Satellite Will Need to Embrace Fiber Content Distribution, Say Executives
Fiber use for content distribution by programmers and broadcast networks will continue to increase, executives said in a Satcon panel discussion. Satellite companies will need to embrace the technology instead of trying to fight it off, they said. The consolidation of cable headends is contributing to increased reliance on fiber, they said. Expect “fiber to play a role in distribution,” said Brent Stranathan, CBS vice president of broadcast distribution. While satellite distribution has been good, “when you look at what fiber has done, networks would be doing a disfavor if they didn’t look at that,” he said.
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New regional satellite operators are unlikely to add much real competition to the two largest companies, Intelsat and SES World Skies, said Stranathan. Both companies have pointed to the new entrants as evidence of strong competition in the market, but upstarts “don’t have depth of resources,” he said. While new entrants could play a role in niche services, such as data and news gathering, it doesn’t seem that they could provide the distribution within the next five to 10 years, he said. News gathering, long a mainstay of the satellite industry, is increasingly sent terrestrially over the Internet, he said. Outside of major events, the capacity leased by CBS for news gathering often sits unused, he said. The move to MPEG 4 coding is also reducing the amount of bandwidth needed, he said. The next large purchase of satellite capacity will likely be more “granular,” so CBS can better “manage” its capacity needs. The company leases about 10 transponders for general use and an additional three for news gathering, he said.
Intelsat has started to use fiber services as to complement to its media satellite services, said Tim Jackson, vice president of media product management. Many distribution needs are met through a hybrid solution, he said. Overall media needs have changed in recent years and managed services needs have grown, with channels leasing small amounts of transponder space at a time, he said. In the past, one channel would lease a full transponder, but now a channel asks for a “sliver” of transponder capacity to deliver services to a new market. That trend will likely continue as HD makes its way around the world, he said.
Prices for U.S. transponder use remain fair, but European leasing has become far more expensive, said Mike Aloisi, MTV Networks’ vice president of technology. Prices in Europe are sometimes more than five times as high as for similar capacity in the U.S. or Latin America, he said. The trouble is that single companies own the orbital “neighborhoods” that can provide access to European countries, and without competition the prices escalate, he said. There has been improvement recently as satellite companies begin to share platforms with other companies, creating competition on the platforms, said Aloisi. MTV has capacity on about 30 transponders, he said.
Capacity pricing is largely dependent on the region, prices are often in flux, and capacity demand and supply change, said SES World Skies Senior Vice President for Global Sales, Scott Sprague. Some concern over large price increases is based in regions that have had low prices, he said. Africa and other places are seeing stabilization of capacity pricing and in some cases price decreases, he said. North America pricing remains largely stable.