By Mark Holmes

The European broadcasting landscape continues to change, pushing out of its traditional boundaries. From the exporting of content throughout the world to advancements in HDTV (High-definition TV), satellite operators have the opportunity to lead the way in terms of distributing European content farther than it ever has before, with lucrative returns for their endeavors.

Such expansion is being explored by one of the continent’s most established news broadcasters, EuroNews. Its Chairman and CEO, Philippe Cayla, believes there are still plenty of opportunities for the pan-European news channel to gain presence on direct-to-home (DTH) platforms across the world. "In terms of gaining presence on new DTH platforms, the first target is to gain on Dish TV in India. We are in the process of striking a deal there. I think we will start very soon with Dish TV. There are also plenty of other platforms for us to target in this area. There may be another 10-20 platforms for us to target."

EuroNews is one of the most successful new channels. It trades on the fact it is pan-European and that it can offer the news in seven different European languages, which makes it very appealing to Europeans working abroad or people who want news with a pan-European focus.

The channel is also working hard on boosting its distribution across the world. Recently, it signed a key deal with satellite operator Eutelsat that will see the channel launch across Asia, which in essence makes it more global in reach. It will be broadcast via the Eutelsat W5 satellite. The deal with Eutelsat was a key transaction for EuroNews as it marks its entry into many key markets in Asia. In terms of the significance of the contract with Eutelsat, Cayla comments, "We have chosen Eutelsat because they are very convenient for us. They can uplink from Europe and downlink in Asia. They have a Ku-band satellite, which is very efficient in terms of performance. So, you can gain reception with small antennas. It is a very convenient way of bringing our signals to Asia."

As well as the potential deal with Dish TV in India, it has also requested broadcasting authorizations from SARFT (State Administration of Radio, Film and Television) — the audiovisual authority for China. Throughout the next 12 months, gaining audience share in Asia will be one of the top priorities. Cayla admits, "With gaining Asian coverage, we have now achieved worldwide coverage. In 2005, it should be a breakthrough year for us in Asia. We want to attract a significant number of viewers here."

The operator competes against some significant channel brands in the news content market. However, Cayla believes the channel has more than held its own against the competition. He says, "We have achieved very good ratings in Europe. We have eight million viewers a day, which is four times the figure of CNN and eight times the figure of BBC World. We think we have a pretty good audience in the Middle East and Africa. We have one million viewers in North America. Our audience is limited there at the moment."

New Platforms

While the channel is looking to expand its reach across different satellite platforms, IPTV and mobile telephony are also areas of distribution, which the channel will look to improve. Content providers are looking more at alternative means of distribution and EuroNews is no exception. Cayla says, "We are also looking at cable and DSL operators for distribution, and even mobile telephony operators. We have already started doing this in Europe. We plan to do the same in South Korea and Japan. We are also going to look at Australia."

He continues, "We are going to launch services in other European markets soon. We also want to attract as many mobile telephony operators as possible. We have been very successful in this area during the last six months. We are now signing contracts every week with European operators. We want to be the news channel of the business traveller. We are looking for distribution across different platforms."

From Expansion To Interactivity

Interactive television is about to go through a key period in the United Kingdom, with most of the innovation likely to take place on BSkyB’s satellite platform. In its most recent results, BSkyB gained GBP81 million ($157 million) in interactive revenues in the quarter ending September 2004, so it is a vital part of the business. Of this GBP81 million, GBP59 million ($114.4 million) came from SkyBet, its interactive betting service.

At this stage, BSkyB’s interactive services far outweigh the alternatives on cable. Ian Shepherd, managing director of Sky Interactive says, "We have hundreds of millions of pounds of interactive revenues in the Sky business already. We are the largest interactive business in the world. We are very proud of the fact that, not only because of what we do, but also because of the interactivity that exists elsewhere on the portal, the digital satellite platform is very well-differentiated against other platforms in the United Kingdom in terms of having rich interactivity for people to use."

Shepherd is a firm believer that interactive services are a key factor, not just in boosting revenues, but enhancing the overall proposition of a digital satellite platform. He said, "There is no question that the volume of interactions going on the satellite platform, the proportion of customers using interactivity on a satellite platform and the numbers of hours of television programming being enriched by interactivity have all dramatically increased. We are very proud of what we have done in Sky Interactive with our own businesses to try and innovate in that area."

Sheperd adds, "We are also very proud in what we have done to help other TV channels. We are partners with ITV, Channel 4 and Cartoon Network and we are behind them somewhere, helping some aspect of their interactive technology. We have done that deliberately for two reasons. Firstly, it is a good business for us in our own right and secondly it is very positive for the satellite platform that there is so much going on."

BSkyB takes interactive services very seriously. At this stage, it pretty much offers a blueprint to other satellite pay-TV operators globally in terms of running interactive services. It is now aiming to take interactive services to the next stage. It has announced a dramatic relaunch of its interactive services portal as it bids to make interactive services a staple part of the viewers’ day.

In addition, BSkyB is bringing a more televisual element to its interactive approach with a lot more video content behind the services. It is creating a magazine-style channel that offers on-demand entertainment and information. What this means is that boundaries between traditional linear television and interactive applications are blurring. "What we are seeing is that just as television channels are trying to add interactivity to their broadcasts, what we are trying to do is add television to the traditional interactive portal. There is a very rich seam in the middle. So, when you look at things like Sky Vegas live, which is our interactive gaming channel and is a television channel listed on the EPG, it is all about playing along. It is all about playing the Keno game and interacting with the presenters. Its entire business model is based on people interacting. The area between traditional interactivity and traditional linear television is a very interesting space," Shepherd says.

The re-launch of its new interactive services portal took place in late November 2004. As well as blurring the lines between traditional television and interactivity, it almost aims to be a substitute for viewers who want a fix of daily news/information. Sky has done considerable consumer behavior research in this area and one of its key findings is that it is not technology early-adopters that are using interactive services. Shepherd adds, "The vast bulk of the regular usage of interactive services comes from people who are much more normal, mass-market. The Sky Active audience definitely skews toward women rather than men. There is a big daytime element to it as well as a big late evening element to it. It is the people consuming women’s weekly magazines, tabloid press, daytime TV and they are consuming interactivity. The realization is that our audience is mass-market entertainment audience who therefore needs a mass-market entertainment solution."

"Combining interactive technology and broadcast video technology inside the interactive menu has not been done before," shepherd says. He adds, "It has taken us seven months to be able to do. It is a first on our platform. That is important to us because Sky Interactivity has been a good growth area for us in revenues over the years. I would anticipate that it continues."

Others Onboard

While Sky will continue to pioneer interactive services in the United Kingdom, it is up to other parties to also bring innovative user-friendly interactive services to the mix. One of the main broadcasters deploying interactive services is ITV, one of the United Kingdom’s largest broadcasters, which has some of the most widely used interactive applications in the United Kingdom. In fact, its voting applications have posted some impressive numbers. In 2003, ITV posted more than 37 million votes. In 2004, it broke through the 40 million barrier and be around 41 million, which is a pretty staggering statistic when you consider the amount of revenue that it can generate.

Jane Marshall, the controller of ITV Interactive, says "I have been in the interactive industry for five years and there have been an enormous change in the last 12 months. Prior to that, we had to push this thing up the hill. Now, it has a momentum all of its own. You can see that in the TV production companies. You can see that in the advertising community. Some of the creatives had previously seen this as a technology issue and shied away from it for that reason. Our job in the next year is to take it back out to them and say it is not about technology, it is about viewers and it is about getting more interesting and engaging programs on to screen."

The possibilities to grow a strong, long-term growth business in interactive television have never been better. Users in the United Kingdom are used to ‘red button’ functionality and have been shown to embrace interactive services when they strike a chord. Marshall is confident that ITV will build a strong interactive business. But, interactivity will not just be about content providers competing, it will ultimately act as a platform differentiator. Marshall said, "We are seeing an industry that is becoming mature and it is starting to show what it can really do. The television marketplace in the United Kingdom is so competitive, all broadcasters and platforms are looking at interactivity and how they can use it as a platform or channel differentiator, or a tool for marketing or revenue generation. The competition among broadcasters is good because it will drive the industry on."

Business Model

What is happening in the U.K. digital television market offers some key lessons for other satellite pay-TV platforms. As BSkyB begins to see its subscriber growth slow down, it will ultimately look for other services to play a key role in reducing churn and boosting revenues. Interactive services are a big business. It can allow content providers a way to bring a richer ex-perience to viewers, boost ratings etc.

For platforms, it will be a differentiator going forward. Satellite pay-TV platforms, particularly in Europe, have aggressively pushed interactive services with many being ahead of their cable counterparts in offering these services.

The United Kingdom will be interesting to follow as Sky aims to take interactive services to the next level. Other satellite pay-TV platforms would do well to examine how successful BSkyB is in the next 12 months. It aims to make interactive services an integral part of the viewer experience and increases the frequency levels in which people use interactive services.

If Sky’s new interactive service portal is successful as some projections indicate, it will offer compelling evidence for satellite pay-TV operators where to gain a competitive advantage in terms of interactive services ahead of other alternative platforms.

The Changing Landscape Of Eastern Europe

By far, one of the most exciting broadcasting advancements is currently underway in SES Astra’s deal with the Croatian communications company Vodatel is one of the first indications of telcos in Eastern Europe deploying a progressive multimedia strategy using satellite communications. The deal puts Vodatel at the forefront of progressive interactive satellite entertainment services.

Vodatel has teamed up with SES Astra to offer satellite broadband, Video-on-Demand (VoD) and more than 100 international TV channels via Astra 23.5 degrees East to users in Croatia. Peter Schuler, vice president of sales, broadband and IP at SES Astra, says, "We have other service providers in different Eastern European countries, such as Poland, Hungary, Czech Republic, the Slovak Republic and other countries in that region. But these are mainly service providers or ISPs that sell broadband Internet access services via satellite. Vodatel is the first one to say that it does not want to get into the home office, but wants to get into the living room with a multimedia center/gateway combining broadband Internet access, multicast services such as VoD as well as popular TV channels. That is the major differentiator between Vodatel and other service providers that we are working with in other Eastern European countries."

Philippe Glaesener, vice president and general manager of sales, broadband and IP at SES Astra adds, "Vodatel have recognized before anyone else in the region that there is an opportunity to combine broadband and TV and to market a product as a combined broadband entertainment service."

More Deals To Follow

Schuler expects the deal with Vodatel to be the first of a series in this area. "Based on our discussions with some of the other Eastern European players, there are others planning to go into that broadband entertainment area," he said. One of the key criteria to successfully provide such services is the availability of cheap and reliable receiving devices for the living room combining current digital STB standards with IP processing functionalities."

Glaesener adds, "The major challenge is signing up with the most interesting service providers, which have access to attractive content and combine such with their marketing powers to broadly launch entertainment services. We want to work with the most interesting and promising service providers that have access to appealing contents. While these customers on one side can profit from an existing strong content neighbourhood on the Astra satellite system, we on the other side ensure the increase of our system’s attractiveness to potential new customers and most importantly to the end user at home."

Vodatel could be pioneering a revolution in terms of bringing multimedia/interactive services and competing against pay-TV operators. The company, which is based in Zagreb, Croatia, will provide one of the most innovative multimedia offerings in Eastern Europe. Its foray into areas such as VoD makes it an operator to watch. The interactive entertainment services will be marketed under the eTV brand and users will be able to access services via an eTV Media Center box connected to a TV set and a satellite dish pointed at 23.5 degrees East.

For SES Astra, the collaboration could be indicative of a more concerted push in Eastern Europe. Glaesener says, "It is a rather important deal because it gives us access to new markets in the sense that Astra’s core markets have, up to today, primarily been centered around Western Europe. We are now starting to progressively enter Eastern Europe. We are certainly looking forward to having additional attractive opportunities in these markets."

Big Year For VoD

The year 2005 is shaping up to be a big year for VoD services. Cable operators such as NTL and Telewest in the United Kingdom are preparing for high-profile launches of VoD services as they aim to battle back against satellite.

But what impact will VoD services have in the satellite arena? Glaesener is confident that VoD services delivered by satellite will have a stronger impact. He says, "Satellite can play a rather important role in VoD markets across Europe, especially in regions such as Eastern Europe that are not yet as connected in terms of DSL networks. Satellite gives the opportunity to provide, as of today, VoD services to these regions with minimal upfront investments both to the VoD service provider and to the end user. It is going to be a key year for VoD services on satellite, but, also for other so-called multicast applications, which can transmit attractive content to multiple users at the same moment. We can already see today with players like EchoStar in the United States, that broadband entertainment is increasingly becoming a hot agenda item."

While there are likely to be more deals with progressive communications companies in Eastern Europe, these deals may have more of a convergent theme when it comes to their services. "We expect to sign more deals for the simple reason that technology in the market is increasingly moving toward using common standards for contents being picked up by PC- as well as TV-based reception, storage and display devices, and as such allowing an optimized convergence of both the TV and the Internet worlds," adds Glaesener.

Mark Holmes is senior editor of Inside Digital TV and International editor of Satellite news, both sister publications to Via Satellite magazine.