Streaming Media
Satellite provider tables plans to enable multiscreen at home and TV everywhere, says content delivery networks are too costly at high volume.
Far from declining in the face of competition from over-the-top (OTT), satellite will remain a dominant platform for video distribution well into the next decade, according to global satellite provider Eutelsat.
It has countered perceptions that satellite has become a costly and legacy technology for pay TV operators by arguing that OTT distribution remains the more expensive option.
"We believe satellite and IPTV will be the two winning platforms in the long term," Eutelsat director of strategy Jean Hubert Lenotte told Streaming Media on a visit to the firm's main teleport at Rambouillet near Paris. "Satellite has three key advantages over IPTV: cost efficiency, universal reach and service quality."
The company is reliant on video. Of Eutelsat's €1.48 billion turnover, video accounts for 65%. It broadcasts 6,755 TV channels, of which 1,210 are in HD (15 in UHD), to more than one billion viewers (direct and indirect) around the globe.
The company shared figures that suggest in developed markets like Europe, satellite is stable to growing and in most emerging markets satellite is accelerating. It predicts the total number of TV homes worldwide will increase by 95 million to 1.7 billion by 2021, with satellite reception growing by 50 million to 430 million homes in that period. The satellite market share of TV homes will rise 2% to 26%, and while cable connectivity will remain flat and DTT will decline by 2030, Eutelsat suggests satellite and IPTV will rank equally as the premier delivery infrastructures. Indeed, Eutelsat—along with other satellite providers like SES and Globecast—have begun offering hybrid satellite and internet distribution networks.
"The cost of satellite is fixed whereas the cost of OTT grows with volume," Lenotte argued. "While the cost of CDNs is coming down, until at least 2025 in mature markets the threshold at which satellite is more cost effective than CDN is 50,000 viewers. In developing markets, the threshold is as low as 15-20,000 viewers."
Satellite's broadcast reach and quality has always been its strongest asset. "If you take Europe and look very closely at all the plans which operators have to cover a territory with fibre there will be at least 5% of the population which will not be covered with high speed broadband in the next decade and probably beyond," Lenotte said. "Operators won't be able to carry most HD and certainly UHD channels to those audiences."
In Europe, Eutelsat believe that the "reach differential" between satellite and IPTV will be 5-10% by 2025 and in MENA it will be closer to 50%. "For most broadcasters it is not even a question. You chose satellite," he said. "Even if broadcasters take a risk and shift to terrestrial networks the bottleneck is the last mile. The internet was not built to support the massive increase of capacity of a terrestrial network."
Nor does the Eutelsat view rollout of 5G as a business threat. On the contrary, satellite paired with mobile connectivity is seen as critical for backhaul. "Satellite is now, and will be in future, a good solution for backhauling in some areas where the cost to transport data through terrestrial means (fibre or microwave) is high," says Lenotte.
However, the company is not ignoring satellite's inherent blind spots. It acknowledges latency, which tend to dog connectivity, but contends that—aside from gaming and financial trading applications—"real-time is not an issue for the large bulk of consumers."
The firm has also tabled plans to enable multiscreen at home and TV everywhere, facilitate new non-linear services via satellite, and provide access to analytics as well as enable targeted advertising on satellite—details of which it promised will to reveal in 2018.
"Because satellite doesn't have a return path it is not as optimal as it can be," admitted Gerry O'Sullivan, EVP, global TV and video. "When we add a return path, this will increase the monetization potential of the reach."
A recent innovation is SmartBeam, a solution enabling platform operators to broadcast live video channels in IP via satellite, to smartphones.
Sébastien Grazzini, head of future applications, innovation explained that, on the transmit side, native IP content is received at a satellite teleport, converted from unicast to multicast, then encapsulated over a DVB transport stream and broadcast via satellite in a standard DVB-S2 transmission platform. Content is received via a standard satellite dish connected to a small, €100 satellite receiver. The receiver decodes the stream, extracts the original IP packets, and delivers them to IP-native devices through a regular Wi-Fi access point or home router. Live content is served on the fly, while VOD content is stored for access any time. The solution is flexible enough to support encryption with DRM and non-linear TV like push VOD.
Russian pay TV operator Tricolor TV has begun rolling the solution out to select public venues in the country.
"Instead of asking customers to adapt their OTT to satellite we are adapting satellite to OTT," said Grazzini. "With SmartBeam, we are leveraging multiscreen solutions to help broadcasters extend OTT services and offer the same experience to users located beyond range of terrestrial networks. It will also be able to circumvent user frustration with buffering and disconnection as terrestrial mobile networks saturate."
Ultimately this is satellite's main play. It remains the best technology to reach remote and rural neighbourhoods, but providers like Eutelsat can still trade handsomely on the guaranteed quality of the signal, provided it also evolves its offer.
"There is a paradox in that consumers demand more channels and high-quality content as well as access to that content," says O'Sullivan. "If consumers demand hundreds of UHD channels, then the internet wasn't built for that. People will want to access cheap low-quality content through OTT but at the same time there is a natural desire to view the best quality TV and that is what satellite delivers."
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