Trace TV, an urban and tropical music channel provider, is distributed to more than 17 million households in 130 countries around the globe. Trace TV CEO Olivier Laouchez discusses the broadcaster’s plans.
VIA SATELLITE: What is the next phase of your strategy?
Laouchez: The road map is clear — make Trace a global brand and a market leader in its three segments: urban music and culture, tropical music and sports celebrities. The Trace team has more energy and resources than ever to build the company to the next level. All profits made during the last four years are invested for the future. Our HD strategy and the launch of Trace Sports require several million euros of investment, and we are confident that these new products will be the key drivers for growing Trace moving forward.
VIA SATELLITE: Are you seeking more capacity in 2011?
Laouchez: We have had a great relationship with Eutelsat since the very beginnings of Trace in 2003. Eutelsat’s understanding of Trace’s growth strategy was a key element to build Trace’s presence in 150 countries. Trace channels are now available on 27 satellites worldwide, including seven from Eutelsat, and we are now discussing with Eutelsat to add our three HD channels on their EuroBird HD constellation. For us, Eutelsat is more than a satellite capacity provider but a global transmission partner that can provide a wide range of services and expertise to bring our TV feeds to our distribution partners anywhere in the world. Satellite is our biggest expense, and it is important to notice that there is always ground to find smart business solutions with Eutelsat teams in France and Germany to build business for the interest of the two parties.
VIA SATELLITE: What impact did the economy have on your growth plans?
Laouchez: 2010 was our best year ever with more than 30 percent growth and more than 12 million euros ($17.4 million) in revenues. Our three revenue engines — affiliate sales, advertising and licenses — were not really impacted by the global recession because of our niche positioning and our strong position in fast growing emerging markets. 65 percent of our revenues come from outside of France, which is still our biggest market, but we are experiencing more and more growth in Africa, Asia and Latin America.
VIA SATELLITE: What impact is new broadcasting technology having on your business?
Laouchez: 2011 is our HD year. There are not many examples of niche channels moving to HD so fast. By the end of March, all of our existing SD music channels were available in HD with more than 60 percent native HD content. Trace Sports, to be launched in May, will be 80 percent HD native. This HD migration is obviously a great development to improve the Trace experience from a viewer point of view. Nevertheless, it is impossible to recoup this investment in the short-term. Versus SD, HD requires important additional expenses in content, graphics, playout, transmission and satellite. Most of the time, end users, who have already acquired full HDTV sets, think this investment includes the HD channels cost, and TV distributors are reluctant to increase their fees because of the intense competition in the pay-TV market. The good news is the migration to MPEG-4. More and more distributors are now adopting this compression format and have more capacity to adopt new channels, especially in HD.