Every year, SES holds an event ahead of IBC that draws much of the European press that is interested in the TV landscape in the region.
The first speaker was Ferdinand Kayser, chief commercial officer of SES, who said that there seems to be almost infinite demand for video. SES research suggests that there are six consumer preferences. Video is increasingly multiscreen and the demands for quality are going up. Value for money is a key requirement, but maximum choice is also wanted. Video needs to be “social and serendipitous”, but consumers also want convenience, simplicity and easy use.
Satellite infrastructure is still the biggest part of the SES business. Conventional video is the largest segment of bandwidth used, then next generation video. SES addresses the three biggest markets for media, including the satellite infrastructure ($8 billion TAM), “conventional” media services ($3.9 billion TAM) and “next generation” video ($4.6 billion for the back end and $15 billion for “experience providers such as Google, Netflix and Apple). SES also competes in Europe ($9.0 billion TAM), North America ($10.3 billion TAM) and RoW ($11.2 billion TAM).
North America and Europe have only limited growth in DTH because of existing penetration. There are 3 million new households in North America and 12m or 13M new households in Europe between 2013 and 2015 which will allow for some growth. Here the emphasis is quality, mobility & flexibility. Satellite has a good competitive position
In Eastern Europe and Russia, the number of DTH homes will grow as there is still digitisation to be done. Asia and Latin America have more growth possibilities.
UHD and hybrid are interesting growth areas for demand. Better coding is not useful for satellite as the technology has the effect of somewhat dampening the demand. There are more and more pay TV platforms and channels and there are also hybrid and simulcast opportunities which will need bandwidth.
There is some opportunity for content push, and terrestrial is limited in capacity. On the other hand, there is a growth in OTT content only and there are opportunities in collaboration with telcos.
The value chain is evolving and in the past the ecosystem was, more or less, stable. With the new media business, stakeholders are moving. e.g. movie studios are becoming back-end providers and media management platforms becoming pay TV companies.
In these rapidly evolving times, satellite still has advantages and Kayser said that to meet the typical viewing needs of European consumers, as much as 700GB of bandwidth is needed per household, compared to a level of 20GB per month at the moment. Further, FullHD needs 20mbits/sec *sustainable* peak bandwidth, while the average sustainable in Europe is 4.6Mbits only. Even with next generation technologies, only 54% of the market can be reached. DVB-T cannot do it, Kayser said. UltraHD and HD penetration continue and will demand more bandwidth.
On this basis, SES is confident that satellite will be needed. Value for money, maximum choice, signal quality and technical reach are key advantages for DTH technologies.
SES Has Many Assets
SES now has 54 satellites at 37 positions with 1,536 transponders available. Four new satellites have been launched in the last year or so with five more due in the next three years. This will give 200 extra transponders (just 20 for Europe, mostly for the East). Most SES investment is in emerging economies.
SES 12 will have new capabilities to cover maritime broadband. It can deliver 14GHz. Asian DTH and data markets are the main targets. SES sees itself as strong in O3b (Medium Earth Orbit to reduce latency – Man. Ed.) for data. It has low latency and wide bandwidth. SES can support trunking and mobile backhaul over this kind of satellite. Aeronautical and maritime broadband are important commercially and in government areas.
SES sees DTH TV as being about co-operation with brands, installers and retailers to improve the quality and also to extend the technical reach. SES works with STB and SOC makers as well as TV set makers to develop the market.
CI+ and conditional access are really important technologies for TV and collaboration with the whole TV ecosystem is essential.
HD broadcasting has been growing and has become standard for many consumers. The number of channels has been growing and SES is now distributing 512 in Europe (only around 15% of the total channels in the region are HD). 28% of SES channels are in HD and SES has added 494 HD channels since 2012. North America has the widest penetration of HD at 1,151 channels out of a total of 1,766.
By 2025, half of all TV sets sold will be UHD, Kayser believes. In 2020, SES expects 200 UltraHD channels with 1000 UltraHD channels by 2025. HEVC is a big factor in boosting UltraHD.
2014 & 2015 will be the “technical set-up phase” for UltraHD as encoders and decoders are becoming available. In 2016, the Olympics in Rio and the Euro soccer championship will be used for a big boost to UltraHD by pay TV operators. Later the free TV players will start to join in.
At IBC, SES will show encrypted HEVC from its 19.2 deg East satellite.
Neighbourhoods are Needed
It’s important to have “neighbourhoods” (a cluster effect) – a range of channels drive access and technical reach which makes it more attractive for other content providers.
Looking at the penetration of different broadcast technologies in Europe, Satellite went from 77.4m households in 2009 to 86.2m in 2013. DVB-T is going down to around 73 million in 2013. DVB-C is flat at just under 70 million. IPTV is growing, but from a low base and is just over 20 million households in 2013.
The “neighbourhood effect” is good in Germany and in the UK. The HD+ platform in Germany now reaches more than 2.7 m households. Asia, the Middle East and India are all good with Dish and Bahti as customers for a number of years. There is good growth in the Philippines, Thailand, Vietnam and SES is looking to Indonesia next.
In Latam, there are 11 satellites with more to come with strong penetration in Brazil, Mexico and Argentina as well as the “Andean community”. In the region, SES has a 21m household technical reach and the firm is hosting four DTH platforms.
In Africa there are 9 satellites in 8 positions with another coming later in the year. SES is distributing 100 FTA channels which is important to develop technical reach. There are offices in South Africa, Ghana and Ethiopia as Eastern Africa is an important market.
In India and Asia, the firm has six satellites in four positions and SES is already distributing more than 1000 channels.
SAT>IP Remains Important
SAT>IP is considered an important innovation and there are now more than 40 manufacturers making client devices and servers and now the technology is being integrated into some TVs. In the future there will be IP LNBs and IP-antennas. Kayser still sees Sat>IP as a critical enabler of access to more screens in each household.
As well as owning satellites and other infrastructure, SES is also involved in broadcasting services to broadcast content owners. That helps the firm to understand customer requirements and that is a competitive advantage.
SES also works in enterprise IP/IT services for maritime and aeronautical as well as trunking.
Capacity is being delivered to gogo, Row44 and Panasonic for the airline market. e.g. If you use Lufthansa from Frankfurt to the US, SES provides the broadband. The same is true for maritime – it is no longer conceivable to operate a fleet without broadband connectivity.
Finally governments in EU, the US and elsewhere is a big market and SES believes its market share is 25%.
Satellite is more reliable than fibre and in the developing world, the technology is used as backup and distribution for Terrestrial TV.
Kayser said that “key takeaways” are:
* The Media landscape is evolving
* SES will invest in O3b for broadband
* It will offer differentiated services for vertical markets
* SES plans to remain the leading DTH provider
* The company wants to grow in Latam, India, APAC
In response to some questions, Kayser said that to compete with OTT operators, some Pay TV operators will simply go 100% HD. FTA channels have to also offer SD and cannot make the switch. Canal+ will switch off MPEG-2 and go to MPEG-4 completely to improve efficiency and will be the first operator to do this.
In response to a question about Mexico, Kayser said that UltraHD will really start to roll out in the region in some volume in 2017 and even the Olympics in 2016 will see some channels.
DVB-S2X is a useful standard and is likely to be used for professional applications where it offers up to 50% applications. However, in DTH for consumers, it can offer 15 -16% improvement in capacity. The operator has to take the decision because it means new STBs, and the change could come with UltraHD as platforms look to refresh. For professional apps, DVB-S2X is important (because of the improvement in low SNR environments, presumably – Man. Ed.). There is no influence from SES, but Thomas Wrede chairs the group in DVB.
There was a question about whether SES is being asked to transport pre-prepared adaptive streaming content. Wrede said that SES is looking at this in emerging markets and has been adopted in the HbbTV 2.0 standard and operators are looking at adaptive streaming over satellite. Live TV is really the focus, especially for the Olympics and Euro championships.
There was a question about SD switch off in Germany – would it be in 2025? Almost half of users in Germany have DTH TV, so the answer is very important for FTA broadcasters. FTA providers can’t change the STBs so will stay with MPEG2. PayTV companies will upgrade boxes to MPEG-4 or HEVC. Apparently big broadcasters want to switch off as soon as possible, but the sooner it is, the happier SES will be. As sets get bigger, the quality needed gets higher, which helps DTH.
In response to a question on 8K, Wrede said that the more bandwidth needed, the better. UltraHD with Phase 1 is here to stay, and we need to move to better pixels. 8K is a topic for 2020 and after.
SAT>IP is about making the most of the technical reach and merging the satellite and IP worlds. Kayser said that SES will make other announcements in the days to come about SAT>IP. Wrede said that there are 18 models from Panasonic that have a Sat>IP client and there was a model at IFA that had a SAT>IP server. In response to a question about the speed of adoption of SAT>IP, Wrede said that it takes time to move these new technologies to the market unless you subsidise them heavily, but he is confident that in a year or two there will be good penetration.