Intelsat Ready To Get ‘Aggressive’ In Media Space
Intelsat is banking on a strategic repositioning in the media and broadcasting market place to reap dividends during the next year. The operator, which recently announced it was pulling out of the Galaxy JV in Hong Kong, wants to accelerate its revenue growth in this arena.
Jon Romm, president of Intelsat’s Media and Entertainment business unit, told Satellite News his company was ready to get “very aggressive” in this space. “In the last 24 months or so, we have done a good job at repositioning Intelsat in the broadcast marketplace,” Romm said. “Historically, Intelsat supported channels to marketplace, which got some broadcast business, but they were significantly able to achieve on the voice and data side. We have sent a very clear message to our old/existing channels to marketplace that we are going to get aggressive in this space.”
He continued, “We are going to have appropriate channels that push our products and services first and foremost, and we are going to have direct contact with end users when we don’t think our channels are working to the best interests of ourselves. We have kept our product line streamlined, but we have kept it current and technologically driven. It is operationally supportive and appropriate for the high-end needs our clients have. We haven’t just offered our client base many products hoping that one or two of them could hit. We thought about them.”
Competition in the media and broadcast space is intense because a number of countries, including the United States, are looking to make the transition from analog to digital. Romm commented, “One of the aspects that I think is really helpful to us is our satellites are steerable. The three spot beams, which sit on our satellites, can be manipulated and can conform to the specific needs desired by customers. That is not something our rivals have. From our standpoint, it is not unusual for us to manipulate spot beams to specifically meet the solution the client is looking for.”
Romm explained Intelsat’s new ways of doing business in this area. “The other aspect for us in the last 24 months is that we have moved the business from being a space- only business to solution selling,” Romm said. “That has been a significant change from an Intelsat perspective. We are providing end-to-end services that have terrestrial aspects to it, from fiber to earth station, that drive capacity on our satellites day in and day out.”
In terms of growth in new markets, Romm admits Intelsat has seen a “significant surge” in the North America marketplace. It’s mainly come from the assets it acquired from Loral. “It has been an area in which, historically, we have not been active. We are now, and it has brought us closer to the broadcast marketplace in North America as well as the cable marketplace,” Romm said. “The orbital roles are in place to support the telco and IP television space.”
In fact, attacking markets where the operator had previously not been that active has become a key for the company in the media space. In addition to the United States, the operator is targeting the Middle East and Eastern Europe. “We are seeing interest out of the Middle East where, historically, we have not been as active. We are seeing some distribution surge in Eastern Europe from a direct-to-home (DTH) or cable-distribution standpoint. The new 10-02 launch is helping us significantly.”
The Move To Digital
Many countries are beginning to see digital terrestrial television (DTT) make an impact, and Romm believes Intelsat can play an enabling role in many territories to get digital to more rural and remote areas. “It is creating an interest for satellite capacity, which once again needs to conform to a specific architectural design. You are not looking for massive land coverage,” he said. “You are looking for something we call ‘loopback’, which is where you uplink from where you want to downlink from. It is a little bit of a different formula than we have had in the past, but it is a real good opportunity for us to maximise the percentage-utilization of certain satellites. If you can operate within the uplink/downlink footprint, that is a pretty attractive thing for us.
One of the other major growth opportunities in the broadcast space is likely to be high-definition (HD) services. In a recent report by Northern Sky Research, by 2009, there are likely to be around 500 channels broadcast in HD. With the move to HD already well-underway in the United States, satellite operators see this as a potential major growth opportunity. Romm believes Intelsat can help kickstart HD in many global markets.
“If the transmission provider can get out in front and push the encoder to the origination location, then HD television is going to take off globally,” Romm told us. “Once you originate HD, it changes the formula for what transmission providers are providing. If we continue to sit back and stay comfortable with providing contribution in SD because we don’t push the encoder out to the forefront, and all we do is accept upconverted HD television, it is going to stagnate this as a whole.
Romm says his company is working with broadcasters, production companies and with the fiber-optic providers to push encoders to the forefront. “We have invested in them. We are working to reside encoders at the origination location, to be able to originate more and more programming in HD,” he said. “As programmers globally are interested in that content – which is either originated at 45 Mbps HD or at 19.4 depending on what the format is — it still is a significant bandwidth change. It requires a mentality shift of how to take HD from a contribution and redistribution standpoint.”
Other markets where the operator wants to make a positive impact include the Occasional Video Services (OVS) market. “OVS television for us is not the sole story, but it is a nice way for our clients to get used to using our network and to get antennas fixed on our network,” he said. “What we are seeing is more OVS utilizers becoming full-time utilizers compared with what they were two years ago. If we were running an OVS network, where someone was just dipping his or her toe in, it doesn’t make sense. But if we can get OVS providers to get comfortable enough with us, where they are getting our full time services, it makes a lot of sense for us.”
These efforts point to a business transition for Intelsat. Historically, it’s been in the business of selling bandwidth. “In the last 12 months to 18 months, as we have transitioned our business from being predominantly contribution to more distribution, the relationships that we are having with the multiplexers and with those STB providers and middleware people are becoming more critical. We understand the technology, what they are doing to develop technology and why they are doing it that way,” Romm said.
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