Yes Looks To Multiplatform Strategy in Israel

[Satellite News – 5-5-08] Israeli satellite pay-TV operator Yes may only have 550,000 subscribers, but it is determined to be one of the most innovative pay-TV operators in terms of adapting its satellite strategy, said Itzhak Elyakim, the company’s CTO.
    Traditionally a direct-to-home (DTH) operator, Yes has been making huge strides in the broadband space, because “the operator had to be there” as it looks to use the best of IP and satellite, Elyakim said.
    In August, Yes teamed with Israeli portal Walla to begin offering TV services via broadband. “Some see broadband as a threat to satellite TV,” said Elyakim. “We see it as a positive opportunity. We looked for a local Internet portal that would give us maximum traffic to expose our content. We chose Walla because of its in-house sales and advertising infrastructure. In addition, Walla has more than 2.5 million e-mail users, a database that Yes can target. As a result, Yes revenue has increased through sharing the advertising income obtained.”
    Israel has a well-saturated market of about 1.7 million pay-TV households, so with a huge gain in subscribers unlikely, Yes must drive its revenue growth with services. “The challenge we face is to increase revenue and profitability,” Elyakim said. “This is the name of the game. We are using HD (high definition), PVR (personal video recorders) and new premium channels as the main drivers to raise the” average revenue per user.
    Elyakim believes Israel can act as a “mini-laboratory” for new services. Nowhere has this been more evident then in the operator’s set-top box strategy. “Yes was the first satellite TV operator worldwide in 2005 to launch a hybrid [set-top box],” he said. “We chose this strategy many years ago and it has opened many doors to the future. It goes hand-in-hand with the broadband and satellite environment. Today, Yes is developing this hybrid world. In order to do this, we have expanded the headend to support broadband and the broadcasting environment. The importance of this is that the viewer is totally unaffected by the source of the line, whether it’s broadband or satellite.”
    Yes also hopes to capitalize on the launch of HD services in late 2007. “The technology is based on MPEG-4 [advanced video coding] and DVB-S2 (digital video broadcasting-satellite-second generation) that enables us to maximize satellite bandwidth.”
    The company is seeing strong early take-up for its HD services, which is priced at $11 per month. “We have reached more than 7,000 customers in the last three months,” Elyakim said. “These numbers look good from our standpoint. In time, we will have richer content on the platform that will increase the HD penetration. We believe that in time HD will become a mass market and customers will increasingly appreciate the product.”
    Elyakim hopes HD adoption will follow the pattern the company has seen with its PVR service, which has exploded in its third year. “It took us more than two years to penetrate PVR to the mass market and for our customers to enjoy the full range of options available,” Elyakim said. “In the first two years we sold 10,000 PVRs. Amazingly, in the third year, we have more than 100,000 PVRs in the market. This is approximately 20 percent penetration.”