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NSR downgrades UHD forecast for satellites

There will be far less UHD channels by 2025 than previously forecast, says a prominent satellite report, paring its forecasts from over 820 UHD channels by then, back to 785 UHD channels.

The report comes from Northern Sky Research, and is entitled UHD via Satellite 3rd Edition, out this week. This reduction in its estimate is perhaps attributable to the recent slump in the satellite market, most notably Intelsat’s financial turmoil, which has had a knock-on effect on the share prices of both SES and Eutelsat. The huge customer losses seen by Dish Networks and DirecTV, the two leading satellite TV companies in the US, may also have been a factor.

NSR also forecasts leasing revenues to run UHD channels, is predicted to be an additional annual $280 million. However, with the emergence of GEO HTS (High Throughput Satellites), which can support many small spot beams and have reduced average data pricing per MHz, the spectrum for HD channels can be reused in spot beams to deliver to different local markets, and perhaps even cover the entire US in about 25% of the spectrum. As a result, DTH delivery of UHD technology would come at little extra cost, even if it required as much as 4 times the bandwidth, and with HEVC and other codecs, it would only use just twice the bandwidth to start with.

For example, in 2005 when DirecTV’s first HD satellites were launched, the satellites had to use up spectrum to deliver 1,500 local HD channels across the US – at a high cost to the satellite company.

Furthermore, the rise of OTT services, DVRs, on-demand content and skinny bundles will only exacerbate this problem, as poor content is squeezed out of the market and channels shut down, and premium content available over fewer channels. Putting together UHD content into channels will have the same result – better content put into fewer channels. The net result will be that revenue for carrying video, which makes up over 50% of many satellite operators’ revenues, could fall, as less channels are delivered DTH.

NSR says only 1% of channels worldwide are currently UHD, with the share of global leased DTH UHD channels being led by South Korean satellite operator KTSat with 34%, followed by Eutelsat with 22%, and SES, Singtel, Telesat, and Sky Perfect JSat all with an 11% share each. It’s surprising that AsiaSat didn’t make the cut considering it has launched several channels via the AsiaSat 4 UHD broadcast platform within the last year – the satellite covers a huge footprint spanning 50 countries from Pakistan in the East to New Zealand in the West.

AsiaSat partnered with Rhode & Schwarz for its first FTA UHD channel on the AsiaSat 4 satellite, using its R&S Clipster solution for editing, handling and playing out UHD data in real time, with a headend for live encoding using an HEVC encoder with 10-bit color depth. Harmonic has also worked in partnership with NASA TV UHD to deliver the NASA channel around the world via AsiaSat, SES, and Intelsat.

Although, AsiaSat has been experiencing similarly tough times to those of Intelsat in Europe, as the Hong Kong-based operator released financial results for 2015 this month, showing revenues down 4%, to $56.75 million. AsiaSat’s Chairman, Ju Wei Min, warned shareholders that the company is in some difficulty due to pricing of rivals pushing down transponder and bandwidth leasing prices, as well as non-renewals of contracts.

NSR also cites East Asia’s head start in launching UHD channels, but says that by next year almost all regions worldwide will have access to UHD channels, and by the end of 2020 this will also expand to some developing countries – aided by the dropping prices of compatible hardware.

Solid figures for exactly how many HD and UHD channels are broadcast via satellite worldwide are few and far between, but according to MAVISE, the online database for TV and on-demand services and companies in Europe, there are currently 1,629 HD channels broadcast within the European Union and affiliated countries, but with no figures for UHD channels.

Another online database from KingofSat, shows that there are currently some 1,700 HD channels broadcast via satellite in Europe, of which 327 are FTA, compared to just 14 in UHD, of which 11 are FTA. Luxembourg-based SES now delivers eight UHD channels across North America and Europe, featuring NASA TV UHD, Fashion One 4K and High 4K TV.

According to market researcher IHS, there were 31.88 million UHD TVs sold in 2015, up a huge 173% from 2014, and forecasts the market share of UHD TVs to reach 49% this year.

“Given the exponential increases we’ve seen on 4K TV shipments, introducing Ultra HD channels and packages is a key strategy to retain and grow pay TV subscriber bases in an increasingly competitive environment. Additionally, this is a vital competitive response to OTT platforms’ ever expanding online content catalogues. While in the short term DTH, Cable TV and IPTV platforms will offer Ultra HD for ‘free’ with existing premium channel bundles, longer term Ultra HD will achieve higher revenue streams generated by increasing ARPUs and subscriber levels,” said Alan Crisp, NSR Analyst and report author.

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