[Satellite News – 5-22-08] The satellite market was well represented at the ANGA Cable trade show in Cologne this week with various representatives from Eutelsat, SES Astra and Premiere speaking on a number of industry panels covering the market. Despite the presence of some of the strongest cable infrastructure anywhere in Europe, as well as perhaps a reluctance of the German consumer to move to digital, there still seems to be a huge opportunity for satellite in terms of digital TV. The potential for growth is still strong despite a resistance on the part of many households to move to digital. However, Germany is a tough market to do business in. Deutsche Telekom (DT), which is investing huge amounts building a VDSL network across Germany, has a little over 150,000 IPTV subscribers, which considering the size of its investments represents a poor return at this stage.
    There are also some interesting strategies in play in the German market. Holger Ensslin, general counsel of Premiere, which offers DTH services among other things, believes the move to digital has been far too slow in Germany. He said, “For a long time, we were the only drivers of digital in Germany. Thank god, others are (now) joining in. This offers more opportunities for pay-TV, but it has been far too slow. Everybody now has to be aligned so we can push digitization. For most people in Germany, analog TV is still the most normal thing. There will be huge potential growth for pay-TV when the digital TV environment grows.”
    Premiere produces a number of channel packages on wants to make them available on platforms other than its own satellite platform. Despite its DTH offering, it wants to see the cable players move to digital faster. Ensslin commented, “We see ourselves as a mere marketing platform and we are looking for maximum distribution on cable, satellite, IPTV, and even mobile. We want to enable the customer to receive the channels they want so they don’t have to buy more equipment. We all want to see a faster digitization of the cable system. Premiere wants to establish its own customer relationships. We are very open. We co-operate with different networks, and run various promotions and campaigns.”

Eutelsat Makes KabelKiosk Progress

For other satellite players, the opportunities appear to be growing, particularly as the cable players seem to be getting more progressive in their move towards digital. Eutelsat has a particularly interesting strategy. It is placing a lot of emphasis on its direct-to-cable KabelKiosk platform in Germany. KabelKiosk partners with huge numbers of cable network operators in Germany, as well as other territories. The offer currently comprises of numerous German and international channels ranging from entertainment, sports, family, cinema to culture and music. Channels are encrypted and distributed via satellite.
    At ANGA, Eutelsat took the next step with its KabelKiosk strategy by announced a new basic digital package of channels called ‘Basis’, which will be made available to cable operators. It has already inked a deal with major German cable operator, Tele Columbus which will be the first German cable operator to offer Basis to its subscribers. The new channel line-up has around 30 channels and is likely to include major channels ProSieben.Sat 1 and RTL, making the platform particularly attractive. Deals with these high profile channels are likely to be finalized in the near future. Tele Columbus has around three million subscribers in Germany, and is one of the biggest cable operators in the country.
    Martina Rutenbeck, managing director, Eutelsat visAvision in Germany, believes Eutelsat can play a significant role in helping cable operators boost revenues and provide attractive digital packages. She said, “We have a B2B concept for cable operators. We enable them to remain competitive so they can survive as network operators in the future. We are expanding our range of services. We will be providing additional digital services. The point of this approach is to promote cable networks. We want to supply a concept that makes digitization possible.”
    The platform provides cable operators with the necessary tools for launching new video services. Eutelsat provides a full range of services, such as encryption and subscriber management. The announcement with Tele Columbus is a major step forward for its strategy in Germany. Rutenbeck outlines Eutelsat’s targets in Germany over the next year. She said, “Our plans for this year are related to the target that the KabelKiosk platform will gain in importance in the market. We want to strengthen the business of our partners. I think Eutelsat KabelKiosk, is living proof that an open platform does work.”

New Path for Entavio

While Eutelsat motors on with its KabelKiosk initiative, SES Astra is rethinking its Entavio strategy. Entavio was launched with much fanfare in September last year. Entavio is a technical and service platform, which does not itself, acquire or bundle channels and is therefore open to all broadcasters. However, despite a deal with Premiere, the strategy of Entavio is now being reworked. Both SES Astra CEO, Ferdinand Kayser and Timo Schneckenburger, managing director, Entavio said the project now needs to change course.         Kayser commented, “We have found out two things with Entavio, the co-operation with Premiere was very good, but not large enough to fund the Entavio concept. Secondly, it is very difficult to pursue a concept if not all stakeholders join in. We have public or private TV operators who were not sitting on the boat with us. We are reversing our course of action. We are now adapting what we are doing.”             Schneckenburger added, “I don’t think the audience knows the Entavio idea. Entavio came up with a single specification for the satellite market. We wanted to make life easier for customers. However, we are not happy with the figures we have obtained. We want to adopt a new approach.”

Will Cable Step Up?

While Germany may be lagging behind in terms of innovation in the digital TV market, it will be no easy market for satellite to succeed particularly if cable players begin to use their own infrastructure more effectively and offer a greater range of services. Unitymedia is one such player looking to boost its performance. Parm Sandhu, CEO of the Unitymedia Group commented, “Our whole strategy is based on triple play. It enhances customer loyalty. Our triple play churn is very low. We are selling customers digital TV, and then marketing the Internet and telephony. Cable is the best suited infrastructure for high bandwidth services. We have no need to look at alternative infrastructures. A significant portion of our triple player customers are coming from other infrastructures. Bundling is bringing customers back to the cable industry.”