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Multimedia Matters: The Next Generation–What Lies Ahead In The Multimedia Arena?

By | February 1, 2003

      by Douglas Graham

      Have satellite-based distribution networks and broadband been over-hyped? This is the view of some industry insiders and analysts who claim satellite’s real future may reside in a mixture of new and established applications, such as in-flight entertainment and enterprise VSAT networks that should be a strong area in 2003. Traditional VSATs have historically been low bandwidth, limited application networks. Providers are now substantially increasing the bandwidth capacities of these networks, and are incorporating new features such as bundled voice, broadband data and digital file distribution services. There have also been some interesting satellite-based developments in the digital cinema sector, these experts say, and in digital audio satellite service.

      Enterprise market VSAT networks are being upgraded to enable the delivery of video for business television, distance learning, large file delivery, corporate Intranets, streaming media and traditional data distribution, says Susan Irwin, president and founder of Irwin Communications Inc., a Washington, DC-based consulting and research firm focused on the satellite industry since 1985. These applications are taking already-proven satellite technology in the corporate environment and making it more efficient, flexible and accessible for either live or non real-time delivery. While these developments are not occurring at the breakneck pace the service providers would like, they are picking up steam and should continue to do so as 2003 gets underway.

      "If you look at market projections and analysts’ wisdom from 1998 onward, the market seems to shrink in terms of projections," says Nihar Shah, senior analyst for Futron Corp., a Bethesda MD-based research firm and consultancy specializing in commercial, military and government space markets. "The industry has put a lot of eggs in consumer broadband, which is really the hardest market to crack because the satellite industry lacks the marketing skill to compete with the likes of cable and DSL. Every year you wait is another year you give the terrestrial services an opportunity to expand, gradually closing your own window of opportunity. The market is about first mover advantage, and you either use those advantages or you lose them."

      This is not to say that satellite broadband is DOA. According to Shah, satellite broadband could gain a deeper toehold in the small business sector in the next few months. Fast Internet connect is mission-critical for many small businesses, Shah adds, and for this reason the relatively high price of satellite may not turn out to be a deal killer in this marketplace. This is certainly the case in the international sector, and for reasons not necessarily confined to economics. Many emerging countries do not have the infrastructure necessary to support either DSL or cable, and for these markets satellite may turn out to be the most practical alternative.

      "Creative solutions are being found that leverage existing DBS infrastructure to provide Internet-like services to consumers," says Stephen Blum, president, Tellus Venture Associates, a satellite communications industry consultancy in Marina, CA. "In South Africa, MIH (a multinational provider of entertainment, interactive and e-commerce services headquartered in the British Virgin Islands) is using television sets, the processors in set-top boxes and phone lines to offer limited browsing and e-mail service in a market that otherwise lacks the basic infrastructure for multimedia services. The e-mail service is particularly interesting because it interfaces to Short Message Service (SMS) capable phones, which are very widespread in the market. They are taking equipment and facilities that people already possess and using those resources to provide advanced services. Very cool."

      But back to new applications–Shah and others consider in-flight broadband a likely growth area for the satellite industry in the years to come. This view is confirmed by the existence of entities such as Tenzing, a consortium of companies that have joined forces to provide airline passengers with satellite-based broadband, and Connexion by Boeing, which provides a similar service. Amenities include a pay Internet service, plus a free package of information and entertainment, and a limited selection of real time television programming. Both Tenzing and Connexion by Boeing are now testing in limited markets.

      According to Blum, the adoption of the DVB-MHP standard for satellite-delivered multimedia services and applications should provide a needed boost for satellite broadcasters. Another trend is the growth of satellite-delivered online gambling. BskyB and SkyPerfecTV are both increasingly looking toward gambling revenues to drive profits, Blum says.

      "Indeed, multimedia is one of the most important trends in the broadcasting world today," adds Peter MacAvock, executive director for DVB in Geneva, Switzerland. "Traditional broadcasters recognize the extra revenue their content can generate in the multimedia field. However, one of the key areas to examine is who is going to pay for porting content to new media–and mixed media is still something which is restricted largely to the IT world. It will need to move from there into a general consumer electronics realm."

      Whatever the future holds in terms of satellite-based multimedia, niche applications such as entertainment, Internet accessibility and enhanced VSAT services are prone to lead the way. In fact, if the analysts following this fledgling market are correct, 2003 may mark the beginning and not the continued ending for multimedia products and services.

      Douglas Graham is a contributing writer to Via Satellite.

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