Satellite Has Growing Role in OTT Viewing, Emerging Markets Content Delivery, Say Satellite Execs
The broadcast distribution industry is facing challenges in a landscape of over-the-top (OTT) offerings and increased viewing of content on portable devices, distribution and satellite company executives said Thursday at SATCON. The industry is undergoing a “sea change” in terms of delivery of TV media, said Bill Tillson, CEO of Encompass Digital Media, a company that provides distribution services to CBS affiliates and other customers. Encompass customers are challenged by more video choices, and “cord cutting is something we need to pay attention to,” he said. Customers are under “revenue stress,” and therefore, they want the company to figure out “how to distribute their media on a cheaper basis to more locations,” he said.
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"We see a very quick shift to the next-generation platforms” like Netflix, Amazon and Google, Tillson said. Monetization of those models is starting to happen, and more customers are requiring video-on-demand distribution, he said. Part of the resolution of the retransmission consent negotiations between Time Warner Cable and CBS this year involved making sure that CBS “regained ground and retained all of the additional rights as it applies to OTT for their media,” he said. The carriage deal between Dish Network and Disney “is all about how those OTT rights are going to be distributed,” he added.
Satellite has advantages that 3G and 4G networks do not, said Bill Steele, KenCast CEO. KenCast offers content delivery solutions for movie theater companies and provides wireless mobile solutions for live-streaming video. 3G and 4G are “very spotty” and nonexistent in some rural areas, he said. They don’t provide a lot of bandwidth, and “they're noisy in urban areas,” he said. “We're still looking for solutions as to how to get up a satellite as smoothly as possible and with the least amount of noise.” Satellite is “playing a role for us now in video on the move,” he said. “This is a solution we found for some of the public safety work and emergency response work we're doing."
Satellite plays a role in OTT, especially in emerging markets, said Peter Ostapiuk, vice president-media product management at Intelsat. Direct-to-home (DTH) operators are looking at converting linear streams “that they transmit over satellite into the IP format and then streaming them to handheld devices inside the home,” he said. However, the solution is costly and there are some rights issues, he said: “I think content owners are increasingly reluctant to give up the streaming rights to the pay-TV operators."
The value of linear TV is very high, even among the cord cutters and young generation, Ostapiuk said. The demand for linear streaming will likely increase, he said. “I don’t think the [content delivery networks] … could actually cope with this potential demand.” There is a role for satellite as a complement to CDNs in providing linear video, he said. There will be linear platforms, but next-generation platforms will be driven by non-linear platforms, Tillson said. People will want to watch content on their own timetables, not on the content owner’s timetable, he said. Most of that nonlinear distribution will likely be over the Internet and wireless and fiber networks, he said: “We do not see that being satellite distribution.” Over the next several years, most linear networks will be fed to the older-generation platforms on satellite, he added.
Satellite operators are finding greater opportunities to expand DTH video in emerging markets, satellite company execs said during a later panel. The growth is coming from emerging markets, such as in Africa, Eastern Europe and Latin America, said Mohamed Youssif, chief operating officer at ABS. Projections are that more than 80 percent of business from Western Europe’s satellite industry will come from emerging markets in about five years, he said. The trend is that “regional operators like ABS are growing and global operators are buying regional operators,” he said. “It’s important for us to look at emerging markets as where the money will come from.”
Some of Eutelsat’s seven forthcoming satellites will be dedicated to serving emerging markets, said David Bair, CEO of Eutelsat America. Eutelsat’s business is concentrated in Europe but it’s expanding, he said. That expansion includes developing more activity in its Africa business by opening a sales office in South Africa and penetrating the Asia and Asia Pacific regions, he said. The company also is taking advantage of opportunities in South America, especially Brazil, he said. Brazil is a major market because of the growing middle class, the low level of pay-TV penetration and an economy on an upswing, he added.