VIA SATELLITE: What are the hot spectrum bands?
ANTONOVICH: In North America, Ku-band is still a strong market. C-band is soft at the moment. There are not a lot of new channel launches for new program distribution due to congestion at the cable headend. There has been a lot of conversion of standard definition to high definition already. With more than 170 HD channels already on C-band satellite, roughly 20 percent all the C-band sold in North America has already converted to high-definition television. Most programmers used existing inventory to make this transition, so there has not been significant demand for new C-band sales. But Ku-band is still being driven by consumer broadband and enterprise networking.
VIA SATELLITE: Given your market perspective, do you see any weakness in demand in the near future?
ANTONOVICH: 2009 looks to be a challenging year for a number of industries. Ad spending is down about 20 percent for broadcasters so far this year, and that will ripple through the rest of the food chain. Long-form sports and program distribution, those dollars are assured. They may be having a hard time, but not many programmers will be going out of business. Expect to see belt-tightening in satellite newsgathering. A lot of that business is captive to events but breaking news is breaking news. They will cover it, but they will try to be more frugal with how they cover it.
I think the $64,000 question is what will happen in the consumer broadband market. Will it soften with the economy, or will it begin a complete migration over to Ka-band? More than 100 Ku-band transponders are at play here.
VIA SATELLITE: Do you expect to see an impact on your business due to the overall economy?
ANTONOVICH: Whenever there is crisis, there is a "crisis resolution opportunity." We see a contracting market right now with a lot of customers unsure about their bandwidth needs and not taking long term leases directly from carriers. We see this as an opportunity where we can and should increase our market share. As people become less confident about their own business, they still need to get jobs done, and we see that as an opportunity for us. It comes down to managing your business, and in these uncertain times, it’s better to have a provider who can meet your needs on terms you like. By being more of a "bandwidth boutique," offering capacity from a lot of different carriers, we think there are places we provide a better and more diversified service than even the larger carriers can. After all, they only sell what they have on the shelf. We source from everybody in the market. They tend to be more rigid and less responsive to customers; we simply can’t afford to do that. We have to be more flexible and dynamic to grow.
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