The concept of neighborhoods in the satellite industry is not new. In the broadcast world, cable neighborhoods abound, providing homes across multiple satellites for broadcast services. Now, SES Americom and Diversified Media Group (DMG) are bringing the neighborhood concept to the enterprise world, offering a suite of application services across multiple satellites that can be accessed by a single dish. With such an offering, enterprise customers can more effectively conduct their operations, giving them a business edge over their competition.

The two companies announced Oct. 25 the formation of an alliance that initially will use the SES Americom’s AMC-6 satellite to deliver a suite of services, including digital signage, business television, disaster recovery and business continuity applications. As the businesses and services grow, the neighborhood can expand to include other satellites.

The AMC-6 satellite “is not dedicated specifically to enterprise usage, but that is one of the services on it,” Orlando Skelton, vice president of enterprise solutions for SES Americom, told Satellite News. “That is where the concept of an enterprise neighborhood comes into play. It doesn’t necessarily have to be on one satellite, but if you can get all those services on a [single] dish that can look at multiple satellites. That is the ideal scenario.” In addition to AMC-6, Skelton said three other spacecraft — AMC-1, AMC-4 and AMC-9 — could be used to fill out the neighborhood.

A Growing Opportunity

When one looks at projections for some of the enterprise markets, it is easy to see why SES Americom and DMG are looking to grow their enterprise offerings.

“The digital signage marketplace represented about $452 million in 2004, based on Frost & Sullivan reports,” John Melillo, president of DMG told Satellite News. “In addition to that, there was almost $161 million in advertising revenue that was generated through these systems.”

Frost & Sullivan is predicting industry growth of about 25 percent through 2009 and speculating that enterprise services could be a $2 billion business with advertising revenues growing to nearly 40 percent of that annual total, Melillo said. “All the sectors — software services, integration services — will grow with” the digital signage market,” he said.

SES and DMG are targeting the business television in a two-pronged attack, Melillo said. The networking segment could be a $100 million business, but that will be a small percentage of the overall corporate communication marketplace, he said. The greater opportunity for this market could lie in reaching out to other aspects of information dissemination in the corporate environment.

“If you look at all corporations that have huge internal television and electronic creative departments that still deliver via the Web, DVD or CD-ROM, that number can grow to about $1 billion a year in total spending,” Melillo said. “Moving from a straight DVB platform to a digital Internet protocol (IP) stream is going expand that market. That is really the market we are looking at. The $100 million market is a nice chunk of money, but there are so many corporate that are not seeing the benefit of this.”

IP technology also opens the door for IP television, which Melillo said has the potential for “opening up the total corporate market to business television. We see that as a very part of our business – television to the desktop.”

Education Key

In order to capitalize on this market, SES and DMG must overcome two factors that traditionally have kept corporations out of the business television market — high prices and lack of audit capabilities, Melillo said.

“People don’t realize how big an industry [digital signage] is already,” Melillo said. “It’s getting bigger because what’s happening is the marketing side of the house is understanding how to put it into the advertising and marketing mix. Advertising agencies that have been a little bit hesitant to [suggest to their customers to move some of their general advertising dollars to a digital signage point of sale type application]. Now they are looking at these networks.”

Skelton said, “Maybe some companies are not as advanced in the area of digital signage, business television and distance learning and how those applications will help their businesses become more efficient going forward. But that is an education issue.”

–Gregory Twachtman

(Paul Sims, SES Americom, 609/987-4143)