Satellite operators in Asia are staring OTT mania in the face... and not finding themselves wanting. For starters, broadband infrastructure across the region is still radically uneven and geography remains a challenge to fibre build-out. Ultimately, major players say, multiple delivery systems will co-exist to deliver quality content at affordable prices rather than one gobble up another’s lunch.

OTT may be the video delivery darling du jour, but Asia’s satellite operators are far from preparing to pack up and move elsewhere.

Asked what impact the region’s burgeoning OTT environment has had on the satellite business in the region over the past year, three major operators say satellite maintains a significant role in reliable delivery of quality signals across a broad and diverse geography.

Hong Kong-based regional operator AsiaSat’s president and chief executive officer, William Wade, says the extent of OTT’s impact on the satellite broadcasting industry going forward is “dependent on how OTT providers can resolve bandwidth constraints and distribute more content with greater flexibility”.

“Continued expansion of terrestrial network infrastructure will be essential in order to have a significant impact on the satellite industry in the long run,” Wade says.

“While the environment is changing, a little perspective is useful,” says Peter Ostapiuk, Intelsat’s head of media product services.

According to Digital TV Research’s June 2015 report, last year there were a little over 171,000 OTT TV and video households in the Asia Pacific; that number is expected to increase by about 26,000 in 2016 to end the year at less than 200,000.

“This is in stark comparison to the 825 million households in Asia Pacific that receive content via traditional linear programming,” Ostapiuk says.

“While we expect the fragmentation of the media market to continue as more OTT programming is introduced, linear TV is still the number-one way viewers are consuming content – today and for a very long time to come. So we haven’t seen much impact at all,” he adds.

AsiaSat’s Wade points out that while OTT has a growing impact on the satellite broadcasting industry, this impact is greatest in more developed countries where broadband penetration is high.

“In Asia, there are still many countries where communications infrastructure is inadequate and OTT is not an immediate solution for broadcasters to access those markets,” Wade says.

Tan Tian Seng, Singapore-based operator Singtel’s director of capacity management and business development (satellite, business group), expects this reality to continue for some time.

“Many Asian countries are unable to provide affordable broadband connectivity,” he says, adding: “Hence, we do not expect the impact of OTT on the satellite business to be too significant as the satellite demand of DTH is still here to stay in the next few years”.

Even developed markets are not without connectivity challenges. “As the demand for delivering reliable, high-quality, linear OTT content increases, terrestrial Content Delivery Networks are coming under pressure in terms of service reliability and costs,” Ostapiuk says.

“Surges in OTT viewership for live events often lead to crashing, buffering, slow start-up time and significant latency compared to broadcast feeds. The internet is not designed to accommodate these traffic surges and the resulting strain on the terrestrial network translates to a poor viewing experience. This presents an opportunity for alternative cost-effective solutions to provide the high-quality viewing experience viewers demand, and broadcasters and advertisers expect,” he adds.

Whatever happens down the line, satellite’s role in regional content delivery in Asia will be strong in 2016.

“While satellite has not been the primary distribution infrastructure in some Asian countries, its value of providing large coverage, saving substantial investment in terrestrial networks, and providing immediate access to markets offers flexibility and economies of operation that other means of content distribution cannot replicate,” AsiaSat’s Wade says.

Intelsat’s Ostapiuk echoes the advantages of satellite.

“Satellite remains the most cost effective way to multicast linear channels at a predictable cost and will continue to provide solutions for traditional and new ways of viewing content while delivering large-scale transmissions that are high quality, reliable and secure – regardless of the screen,” he says.

Different ways of distributing content are likely to coexist in Asia in the foreseeable future.

“DTH, IPTV, cable, OTT and mobile platforms are all available forms of video distribution in Asia that can be complementary with each other in offering convenient access to quality content at affordable prices,” Wade says.

Rather than looking specifically at satellite versus OTT and how this scenario will play out, Intelsat’s Ostapiuk says the industry should be talking about what OTT means from a business model standpoint “and how content owners should adapt their networks to maximise revenue opportunity from all viewer outlets”.

“While consumer viewing habits are rapidly shifting, media companies are still developing business models that will monetise viewers consuming content via traditional linear TV as well as those viewing content on multiscreen devices,” he says, adding: “As this creates a complementary revenue stream, we do not foresee multi-screen viewing completely replacing linear TV. Instead, we believe it represents another way to view content”.

Date: 23 May 2016