In the Cord-Cutting Era, What's the Way Forward for Broadcasting Distribution?

In the Cord-Cutting Era, What's the Way Forward for Broadcasting Distribution?

Cutting the Cord
As digital streaming services gain ground, viewers are beginning to cut the cords that tie them to subscription television. Granted, the reports of television’s death have been greatly exaggerated over the years. Until recently, cord-cutting rates were proceeding at a crawl, as audiences—not least older consumers—stayed unexpectedly loyal to their television sets.[1]  Yet in 2017, the cord-cutting phenomenon picked up pace in the United States, reaching a level that could no longer be easily dismissed. But this is not confined to the US alone. According to research firm IHS Markit, markets across the globe saw declines in pay-TV subscriptions in 2017, including Japan, Hong Kong, and Singapore.[2]

Threat to Satellite
Satellite providers have arguably been more affected by cord-cutting than their cable counterparts. In the US, the top six cable companies lost about 660,000 subscribers in 2017, more than double the loss of some 275,000 subscribers in 2016, according to Leichtman Research Group, Inc. Yet the decline was even greater for the satellite TV companies—dominated by DirectTV and Dish Network - which lost a staggering 1.55 million subscribers in total - an all-time high for net subscriber losses.[3]

Cable’s Advantage
Cable operators have one strong advantage: their provision of terrestrial broadband. Consumers may be cutting television cords, but not their broadband connection—which is essential for digital streaming and hence, the centrality of broadband in today’s internet-centric world cannot be overemphasised. In 2017, the top US cable companies Comcast and Charter added a total of 2.7 million new broadband subscribers.[3]  In contrast, satellite companies do not offer broadband services, and, as a result, cannot offset the loss of video subscriptions as easily.

Staying in the Game
In the face of this threat, satellite players are not staying complacent. Many now offer digital bundles of their own, converting pay-TV subscribers to digital streaming TV subscribers. In 2017, for instance, DirecTV Now and Sling TV gained an estimated 888,000 and 711,000 streaming subscribers respectively.[5]  Yet these cheaper digital bundles do not command the same profits as cable companies’ broadband packages. To help boost margins, some satellite companies are exploring add-on services such as video recording or other local services.

Broadband by Satellite
One way for satellite companies to overcome the falling subscription numbers is to provide broadband services of their own. Satellites have an advantage in remote areas where a terrestrial, fibre-based broadband network would be too costly to install.

However, satellite-provided broadband suffers from latency issues, where the signal’s travelling time results in a connection lag. Though such delays are often very brief, even a few milliseconds can drastically disrupt a consumer’s viewing experience, given that streaming video requires an uninterrupted and robust connection. Recognising this, satellite providers are moving to remedy the situation by adding more low-earth and medium-earth orbit systems, thus reducing the time needed for signals to travel.

Providing Reliable Transmission
One of the solutions which SES offers is its Advanced IP Contribution.[6]  This software-based platform enables global transmission of broadcast-quality, high-definition (HD) video over private IP networks and the public internet. It can be easily installed and deployed quickly, with the software adapting to suit pre-configured or pre-existing hardware. To deliver the ideal audience experience, the solution uses advanced technologies to minimise errors in video transmission, tackling issues such as jitter, packet-loss and latency. The result? A smooth, disruption-free video transmission at an affordable price.

Get in touch with SES today to find out how you can use Advanced IP Contribution to bring your content to more audiences.

[1] The Economist: Cutting the Cord

[2] IHS Markit: Pay TV Subscriptions Declined in 14 Markets in 2017 as Cord Cutting Takes Toll, IHS Markit Says

[3] Axios: Satellite TV’s Tricky Future in the Cord-cutting Era

[4] Leichtman Research Group: 2.1 Million Added Broadband From Top Providers in 2017

[5] Leichtman Research Group: Major Pay-TV Providers Lost About 1,495,000 Subscribers in 2017

[6] SES: Advanced IP Contribution