Active Summer for Satellite Sector

By | September 1, 2012 | Broadcasting, Editor's Note, Telecom

Though the summer is traditionally a quiet time in the satellite industry, it has certainly not been the case this year. During the course of the last few weeks, we have seen some highly significant moves in a number of different verticals, including: MacDonald Detwiller and Associates (MDA) striking a deal to acquire Space Systems/Loral (SS/L); Virgin Galactic announcing plans to launch smaller satellites into orbit; and two major players in the Earth observation sector, DigitalGlobe and GeoEye, announcing plans to merge and create a potential industry giant. Intelsat’s EpicNG capacity announcements are also worthy of mentioning, representing a major strategic push by one of the industry’s FSS giants. It is good to see some deal making in the sector since there has not been a lot of consolidation recently.

I would be lying if I said I did not expect DigitalGlobe and GeoEye to merge at some point, but MDA’s move is certainly an interesting one, as it creates a very powerful entity in the satellite manufacturing sector. SS/L has been one of the standout companies recently, and while the sector remains competitive, it is hard to argue against buying a company that has more than held its own. MDA has made several bold moves recently. Its deal last year with Intelsat for in-orbit satellite servicing, which ultimately did not come to fruition, was a sign of a company constantly looking to generate revenues in new areas. Time will tell whether the SS/L deal will be more successful, but it certainly makes MDA a much more global player than before. So, I have to give them credit for that.

On a different note, we are getting ready for IBC 2012, where the satellite and broadcasting industries will converge on Amsterdam to talk about where broadcasting goes next. The 3-D TV conversation seems very dated and more talk of 4K and Ultra-HD TV is likely to be on the agenda. One of the interesting trends in broadcasting is the clear generational shift in how we consume content — the younger generations seem to be much more willing to watch content on smaller devices than their older counterparts. I am curious to see if this younger generation’s habits change the older they get, and whether, in essence, they become their parents.

Despite this, the growth in DTH connections is nothing short of phenomenal. Telcos have looked more to satellite in order to bring a DTH service to their offering. While I can’t say I have been massively surprised by this, it is heartening to know that in this complex broadcasting world we now all live in, it is still the satellite companies that are setting the pace and bringing to market the most compelling packages of content. It is an example of the industry’s creativity and, thankfully, we are still seeing a huge number of capacity deals involving DTH players. It has not slowed down, which is a real boon for our industry.

The multi-layered broadcast world we live in is full of formats and different devices, and the satellite industry will remain at the cutting edge of bringing this content to consumers. I don’t know what the buzz terms of this year’s event will be, but you can be sure there will be something that causes great excitement — it happens every year. However, in the case of 3-D TV, no one can be sure whether the next big thing will live up to the hype.

So, with deals a plenty, and one of the last big events of the year, we look on and try to figure out where the satellite industry is headed. As recent events have shown, it is unlikely to stand still.

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