[Satellite News 10-13-09] NDS is expanding its service offerings beyond content security and into middleware and complex interactive services, the company said.

            The company has unveiled a conditional access (CA) add-on module, NDS VideoGuard Pre-Paid, an offering that will enable operators to provide customers with more payment options at minimal cost. Based on VideoGuard CA, NDS VideoGuard Pre-Paid allows pay-TV operators to reach new market segments with pay-as-you-go TV services. With this offering, subscribers can purchase and store credit for future viewing options or for immediate activation.

NDS CEO Abe Peled discussed with Satellite News the opportunities for the company in different markets as well as how the changing nature of the way consumers watch content impacts a company like NDS.

Satellite News: Why unveil a prepaid system?

Peled: As we go into developing markets, the credit card infrastructure is not there, and collection is a big problem for operators. We are seeing some demand in these markets, particularly for small operators. The billing system is always the most complex part of pay-TV so we offer other options in terms of collecting money. We launched an earlier prepaid system in 1999 where there were Kiosks to buy smart cards in Latin America. We have not seen demand for this for a while so we have developed a new model.

Satellite News: How has your business changed over the last two-to-three years?

Peled: I think the biggest changes in business have been the plunging costs in hardware. This has bought a whole new category of operator’s to the market. DirecTV’s first set-top box was $700. Right now, the set-top boxes in India, which are 10 times as powerful, are now $35. Our value-add is now a significant proportion of the set-top box cost, but we have helped enabled this change. We went through this period where people thought interactive would be the next big thing. We have always offered interactive services, but we never viewed it as the thing that will make you successful. However, we saw PVR (personal video recorders) as something that would help operator’s be successful, indeed.

Satellite News: What are the trends for securing content today?

Peled: I think we are going through a period where businesses have recognized that the free business model has some difficulty sustaining itself. Yes, content will be available everywhere, but they will have to pay for it somewhere. You will need a subscription package to do this. If you accept that the free content model is not going to work, then security will be important. For satellite platforms, it is do or die. It is those that have piracy problems that suffer. EchoStar attributed a lot of their problems to piracy. Platforms that have been successful over the last three-to-four years have recognized that this is key to their business. We believe it will continue to be important.

Satellite News: What is the importance to NDS of your Connected TV initiative?

Peled: Television is clearly becoming broadband enabled. We have a relationship with Access Networks for a net browser. We have Jungo, which offers gateway software. So our vision is that broadband comes into the home and satellite comes into the home. Satellite will bring HD, the most popular channels, and then IP will bring catch-up channels, on-demand, network storage and the distribution from that point on will be on IP. Some will be to another set-top box. People don’t want just a single point of failure. A single home hub may be a single point of failure.             Distribution of content to the home will be a hybrid service, including broadcast received content and broadband IP over-the-top. We view the connected home as a very critical part of our longer term revenue. We also looking at advertising. This can be addressed in the pay-TV market, enable targeted, accountable and relevant advertising. We are working on this. We have expanded our technology focus on the advertizing side, not only to reach pay-TV markets but also to reach [free-to-air] markets. It is going to be very complicated, but we are going to build this

Satellite News: Is it important to work with household names such as Microsoft and Apple to get this vision across?

Peled: It is about content experience and this is what matters. TV operators are large players. They have strong content relationships. They understand the consumer. They understand that they need to offer the customer the ability to offer content everywhere. Apple views this as an opportunity to sell more hardware, but we think TV operators will win because they have the content relationships as well as the buying power because of the established subscriber bases that they have.

Satellite News: Has the economic situation impacted your ability to do business?

Peled: We have had a very good year. The only impacts we have felt are currency related. We have seen strong currency impact on both the pound side and on the euro side, but aside from this, our performance has been strong. The only operational problems were really in the Eastern European countries where the economic crisis hit badly. Currency devaluation made things quite expensive in terms of dollars, but for us, this had a very small impact.