SES Astra CEO Predicts Strong Demand For New Digital Services

SES Astra has launched a new service it hopes will smooth the digital transition process in Germany, offering an infrastructure for free-TV, pay-TV and additional interactive services as the country moves toward an all digital landscape.

The new offer will be open to all broadcasters and is intended to ease the development of digital services on an open technological basis. TV households will be able to take advantage of the digital offer if they have a satellite dish, a satellite receiver with an appropriate smart card and if they complete a one-time registration.

Ferdinand Kayser, SES Astra’s CEO, hopes this initiative also will cement satellite’s role in Germany digitization efforts throughout the next few years and told Satellite News that by this time next year, most of Germany’s most popular channels will be delivered via the broadcaster’s digital infrastructure. "At the start of 2007, I think that we would have succeeded in convincing the broadcasters, but also the public, in Germany about these digital TV services, in particular, the added value gained via these services like interactive applications, regarding [electronic program guides], pay-TV, HD and push services. We would hope to have broadcasters under contract representing more than 50 to 60 percent of the viewership."

10 Million Households Targeted

With more understanding of digital technologies in the marketplace, Kayser believes the time is right for the launch of these new services. "It is quite a complicated initiative and project that we worked on for the last six or seven months," he said. "We could have taken this step earlier, but I think Germany was not ready for this before. You have to examine the awareness of the conversion from analog to digital. We have a regional situation in the market where people understand what is going to happen and what will be the positive impact of all of this."

In Germany, SES Astra served 16.2 million households at the end of 2005, of which 6.3 million already are digital, Kayser said. The remaining 10 million households relying on analog satellite signals will have to be converted to digital before 2010. "It is an important initiative for us because we want to make sure that we continue to have competitive advantages, vis-a-vis the other distribution channels, in particularly cable," Kayser said.

The full SES Astra offer will consist of playout services, encryption of program signals, smart card distribution for access and customer relations management. With this offer, TV households will be able to use a future-proof solution for digital TV.

Kayser believes there "is a need" for this kind of initiative in Germany where the free TV digital signal via satellite still is not encrypted, and there are a number of reasons why broadcasters could benefit from placing their channels on SES Astra’s infrastructure.

"They need to encrypt the signal in order to be able to control it against unauthorized usage and piracy," Kayser said. "They need to encrypt it in order to get access to premium rights from studios or sports rights. The third reason why we believe they need to encrypt the signal, is that the broadcasters need an addressable basis of satellite households in order to be able to offer new pay-TV, [pay per view], push, interactive services, etc."

Generating revenues from these new services will be key particularly as revenues from advertising have been declining throughout recent years, although Kayser believes this situation may stabilize, if not show a slight increase in 2006.

Ambitious Project

Kayser hailed the infrastructure project as "an ambitious one" that will be confined to Germany for the time being, but he does not rule out extending the project to other countries if it proves successful. "We do not exclude doing this in other markets, where the same model might be valid," he said. "Due to the high penetration of [direct-to-home] satellite and due to the fact there is work that needs to be done in terms of digital TV signals, there is plenty of work to do in Germany. But it could also work elsewhere. However, we have no concrete plans right now."

SES Astra’s expectations for return on investment "will depend on how much progress we will be able to make over the coming months," Kayser said. "Therefore, it is difficult to give you a precise timing. It depends on how far this moves ahead, and in some ways, this is not dependent on us. We do not want to twist the arm of anyone. We are offering this because we feel as though there is no way around this project."

Contact, Markus Payer, SES Astra, e-mail, [email protected]