UHD: “Positive catalysts ahead”

On February 12th, SES is hosting a dedicated Ultra-HD conference in London, and the event has helped prompt investment banker Exane BNP Paribas to put out a research note on 4K’s prospects, and Europe’s satellite industry in general.

As far as Ultra-HD is concerned, the bank says it expects this event to support its view that UHD is likely to drive satellite capacity demand. “Recent industry surveys suggest that a majority of broadcasting executives expect mass adoption of UHD within the next five to seven years. Direct TV in the US, Sky Japan, Skylife in South Korea and Tata Sky in India all have plans to launch their first UHD channels in 2015. The launch of UHD content from OTT players (Netflix and Amazon in 2014) is likely to speed up the adoption of this standard by broadcasters,” it notes.

The bank’s report continues: “SES and Eutelsat generate an estimated c.85% and 80% respectively of group EBITDA15e from video broadcasting. Our review of the state of the art of Ultra HD broadcasting leads us to expect growth in video revenues to accelerate, especially at Eutelsat. On 12 February, SES Ultra HD seminar is likely to underpin our view of the solid progress in the Ultra HD ecosystem.”

“We believe that the gradual roll out of Ultra HD TV channels is likely to be a key driver of satellite capacity demand from video broadcasters. Despite more efficient signal compression technology (HEVC), Ultra HD channels still require a much higher throughput (to broadcast a much higher image resolution) than HD channels, let alone standard definition channels. At IBC 2015, the head of innovation of Sky Deutschland suggested its current UHD testing runs on about 30 Mbps. This in turn is likely to drive satellite transponder demand.”

“With global UHD TV screen shipment set to rise by 200% in 2015 (Consumer Electronics Association forecasts), we expect a growing number of TV broadcasters, in particular Pay-TV platforms to launch their first Ultra HD channels over the coming 2 to 5 years. In our view, Pay-TV operators are likely to use Ultra HD channels to reinforce their commercial value in their fight against OTT (Netflix and Amazon have already launched content in Ultra HD) while attempting to increase revenues by offering premium services. The 2016 Olympic event may also drive more broadcasters to launch a commercial service within the next 18 months (and hence acquire satellite capacity beforehand).”

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