Satellite 2010: Competitive Challenges By The Carmel Group’s Jimmy Schaeffler A handful of competitive developments emerged from the Satellite 2010 conference held March 15-18 in the Gaylord National Conference center, just south of Washington, DC, within the newly-built National Harbor facility. Several are worth noting for broadcasters, cablecasters, mobilecasters, and other actual or would-be opponents (or allies?) of satellite-based content providers.

• 3DTV: This application, born decades ago in miscellaneous random theatres, and started and restarted tortuously over and again, seems finally to have found its legs, albeit admittedly short ones for now. Revived by the creative genius of Hollywood directors such as James Cameron, in his epic Avatar, and Tim Burton, in his spellbinding Alice In Wonderland, 3DTV was a topic that often found the stage at the conference’s sessions. For commercial satellite content distributors such as industry leaders SES and Intelsat, 3DTV holds much promise to give viewers globally yet another reason to watch the video services they deliver (or help deliver) to those 100s of millions of cable, broadcasting, and satellite customers around the world. It also increases the bandwidth demand, which means improved revenues for these fixed satellite service (FSS) providers. Just as HDTV has helped these FSS providers weather the economic storms of the past two years, so, too, do many in this industry subsector see 3DTV doing the same further into the next decade. Possible impediments include: finding agreeable industry standards, getting more hardware into homes, and getting more content produced in the 3DTV format. • Telcos Rising: Outside the satellite show conference facilities, from TVs found in public places and hotel rooms, advertisements constantly touted the telcos’ positioning in the race among satellite and cable providers for the video souls of millions of would-be disloyal pay TV subscribers. Indeed, the prediction of The Carmel Group at last year’s 2009 Ohio Cable Association show in Columbus -- that one of the top future concerns cable operators would face would be in the form of competitive bundles and better deals offered by once-asleep telephone companies -- has risen like a phoenix in metropolitan areas like greater WDC. Possible impediments include: not enough revenues from any form of wireline service over a short enough period of time needed to support telcos’ spending and future expansions, and concerns over renewed competition from cable and satellite providers. • O3B: This broadband-by-satellite venture has recently received a rather rare $75 mil. cash and in-kind infusion from industry giant, the Luxembourg-headquartered SES (Euronext Paris and Luxembourg Stock Exchanges: SESG). O3B stands for the “other three billion,” a reference to a bit less than half of the world’s population that do not receive Internet services where they live today, focused on Africa and South America. O3B is SES’ intent to not only enlighten these masses, but to also acquire hard-fought access to this huge base of would-be subscribers and targets of advertising. Other investors in O3B include Google, Liberty Global, HSBC, and North Bridge Venture Partners. Details of a recent press release include: “O3B is building the world’s first ultra-low latency, fiber speed satellite network to serve as a global internet backbone and next generation backhaul infrastructure for people and businesses in emerging markets. The company will be able to combine the speed of a fiber network with the global reach of a satellite system, and will partner with telecommunications providers and internet service providers (ISPs) to serve billions.” (See, http://www.ses-astra.com/business/en/news-events/press-archive/2009/09-11-16/index.php). Possible impediments include: like the telcos’ video investment, O3B faces possible returns on investment and low telco client growth, that together fail to support continued investment at levels needed to properly launch such an ambitious global project, as well as land-based competition (once those possible land-based competitors notice the possible successes of O3B). Jimmy Schaeffler is chairman and CSO of The Carmel Group, a Carmel-by-the-Sea, CA-based consultancy, event organizer, author, and publisher.

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