Wednesday links: DTS to Spin Off Digital Cinema Business ... Google's TV Quandary ... Spending on Video Downloads to Hit $4 Billion by 2011

- DTS plans to spin off its digital cinema business, according to the San Fernando Valley Business Journal. DTS isn't a major player in digital cinema; its biggest product seems to be an encoder that creates digital movie files for distribution to theaters. The company was founded in 1990 to bring a new kind of multi-channel digital sound to theaters. DTS' first big release was 'Jurassic Park,' in 1993.

- Great article in the Wall Street Journal about the challenges Google faces in negotiating deals with TV networks. The piece focuses primarily on a deal that didn't happen with CBS. Kevin Delaney and Matthew Karnitschnig write:

Until about a month ago, Google thought it might get a big boost from CBS Corp. The two companies were closing in on a multiyear deal to let YouTube users watch clips from CBS shows such as "The Late Show with David Letterman" and "CSI," and even to splice those snippets into homemade videos, say people familiar with the matter. The two companies also discussed ways to peddle CBS Radio advertising spots to Google advertisers. Under the deal, Google would have guaranteed ad revenue of more than $500 million for CBS, these people say.

Later, they note:

For TV executives fretting about the future of their business, YouTube [owned by Google] is both fascinating and terrifying. The popular Web site has brought online video to the masses, making it easy for anyone with a computer and an Internet connection to find and view clips ranging from home videos of pet tricks to TV shows like the "The Simpsons," which YouTube users post without permission from anyone.

The way TV executives see it, programming they own has contributed to YouTube's success. Thirteen of the 20 most-viewed YouTube videos in the month ending Feb. 15, for example, were professionally made. They included a clip of Ivanka Trump on ABC's "Jimmy Kimmel Live" and a local TV news report on lock picking.

- Adams Media Research is projecting that spending on digital video downloads of TV shows and movies will hit $4 billion by 2011, up from $111 million last year. From the Reuters piece:

The market researcher forecasts that sales of video downloads will total $472 million in 2007, $1.2 billion in 2008, $2 billion in 2009, $3.1 billion in 2010, then hit $4.1 billion in 2011.

It also predicts that advertiser spending on Internet video streams to PCs and TVs will approach $1.7 billion by 2011.