Video Traffic Moving From Satellite to Fiber, Leading to Potentially Major Disruptions
Video programming increasingly is shuttling from satellite to fiber networks, and eventually hybrid networks that include satellite will be the norm, industry experts said Monday at the Satellite 2016 conference in National Harbor, Maryland. Dropping fiber and data storage prices are leading U.S. broadcasters to cut back from the four video streams they used to put out -- one for each time zone -- while cable companies are getting more of their feeds terrestrially instead of by satellite, all of which is leading to a bigger satellite industry disruption than the digital transition, said Armand Musey, Summit Ridge Group president.
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There are many signs of those disruptions. Paul Scardino, Globecomm senior vice president-sales, engineering and marketing, said instead of standard 10-year broadcast contracts, satellite customers increasingly are moving to three- to five-year deals. He also pointed to NBC's move to a satellite/fiber/cellular hybrid network and said other broadcasters will be moving in similar directions. The stock market woes of the past 14 months of major satellite operators like Intelsat and SSL illustrate investor community bearishness about how that changing media market will affect satellites, Musey said.
There's no clear picture on the role satellite might play in over the top as online video goes increasingly high-bandwidth, such as Ultra HD. Satellite broadband doesn't have the bandwidth capability to support 4K video if, for example, Netflix made that more the norm of its offerings, said Scot Loach, Aterlo Networks chief technology officer. New satellites will double or triple the capacity available, but not the order of magnitude needed, Loach said. There's plenty of capacity and more going up; but the cost of dedicating that to consumers is prohibitive, said Thomas van den Driessche, Newtec chief commercial officer. About 25 percent of satellite channels are in HD, the rest in standard format, said van den Driessche. Within a couple of years, he said, HD will be 50 percent, and 4K will be about 10 percent, he said.
While OTT is growing, a bigger issue for satellite operators is cable consolidation resulting in satellite operators sending to far fewer head ends, and cable companies even getting content from providers directly, said Lisa Hobbs, Ericsson vice president-compression commercial portfolio strategy. OTT won't supplant linear video, and the two are "going to go hand in hand," Hobbs said. Much of the developing world will continue to rely on satellite for direct-to-home video, Scardino said.
Dish Network, which lacks a two-way communications channel and thus can't offer on-demand streaming, has "a real problem," Musey said. Dish's best option would be some kind of partnership or arrangement with a wireless company, which it supposedly has pursued without success, Musey said. Dish didn't comment Tuesday.