[Satellite News – 6-12-08] SES Astra is having to go back to the drawing board for its digital TV plans in Germany.
    The company in September launched its digital satellite TV platform Entavio with German pay-TV operator Premiere. SES Astra hoped would the platform would offer broadcasters a compelling alternative to bring their latest digital channels to households throughout Germany. However, less than a year after launch, Ferdinand Kayser, SES Astra’s CEO admitted that the “initial business model would not generate the results needed.”
    Kayser spoke with Satellite News about what next for the operator in Germany and what lessons it has learned so far from the Entavio experience.

Satellite News: What is the latest with Entavio?

Kayser: We are in the process of adapting the long-term plan for Entavio. We are discussing this with the various stakeholders. Once we have finished that discussion we will, of course, communicate that with the market. First of all, the cooperation with Premiere has not been enough and was always intended to only be the beginning. Secondly, whatever you do in this very complicated German TV market you have to take into account the point of view of many different major stakeholders. If one or two are neglected, then the ecosystem does not work.

Satellite News: What lessons have you learned from Entavio?

Kayser: The most important lesson learned is that various important stakeholders have to be approached. You cannot do anything without the support of the major broadcasters, as we are a neutral service provider for them and the changes of digitalization have important implications in terms of their business models. For a project like Entavio you also need the support of the manufacturers. You need the understanding of the regulators, the retail chains and the broadcasters. You have to respect how the ecosystem works.

Satellite News: When did you realize Entavio in its current state was not working?

Kayser: We saw indications that we would have to amend our model in autumn and winter last year. We started to see that the initial business model would not generate the results needed. Today, I don’t think we are back to square one. Over the last few months, we have done a lot of work which has been very useful and will be very beneficial going forward.

Satellite News: Is there a sense of disappointment over what has happened?

Kayser: No. We had some expectations for the platform, and the results have not matched the expectations. But having a platform like this for transactional-based services for customers is very important. We have a broad technical reach in Germany with 16.7 million satellite homes. There is no other infrastructure in Germany that has such a broad reach. The objective is to try and serve these households also with other and new digital services and to bring the added value of digitalization to them. It is a major priority for us, but we have to adapt the Entavio concept now in order to do this. We don’t see the German market as a frustrating one, not at all. Our position in the market has further evolved. We have a strong position. It is and remains our most important market.

Satellite News: When do you think you will be ready to communicate the new plan for Entavio?

Kayser: I think we will be able to communicate this after the summer break. We can’t go into technical details now. There are no plans for the platform to close down.

Satellite News:. What do you think needs to be done in order for Germany to become a more dynamic market?

Kayser: The situation in Germany is somewhat complicated. Contrary to most other markets in Europe, there is no overarching and single authority. The federal government has no say in media politics, as the regional governments are in charge of media policy. So the government has no means to decide a national analog switch-off. This is a major issue in Germany, quite unlike any other major market in Europe. In markets such as the U.K., France and Spain, the government decides and sets the analog switch-off target date. In Germany, there is no unified position towards analog switch-off. We therefore need the whole industry to drive the development and pull in the same direction.

Satellite News: From Astra’s perspective, is Germany one of the most frustrating TV markets you are in considering the market and the problems with Entavio?

Kayser: No, as I said, we are very satisfied with our position in Germany, and the market where reach 16.7 million satellite homes directly with our satellites. It is by far our largest market in terms of presence. If you consider that digitalization is only underway there is still huge potential. In markets like the U.K., the digitalization is largely or completely achieved. In Germany, there is still a strong market demand to address the non-digital households

Satellite News: What impact do you think the big telcos will have in the German market?

Kayser: The big telcos have important positions and big budgets. They will be aggressive to develop TV offers. Competition between the telcos and cable players will be intense, as the cable players are performing more strongly now and they have seen strong subscriber increases over the last year. Their real priority now is triple play. However, we do not think that this new and intense competition will negatively impact our position. We will be able to leverage all technical and strategic advantages of our satellite system.