CES 2009

Microsoft Mediaroom Gains Reverse Gear, But Will It Go Forward?

| Jan 9, 2008 | Digital Media Infrastructure | Show Update

| Analyst: Yoav Schreiber

Current Perspective: Neutral/Positive Vendor Importance: Moderate Market Impact: High

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Event Summary

January 8, 2009 – Microsoft unveiled Mediaroom Anytime at CES 2009, enabling IPTV service providers to offer their subscribers time-shifted TV features such as access to previously aired shows directly from the Interactive Program Guide, or the capability to restart currently airing shows without any preplanning or DVR prior recording. Microsoft also unveiled additional third party applications built on the Mediaroom Presentation Framework that it expects service providers to begin rolling out in the second half of 2009.

Analytical Summary

• Current Perspective: Slightly positive on Microsoft’s unveiling of the Mediaroom Anytime feature set at CES 2009, because the network-based digital video recorder (nDVR) functionality can potentially offer service providers with a lower capex and opex model for delivering time-shifted TV functionality to their subscribers while also providing a competitive alternative to over-the-top (OTT) content distribution models. However, despite the announced trial with SingTel, the Mediaroom Anytime feature set faces three hurdles: regulatory, especially in the U.S. where a Supreme Court review of nDVR is pending; competitive, as Microsoft’s rivals already offer nDVR functionality; and deployment, as Microsoft must prove the scalability of Mediaroom Anytime across its expanding subscriber footprint, which now reaches more than 2.5 million subscribers.

• Vendor Importance: Moderate to Microsoft because nDVR functionality is likely to become table-stakes functionality for triple-play service offerings, and therefore, the Mediaroom Anytime feature set is essentially a foreseeable roadmap development. More importantly, Microsoft’s continued momentum enabling third party application developers to leverage the Mediaroom Presentation Framework, by developing and demonstrating concept applications that blend rich content with interactive services will prove critical in establishing the longer term differentiation of Microsoft’s Mediaroom platform from rivals as well as ensuring the success of IPTV service provider offerings.

• Market Impact: High on the digital media infrastructure (DMI) market because Microsoft’s Mediaroom developments are becoming competitive reference points that rivals will need to continuously anticipate, meet and counter. For instance, while Mediaroom Anytime brings Microsoft in line with rivals such as Ericsson, NDS and Thomson that have already announced nDVR functionality, the growth rate of Mediaroom-supported subscribers (250% in one year) is industry-leading, and a likely precursor to the adoption rate of Mediaroom-enabled applications that will begin entering the market later this year.

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Current Perspective

Competitive Positives and Concerns

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