“Large price cuts” being won by major satellite customers

Equity analysts at Deutsche Bank say that Europe’s major broadcasters are winning large price cuts from satellite operators when they negotiate their capacity renewal contracts.

Analyst Laurie Davison, using Eutelsat’s latest set of H1 results, explains that if – as Eutelsat reported – video transmission bookings are rising (more HD TV, emergence of UHD TV, higher number of channels, etc) and yet actual revenues are falling, then inevitably “this means that pricing is going backwards.”

Deutsche Bank says “the reseller pricing cuts are indicative of a lack of demand and selling directly [Eutelsat has taken a number of accounts ‘in house’] will not help. It is worth noting that Eutelsat is offering this capacity free for 18 months to channels to tempt them to move to HD – the pricing test will not come until 2018.”

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