Multimedia & Satellites: Buying The Whole Package
By Theresa Foley
Multimedia services over satellite have begun to change the face of the satellite industry as consumers, corporations, broadcasters and Internet companies create a new customer base with a variety of needs to receive and interact with bundled digital services.
Although multimedia services can cover a wide range of activities, the term generally refers to the bundling of several types of traffic–video, data and voice–into a converged service, typically delivered to a user or platform that is capable of interacting with the content, although much of what is currently labeled multimedia is not interactive. Among the big satellite operators, the multimedia offerings include broadband, Internet access, multicasting, telemedicine and other applications. It also is being defined to include much of the new media service sector that is tied to Internet usage or content management, such as streamed media, hybrid interactive services, two-way satellite Internet access and “edgecasting” of content for storage at the edge of the network.
“The device on the user end can be a PC or a TV, but typically, multimedia service is Internet Protocol (IP)-compatible and linked with a store-and-forward capability in the home or office,” says Romain Bausch, director general and chairman of Luxembourg-based operator Société Européenne des Satellites (SES). A typical multimedia application for SES would be to link a TV program with a Website, and then allow chatting or information retrieval by viewers, or to send advertising content from a company.
Panamsat Corp., in contrast, defines its new Net 36 network of servers as a multimedia service. Net 36 is being used to help distribute content from Panamsat’s broadcast customers around the Internet, where it can be further distributed through terrestrial networks to end users.
Eutelsat is one of the first operators to design a satellite optimized for these new services. Others, like Loral’s Cyberstar, are planning new networks that tie satellite capacity to terrestrial networks and equipment as they devise ways to meet the multimedia challenge.
Operators also are investing in smaller multimedia service firms to give themselves a leg up in building a multimedia services base. SES has invested in Kokua Communications, its first customer for the Broadband Interactive (BBI) product, and Netsystems.com, an Italian broadband services provider.
“We are taking an equity position, with the flexibility to remain shareholders or to divest when the time is right,” as the new companies go public, Bausch says.
Eutelsat may take a stake in TV Files, a company set up to distribute broadband content to business users over a Eutelsat-developed platform. “TV Files is a promising type of company,” Giuliano Berretta, Eutelsat director general, says, explaining the interest. “My idea would be to invest in many new businesses. We like the ‘New Economy.'”
The multimedia offerings typically center around use of IP packeting and routing and other Internet-related protocols, and often include MPEG compression formats.
While multimedia services do not have a global standard for satellite transmissions, within Europe a standard technical platform called DVB-RCS is emerging. Bausch says the DVB-RCS standard, which SES is promoting for its Ka-band multimedia services, could benefit the whole satellite industry if it is adopted. “The forecasts say that the market share for satellites in broadband is five to 10 percent of the total. By promoting open standards, we are maximizing the opportunity for satellite to get a bigger piece of the cake,” Bausch says. “We also risk more competition for ourselves.”
The European Scene
In Europe, industry leaders SES and Eutelsat have strategies for pursuing new multimedia clients.
Paris-based Eutelsat is now devoting 41 percent of its capacity to a collection of services that are related to multimedia/interactive services, up from 25 percent a year ago, when broadcast services took 75 percent of the capacity. Berretta comments that pure multimedia-interactive services only take a few transponders, but that amount is growing fast.
“The future is very bright. The computer is going to help us. People will be caching the Internet on their own hard disc,” Berretta says, predicting that today’s typical 15-20 Megabyte hard drives will be replaced with 100 Gigabyte hard drives within a few years. That high storage capacity on each user’s computer will change the way Internet content is delivered and used, and satellites could have an even more prominent role, he says.
One Eutelsat multimedia customer is Tachyon, a U.S.-based premium business network service provider who uses several Eutelsat transponders to deliver interactive services to business. Other Eutelsat multimedia customers focus on consumer services, including Telus, a German service for broadband; Wanadoo Satellite, a France Telecom customer for Internet services; and Iperspace, an Italian Internet access provider.
Eutelsat will order a new satellite that is optimized for multimedia, called IPsat, by early 2001. “We are the only one in Europe to have a design optimized for multimedia,” Berretta says. “Current satellites are not optimized for multimedia with their narrowband transponders, which are very costly. Thirty-six-MHz transponders are not good” for this service. He says IPsat should have 72- or 108-MHz bandwidth transponders.
Even more important than the wider band transponders will be the tightly-focused spotbeams that IPsat will have for the return link from the user terminal to the network hub. Medium-sized beams will be used for the forward link going out to the terminals. Such a design would allow the most cost-effective interactions with users and will be cheaper to build, because the mix of two different types of beam patterns means extensive onboard processing, which drives costs up, will not be needed, according to Berretta. The new satellite will be based on Ku-band frequencies for now, as Berretta believes the high cost of Ka-band terminal development makes the use of this frequency impractical.
Developing an affordable interactive multimedia terminal is another Eutelsat objective. Eutelsat has an agreement, struck in September, with Nera Telecommunications to build a prototype broadband access terminal and hub earth station based on the DVB-RCS standard. The terminals would be able to receive at bit rates up to 50 Mbps and transmit at up to 2 Mbps. The Nera prototype terminal should be available by March 2001, allowing decisions to be made on whether to put the Nera design into mass production to obtain a terminal costing less than $860. Berretta believes that comparable Ka-band terminals will cost around $3,000 to produce.
Eutelsat’s strategy includes an expansion into offering network functions like gateways and hubs or distributing caching solutions. To develop these new services, Eutelsat has created a multimedia product management team and is working with the former Comsat Corp. (now owned by Lockheed Martin) on broadband DAMA networks, and also on DVB-IP hybrid Internet access and distributed caching ideas.
SES’s multimedia strategy is to promote the same multimedia access platforms–first the one-way Astra-Net, and now the two-way BBI–across customer and geographic markets, Bausch says. “We’re trying to convince our partners to go with the same technology so we can have coverage outside Europe, and become a global service.”
Bausch says a nine-month exercise this year determined the best place for SES to be in the multimedia value chain. This ideal niche is in providing complete broadband connectivity through space segment, ground services and network support, but to stay away from a role as the service provider. Nor will SES invest heavily in packaging or producing content, or in subscriber management systems, but it is ready to make equity investments and provide new distribution channels to help its multimedia customers and partners.
SES also will offer these customers a pricing scheme that has a fixed component for capacity, and variable pricing based on the growth of its business. To further encourage new multimedia service providers, SES is willing to participate in a cost and revenue sharing model with them, Bausch says, or SES could help the startups with subsidies and by opening its marketing and distribution channels to them.
Bundling voice into the mix of video, audio and data is the trickiest part of delivering true multimedia services, according to Bausch. “The voice piece of multimedia is the one requiring some technology development. It is dependent on onboard processing,” Bausch says. SES Astra’s BBI system being tested now uses bent pipe technology, which means the satellite simply relays the signal without processing it to increase the power or quality. SES will look at whether it needs to add onboard processing to its multimedia services to improve the voice service, he says.
To develop the two-way terminal, SES is relying on partners EMS Technologies Inc., Norsat International Inc. and ND Satcom. SES also has partnered with IBeam Broadcasting to use its technology to deliver Internet content to edges of the public infrastructure of the Internet, and also is working with applications developers like RealNetworks to find new roles for satellites in multimedia services. Multimedia-related services are now providing seven to eight percent of SES’s total revenues, according to figures from the first half of 2000, Bausch says. Two years ago, when SES went public, the company predicted that it would have 33 to 50 percent of its revenues from broadband services by 2005, and Bausch says SES is on track to achieve that goal.
Multimedia Melting Pot
In the United States, the multimedia strategies of Hughes Network Systems, Loral Cyberstar, Intelsat and Panamsat focus less on interactive consumers and more on the delivery of digital streams of converged media.
“Hughes’ strategy for multimedia varies from consumers to small businesses to enterprises,” says Scott Cress, HNS senior director of marketing for its consumer division. “The intention is to focus on the power of satellite for IP multicasting. It could be to deliver a rock concert or a Victoria’s Secret Webcast. Those are things we’ve done at broadband speeds.”
Hughes Network Systems this year introduced its Direcway Multimedia VSAT (MMV), which allows two-way broadband services. The product is aimed at users in the business television and audio, training, corporate communications, in-store music, point-of-sale TV and in-store multimedia-based advertising categories.
For small businesses, HNS offers an EdgeUcast service, in which customers can learn how to write a business plan or run a Power Point presentation. Hughes will integrate Web- based and e-commerce applications into EdgeUcast as it matures, Cress says.
HNS has joined with AEI Music Network Inc., the audio programmer for big companies like Red Lobster restaurants and Nordstrom department stores, to develop Direcway Music Services, which will jointly market satellite-delivered music and messages. The venture will be able to multicast content to users at speeds up to 45 Mbps.
Cress says interactive kiosks are one of the hottest uses for DirecPC and MMV. A company called Automated Media Services in New York has agreed to use DirecPC with electronic kiosks it manufacturers, and other kiosk makers also are signing up but haven’t yet been announced. Scala, a company that makes software for the kiosks, is a partner of HNS and plans to integrate the HNS satellite-delivery mechanism into the multimedia presentations designed to be sent to airports and gas stations for display to consumers.
Intelsat’s main multimedia application continues to be satellite-based backbone connections for Internet, where it has a 25 percent market share. It serves more than 80 countries and more than 120 ISPs, generating some $150 million in estimated revenue in 2000. The international operator will add more multimedia services during the next year.
“Thirteen of our satellites can see the United States in one way or another. The majority of the Web content resides in the United States, and this is a sound base to grow from,” John Pottle, director of commercial development for Intelsat, says.
In addition to straight capacity leases, Intelsat introduced in the Atlantic Ocean region this year a service called Broadband VSAT, which uses the Comsat Linkway networking product. Broadband VSAT customers can get burst rates up to 4 Mbps with a 1.8-meter dish in Ku-band and a 2.4-meter dish at C-band. The service will be phased into other regions in 2001.
Intelsat’s next multimedia initiative will be called mediacasting, which is planned for introduction during 2001 to deliver high data rate, live streaming services. “We see opportunities in multicast feeds for caching, streaming media and data broadcasting as big applications in the future. We would use a satellite mediacast platform to stream out video and audio to ISPs, broadcasters and corporate network users,” Pottle says.
ISPs should save substantial amounts in bandwidth through mediacasting. Pottle says a comparison of terrestrial and satellite for streaming found that to send a 100 Megabyte file to 1,000 sites over the terrestrial network on a 45 Mbps link would take 4.9 hours of transmission time, compared to nine minutes using a satellite with 1.5 Mbps of bandwidth.
Multimedia customers are asking for simplicity in setting up the service and the ability to pay for only the bandwidth they require, Pottle says. To satisfy those needs, Intelsat will provide a managed network and gateways for the mediacasting service, with service launch in the second or third quarter of 2001. Intelsat also will double the number of regional support centers over the next six to nine months to prepare for the new services.
For consumers, Globecast, the France Telecom broadcast service division, and the Office des Postes et Telecommunications of French Polynesia in September began using Intelsat 701 for a satellite DTH service in French Polynesia that mixes TV and Internet. The service combines TV programming from France with local programming, plus three Internet applications. The Internet applications include high-speed access, content delivery and e-mail alerts.
Cyberstar’s multimedia strategy is to take its current services–private corporate networking, Internet access for ISPs and business TV and distance learning–and move into streamed media distribution, according to Neil Bauer, president and CEO of Loral Cyberstar Inc. Cyberstar will use a DVB-IP platform and build upon its existing customer base to deliver streamed multimedia services around the world, he says.
The first product in the new service, called Clearstream Forum, has been deployed for use by early customer Cisco, which utilizes it for an international sales training effort. The Clearstream I-Forum product provides a dedicated circuit to deliver video into a local area network down to the desktop, Bauer says. Cyberstar has built on its business TV equipment experience for implementing the service.
Cyberstar will introduce a family of Clearstream services for real-time or streamed buffered content over either RealNetworks or Microsoft delivery platforms for streaming. In the future, Cyberstar will deploy its own server network, numbering in the thousands, at ISPs or enterprise locations. Bauer says Cyberstar’s network will be unique because other companies are not deploying at enterprise locations, and are focused on caching servers rather than the streaming servers that Cyberstar will use.
Three uplink sites in the continental United States, Europe and Hawaii are planned, as is use of the Southern Cross undersea cable to Hawaii, and the Japan-U.S. undersea fiber cable.
In addition, Cyberstar will entice the ISPs to use its service by offering a free 12-Mbps news feed. The offer has helped Cyberstar convince about 200 ISPs to take the service in the first two to three months of promoting it.
On the enterprise side, corporate multimedia clients include Citibank, Nokia and Ericsson. Bauer says Ericsson uses Cyberstar’s distribution service to forward a data stream from a central source to cellular operators, who then send it on to cellular phones of their customers. The service is considered multimedia because it can contain graphics or whatever other type of content Ericsson wants to push to its customers’ cell phones or personal digital assistants. The service does not carry voice, however.
Panamsat’s Net 36, which became available to customers in September, is Panamsat’s multimedia service offering. Panamsat owns and operates a network of edge servers, installed during 2000, that deliver video, audio and data to the edge of the public Internet on behalf of its prominent broadcasting customers. The first customers to be announced included ABC, Bloomberg Television, Disney and Hollywood.com. Panamsat says its service allows higher-quality streaming of video content, which means that viewers at the end will see more streams, spend more time watching and return more. The clients get a stronger brand and higher viewer loyalty as a result. Panamsat also is able to generate reports of viewer statistics for its customers to use in advertising and e-commerce.
Spotbytes, Panamsat’s DVB-based Internet access service for ISPs, also carries multimedia content. Spotbytes provides the ISPs with guaranteed minimum transmission speeds and burst capability. The ISPs use either a satellite or terrestrial connection to request Internet data, which is generally a narrowband transmission, and then the satellite link is used to deliver the data–which typically is a much larger file–down to the ISP.
The List Goes On
Certainly Europe and the United States are not the only regions where multimedia offerings are planned, but they are hatching grounds for the new services. Once success has been demonstrated in these markets, satellite operators will do what they do best and take these services global. Multimedia services are proving to be the latest application in which satellites find a solid and growing role in supporting consumer and business needs for packaged voice, data and video.
Theresa Foley is Via Satellite’s Senior Contributing Editor.