The New Satellite Broadcast Environment
Alan Crisp, Senior Analyst, NSR
The big picture
Video broadcast, one of the first users of satellite capacity by consumers, is one of the cash cows for satellite operators, both small and large alike. With substantial migration of non-video data applications, both enterprise and consumer, to HTS capacity (GEO and LEO), it is likely that video broadcast will also be one of the last remaining applications for FSS Ku- and C-band satellite capacity.
With over 2,800 TPEs of commercialized FSS capacity supply in Asia Pacific online at the end of 2022, it is therefore essential that satellite operators leverage existing video assets to ensure long term sustainability, and carefully consider FSS satellite renewals as OTT streaming services dominate long-term.
State of the market
In Global Satellite Capacity Supply and Demand, 20th Edition, a report recently published by NSR, an Analysys Mason company, it was found that the number of video broadcast channels will remain flat for the most part, with some migration to HD channels along the way. HD channels will increase from a share of 24% to 32% over the coming decade.
DTH and Video Distrubution Channels in Asia Pacific, by Type
Despite this increase, a huge decrease in pricing will result in a 32% decline of annual transponder leasing revenues from USD1.01 billion to USD695 million between 2022 and 2032, which is felt by both DTH and Video Distribution. The only silver lining from this decline is that the rate of revenue decline is expected to stabilize and not accelerate, with declines remaining steady at around 3% to 4% per year.
Asia Pacific Revenues for Leased Video Broadcast TPEs, FSS C- and Ku-bands
Advances in compression and reducing the duplication of SD & HD channels with the same content into a single HD channel is also contributing to this trend, and while this revenue decline continues, NSR expects that the operators with the largest exposure to the video market will keep their respective market shares moving forward. While in the past year, there have been some key renewals for large platforms, there have been some exits among smaller players.
A Declining Cost Advantage
The reason why video broadcast exists in the first place is due to its point to multipoint benefits, where a single satellite can cover an entire country or region, unlike streaming video content which is delivered in a unicast fashion. Thus, satellite DTH broadcast has zero marginal cost, in terms of satellite capacity, as subscriber numbers grow or decline. For video distribution to FTA and Cable TV platforms, the point to multipoint environment will continue to see demand over the medium term in Asia Pacific. This price advantage and lack of marginal cost is what has been sustaining satellite video broadcasting for so long over the decades.
However, times are changing.
In North America, pricing of CDN distribution to headends is becoming increasingly cost competitive with satellite. Thus, longer-term, new channels will likely choose CDN distribution over satellite. NSR believes HLS-CDN distribution will become a clear trend, and this is especially the case for HD content when only a few distributors require receiving of the feed and other niche channels. This is something that is of particular significance in Asia due to strong demand for local and regional language content. The price advantage that satellite has over CDN distribution will soon decline in other regions as well.
However, challenges still remain with CDN distribution (for now). Platforms will need to assess feasibility with target distributors as they may have Internet bottleneck issues, particularly when territories are not major cities and are multiple hops away from CDN POPs or servers. For this reason, migration of satellite to CDN is not a concerning trend for satellite operators in the short term. Regarding distribution across Asia, all major CDN players (Akamai, Amazon Lumen-CenturyLink, Limelight, etc.) each have their pros and cons, and one may better to serve one area or application.
A higher bandwidth saviour?
What about newer video formats – shouldn’t this keep video broadcast over satellite economical? The very high bandwidth nature of UltraHD content, often times requiring a data stream which exceeds 20 Mbit/s, should in theory be a strong beneficiary of satellite broadcast. However, this is something that hasn’t been very successful to date by satellite and pay TV operators. This is even the case in East Asian countries where UHD TV displays are extremely common, in addition to extremely high resolution screens on high end smartphones. All the while, UltraHD content has been very successful on OTT services, with platforms able to charge a price premium for UHD streaming content. What explains this difference?
Non-IP multicast systems require upgrades to set top boxes that can handle both HEVC codecs and UltraHD content output (including, ideally, HDR content streams). This requires a huge rollout to replace likely very large numbers legacy set top boxes, for customers who may or may not end up subscribing long term. Due to this large cost, there has been limited investment in large scale broadcast of UltraHD content and upgrades of equipment to broadcast locally produced content in UltraHD (let alone with arguably better improvements such as Dolby Vision or with other HDR formats.)
A true ‘chicken and egg’ scenario.
For local language and regional content – the type that has typically driven new subscribers in the past, there is a much smaller customer base that the upfront investment cost can be divvied up, unlike say Netflix which can be supported by a truly global audience. Simply put, and with few exceptions, investing in an UltraHD ecosystem, will bring limited overall return in an environment of declining subscriber numbers.
A Cautionary Tale
If longer term, multi-cast content distribution does not provide the benefit that it once did, and higher bandwidth content won’t save the day, what do satellite operators have to offer in terms of video broadcast? The key advantage that satellite operators have over streaming services is the ability to deliver real-time content, including local news, sports, and events to end-users. By prioritizing local programming and offering live coverage, operators can retain viewers who value up-to-the-minute updates, community engagement, and sports.
This is especially the case for the Asia Pacific market, where language-specific content is sought after. While English-language content, particularly sourced from North America, provides TV episodes to subscribers of OTT services the following day, this means that for non-sports watchers, there is no reason any more to subscribe to Cable TV or DTH services.
Consequently, in North America, the only reason to subscribe to a cable bundle is to watch live sports, and with a much reduced pool of subscribers who are indirectly paying for the huge sums of money that sports leagues have demanded (given that sports is the primary driver for DTH platforms), pricing either has to increase substantially, or pricing of rights deals will decline.
For DTH platforms in Asia Pacific to survive, platforms need to ensure not to make the same mistake, and to ensure that exclusive, local content, remains only available on linear TV services, and catch-up services provided by the DTH platform itself. Thus, while it may be tempting to offer everything to a Netflix type service after seeing the company’s huge rise in streaming subscribers over the past decade, this has the effect of killing the golden goose with no incentive for people to subscribe to services.
In the meantime, satellite operators should opt to replace legacy video focused widebeam with more flexible satellite types. This is what has occurred with ASTRA 1Q, Optus 11 and Superbird-9 for example. This gives the opportunity to initially serve video broadcast customers, but at the same time progressively shift capacity to data use types using flexible HTS satellite architectures. This is all the while demand evolves, but also in the process creating more targeted beams for video use cases (matching countries or specific language communities).
In the past, DTH platforms in Asia Pacific have been able to offer high quality content on linear TV platforms to regions where by geography, or by economic reasons, end users were unable to receive or afford high speed internet connectivity capable of OTT services. With limited competition and long transponder leases, there were few business pressures felt.
However the advent of high speed cellular 5G connectivity, as well as LEO-HTS consumer broadband services, will make the DTH and multicast broadcast advantage in these regions moot over the coming decades. In an era of abundant bandwidth, the remaining key driver for DTH subscribers is high quality exclusive content – and that’s it. Operators in the DTH value chain must then either double down on exclusive content, or begin a (slow) migration away from linear broadcasting over the coming decades.
Alan Crisp began his consulting work for NSR in 2014, following a Hong Kong based engineering role at Aurecon. Mr. Crisp is the co-author of NSR’s annual M2M and IoT via Satellite report and also Linear TV and other video broadcasting reports. Mr Crisp’s areas of expertise include of M2M and IoT communications – including both the satellite and terrestrial M2M landscape. Previous consulting experience includes forecast analysis and risk management of natural disasters in Manila, where he made recommendations to policymakers about backup and emergency telecommunication links for use in city and nationwide emergencies. Mr. Crisp obtained a Bachelor’s Degree with First Class Honours in Engineering (Civil & Structural) from the University of Adelaide, Australia.
Video’s Silver Lining: The APAC Market
Blaine Curcio, Affiliate Senior Consultant, Euroconsult
The American author Mark Twain once said, “the reports of my death have been greatly exaggerated”. And while Mark Twain probably never watched linear TV in the Asia-Pacific region, his words may just as well apply to the video market in our corner of the world.
It’s no secret that satellite broadcast demand is slowly eroding, with Euroconsult research estimating that the number of transponders used for broadcasting globally declined by some ~8.3% between 2018 and 2022. But digging deeper into the regional landscape, the picture in APAC looks more optimistic, even if it’s still a far cry from the industry glory days.
Setting the Table: The APAC Video Market Today
The video markets in Asia-Pacific are entering a period of slow growth, which Euroconsult expects to last for several years. The period of 2018-2021 saw a marked decline in the number of channels being carried over satellite in the region, with this predominantly due to consolidation of DTH platforms in South and Southeast Asia. Taking into account DTH and video distribution channels, South Asia, for example, saw a drop of some 16%, or ~770 channels, from 2018 to 2020, before returning to growth in 2021 and 2022. Other sub-regions have fared somewhat better, though most, including Oceania, Northeast Asia, and China Area have seen channel declines in recent years.
Source: Satellite Connectivity and Video Market, 2023 edition, Euroconsult
Moving forward, channel numbers across APAC are expected remain more or less stable for the next few years, with South Asia seeing growth as the rest of the region sees differing rates of declines. Despite channel growth, Euroconsult does forecast the amount of capacity used for TV broadcast in Asia, expressed in transponder equivalents, to decline marginally for the foreseeable future, with improved compression more than canceling out channel upgrades from SD to HD. With that said, even this decline in transponder usage is not uniform across the region, with Southeast and South Asia faring considerably better than China Area and Northeast Asia. In addition to evolution in existing channels, we expect the industry to find pockets of new growth, particularly in frontier markets, by going downstream, or by leaning into the OTT wave.
Buying Their Way Downstream: The AsiaSat Method
Hong Kong-based satellite operator AsiaSat has long been known as a premium satellite operator, particularly in the video markets. Over the past couple of years, the company has expanded its presence downstream through M&A, bolstering their credentials as an end-to-end video service provider. First, in October 2021, the company announced a strategic investment into One Click Go Live, a company specializing in live video streaming services. At the time, AsiaSat CEO Roger Tong noted that the investment would “be an excellent complement to AsiaSat’s growing portfolio of video services”.
More recently, in June 2023, AsiaSat acquired Lightning International Limited, a content distribution and media solutions company. Similar to the One Click Go Live investment, the Lightning International acquisition was described by AsiaSat as a “strategic move to expand the company’s services and extend its clients’ reach to global audiences through traditional and new distribution platforms including OTT and FAST”.
And while one data point does not indicate a trend, the investments by AsiaSat into downstream video services seems to be paying off. In July of this year, the company was selected by the Nepalese state broadcaster, Nepal Television (NTV) to broadcast a bouquet of 5 HD channels in Nepal and across Asia and Oceania. Separate to the NTV deal, AsiaSat has won a few other OUTV and niche content broadcasting contracts over the past year, again likely indicating some measure of success in trying to move downstream into the video sector.
While not a cure-all for the ailment of sluggish satellite video growth, vertical integration appears, albeit with a small sample size, to be an enabler of expanded services, and possibly a differentiator in a generally competitive market.
Riding, Rather than Fighting the OTT Wave
Years ago, most satcom industry analysts thought that OTT was an invariably bad thing for satellite operators. Prior to the widespread adoption of HTS, and the accompanying orders of magnitude more capacity, it was hard to imagine OTT being a real market for satellite, and undoubtedly, the steady march of internet-enabled content can have a negative impact on traditional linear satellite broadcast. But with more capacity coming into the market, and with satellite operators able to offer all sorts of nifty new tricks for content multicasting, operators are beginning to lean into the OTT market, rather than fight it.
In September 2022, SES announced a deal with Indonesian OTT broadcaster Mola, whereby Mola would use SES’s 360 Unified Media Platform to boost its OTT services across Indonesia and APAC. The 2022 agreement built on existing work between SES and Mola in broadcasting OUTV events, and enables Mola to have end-to-end content management and distribution using SES’s 360 platform. While not explicitly mentioned in the press release, one could speculate that the deal is partly possible due to the fact that SES-9 is a big, CAPEX-efficient satellite.
Other countries in the region have seen smaller OTT platforms begin to experiment with satellite broadcasts. In Bangladesh, Beximco, one of the country’s largest private companies, recently began broadcasting satellite TV on Bangabandhu-1.
Moving forward, we are likely to see satellite in a stronger position in the context of OTT, with the point-to-multipoint advantage of satellite possibly enabling broadcast of the hottest, most widely-viewed content to hundreds, thousands, or tens of thousands of end points across a wide area. While it would require significant upfront investment in terminals and other hardware, the benefits could be significant, with the possibility of saving a huge amount of terrestrial bandwidth. This will be accelerated by more widespread use of HTS in the region, with the latest example being the large HTS jointly announced by Thaicom and Eutelsat in August this year, which seems primarily aimed at data markets, but which could also serve OTT clients.
Consolidation and Fragmentation
As recently as 5 years ago, the Indian DTH market was saturated, with 6 or more DTH platforms competing over an admittedly mind-boggling number of subscribers. Recent years have seen consolidation, which led to short-term pain in reduction of channels, but may finally be bearing long-term gain as financially healthier DTH platforms are able to charge more sustainable prices for their services, and subsequently invest more money into improved channel offerings. The clearest example of this was in mid-2023, the GSAT-24 satellite entered service over South Asia, carrying an additional 300 channels for Tata Play (formerly Tata Sky), increasing its total channel count from ~600 to ~900.
On the other hand, the Malaysian DTH market, which has been absolutely dominated by Astro Malaysia since the beginning of time, has seen a bit more dynamism, with Ansat Broadcast and Indonesia’s MNC Group signing an MoU in late 2022 to bring a new DTH platform to the country. Notably, the new broadcaster Ansat is owned by Vincent Tan, founder of Berjaya Corporation and one of Malaysia’s wealthiest people, and may represent an opportunity for growth in what has been a relatively stable and captive market. Just a few months later, we saw a firmer announcement from MNC about their plans to expand into Malaysia.
These country-level competitive dynamics should not be taken lightly, as new platforms need satellite capacity, and in some cases, upstart platforms may prefer using a foreign satellite operator, especially if their domestic one is working with the established DTH platform(s).
Despite geopolitical tensions, trade wars, a massive shift towards OTT, and a host of other challenges, reports of the death of the satellite video market in Asia-Pacific have been greatly exaggerated. While far from an entirely rosy picture, this region with nearly half of the world’s population is home to a number of different opportunities for satellite broadcast.
With bigger satellites coming into the region, operators can lean into the OTT opportunity, pushing offerings towards niche channels that might benefit from satellite distribution. At the same time, operators can vertically integrate in a variety of ways, which may better position them to provide more comprehensive services. And by watching market dynamics in countries with too many, or too few DTH platforms, operators can capitalize on the opportunities to serve new and emerging customers, as may be the case in Malaysia.
Ultimately, while APAC is no longer in the heyday of satellite video broadcast, it remains arguably the world’s most dynamic region, representing a silver lining in a cloudy global satellite broadcast space.
Blaine Curcio is Affiliate Senior Consultant at Euroconsult, where he contributes to consulting projects focused on satcom strategy, financial due diligence, and projects in the Asia region, with focus on China. Blaine also contributes to Euroconsult reports, including the China Space Industry Report, and the Government Space Programs Report. Blaine is a contributor to a variety of satcom and space industry publications, and a regular moderator and panelist at industry conferences. Outside of Euroconsult, Blaine is founder of Orbital Gateway Consulting, a Hong Kong-based firm focusing on commercial space opportunities between China and the west.
Addressing Consumer Demands Through IP Distribution
Gaurav Kharod, Regional Vice President, Asia Pacific, Intelsat
Programmers and distributors alike are facing new pain points thanks to changing consumer demands and evolving trends in the overall media landscape.
Programmers are facing challenges due to new service offerings. The increase in streaming applications has been disruptive, causing those who rely on traditional linear distribution to lose subscribers. As a result, programmers are tasked with focusing on the consumer relationship and figuring out how to add streaming services to their traditional offerings. Distribution, on the other hand, is struggling to integrate traditional methods of terrestrial, cable and satellite technologies and the new emerging IP-based streaming platforms, reaching not only to the traditional televisions screens but also the displays on tablets and cellphones.
Globally, video consumption is increasing. Over the past two years alone, it has grown by 60%. This is largely due to growth seen in Over-the-top (OTT) and IPTV services worldwide. As video consumption over OTT and IPTV services continue to increase, so does data traffic. Video over data now accounts for 69% of global media traffic, and is slated to increase to 79% by 2027. As a result, broadcasters are increasingly shifting investments to OTT services. This includes looking into launching their own OTT services, as well as providing hybrid options including OTT and traditional television.
Two examples of what is happening globally are the North America and Eastern Europe regions – vastly different regions with unique opportunities, but the shared challenge of meeting viewers where they are with the content they want.
In North America, traditional TV has found success with broadband services. Pay TV and telecommunications operators upsell services that bundle their core service along with a subscription video on-demand (SVoD) option. OTT penetration in North America is so high, 310% at the end of 2022 that providers must look at these bundled options to keep existing viewers as well as reach new ones. The OTT market in North America is expected to increase to 335% penetration by 2027.
In Eastern Europe, traditional Pay TV has remained stable due to packages that are competitively priced. This has kept Pay TV penetration in the region high at 80%. At the same time, both IPTV and OTT services are expected to grow. Fiber networks are continuing to expand throughout the region and through the packaging of services, viewers can find their favorite OTT content alongside their traditional Pay TV package. IPTV penetration is expected to grow by 6% over the next five years. Meanwhile, OTT will reach 60% penetration in the region by 2027.
As media consumption habits change, distributors need to be able to support the new viewing requirements. This includes increasing bandwidth to ensure video is available anytime, anywhere, while also being able to reach underserved communities. This creates complexities when managing network and programming costs.
Photo courtesy of Getty Images
Asia Pacific Media Landscape
In Asia Pacific, the way viewers consume content has drastically changed, largely driven by the increased demand for easy and reliable accessibility to programming. Viewers have transitioned to more digital and personalized viewing experiences. Many opt to watch content online or on their mobile devices.
While this has changed how distributors approach video delivery, Pay TV penetration across the region is relatively high, at 80% at the end of 2022. This is expected to remain stable over the next five years through 2027. Pay TV services used consistently across Asia Pacific are cable TV, satellite TV, IPTV, and OTT.
Cable TV, a long-time staple, ended 2022 at 28% penetration of households. This is expected to decrease slightly to 25% by 2027. This is largely due to viewers switching to IPTV subscriptions.
IPTV household penetration is expected to increase from 46% in 2022 to 48% in 2027. A key driver here is the popularity of bundles in the region that include broadband, telephony, and cheaper Pay TV services.
The strongest growth has been seen from OTT, sitting at around 70% penetration of households. However, this is expected to plateau and reach saturation.
Outside of terrestrial options, satellite TV will also remain stable at 31%, due to Asia Pacific being a vast region with large rural populations with poor connectivity. Terrestrial infrastructures have a hard time reaching these places.
While growth is being seen in the newer forms of distribution such as OTT and IPTV, cable still remains, and is projected to continue to be the largest revenue generator in the region. This presents an interesting challenge for programmers and distributors. Their viewers are moving to new service formats, however, their traditional distribution model still accounts for the most revenue. So then, what is the best way to maximize viewership and revenue across multiple platforms and technologies?
Flexible Distribution Models
To stop the erosion seen in traditional linear distribution services, content providers need to evolve their business models in order to meet new needs and expectations. As more consumers move to digital viewing options, both traditional and new content providers will be under pressure to continue to reliably serve an increasing number of online viewers, while scaling their capacity and still maximizing the value of their existing linear distribution models.
One technology making waves in the media industry is IP transport; and although it’s not new, recent advancements in protocols have made the media industry increasingly more comfortable with IP-based delivery as a means to transport high-value video content. Increasingly, media companies have started employing solutions that capitalize on all that IP has to offer, including its global reach, scalability, and cost-effectiveness.
The use of internet for video consumption has taken off as terrestrial networks continue to expand and 5G networks are built. The evolution of high-speed internet, mobile networks, and connected devices has created alternative and reliable platforms for viewing video. The total addressable market for those who can be reached by high-speed internet will continue to grow as there is more 4G, 5G, and fiber connectivity.
Additionally, access to local, high-quality content has been another key driver for the uptake of streaming services. Today, viewers want to be able to have the choice, as well as control of content watched. IP streaming helps provide access to locally-focused content that large operators may not offer. In countries like India, Thailand, and Japan, accessibility to local, high-quality content has become imperative. Consumers increasingly want to be able to take this kind of content on the go with them. Premium sports rights have also been slow in making the transition to online services. This is being seen with cricket and football in countries like Australia, Indonesia, and Singapore. These trends are pushing consumers further from traditional linear services to digital media viewing options including IPTV, on-demand and OTT services.
IPTV services had over 223 million subscribers at the end of 2022 and are a primary growth driver. The most IPTV subscribers are seen in Mainland China and South Korea. Thailand, however, was the fastest growing IPTV market in the region with an estimated growth of 26% year over year. Adoption of high-speed residential broadband along with bundled services has contributed to this rapid growth. The region as a whole is expected to grow at a CAGR of 2.7% in the next five years.
IPTV is making a big push in region, with Australia, Japan, and South Korea, representing key markets that should be watched.
Australia is one of the highest revenue generating markets for IPTV. This is largely led by subscription-video on demand services, which in 2022, reached 85% of household penetration.
Japan and South Korea represent countries with growth potential for SVOD services. 49% of households in Japan currently subscribe to SVOD services. That number is 42% in South Korea. More than half of the market still has the potential to be reached. Another key driver in both markets is content. The local content from these countries is sought by viewers globally, giving content providers more options to reach these consumers. Global distribution of content ultimately increases viewership and therefore generates more revenue streams.
IPTV and Satellite
Distributing a variety of content across platforms is challenging. As more online video service offerings increase, programmers and distributors will be challenged to continue to optimize their existing business, reach new audiences with more content, drive cost efficiencies, all while managing cost. Across Asia Pacific, this will be escalated as high-speed internet continues to rollout across the region. Content providers need to take advantage of all IP transport has to offer. And while IP offers many options for content contribution and distribution -more importantly, it also enables hybrid networks that blend different transport technologies to balance security, costs, capacity, latency, and availability.
Programmers and distributors need to maximize the technology available to them so they can expand their reach and deliver content to all viewers, whether through cable, satellite, IPTV, direct-to-home, or OTT. In addition to adopting IP streaming services, other pieces of technology, including using satellite for distribution, will continue to play a key role. Its reliability, large coverage area, and accessibility to regional and global content make it an integral component of the distribution model.
Asia Pacific is a vast region with an abundance of opportunities. Those opportunities, however, diverge between the developed and developing markets. This is why hybrid approaches to distribution, including IPTV, as well as satellite, are the clearest enabler of reliable and efficient distribution for those looking to reach the Asia Pacific audience.
*Information assisted from S&P Global, Ampere, and Satellite Markets and research
Gaurav Kharod is a strategic satellite professional with more than two decades of experience in the satellite communications and satellite broadcast markets in Asia Pacific. He has led various teams at Intelsat since 2012. Prior to joining Intelsat, Gaurav held leadership roles at Hughes India and Viasat Inc. in the satellite domain, along with a stint at Conax AS in the media industry. Functionally, he brings a mix of expertise across Sales, Product Management, Business Development, Regulatory and Policy Affairs. Gaurav holds a Master of Business Administration degree and a Bachelor’s Degree in Electronics Engineering as part of his college education in Gujarat, India.
Satellite’s Role in a Streaming World
Why Satellite Services Remain Key in the Age of Streaming
Yvonne Bertalot, Director, Product & Reach Marketing, SES
In the span of 20 years, we have drastically expanded the way we consume content. Be it the proliferation of screens or time-shifted content, there is no double we are all consuming much more content today than before.
In Asia-Pacific in particular, viewers are spoil for choices with dozens of regional platforms such as iQiyi, Viu, WeTv, Hotstar, Disney+ Hotstar, Jio Cinema as well as global players such as Netflix or Amazon Prime. Research shows that there are roughly 1.1 billion people worldwide that subscribe to at least one streaming service, a number that’s only expected to grow. On top of that, projections show that the number of homes worldwide with linear TV and online video platforms is expected to increase to 5.69 billion by 2027.
What does this mean for the future of satellite operators and linear-television providers? While habits continue to evolve, it leaves windows of opportunities to engage viewers. Whether it’s streaming or linear channels, there’s a need and place for both, as people look to watch their favourite content.
Photo courtesy of Getty Images
The Streaming Battle Has Begun
Streaming offers people the option to consume content when they want, and how they want: any time of day or night from the comfort of their own home or when traveling. In Asia Pacific, it is clear that online video subscription numbers continue to grow as more and more viewers turn to streaming with the offering becoming more widely available, often through bundles with their providers.
However, pay-TV still dominates most big markets in the region. Research from Omdia shows that despite growth in the SVOD market, pay-TV continues to lead the video market in the region, with 69% of total revenue contributed by pay-TV services in 2023. And while pay-TV subscriber growth has plateaued in recent years, pay-TV remains the leader in APAC, accounting for 64% of TV households. That is the highest pay-TV penetration rate of any region globally, and even with the rising streaming subscriptions, pay-TV is predicted to retain its subscriptions and high revenue for several next years.
Streaming platforms have also been facing problems with subscriptions. Recently, companies like Netflix, Disney+ and others have begun raising prices and cracking down on people sharing passwords and account access. And doing so has caused some customers to rethink their subscriptions. A recent Forbes survey found that 35% of respondents would consider cancelling their Netflix subscriptions if higher prices and the crackdown on password sharing continues. This could in turn push viewers to explore other options to consume content.
While content consumption habits continue to evolve, it is clear that the growth of online video platforms and the stability of pay-TV prove that it is not a straightforward choice between two content viewing methods for consumers, but that they see value in both for the years to come.
Photo courtesy of Getty Images
Free TV on Streaming
Streaming services have begun to innovate and change, looking for new ways to capture the attention of potential viewers. Free Ad-Supported Streaming Television (also known as FAST) has burst onto the streaming scene in the United States in recent years, and is starting to make its way into Asia-Pacific. They operate the same way as other streaming services, emulating the benefits of linear television on your phone or smart TV. But instead of picking a movie or television show you want to watch, you watch content through “channels.”
The success of FAST streamers has been steady in recent years, with research suggesting that there could be over 1 billion FAST streaming users by 2027. In fact, a recent Deloitte survey found that 60% of respondents say someone in their household uses a FAST streaming service.
It’s proof that the linear television model is not something people want to give up. And it won’t anytime soon, because linear television still has one very important part of the content equation.
Photo courtesy of Getty Images
The Crown Jewel: Live Sports
While streaming services and FAST streamers have impacted linear television viewing habits, linear TV still has one thing that streaming does not have the majority share of: live sports broadcasts. Some events are broadcast on streaming services, but the vast majority of top tier events like the Olympics, World Cups and European football cups and leagues are still taking place on linear television. Sports Business Journal says that sports accounted for 94 of the top 100 telecasts of 2022. The Beijing Winter Olympics made the list twice including the opening ceremony. But the NFL in the US remains king, responsible for 19 of the top 20 events.
In the world of advertising, those big games can be lucrative opportunities. For example, a recent report valued a 30 second commercial during the Super Bowl at roughly $7 million. Even in the age of streaming, there’s still big money in linear television, because of the reach that it provides especially when it comes to live sports. That’s why satellite companies have an opportunity to be big players in the live television broadcast market.
At SES, we experience the demand for live sports and events across the globe every day from customers as we have played a role in the delivery of all 10 of the most watched sports events ever and work with over 500 leading sports organisations.
Satellite remains the most reliable way to deliver content from one part of the world to another. We have not only delivered key sporting events in and out of Asia in the last few years, but also have seen how broadcasters and media companies address their viewers’ needs to access the most exciting sports content from virtually anywhere. For example, we partner with companies like Softbank in Japan, DTH operators like Nex Parabola or Cignal and GSAT in the Philippines to provide premium quality live content for viewers across the region.
Photo courtesy of Getty Images
Is Satellite Staying?
While streaming and social media content continues to grow and evolve, new opportunities are becoming more and more apparent for traditional broadcasters and satellite operators as emerging innovations make their way to the market.
At SES, we see the shifting focus on using new technology as a tool to adapt to the changing marketplace. For example, there are new software solutions in development that can be installed by the end user to capture the activity of their TV usage. With the user’s permission, it can track things like viewing habits, time watching, preferred programs. This valuable data collected from viewers can be studied by broadcasters to better understand their viewers and create new opportunities to engage them, something that was not possible in the past. Another new type of technology being developed is the ability to deliver ads to specific audiences. This allows broadcasters to benefit from targeted advertising while relying on linear delivery of their content, which is more reliable and cost-efficient to mass audiences.
The undeniable benefit of satellites is their reach, as some areas rely on satellite, to provide coverage over vast areas that the terrain and geography doesn’t allow for other infrastructure especially in places where internet or cable television isn’t possible. Just like data connectivity, content delivery needs to rely on various forms of infrastructure to truly reach viewers regardless of circumstances. Satellite companies have an opportunity to bring these places new content that they normally would not have access to in what’s known as edge feeding, delivering satellite communications to isolated and remote locations where there are no other options.
Looking to the Future
While many people are changing the way they consume media, there will always be a need to deliver high-quality content in the most reliable way. A research from eMarketer predicts that by 2025, digital video will reach 82% of internet users or 2.2 billion users in the APAC region. Yet much of the content in APAC will be delivered through satellite operators such as SES, giving them a seat at the table as a key way people receive their content in a changing media landscape.
Yvonne Bertalot as part of SES Media is leading the Product & Reach Marketing department. She is currently involved in business development in the media industry. Yvonne has more than 10 years of experience in the media and telecommunication industries. Within her working background in cinema and production, she has a strong understanding in media industry and space. Yvonne experience spans from medium to key accounts with several business skills in production, sales, marketing, strategy, product and reach marketing. Yvonne has a university background in Business & Management.
How the Satellite Industry Should Respond to
New Broadcast Environment Trends
Alex Beach, Head of Media and Broadcast Market Developments, ST Engineering iDirect
According to data from May 2021, households spent more time streaming than watching broadcast TV. While some initially attributed this to the COVID-19 pandemic, and the fact that more of us were consuming content at home, the 2022 data continued to follow the same pattern. By July 2023, streaming had claimed a record 38.7 percent of total TV viewing.
As the competition between streaming giants and broadcasters intensifies, we continue to see the rapid deployment of IP-based technology for media. In order to stay relevant, organisations must embrace this, adapting to change and identify tactics that can enable them to future-proof their business model – with satellite playing a vital role.
The rise of over-the-top (OTT) platforms
It’s no secret that consumers love choice. Whether buying weekly groceries or booking a holiday, the ability to choose from more than one option and tailor their purchase to their own requirements can go a long way in building brand loyalty. The same can be said when choosing what to watch – both how and when.
OTT services such as Disney+, Netflix, Apple TV and Amazon Prime Video have seen significant growth over recent years, and it’s easy to see why. The endless choice and ability to access the latest ‘must-watch’ TV from anywhere, and at any time, is clearly an attractive offering to consumers across all demographics.
There are two main types of OTT streaming. The first is Video on Demand (VOD), a time-shifted model that refers to content that can be watched whenever convenient and removing the need to wait until a certain time on a certain day, as was the case a few years ago.
The second is live streaming, and this enables viewers to be part of the action, in real-time. As well as referring to live news, sporting events and concerts, the popularisation of curated FAST channels (Free Ad-Supported Streaming Television) is driving much of global live viewing.
Reports are already suggesting that these OTT services are winning the battle against traditional content delivery, with streaming reportedly outperforming both cable and broadcast TV for the first time ever in 2022. In the UK, households are forecast to spend £4.2bn on Netflix and other OTT services by 2025, overtaking TV packages from providers including Sky, Virgin Media, BT TV and TalkTalk, where £4.1bn will be spent. It’s taken just 13 years to reach this ‘tipping point’.
OTT platforms are not without their limitations
Both VOD and live streaming rely on the broadband network, and while these offerings have their clear benefits, they also have their limitations. As a growing number rely on the network to stream OTT content, outages and poor-quality coverage have been reported – especially when we saw a surge in streaming during the COVID-19 pandemic.
Under the instruction of governments and network providers, the quality of video streams was actually downgraded with the aim of reducing bandwidth pressure. While this solution had the desired impact in the short term, it’s only papered over the cracks. If subscriber numbers continue to increase, as predicted, it’s likely that OTT solutions will face the same issues again.
Satellite will continue to play a key role in delivering content
Due to the challenges outlined above, it’s clear that satellites will still play a fundamental role in delivering content to the masses. Our project with DIVICAM, supporting the Peruvian government as it looks to bring public broadcasting and educational content to those living in remote regions, is a prime example of how OTT platforms and satellites can work together.
SKYflow, the technology being deployed in Peru, is actually the first Satellite OTT Ecosystem. This technology has defined satellite’s role in OTT delivery, enabling service providers and telcos to deliver content to any device, in any location. Comprising technology from a group of companies, including iDirect, the SKYflow ecosystem will provide 100 percent of the Peruvian population with direct-to-home (DTH) content and access to live and file-based content – providing invaluable educational video and media content.
Additionally, SKYflow’s bi-directional capabilities will allow the Peruvian government to take advantage of a broad range of applications. Leveraging real-time network monitoring data, one such application of this technology is its ability to supplement network load management. Based on network traffic peaks, Network Operators can engage SKYflow to utilise satellite’s inherent multi-casting functionality. Additionally, Mobile Network Operators will be able to take advantage of the longer geographical range that satellite networks cover, which can complement the build-out of 5G in remote areas.
Consumers will benefit from SKYflow’s ability to deliver DVB-NIP so families can gain all-important telemedicine access, remote hotspot capabilities, and the ability to access live content, VOD assets and materials like e-books and exam papers, all using a cost-effective satellite infrastructure.
We know this is a critically important service to households that, without it, have limited options for education, health and growth.
With these new technologies enabling better quality content to be streamed to a greater number of people – even those living in remote locations – satellite will continue to play a vital role in content delivery.
As leaders within the satellite space, we must remain at the forefront of those changes and that’s why we released the now award-winning MCX8000 Multi-Carrier Satellite Gateway back in 2022, designed with the aim of combining high density, high reliability and IP-video support through robust design and industry-leading redundancy solutions, enabling broadcasters to cater to every type of broadcast scenario.
The result is a future-proof system that combines video and IP multiservice capabilities to support the transport of today’s and tomorrow’s services, offering easy configuration, higher availability to broadcasters and hot swappable design resulting in lower OPEX.
Focusing on the need for an integrated, end-to-end solution that both helps to close the digital divide and delivers the very best quality service to an expanding global audience, satellite should continue to be viewed as a key player in the broadcast and telecoms industry.
Alex Beach currently serves as Head of Media & Broadcast Market Development at ST Engineering iDirect. He is tasked to manage and grow market position and revenues in the Media & Broadcast vertical, including DTH, Distribution, Contribution, Satellite OTT, and IP Content Distribution over Satellite. Previously, Alex served as Vice President, Business & Product Development for EasyBroadcast – a SaaS media platform based in Nantes, France. In this role he was responsible for developing new business and product partnerships utilizing EasyBroadcast’s streaming and patented Viewer Assisted Distribution technologies for Media and Enterprise clients.
Interview with Dr. Sunghee Lee, CEO, CONTEC
Q: Can you give a brief introduction of CONTEC and its current position in the downstream industry?
CONTEC, founded in 2015, is a leading space company that provides a full vertical chain solution in the downstream industry. CONTEC is the first commercial ground station provider in Asia and the only company to provide a total end-to-end solution for the ground segment industry. Solutions range from space ground station design and implementation to GSaaS services (Ground-station-s-a-service). CONTEC has set up its own ground station network with a total of 12 ground stations spanning across 10 different countries. CONTEC aims to ensure enhanced coverage and accessibility to satellite operators, enabling them to optimize their missions and effectively manage their satellite fleets. CONTEC has developed advanced technologies using AI to process and analyze raw satellite data to deliver high-quality standard satellite images. In addition, CONTEC offers value-added satellite image services by applying AI and ML technologies to perform object detection and change detection for diverse societal and industrial application in Smart City, Disaster, Defense, Agriculture, and Maritime sectors.
CONTEC has also established three subsidiaries, CONTEC Space, CONTEC Earth Services (CES) and CONTEC Space Optics (CSO). CONTEC Space, located in Luxembourg Technopark, provides support for business and research collaborations in Europe. Meanwhile, CONTEC Earth Services provides satellite imagery and value-added applications and CONTEC space Optics provides technologies in high-resolution imaging for space missions.
CONTEC’s Ground Station Network (Source: CONTEC)
Q: What are the key strategies to maintaining competitiveness in the ground segment?
The space market is open to many new businesses and its scale is growing continuously. As the number of satellites (especially small-sized satellites) launches has continued to increase, so has the need for services to provide satellite operators and launchers the connection from the ground to the satellites. These customers are comprised of government agencies, research institutions, universities, and the private sector across the world (Americas, Europe, and Asia). So, the demand for ground stations will continue to grow with the satellite industry. But, ground stations are not cheap and require lots of labor, therefore while it’s important to be aware of your competitors, it is also useful to collaborate with them. For example, CONTEC main competitors in the ground segment are also our partners as we share our ground station network and customers to create synergy in the space industry.
CONTEC’s Ground Station in Jeju (Source: CONTEC)
Q: As ‘New Space’ is gaining taction, what is your evaluation of the space ecosystem in South Korea?
In my perspective, Korea has yet to fully embrace the new space era. While several Korean companies collaborate closely with the Korea Aerospace Research Institute (KARI), not many of them are willing to manufacture their own launch vehicles or satellites. Also, this is the stage where space companies shouldn’t keep depending on the government but need to have the capabilities to engage in global business.
The key factors of a New Space ecosystem can be summarized as follows. First, an appropriate launch vehicle and satellite are crucial. Unlike the past, it is now possible to obtain meaningful data with satellites as small as a laptop, and what used to cost hundreds of millions of dollars now only costs us a few million. Second, technological expertise must be secured. Next, a business model should be developed. If you demonstrate that you are making money with this technology, you can attract investment, and the more investment you receive, the more advanced this technology becomes, creating a virtuous cycle. Lastly, the government must take on an active role in breaking down regulatory barriers for the commercial sector. The ‘New Space’ led by the private sector is the trend, but they cannot do everything but rather need to be supported by the government. In particular, the aerospace field overlaps with the defense field, so there are many regulations. Also, in comparison to other countries, Korean companies are at a nascent level, and to overcome this, building an ecosystem is essential.
CONTEC’s Ground Operation (Source: CONTEC)
Q: What is in store in the future for CONTEC?
On the business side, CONTEC is getting ready for two milestones by 2024. First, CONTEC is getting ready to go public on the KOSDAQ market and plans to launch CONTEC’s first satellite, OREUM-SAT in early 2024. CONTEC will also continue to construct more ground stations (RF and optical) along with developing new technologies. But most importantly, CONTEC’s core value is to help boost the growth of Korea’s space industry and the creation of space-related content for future generations to raise awareness of space. CONTEC is currently working on building the first ‘Asia Space Park’ to underline the importance of making space part of everyday life. The space park will have up to 12 antennas and a satellite operation center. As well as an education filled space experience center and space media art center to help educate the public about space. CONTEC also hopes to encourage the space industry in Korea through the establishment of a space incubator to bring space startups from both in and out of Korea together and create synergy to advance the space sector.
CONTEC’s Asia Space Park (Source: CONTEC)
Dr. Sunghee Lee is a highly accomplished professional in the field of space, currently serving as the CEO of CONTEC. With an illustrious career spanning over 16 years at KARI, where he specialized in ground systems and satellite operations, he played a pivotal role in launching ‘KSLV-I (Naro)’ – Korea’s first launch vehicle. Dr. Lee expanded his expertise by collaborating with international experts as a visiting researcher at Carleton University, focusing on cubesat missions. His passion for space tech advancement prompted him to establish CONTEC, which has emerged as a leading player in the satellite industry, offering state-of-the-art solutions.