News Analysis

by Virgil Labrador, Editor-in-Chief

The Satellite Industry Association(SIA) released its 2009 State of the Satellite Industry Report at the ISCe 2009 conference in San Diego, June 3rd. The results of the report show a 19 percent growth in overall world satellite industry revenues – with revenues totaling $144.4 billion in 2008. Global revenues for the satellite industry continue to increase, averaging an annual growth rate of 14.2 percent from 2003 – 2008. Meanwhile, Euroconsult is projecting the industry will grow 50% in the next decade.

 A diverse mix of military leaders, state disaster recovery officials and industry executives shared a range of insights on making the best use of the global satellite communications grid during the three-day ISCe conference organized by Hannover Fairs USA from June 2-4 in San Diego, California.

by Robert Bell

Executive Director, World Teleport Association

The total satellite industry today is estimated to produce about 1% of global communications revenues. Anybody care to try for 2%?  At the 2009 NAB Show, the  World Teleport Association and Society of Satellite Professionals International produced another year of their Content Distribution Forum on the show floor. Attendance was great despite the decline in overall exhibition traffic in this year of recession, which is having such an impact on the media business. (You can view video of the sessions at www.worldteleport.orgwww.sspi.org, thanks to the support of PSSI Global Services and Echostar.)

by Michelle Elbert

Since the Stimulus Bill passed early this year, countless private and public organizations have begun gathering information to apply for billions of dollars in stimulus grants and loans. However, these groups tend to underestimate satellite broadband technology’s ability to meet the goals of the US Congress and the Obama Administration. Not to be left out, some of the largest satellite companies have launched their own campaign to get the message out to Washington and the public.

by Bruce Elbert, President Application Technology Strategy, Inc.

with Michelle Elbert

Satellite TV is the biggest money maker for the overall satellite industry, creating investment, subscriber base and wealth. It rests on the solid revenue footing from a food chain that ranges from the end user paying for subscriptions to networks that collect from advertisers and affiliates like TV stations and cable systems. However, we are witnessing a new business model that provides a free service to end users who only need to buy reception equipment consisting of a dish with a digital set-top-box. This is not unlike C-band backyard dishes of the US from the early 1980s, before HBO began to scramble their signal.

by Elisabeth Tweedie

Not too long ago when someone got on the internet the chances were it was to do email or to search for information. In other words communication was mainly one to one and users were primarily consumers of information. With a few exceptions these were not time sensitive pursuits and were heavily biased towards downstream communications. Not any more. Many users have become participants creating, sharing and commenting on content. This will come as no surprise to anyone with children in their teens or twenties, as this change in usage is being driven by them – the Millennial Generation. Accounting for 48% of the world population makes them numerically the most significant generation so whatever they do has an impact.

by Tom Watts, CEO Watts Capital Partners

The current credit crisis and global recession has pressured satellite industry balance sheets around the world. The question, "Will they run out of cash?" has been asked with increasing frequency about many satellite companies that just months earlier looked forward to seemingly bright futures. While the public equity markets and many sources of debt financing have closed to satellite companies, the market for PIPEs, or Private Investments in Public Equity, offers a potential solution. In fact, the PIPEs market already has been the financial savior of at least one high-profile satellite operator.

Facing a US$ 175 million debt payment  Feb. 17, embattled US satellite radio operator, Sirius Satellite was bailed out by mogul John Malone of Liberty Media Corp. which has substantial interests in the leading satellite DT provider in the US, DirecTV and in the satellite broadband service, WildBlue. Sirius earlier announced that if it was unable to restructure its debt or come to an arrangement with a third party, it may have to declare bankruptcy. The Malone rescue was just in time and not only did it stave of bankruptcy for Sirius but a rival bid from DirecTV’s competitor, Charlie Ergen of Echostar, who has been buying up Sirius debt.

On February 17, 2009, US President Barack Obama signed the American Recovery and Reinvestment Act of 2009 into law which provides for a US$ 787 Billion economic stimulus package. Some of that money may filter to the satellite industry. Specifically, two items may be of interest to satellite companies-the US$ 7.2 Billion in grants to bring broadband internet service to rural areas and the US$ 1 Billion for NASA, which includes $400 million for space exploration.