Starting a pay-TV service is harder than it looks, from the cost of building a headend to acquiring the programming. Enter satellite players that have hit upon a strategy for cashing in on the race to IPTV and mobile TV: bundled, preformatted content delivery and management
Satellite industry players and observers have been saying for some time now that growing interest among telcos and cellular operators in IPTV and mobile TV, respectively, is as much an opportunity for the satellite business as it is a threat, depending on which part of the business you're in. For DTH service providers, the idea of telcos getting into the pay-TV business is undoubtedly one more headache they don't need. For satellite players that deliver the video, broadband telcos are new video delivery customers waiting to happen.
The catch to the latter, however, is that there's more to starting a TV service than downlinking a bunch of video channels to a headend. It's an expensive, time-consuming and complicated endeavor even if you know how the broadcast business operates - which the majority of telecoms operators don't, although they're learning, and fast.
Indeed, IPTV and mobile video broadcast technologies like DMB, DVB-H and MediaFLO are in full hype mode, and while mobile TV is still a year or two away from serious commercial reality outside of South Korea and Japan, IPTV is live and growing. IDC expects worldwide IPTV subscribers to more than double this year, reaching over 6.5 million subscribers.
But even as telcos, cellcos and other service providers make plans for getting into the pay-TV business via IPTV and mobile TV technologies like DVB-H, DMB and MediaFLO, satellite players looking for ways to cash in on the trend have found that most of their potential new customers may have the local-loop bandwidth to run video, but they don't have the know-how or, in many cases, the resources to set up a proper headend.
Which is why several satellite companies are now promoting bundled MPEG-4 video delivery services designed to take the pain out of starting a video service.
Outsourcing the headend
Intelsat is the latest to jump in with the April launch of its Ampiage service, a 'super headend' content delivery and management service aimed at both greenfield players looking to launch pay-TV services and existing cable operators looking for fast, easy upgrades to IP-based MPEG-4 video feeds. SES Americom has had a similar offering called IP Prime on the market since late 2005.
The basic premise of services like IP Prime and Ampiage is to bundle content and technology into a turnkey package that allows service providers to set up TV services quickly and cost-efficiently.
'Every telco could spend $15 million building its own headend, or it could buy from us and save on its capex costs,' says Brad Seibert, Intelsat's director of business development.
Ampiage is also being pitched to cable operators as a cost-effective way to upgrade their networks from MPEG-2 to MPEG-4.
'Cable companies can't swap MPEG-2 out for MPEG-4 overnight - it's just too radical a jump,' Seibert says. 'So we offer MPEG-2 as a bridge strategy to get them to MPEG-4 when they're ready.'