Neil Gaydon, CEO, Pace Micro Technology

Via Satellite: What types of new products are you planning to introduce for satellite pay-TV operators?

Gaydon: The products we are developing range from hybrid MPEG-4 HD/PVR solutions all the way to new low-cost standard-definition (SD) boxes. This includes next generation versions of current products, such as SD and SD PVR boxes, many coming through with Ethernet connectivity.

Interestingly, although there is a lot of buzz about HD, the demand for SD and SD PVR remains strong. However, when you look at operators on an individual basis, some are more advanced than others in what services and products they are rolling out. So for those without an HD PVR on the market, HD PVR will make for exciting launches in 2007.

Via Satellite: Has the initial demand for HD services been in line with your expectations?

Gaydon: Although not a complete surprise, the take-up of HD has been lower than initial projections suggested around Europe. If I go back to when HD launched in the U.S. and where we were delivering some of the world’s first HD cable boxes, the take-up of HD happened in fits and starts over a five-year period. The reasons were content, price of HD-ready panels and set-top boxes.

Now that all of these things have aligned, the U.S. market is taking off in a significant way. I believe the same will happen in Europe in a shorter time frame than it happened in the U.S., although the dynamic will be somewhat different, as Europe is more fragmented in terms of various cultures, content availability and operator capability.

Via Satellite: How much of a threat do you see IPTV being to satellite providers in major markets?

Gaydon: I think there is a very real threat there from the telcos, as they have tremendous resources, a large number of users and very strong brand names. They also, in some cases, have earned consumer trust. What they don’t have, or will find problems with, is ensuring they have the primary content rights. If for example BT had won the Premier League rights for their launch of BT Vision, I would say they would have been a very big threat to the incumbents.

Another key issue facing the telcos is being able to put together a very strong consumer experience. In the main, telcos have been very good at building infrastructures, but when it comes to the end-user experience and competing against the likes of BSkyB, DirecTV or Comcast, who are masters in this area, I remain to be convinced that telcos can be as strong here.

Via Satellite: Do you see more satellite pay-TV operators following BSkyB’s lead and buying telecoms infrastructure?

Gaydon: I think BSkyB is much further along than other operators I can think of in Europe, but obviously I can’t speak for all of them. You have to assume there are talks going on, and you have to think they are looking at the return channel so they can offer triple play.

Via Satellite: What types of new products are you planning to introduce for satellite pay-TV operators?

Via Satellite: Has the initial demand for HD services been in line with your expectations?

Via Satellite: How much of a threat do you see IPTV being to satellite providers in major markets?

Via Satellite: Do you see more satellite pay-TV operators following BSkyB’s lead and buying telecoms infrastructure?

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