At NAB 2014 in Las Vegas, Nev., hybrid networks will play a pivotal role in the discussion on how commercial broadcasters’ strategies to deliver regionalized content.

In nearly every executive briefing that Cisco conducts with its commercial broadcast clients, one question keeps popping up: What is the new role of fiber or terrestrial services?

“Categorically, we get a consistent answer,” says John Bishop, director, of the center of excellence for digital video infrastructure products at Cisco. “It comes down to economics.”

In some regions of the world where fiber is cost prohibitive, satellite wins hands-down. In other areas where fiber is readily available, satellite can’t possibly compete; terrestrial is perceived to have the upper hand. But there’s a third alternative — a middle ground of sorts. Consider a hybrid infrastructure with a fiber footprint that complements satellite and also uses IP backhaul to help accommodate the service needs of commercial broadcasters.

Whether it’s due to cost, regulatory reasons or geography, satellite and terrestrial are like brother and sister. They may disagree, compete for attention, even do battle every now and then, but over the long haul, they’re part of the same family. Commercial broadcasters need both and will continue relying on them to distribute high quality content to all types of devices across world regions, enhance the consumer experience, and develop more cost-effective ways of providing the programming that consumers crave.

Multiple Devices, Multiple Challenges

Technology never stands still for long. Neither do satellite or terrestrial. Consider 4K, the latest buzz coming out of the Consumer Electronics Show held in January.

“Terrestrial will play a key role in 4K contribution, offering beautiful, pristine pictures of the Super Bowl, World Cup or Olympics,” Bishop says. “The economics are going to be pretty interesting on the fiber side. Satellite must now deal with a gigantic barrel of monkey wrenches, taking a high OPEX [operational expenditures] hit. The question is, what does satellite give up?”

Perhaps it will give up some traditional business practices. Bishop says satellite is meeting market demand by becoming much more flexible with contract terms. Instead of 10 to 15 year agreements, for example, contracts are much shorter now. The industry is also investing more in hybrid architecture, including data centers, something that commercial broadcasters want. Yet, despite 4K and other advancements, he says satellite still has a firm industry grip and will continue working on more flexible services and efficiencies for commercial broadcasters.

Bishop says there are two areas that concern commercial broadcasters: the role of cloud and the types of disruption that can occur in a multiscreen environment. For example, how do new technologies complement the cloud environment and remove some of the complexity? How can they take the same, single piece of content and deliver it to TVs, tablets and cell phones? The idea of second-class screens no longer exists.

“There are so many different versions of mobile devices and tablets, which add a lot of operational and technical complexity,” Bishop says. “A lot of that could be determined through some pretty intelligent cloud systems. The role of satellite and terrestrial in a hybrid is going to work hand-in-glove with some interesting data center capabilities as we move forward to reduce some of the OPEX and maximize bandwidth.”

But for now, he says the role of encoding is paramount. Much attention is being focused on video preparation around pre-filtering and compression, not only with existing technologies but next generation software and equipment. Bishop says the next generation codec, high efficiency video coding (HEVC), is already on the horizon. Expected to offer more than 50 percent quality improvements at the same data rate, he says it can deliver more compelling video and accommodate many more channels on the same spectrum.

As for Cisco’s role, he says it’s heavily investing in pre-filtering and compression technologies. “We’re seeing gains close to 20 percent on a given channel just by cleaning up input sources,” Bishop says. “Some of the SD sources can be quite noisy when distributing them. Taking out some of that noise means reducing encoding complexities that lead to a lot of OPEX savings for broadcasters through efficiency gains for satellite operators as well.”

In the past, Bishop explains that broadcasters paid for two streams: an HD and an SD stream for the same programming. Not anymore. Cisco’s new transcoding technology enables them to send higher quality services and an additional SD channel can be derived without the need to replicate programming. And by piggybacking more channels on the same spectrum, he says broadcasters are getting higher quality and higher monetization potential in the channel without OPEX costs.

Other efficiencies are the result of higher modulation, adds Jacob Jeevanayagam, market development specialist at Cisco. He says broadcasters are able to gain another 30 percent bandwidth efficiency by moving from DVB-S to DVB-S2 on the satellite space segment. Part of the company’s strategy includes using IP to send out signals over either satellite or terrestrial. By establishing an IP path, he says there are not only operational efficiencies for broadcasters, but also a better end-user experience.

Vendors and operators in terrestrial or satellite markets are not taking their foot off the gas. As the world population becomes more mobile, there will be an increasing demand for targeted programming and specific content delivered to specific users and specific devices, adds Peter Ostapiuk, VP of media product management at Intelsat.

In the future, he says satellite’s role will be to help deliver linear content to networks supporting multiscreen devices. At the same time, global media companies will regionalize content, including advertising. Both satellite and fiber will be used to deliver more personalized or relevant ads to consumers, he says. Instead of viewing a generic advertisement for Ford cars, for example, viewers will watch ads promoting their local Ford dealership. Likewise, different advertisers can fill the same time slot in different countries based on consumer viewing habits.

“Large programmers plan to offer programming that better addresses local needs, retains viewers, and captures incremental advertising dollars by targeting advertising per country rather than on a global or regional basis,” Ostapiuk says. Although the revenue pie is significantly growing for media companies, there are more sources of it so every slice is ‘skinny,’” he adds, explaining that’s why delivery systems must be cost effective and easily scalable.

As services become more complex, fiber will be used to build connectivity between different systems and regions and serve as the backup to satellite (and vice versa) for hybrid disaster recovery systems. Meanwhile, Ostapiuk says Intelsat is innovating on both fronts — in the sky and on the ground. Consider Intelsat EpicNG, a high performance, next-generation satellite platform that delivers global high-throughput technology. It uses C-band and Ku-band spot beams that allow broadcasters to target specific areas around the world, even metro areas in the near future, while still using existing equipment and ground infrastructure for reception. In contribution areas, it will offer triple play services and include video, data and voice.

Back on Earth, Intelsat plans to expand the footprint of its IP and MPLS network, seamlessly moving linear and nonlinear content between satellite and major service providers and their customers. By partnering with service providers to build video processing capabilities on the ground, it will also ensure that content is appropriately formatted so that it can be delivered to multiscreen devices for broadcast customers.

“We’ve also made a number of demos using the current generation of satellites to show that 4K is something we can transmit today,” says Ostapiuk. “Part of the 4K delivery ecosystem is already in existence but a lot of other pieces still need to fall into place before it becomes a reality.”

More Content, Higher Quality

Back in the early days, transmission networks were an aggregate of multiple satellite and terrestrial technologies, says Steven Soenens, VP of product management at Newtec. One key difference between then and now, he adds, is that everything has since become IP, resulting in satellite technology seamlessly integrating with terrestrial networks. Another difference is that satellite technology has become more efficient than ever in terms of bandwidth efficiency and throughput.

Since Newtec supports broadcast applications, it created new technology candidates for higher efficient satellite transmissions beyond DVB-S and DVB-S2 standards.

Soenens adds that there’s a big drive by broadcasters to deliver more content and higher quality content — such as high and ultra high definition programs — to customers. Newtec and others have been focusing on modulation efficiency, or the physical layer of how video, audio and data are transmitted over satellite networks. In 2011, Newtec released Clean Channel Technology that increases that physical layer of efficiency and has been endorsed by key satellite operators, such as Intelsat.

Firm Grip

Commercial broadcast is probably the best application for satellite because satellite is really a one-to-many technology, enabling broadcasters to “hit or cover” an entire country or region at once with the same programming, explains Thomas Parish, SVP of broadcast technology at Globecomm Systems.

But some countries such as the U.S., South Korea and Japan are supporting more and more fiber connections, which is shrinking satellite’s market share.

“When more people get fiber to their home, they can receive a lot more content. That can threaten satellite’s business,” says Parish. However, I don’t see satellite going away in the near future.”

This is partly because network broadcasters like ABC and CBS use satellite to deliver national content to their affiliate stations. However, since satellite bandwidth is a recurring cost, that’s an area that satellite vendors need to address and possibly improve. However, fiber is not without problems. While it provides very high bandwidth, fiber infrastructure is costly. Broadcasters send content to their affiliate stations at a much higher data rate than affiliates use when broadcasting it to their customers, which demands some very big pipes, Parish says.

Whether satellite or terrestrial, cost is always in the driver’s seat. Since broadcasters have a built-in base of equipment, many believe it’s too costly to make a direct transition to new equipment. A good example is PBS in the U.S., which he says did not deploy their next generation program distribution system from MPEG2 to MPEG4 until 2012.

Since 2007, Parish says new compressions techniques, such as MPEG4, have been able to drive down costs for set top boxes and compression equipment to a level comparable to MPEG2, while significantly reducing satellite transponder costs at the same time. “CBS has maybe 175 affiliate stations, where in the India direct-to-home market, you’re talking about millions of customers, so you can really drive prices down,” Parish says.

While some broadcasters are just now playing catch up, there’s a new standard being released, called high efficiency video coding or HEVC. He says HEVC will cut bandwidth in half compared to MPEG4, and this will be significant when delivering video for mobile cell phones.

In this scenario, everybody wins, says Parish. He says content providers are saving money because the bandwidth is reduced and vendors are making money because it enables them to continually sell new products.

But many of these new developments are targeting terrestrial, not satellite. “Everything is becoming file-based now,” says Parish. “Video is not sent live, but provided as files that broadcasters can send over the Internet very easily. Because it’s nonlinear, you can take and build it into a linear stream on the receiver side. Some broadcasters are looking to send the live content over satellite and all file content will be sent terrestrially.” Still, satellite hasn’t lost its industry grip. People on ships and airplanes also want access to content.

“You can’t run fiber to a ship or plane,” he says. “Satellite is going into higher and higher frequencies, allowing the industry to provide more bandwidth. There are many things you cannot reach terrestrially that satellite can.”