Satellite Television

I

Introduction

Satellite Television, industry built around the delivery by satellite of television programming to reception dishes either at individual homes (DTH—“direct to home” satellite) or to cable systems for onward distribution to homes (see Cable Television). The term is also often used in the narrower sense to refer only to DTH delivery.

Satellite television requires the use of satellites located in geostationary orbit—35,880 km (22,300 mi) above the Earth’s equator—where the satellite is always in the same position relative to the Earth’s surface. As a result, the satellite’s signal can be received by reception dishes within its coverage area. Some receiving dishes are automatically moveable, and can “see” more than one satellite. The possibility of using geostationary orbit satellites for television transmission was first suggested shortly after World War II by the science-fiction writer Arthur C. Clarke.

The development of satellite television was made possible by advances in satellite and reception technology. Since the early 1990s digital compression has played an important role, where analogue signals are digitized, initially enabling around 6-8 digital channels (and by 2002 up to 16) to be carried instead of a single analogue channel. The satellite industry developed first in the United States, mostly during the 1970s and the 1980s, used for distributing analogue signals to cable head-ends. Cable delivered better-quality pictures than those provided by terrestrial television. Some home-owners in North America installed large satellite reception dishes from an early stage generally because they were living too far from cities or towns, and frequently looking at the same satellites used by the cable industry.

DTH satellite television in the United States did not start until 1994, with frequencies allocated by the government specifically for the purpose (“direct broadcast by satellite”—DBS).

The DBS services of DirecTv (and its rival EchoStar) were aimed initially at uncabled areas, and were immediately popular. This popularity was largely because of channel choice. DirecTv offered almost 200 channels, rising to 500 by 2002, while most analogue cable systems were offering about 50 channels. By 2002, DirecTv had 11.19 million subscribers, although there were still 72.9 million cable subscribers. Whatever DTH’s disadvantages (limitations on interactivity, its late arrival in the United States), its key advantage over cable is that it reaches the whole coverage area from the first day, whereas cable networks are slow and expensive to build up. From 2001, DirecTv and EchoStar were able to add local channels to their satellite-delivered mix of services.

II

Satellite Television Around the World

In the United Kingdom, DTH started in earnest in February 1989 when Rupert Murdoch launched Sky Television on the Astra 1A satellite (launched December 11 1988). Satellite quickly built up a strong lead over cable. By the end of 2001, there were 5.7 million homes with satellite dishes (and another 613,000 in the Republic of Ireland) subscribing to British Sky Broadcasting (BSkyB), and 3.67 million cable homes receiving Sky channels plus a further 1.2 million digital terrestrial-equipped (DTT, see below) homes. These numbers mean more than 50 per cent of the UK population (February 2002) live in multichannel homes. In Europe, Astra claims (December 2001) a total of 89 million (DTH and cable) homes can receive its broadcasts. In Germany, the most advanced European new-media country, there were (June 2001) 19.10 million cable homes and more than 12 million DTH homes.

The British satellite and cable markets are dominated by BSkyB, US programmers, and US cable and telephone companies, the latter cashing in on the fact that cable operators can offer telephony services. Murdoch and US programmers have also been instrumental in developing satellite services throughout Asia and Latin America, seeking to start DTH services and to feed the emerging cable networks.

Murdoch launched the Star TV service from Hong Kong, covering much of Asia, but aiming in particular for the huge markets of China and the Indian subcontinent. Other key markets include Japan, Thailand, the Malaysian peninsula, Indonesia, and Australasia. Western programmers have also been working with local partners to develop services in South Africa and the Middle East.

The driving force behind the growth of pay-television has been channels devoted to sport and films, for which relatively large monthly subscriptions are charged. Other channels, featuring entertainment, news, and a variety of specialist themes, tend to form large “basic” packages of channels for which an overall fee is charged.

III

Recent Developments

Digital terrestrial transmission (DTT), which began being introduced into Europe and elsewhere from the late 1990s, allows for many more channels and a new range of interactive and multimedia services to be launched. As with satellite and cable television, DTT services include pay-per-view channels, where the viewer pays a fee for each individual event (generally a top film or sports event), plus other specialist channels.

Governments are enthusiastic about DTT, which, in time, will permit them to close down—and sell off—the existing valuable analogue frequencies for other uses. Most European countries are looking at a close-down timetable of 2006-2010 for analogue transmissions. Two major questions arise over digitalization: whether viewers want the new services, and which medium will best provide them. Generally, the transition from analogue to digital has been financially painful. As at February 2002 no European satellite pay-television broadcaster was profitable, and the likes of BSkyB, CanalPlus (France), and Premiere World (Germany) had lost significant sums. Much the same was true of cable operators (see Cable Television).

Commentators outside the United States have criticized some of the quality elements of satellite (and cable) programming. The complaints have tended to concentrate on inferior, low-cost imported material usually from the United States. However, satellite television has transformed the nature of sports coverage both in terms of quality and quantity, and has allowed the creation of niche channels addressing minority tastes and some very real needs in the community. The mass market has also shown an enthusiasm for new speciality channels, especially those featuring documentary programming which in turn has led companies like Discovery Communications to invest significant sums of new money in high-quality documentary material.

There are also signs that satellite multichannel television is popular once installed. “Churn”, that is the number of viewers who cancel their subscription within any given year, is lowest among satellite subscribers in the United States and the United Kingdom. Viewers increasingly appreciate the interactive services on offer, although it is fair to say that in the United Kingdom, for example, older viewers are seen as being the slowest to convert to multichannel television.

IV

Overview

Satellite television has added a new dimension to the market’s enthusiasm for multichannel television. BSkyB reached its target of 7 million DTH subscribers in the United Kingdom by the end of September 2003. Analysts are forecasting the number of subscribers to US satellite television will reach 25.9 million homes by 2007.

The successful broadcast platforms like BSkyB, CanalPlus, and DirecTv are but one element in the story. The satellite operators themselves have also matured into major business entities with SES Astra valued (February 2002) at some US$10 billion. Astra, along with its rivals, is looking at next-generation opportunities, not least the use of satellite as a means of delivering broadband and multimedia to homes.