SES: Satellite Television Gaining On Cable Television in Germany

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PARIS — Satellite fleet operator SES on Sept. 6 said satellite television in Germany — SES’s most profitable national market — has almost caught up with cable television in subscriber totals, with satellite reception growing and cable television declining in popularity.

In addition to its place as a key market, Germany is the focus of special attention for Luxembourg-based SES because of the switch-off of analog television there on April 30, 2012 as Germany goes all-digital. Analog television uses much more satellite capacity per television channel than does standard digital TV, meaning at the cut-off date, SES will find itself with a large number of unused satellite transponders.

As of late July, SES was beaming analog broadcasts into Germany on 33 transponders, mainly from satellites at SES’s 19.2 degrees east orbital slot. Another 32 transponders were providing digital services in Germany.

How to find replacement customers for these analog transponders after the government-ordered switch-off date is a concern that SES management addresses with investors on every quarterly conference call and analyst meeting.

For now, the company has resold nine of these 33 transponders to broadcasters to use after April 30. Seven of these nine transponders have been booked for use starting later in 2012, with two others to be used starting in 2014, according to SES.

That leaves 24 transponders carrying analog television, which usually means one channel per 36-megahertz transponder, compared to 10 channels or so for standard digital television, and around five channels per transponder for high-definition television, depending on the signal compression used.

SES has told investors that it expects these 24 transponders all to be sold by sometime in 2016, meaning that for a period of 30 months, some of them will be vacant. The company expects that between analog switch-off and the time it has resold all the analog transponders, it will have incurred a revenue drop averaging 40 million euros ($58 million) per year.

Already 85 percent of German satellite customers have moved to digital broadcasts, with veteran customers replacing their analog receivers with digital models. SES said that for 99 percent of customers, only the receiver needs to be replaced. These can be had for as little as 30 euros.

Wolfgang Elsasser, managing director of Astra Deutschland, said German customers have available to them some 270 German-language programs by satellite, of which more than 30 are broadcast in high-definition format.

“We are confident that the remaining analog households will switch to digital,” Elsasser said in a statement accompanying the survey. “We recommend [that analog customers] switch to an HD receiver straight away.”

As German households move to digital television before the analog shut-off date, the business case for continuing to transmit in analog has deteriorated. In its Sept. 6 announcement, based on research conducted for SES and for German broadcasters by TNS Infratest, SES said only 2.5 million German homes still receive analog satellite services.

Spread over 33 channels, that works out to just 75,800 viewers per channel. Given that each analog channel has to support the multimillion-euro annual cost of a satellite transponder, the incentive for broadcasters to move to digital is clear.

The survey, which consisted of interviews of 8,000 Germans between May and June, found that satellite television’s reach had increased by 3 percent, to 17.1 million households, since December. During the same period, cable television lost 260,000 subscribers, and its market share stands at 17.9 million customers, according to the TNS Infratest survey.

The drop in overall cable subscribers came despite the increase in subscribers to digital cable programming. These customers totaled 7.8 million, up 13 percent from late 2010.

Digital terrestrial television has fared even worse, with its subscriber base dropping by 15 percent, to 1.7 million, the survey found.

Internet television, known as IPTV, remains small but now has more than 1 million viewers in Germany, up 12 percent from late 2010.