Arqiva, the U.K.-based communications infrastructure and media services company, hopes to bounce back after a tough 2010. The company has combined its terrestrial and satellite units, as it looks to streamline the sales process.
“We brought the terrestrial broadcast and satellite broadcast businesses together at the beginning of October, which made a lot of sense, as our broadcast customers face many of the same challenges whichever network they are on,” says Nick Thompson, managing director, Arqiva Broadcast and Media. Thompson admits that with a recession and a weakening pound affecting operations, it may be a while before Arqiva returns to growth, but he is optimistic that the long-term foundations are in place to build a stronger business.
VIA SATELLITE: Are you expecting to see an increase in revenues and profits for the satellite business in 2010, and if so, what have been the major growth drivers?
Thompson: We achieved growth in the financial year ending June 2010. Our largest customers are growing and we are expanding the services offered to them. The U.K. DTH platform is our single biggest product in the satellite business, where we run 22 transponders, and where it’s been a challenging environment for some smaller channels and there have been some casualties.
VIA SATELLITE: Which of your customers have been affected by the economy?
Thompson: Some of the smaller broadcasters that are heavily reliant on transaction-based services have struggled during the recession. In addition, the net number of new channels on the Sky platform has been flat for probably around 18 months. Although many of the tier one broadcasters are switching to HD channels, what they are doing is either adding to what they have already got or, in many cases, working directly with Sky in the early stages. I think the whole industry has noted that some of the niche channels, particularly those without well-resourced parents, have had a pretty tough time. Arqiva is not alone in seeing that.
VIA SATELLITE: How have falling advertising revenues affected Arqiva and its broadcasting business?
Thompson: What has gone against the U.K. market has been the significant weakening of the pound, bearing in mind that most of the satellite industry operates in euros and dollars. At Arqiva, we have had to constantly look at our pricing in the market, but we’re now seeing some customers expand, so there are winners as well as losers in the market.
VIA SATELLITE: When do you expect to return to growth?
Thompson: A lot of our larger and better-resourced broadcasters are expanding, so certain parts of the market are growing while others are static or in decline. Actually you can look at growth several ways. For instance, a number of our satellite customers are growing in geographic reach or in the number of services they are providing in the United Kingdom. That is good, and will I think continue. More difficult questions hang over some of the industry’s smaller and less well-resourced players: At what point will they stabilize, to what extent will recovery come from advertising or transactional services, and when will people start spending again to fuel their return to growth?
Email
Comments
Print
Reuse
