnLive chief operating officer. “By substantially lowering the barriers between content and con-
sumers, OnLive has created an environment that is highly beneficial for every facet of the videogame ecosystem.”
Epic’s Unreal Engine 3 is compatible with the OnLive platform, so games “leveraging the cutting-edge
technology and versatility of the Unreal Engine will easily run on the OnLive service,” OnLive said. -- Jeff Berman
'Marketing Savvy' Required
Investors Seeking New Game Strategies to Fund, Despite Recession
SAN FRANCISCO -- Venture capitalists are still seeking out new game strategies to back, despite the eco-
nomic downturn, five of them said at the first GamesBeat conference Tuesday. "We're looking for what we always
look for," including "great leaders," companies that can deliver "predictable monetization" and those that can de-
velop a "niche" they can "win in," said Benchmark Capital Partner Mitch Lasky.
There "clearly is money to be made" in the game market despite the recession, Lasky said. Norwest Ven-
tures investors, however, aren't looking to invest in games, but rather game market "disruptions" -- strategies that
7. WEDNESDAY, MARCH 25, 2009 CONSUMER ELECTRONICS DAILY—7
challenge the status quo, said Timothy Chang, a principal at the firm. The panelists agreed that the game market is
"confusing and fragmented." But Lasky said, "That's precisely what makes it so interesting."
It remains important for game companies to introduce high-quality games, because "if your games
suck you will not make any money," Lasky said. But Mayfield Fund Managing Director Janice Roberts said
"marketing savvy" is important now also, because of the growing importance of interacting with players and
online communities.
Earlier at the conference, Gas Powered Games CEO Chris Taylor said it's encouraging that game in-
dustry sales were up overall in January and February despite "the worst recession in 60 years." He predicted
the next 10 years will be "great" for the industry. Taylor also predicted that "boutique," independent game
companies like his "will be a major force in gaming," despite claims to the contrary from Electronic Arts
when he left that publisher, he said.
But Lars Buttler, CEO of online game maker Trion World Network, offered a darker view of the current
industry. Strip away the successful Wii platform and World of Warcraft, and most of "the rest of the industry looks
pretty dire," he said. Wii and WoW account for "all the growth and all the high-margin in this cycle," he said.
GamesBeat Notebook...
Sony Computer Entertainment has a "10-year vision" for the PS3, and it wasn't part of the firm's strategy to
"come out of the gate kicking and screaming," said Susan Panico, senior director of the PlayStation Network in
North America. The PS3 is making "a lot of progress" in games and Blu-ray movies, she said, noting the Play-
Station Network "plays a huge role." Her comments came in response to a panel moderator's statement that the PS3
is in third place this console cycle, far behind the Wii and Xbox 360 in installed base. More than 60 percent of
PlayStation Network revenue comes from third-party partners, she said.
---
Microtransactions and smartphones are the main areas of growth for the game industry, according to a re-
cent survey of 160 game industry professionals by GamesBeat organizer VentureBeat. More than 66 percent of
respondents cited microtransactions and 61 percent smartphones as the developments that "will have the deepest
impact on the games industry in the coming years," it said. User-generated content trailed at 43 percent, advertising
revenue at 21 percent and voice recognition at 18 percent. Apple's iPhone, singled out by 74 percent of the respon-
dents, was seen as the platform with the greatest potential. Trailing it were social networks with 65 percent, casual
Web-based games at 62 percent and consoles at 57 percent.
---
A public beta test of the game FreeRealms will launch in "the next few weeks," after the current closed
beta, said Sony Online Entertainment President John Smedley. The game marks the company's first effort to sig-
nificantly expand the player base of massively multiplayer online role-playing games from adult males to kids and
a family audience, he said. The title's target user base is 10 to 12 year old boys and girls, and "we are going after"
that demographic "in equal numbers," he said, adding that it's unusual for an MMORPG to try to appeal to girls.
---
Ngmoco would like to support Nokia's mobile devices with games, but it has no plans to do that, because
Apple's iPhone is a "better platform," ngmoco CEO Neil Young said. The company is concentrating on games for
the iPhone and iPod Touch.
---
Startups like 38 Studios have greater "agility" in responding to new game trends than large companies do,
said CEO Brett Close. 38 Studios is preparing its first title, an original MMO fantasy game. The firm's founder,
ex-Red Sox pitcher Curt Schilling, was to speak at the conference about the game after our deadline, one day after
announcing his retirement from Major League Baseball. -- Jeff Berman
8. 8—CONSUMER ELECTRONICS DAILY WEDNESDAY, MARCH 25, 2009
Formats
Clarification: Any Blu-ray playback device, regardless of where it’s made, is required to include
Dolby Digital Plus and DTS Digital Surround (CED March 24 p4) because they’re mandatory for Blu-ray, a
DTS spokesman said Tuesday.
Ads & Promotions
Sharp, a New York Mets sponsor for over 25 years, will supply 800 Aquos LCD TVs to the team’s new
CitiField stadium, which opens officially April 13, Sharp said Tuesday. The sets will include Sharp's flagship 108-
inch model, to be installed in the facility's main lobby, the company said. Other sets will be installed around the
stadium’s concourses, restaurants, club spaces and concessions, Sharp said. Sharp also will get prominent in-game
branding at the stadium, including rotational signage, permanent signage on the center field scoreboard, in-game
video features and a presence on the team's Mets.com Web site.
Satellite
EchoStar is offering a conversion program targeting SES Americom’s IP Prime subscribers whose 250-
channel service will go dark July 31. SES had 70 small telcos in 31 states signed up to sell the service when it decided in
December to shut it down after gaining less than 10,000 customers (CED Dec 18 p3). About 37 of the telcos were mem-
bers of the NRTC, which worked in recent months to find an alternative service for them to sell, the company has said.
EchoStar IP Prime Conversion Program will provide customers the company’s VIP-TV transport service and replace-
ment receivers. The VIP-TV transport service provides MPEG-4-encoded programming including about 110 standard-
definition feeds and 42 HD channels, EchoStar said. It can provide local TV channel aggregation in the telco's DMA in
both SD and HD formats. EchoStar also will provide repointing of the satellite dish to one of its satellites, most likely at
85 degrees west, a spokesman said. While IP Prime currently uses IDC satellite receivers, EchoStar has the “capability”
to make telco set-tops in the future, a company spokesman said. EchoStar leases capacity on SES Americom’s AMC-16
satellite at 85 degrees west that could be used to deliver IP Prime, an EchoStar spokesman said.
Videogames
Nokia disclosed the countries where its Ovi online-services umbrella will launch, early in May. It will
start at least in the U.S., Australia, Germany, Ireland, Italy, Russia, Singapore, Spain and the U.K., a company
spokeswoman said. Ovi will encompass the company's current Web efforts, including N-Gage in gaming, and will
advance customers' discovery in mobile commerce by taking into account a user's location and the choices that
friends have made, Tero Ojanpera, Nokia's executive vice president for services, said Tuesday at the GDC Mobile
conference in San Francisco. There are 50 million Nokia handsets suited to the service in the nine countries, he
said. India and other markets may be added for the launch, the spokeswoman said. "There's a long list that are on
the cusp, and it's a local business decision, really." Ovi will be essentially global by year-end, Ojanpera said, with a
potential reach of 250 million devices. "Mashups" making use of various handset capabilities will be a growing
trend, he told the audience of game developers. Nokia is developing a game in which an online map of any place
can be used as the setting for an automobile race track, Ojanpera said, and Dance Fabulous, also in development,
will make use of the cellphone's music-player side. Social networking also will become integral to mobile gaming,
he said. Nokia is the No. 1 maker of mobile devices for Facebook updates from Europe and Asia, Ojanpera said,
citing M:Metrics research. Billing is a challenge for an international mobile-content store because credit cards
aren't a standard way to pay in some countries, he said. "We'll be working around the world" to make carrier bill-
ing a reality, Ojanpera said. N-Gage has seen sales increases up to 80 percent where carrier billing has been intro-
duced, he said. The service has taken orders from 200 countries, the spokeswoman said. -- LT
