OTT Uncertainty Breeds Opportunity for Satellite Providers

Consumers are streaming Over-the-Top (OTT) content everywhere — from cruise ships to bathroom stalls on airplanes. But the extent to which satellite will enable residents of remote or rural locations can watch high-definition “Game of Thrones” dragons flying across their smartphone screens depends on a number of factors, like cost and a compelling business case.

That was the takeaway message of Tuesday afternoon’s hour-long panel, “OTT and Streaming Digital Media Services” at SATELLITE 2019.

Another big signal of the shift away from traditional TV came in December, when DirecTV owner AT&T Communications announced a switch from satellites to OTT delivery. But, precisely how the satellite industry will support the OTT market is still uncertain.

Panelist Don Gabriel, a general manager for EchoStar Satellite Services, said that with 5G, there’s going to be an opportunity for satellites to play a greater role for backhaul services to “whatever the edge points will be in 5G.”

“I’m not an expert, but it’s going to look different from one POP for all,” he said. “When I look at the future now, that’s what’s going to drive us.”

When asked by moderator Lisa Dreher, Chief Marketing Officer (CMO) and NewSpace brand strategist at Guideforce, about whether satellite backhaul for telcos is a solid long-term strategy, Gabriel said satellite is indeed becoming a more cost-effective, high-capacity solution for backhauling cell traffic. “You could see where people would come to that point, and maybe a few years ago I would draw a blank on how satellite would fit in,” said Gabriel. “It’s not going to happen overnight but if you’re looking down the road, that’s what you should be seeing and believing.”

Jo De Loor, market director of High Throughput Satellite (HTS) and enterprise at Newtec, suggested that hybrid solutions involving wireless, fiber, satellite, and other technologies could make sense for some telecom providers seeking the quickest and easiest way to expand OTT to new markets. “If you happen to live in a remote place, it’s a massive challenge,” he said. “It’s going to be important to reach individuals who are less well-connected.”

When asked why one would invest in satellite, Navid Motamed, Assistant Vice President (VP) of public policy at AT&T, admitted that telecom providers are heavily invested in fiber — but there could still be opportunities for satellite. “From a telco perspective, the goal is to connect to the most cost-effective terrestrial solution,” he said. “But I think satellite’s role could be temporarily, a short-term functionality as they build out their network as more fiber becomes available or negotiable. By its nature, satellite is a cool capacity resource that can be moved around.”

To that, SES Video VP of Sales Jurandir Pitsch countered, “We hope to make it temporary as long as possible,” echoing a universal sentiment frequently expressed among satellite carriers. Even still, he added, satellite still offers the value proposition of high-speed connectivity — and shows like “Game of Thrones” or games on ESPN — in places fiber can’t touch. "For the end-user consumer, they don’t care about technology,” said Pitsch. “They want content, easy access.”

Businesses will need to consider how satellite can play an essential role as the OTT market shifts. If Disney’s recent announcement of plans to unveil a family-friendly network with exclusive content is any indication, disruption can come from anywhere. With that in mind, there may be opportunities to offer content in new ways that would appeal to consumers’ media habits.

“Life is so busy now —do we have time to watch a two-and-a-half-hour basketball game, or maybe we can get bits of pieces in another way,” said Motamed. “We’re in transition.”

The de-centralization of OTT content could end up backfiring if consumers decide they don’t want to pay for a million different channels, Dreher noted. Moving forward, satellite providers need to be flexible and ready to support content providers.

“That content still has to get out there — and if Disney and CBS can make business stand on their own with their own subscription, it still has to get out there,” said Gabriel. “And maybe that justifies satellite even more. It could work for us.” VS