Asia-Pacific Broadcasting (APB) Satellite Special 2018 | Page 14

2018 SPECIAL
How satellite service providers
respond to disruption will
determine their future
90% will do the same in IoT and cloud
services. However, 37% expect their
investment in DTH to decrease in the next
three years, while 17% said the same for
distribution to terrestrial broadcast and
cable TV systems.
BY ROBERT BELL
T
he satellite ecosystem is made
up of satellite operators, ground-
based service providers and the
customers they both serve, supported by
technology providers and other vendors.
In the past year, a wave of disruptive
technology and market change has begun
to challenge all of them. It includes new
models of connectivity — high throughput
satellite (HTS), middle and low earth
orbit spacecraft. It is driven by the rising
domination of software over hardware,
customer demands for seamless global
service, and the accelerating shift in how
media consumers want their programming
delivered.
As the CEO of one teleport operating
company summed it up: “Everybody
desperately wants to know where things
are headed right now — and nobody
knows.”
At the end of 2017, the World Teleport
Association surveyed top executives of
satellite service providers on the changes
they were seeing in the industry and how
they were responding to them. What
market opportunities are they targeting
and where are they investing their capital?
What are their biggest obstacles to growth
and the biggest threats to their survival?
Their responses paint a picture of an
industry sector that is facing disruption
and, in many cases, disrupting their own
operations by innovating up the value
chain to meet new customer needs.
What are their biggest
obstacles?
Teleport operators have succeeded by resisting the temptation to get too far ahead of
the market, too close to the bleeding edge of technology or too sure of the road ahead,
according to the World Teleport Association.
Where will growth come from?
The survey data allowed us to focus on
the teleport business, whose primary
market is the broadcast customer. The
top five opportunities that they see in the
market include supporting Internet of
Things (IoT) applications, over-the-top
(OTT) origination and distribution, cloud
services, aeronautical service for passenger
airlines and enterprise video and data
networks. It is a very interesting list —
because only two of those opportunities
are in the broadcast space. That reflects a
dim view of the future of their traditional
business. Nearly half of the respondents
(44%) of media-focused companies
expect declines in direct-to-home (DTH),
terrestrial and cable TV origination, as well
as distribution services.
The growth in OTT distribution needs
little explanation. The viewing habits of the
young — anywhere, anytime and on any
device — are rapidly become the viewing
habits of us all, particularly in Asian cities
where mobile bandwidth is exploding.
We dug deeper into the reference to cloud
services, because media-focused operators
have a different view of the future from
their data-centric peers.
As the CEO of one teleport operating
company summed it up: “Everybody
desperately wants to know where
things are headed right now — and
nobody knows.”
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An
Supplement
Media-focused operators see
opportunities in providing their own
cloud services, as well as integrating third-
party providers, while non-media-focused
companies see value only in third-party
integration. TV content owners have been
far slower to adopt public cloud services
such as Amazon Web Services, and service
providers are offering their own private
clouds as solutions.
Asked to name the one obstacle that
presented the greatest threat to their
businesses, executives saw danger
in increasing competition from new
companies entering the market, in addition
to established competitors. At the same
time, they foresee the need to invest a
rising amount of cash in technology to
meet their customers’ needs. These same
factors, however, are likely to translate into
greater choice, better pricing and more
advanced offerings to broadcast customers.
Entrepreneurship lies deep in the DNA
of independent commercial teleports. The
sector was born when entrepreneurs seized
the chance created by the US Open Skies
policy to access satellites directly for the
first time. From analogue to digital, one TV
channel per transponder to hundreds, telex
and fax to broadband and IoT — teleport
operators have never stopped innovating.
In spite of that, innovation has
always been about evolution rather
than revolution. Teleport operators have
succeeded by resisting the temptation to
get too far ahead of the market, too close to
the bleeding edge of technology or too sure
of the road ahead. In 2017, they even faced
a faster and deeper rate of technology
and market change than ever before. The
question that will begin to be answered in
2018 is whether the industry’s tried-and-
true approach to innovation will continue
to deliver success in the years ahead.
Where is investment going?
The media-focused service providers
are directing today’s investment in OTT
distribution, private cloud services for
content owners, IoT and the integration
of third-party cloud services into their
offerings. Despite expected decline in
their core business, however, 18% of
respondents will continue to invest in
terrestrial, cable and DTH distribution.
Looking forward three years, every
broadcast service provider expects to
increase investment in OTT, while nearly
Robert Bell is the executive director of
the World Teleport Association (www.
worldteleport.org), which conducts research
into the teleport and satellite industry, and
offers a Teleport Certification programme to
service providers. This article is based on data
from the Teleport Opportunities 2018 study
published in January.