Ethnic programming connects people to their homeland, providing both comfort and information in the form of a wide
variety of content such as news, sports, education and children’s programming. Satellite technology has played a key role in the creation of this market, but will it continue its leadership role or be edged out by emerging technologies?

It is the dinner hour and Anh Nguyen, a mother of three, is overseeing her children’s homework while making steady progress on the family’s evening meal. Her pre-schooler sings along with Big Bird on the big screen TV in the family room, while a smaller screen in the corner of the kitchen broadcasts local news programming in Vietnamese. Nguyen and her husband, first-generation Americans from Vietnam, are eager to keep up with the news and events in the country of their birth and are part of a swelling audience for ethnic programming.

The world’s population is becoming increasingly mobile, and geographic borders no longer are a physical constraint to population shifts. England, France, Germany and Australia have seen large surges in immigrants and guest workers throughout the last two decades, and the 2000 U.S. Census found 27 million legal immigrants in the country. It is estimated that there are an additional 13 million people in the United States illegally, bringing the total to 40 million people who may seek their primary programming choices from outside U.S. border.

Market Continues To Grow

One example of the growing demand for ethnic content can be found in Spanish-language programming in the United States, which was an oddity just 20 years ago. But what started as a trickle is now considered mainstream; so much so in fact that Spanish content is no longer included in the ethnic content market segment. Viewers of ethnic programming now only have to click their remotes to find a variety of choices, but moving television programming from around the globe to other countries has not always been that easy.

GlobeCast, a subsidiary of France Telecom, began receiving requests from international broadcasters in the mid-1990s to help get their content distributed inside the U.S. market. Recognizing a profitable niche, GlobeCast developed its own direct-to-home (DTH) platform to deliver ethnic content directly to the consumer market. In a strategic move, the company opted not to carry mainstream programming, focusing exclusively on the delivery of ethnic programming. The decision avoided going head to head with Dish Network and DirecTV.

GlobeCast’s WorldTV provides two types of content: free-to-air and subscription. Consumers who purchase a basic DTH package — generally sold through distributors in multicultural communities — can view content at no cost. Adding a set-top box allows users to subscribe to pay channels. Today, WorldTV offers more than 200 channels from 30 different countries and delivers programming in more than 40 different languages in the United States and Europe.

Emrah Ozkan, president of Home2US, was born in Turkey and went to college in the United States, but he found that the only way to get information from Turkey back in the 1980s and early 1990s was by shortwave radio and later Internet chat rooms. Video programming at the time was still a dream.

After starting a company that delivered ethnic programming to immigrants in Germany, Ozkan launched Home2US in late 2002, initially offering a limited number of ethnic channels to customers in the United States. “My company in Germany provided programming to Turkish expatriates living in the country,” Ozkan says. “When I moved back to the United States there was only one company providing ethnic content and the market needed an alternative. There were a large number of ethnic neighborhoods not being served. We started listening to the concerns of broadcasters and decided to start a competitive service.” Home2US now provides more than 40 channels, requiring four transponders on SES Americom’s AMC-4 to deliver content to North and South American markets.

Ken Takagi, Director, managed video services for Intelsat, says ethnic content has been growing very rapidly over the last 10 years. “Intelsat focuses on transportation and delivery of the content, and we don’t work directly with consumers,” he says. “We play a key role in the in the delivery of content to the U.S. market and see a similar growth in Europe and Asia Pacific markets. Intelsat currently supports over 300 video channels around the world. Our global network of satellites and fiber optic circuits allow Intelsat to transmit and deliver content anywhere a customer wants.”

Patrick French, senior analyst and head of NSR’s office in Singapore, notes that the delivery of ethnic content by satellite continues to grow. “A good example is Australia which has large Greek and Vietnamese communities. The local cable companies didn’t provide ethnic programming; therefore some independent businesses filled this void,” he says.

In the early days of the market, DTH platforms were the ideal delivery mechanism for ethnic content as they allowed broadcasters to bypass cable companies, but as the number of subscribers grew, cable companies and telephone companies took note and began to offer ethnic content on their own platforms. “Ethnic programming drives growth and creates a stickier service that customers have a hard time leaving,” said French. “It’s like the NFL network but not quite that sticky.”

In March 2007, SES Americom launched its IP-Prime service, a turnkey service delivering 285 video channels to telephone company super headends. Working in conjunction with Home2US, SES Americom incorporated the service provider’s mainstream ethnic content into the overall mix of channels available on IP-Prime. This allowed the broadcasting clients for Home2US to maximize their reach, says Ozkan. “By extending their reach into the U.S. market on other platforms, we help them maximize the value of their content,” he says.

Finesse Game

But it takes more than global reach and technology to be successful in the ethnic broadcasting market, says Ozkan. While the size of the overall ethnic market is very significant, “it remains a collection of niche markets,” he says. “It requires intimate knowledge of the market to be successful.”

Lisa Coelho, director and vice president of GlobeCast’s WorldTV, agrees. “Global relations are critical to be successful in this market and they sometimes require years to develop. Broadcasters want distribution around the world, but to do so you must be closely integrated with the distributors that service multicultural communities. In addition, you must have specific knowledge of the community being served. That takes significant market research to develop the demographics. Different nationalities want their own programming. They have their respective languages and nuances. For instance, you wouldn’t promote a Bosnian channel like you would an Italian channel.”

Ozkan also points out the value of specific language support at call centers. “It’s important to be able to speak with customers in their own native language,” he says. “Whatever language support our clients need, we will provide it: Korean, Croatian, you name it. Because of this diversity we don’t outsource our call centers to India like some competitors do. We have a number of different call centers based on the specific language skills required.”
Still, the success of GlobeCast and Home2US has not gone without notice. It is clear that the future of ethnic broadcasting revolves around distributing content on a worldwide basis. This realization has spurred hundreds of new market entrants, each trying to lock up the global distribution rights of broadcasters around the world.

In April 2007, Arqiva Inc. completed its acquisition of BT Satellite Broadcast Services, extending Arqiva’s operations — including the addition of teleports in the United Kingdom, Paris, Washington, D.C., and Los Angeles. This helps provides broadcasters more solutions to help them reach their subscribers, says Simon Thrush, senior vice president for Arqiva Inc. “We have seen an increase in the delivery of ethnic content, especially in Europe,” he says. “Launching a new channel is very difficult and Arqiva has studios, a fleet of [satellite newsgathering] trucks, and an infrastructure in place to support occasional use traffic. Being able to supply new clients with an end -to-end solution is very important.”

GlobeCast also is modifying its operations to keep up with the latest demands, as WorldTV also now repackages content bouquets for other operators. “While others are strapped into their own DTH platform, we are now taking a platform agnostic approach.” Coelho says. “We are shifting to content distribution more and more. This is significantly different than our approach in the previous years. More viewers mean additional revenue for our broadcasters. We are no longer focusing exclusively on satellite distribution. This allows us to provide a wider portfolio of services to our clients.”

WorldTV recently launched a broadband delivery system for Bosnian content in Canada and will launch services to telecommunications companies in the United States in the next few months, Coelho says. “The next few years will be extremely challenging,” she says. “Everyone has realized the demand for international content and is trying to secure broadcasting rights. Distributors will try to sell international programming to cable systems, but they don’t realize the huge amount of work it takes to make a new channel successful and they will go through a teething period,” she says.

“In the beginning, DTH services allowed new companies to acquire a customer base without having to get capacity on a cable system,” says French. “Now IPTV is basically another channel for carrying content. As new channels develop a customer base they can then try to move onto the large distribution platforms. Everyone is competing for the same real estate. This is the reason why you have 500 channel systems. Bigger platforms allow service providers to add more content. No one needs 500 channels, but everyone has their own top 10 to 15 channels. Providing content that everyone wants helps attract new customers and reduces churn.”

The overall market is still growing, but the demand for new channels has slowed, says Takagi. “While we expect some growth in the ethnic content segment, the market is maturing and it won’t keep expanding at the same pace,” he says.

Although the creation of new channels is slowing, the number of new subscribers of ethnic content continues to grow around the world. Home2US has doubled the number of subscribers every year and expects that trend to continue for the foreseeable future. “The average household in the United States has 2.3 people but three televisions,” he says. “When you factor in that immigration rates aren’t slowing down, the demand for ethnic programming around the world will continue well into the future.”