What will the role of satellite be in the delivery of UHD content?

Nicolas Moulin-Fournier, ESOA – Member of the Ultra HD Task ForceEutelsat - Head of the Connected TV Program

@ESOA_SatOp#tvconnect

TV connect, London, April 30th 2015

2

Who is ESOA?

Flying over 182 satellites,

Global coverage of communication

services,

Covering > 99 % of the world population

EMEA Satellite Operators Association

20 satellite operators (+14 supporting members)

The world’s 4 largest satellite operators are EMEA companies

CIS

3

Ultra HD is pushing the limits of user experience in all dimensions

The nextbig thing !

UHD specs

Ultra High Definition TV offers an unrivalled new TV viewing experience

(vs HD)

Higher resolution,8 M pixels 4x pixels

Higher frame rates,60 or 120 fps 2x or 4x

More and deeper colours

Higher Dynamic Range (HDR)

Immersive video and audio

25% more bits/pixel

4

End 2014

Still low unprompted consumer awareness, prompted awareness in WE at 64 %

Consumers recognize the superior image quality versus SD and HD

Consumers are seduced by UHD experience but expect UHD-TV to be a costly, premium product

Genre expectations include:movies, series, documentaries and sport

Significant difference in markets maturity:

UK, Germany, Poland: ready to invest / subscribe

France, Italy: need more communication

Source: Eutelsat 4kTV Focus Groups – Q4-2014* Source: Eutelsat TV observatory WE 2014

Viewers are feeling the difference

5Eutelsat 4kTV Focus Groups – Q4-2014

Viewers are feeling the difference

“… I’d buy a 4K TV, but 4K broadcasts will only be available in 3 years!”

Poland, 41-65yo - PTV

“This must be 4K – already proposed by Sony and Samsung but no broadcasting available for the moment.”

Germany, PTV

”You could see every detail, each drop, even ashes falling off the building, it’s all shown, faces of the firemen. Slow motion is also a plus, it features all the details even better.”

Poland, 41-65yo - PTV

“They look like 3D pictures.” Italy, male, NPTV

“An amazing view of a scene that I felt I could touch, almost smell, feel. Really realistic. Made me want one of those TVs.”

Female, NPTV

“It was a top quality picture, unbelievable, new technology.”

Male, PTV

6Strategy Analytics, Feb 2015, Eutelsat Estimates

TV-set sales are heralding a big commercial success

UHD shipments, estimatesMio units

UHD TV households ownershipHousehold penetration

2013 2014 2015 2016 2017 2018 2019 2020

20%

10%

0

50%

40%

30%

Af. ME

ASPA

CEEu

Latam

WEu

NA

1723 28 31

10

18

28

28

9

19

10

55

2014

28

1

121

LATAM

ASPA

100

+97%p.a.

+46%p.a.

2018

Europe

72

2017

NAM

2016

47

MEA

2015

7

But “big thing” means also bigger volumes of information

15-30 Mbpsper channel

> 10 GB/hour

Ultra High Definition TV (UHDTV) will offer an unrivalled new TV viewing experience

Higher resolution

Higher frame rat

More and deeper colours

Higher Dynamic Range

Immersive video and audio

8

UHD would face the limitations of OTT, if distributed over the Internet

Growing distribution costs

Inability to reach the entire population

Lower quality of service, especially at peak hour

9

Growing distribution costs

Lower quality of service, especiallyat peak hour

UHD would face the limitations of OTT,if distributed over the Internet

Inability to reach the entire population

Fast broadband (>30 Mbps) penetrationSubs as a % of households, 2014

10

Lower quality of service, especiallyat peak hour

Source: European commission, Eutelsat analysis

UHD would face the limitations of OTT,if distributed over the Internet

Growing distribution costs

Inability to reach the entire population

Lower image quality …

… or no video service at all

Fast Broadband penetration % household, 2014 (30+ Mbps)

0

81011

2227

29

Europe15%

ITFRESDEUK

21%

PLSEPTNL

40%

OTT distribution cost pattern

Cost

# viewers

Satellite

OTTSwitching point

to satellite

11Source: European commission, Eutelsat analysis

UHD would face the limitations of OTT,if distributed over the Internet

Growing distribution costs

CDN costs increase with the audience

Unsustainable for UHD

Inability to reach the entire population

Lower image quality …

… Or even no video service at all

OTT distribution cost patternFast Broadband penetration 30+ Mbps (2014)

Cost

# viewers

Satellite

OTT

Lower quality of service, especiallyat peak hour

Broadband networks saturated by OTT demands

Internet at peak hour

Adaptive bit rate that transforms your UHD content in HD of SD content

0

81011

2227

29

Europe15%

ITFRESDEUK

21%

PLSEPTNL

40%

12

Internet is the wrong horsefor mass-market commercial launch of Ultra-HD

Start UHD service on OTT Addressing a portion of subscriber base

scattered around the territory

UHD service: nation-wide promise

New digital divide

Still 38% homes not passed by NGA

Only 15% subscribing to it

Frustrating non-eligible subscribers

Nation-wide marketing Very high cost / eligible subscriber

But

Wait that fibre reaches all your subscribers

Wait 2020 at best (€ 150 bn investment) …

… while you can offer the same service TODAY, with an existing infrastructure

Or

13

Satellite is the right distribution for mass-market service

Status of Ultra-HD per infrastructure

BANDWIDTH

AVAILABILITYREACH IMAGE QUALITY TIMETABLE

Satellite

Cable

DTT

IPTV

OTT

14

Satellite can be used as a feed to other distribution networks,thanks to its available bandwidth and ubiquity

Status of Ultra-HD per infrastructure

Ultra HD Ultra HD Ultra HD Ultra HD

15

Nov 2014: Nation-wide introduction of UHD VoD service,preloaded via satellite

Later in 2015launch first channels

Launch of 4K set top boxes

1st WW commercial UHD channel (Star Sports), ahead of ICC Cricket World Cup

March 2015: 7 matches broadcasted

Real UHD: guaranteed quality of service

100% subscribers reach: existing set-top-boxes are compatible with UHD service

Mass audience reached with state of the art TV quality for a leading sport event

Nation-wide commercial launches of Ultra-HD have started on satellite

16

“Sky delivers first 4K TV broadcast in UK”

“Sky Germany launches UHD demo for IFA 2014”

“Over-the-air 4K broadcast of (Roland Garros) French Open”

“Rai screens 1st UHD Documentary (Rossini) and “La Boheme””

“Red bull gives wings to 4K”

“Tricolor TV launches pilot 4K channel”

Ultra-HD distribution based on satellite feeds with Cable/IP (Vodafone, ANGA, PIKE…) and DTT (TDF) players

…

EMEA actors are actively preparing Ultra-HD launches over satellite

17

Analysts expect satellite to drive Ultra-HD roll-out

~20 Ultra-HD channels expected in 2015-16

About 60% channels from North America,

Europe

70% of UHD channels distributed via DTH

platforms,

Number of Ultra HD Channels by platform#

Northern Sky Research, 2014

561 DTH

260

23

20192018 2020 2021

15

2024 2025

821

63

20232022

Others707

2015 20172016

106161

234

336

484

585

18

Open standard for advanced TV

Latest version of HbbTV standard includes push-VoD

Growing adoption of the standard

18

Current deployment 1.x

Testing

V2.0 to be deployed CE manufacturers

Broadcasters

…

HbbTV Association

…

19

HbbTV push-VoD: key for free-to-air broadcasters to offer on-demand Ultra-HD

Flat-fee distribution cost, irrespective of the audience

Guaranteed quality of service

Broader reach of VoD service (100% population reachable)

HD and UHD services to all viewers (beyond broadband footprint)

Push-VoD benefits

Free-to-air broadcasters

Access push-VoD distribution model (standard feature of TV sets and set top boxes)

Small pay TV platforms

CE economies of scale

No proprietary push-VoD technology to integrate

benefits

20

Ultra HD is here to stay - the next frontier in TV experience, expected by the end users

Satellites: ready to broadcast UHD content, direct-to-home or to other infrastructures

1st DTH commercial services have started

Satellite: the right distribution for nation-wide UHD services, thanks to

Large availability of bandwidth

Massive reach, and the ability to deliver UHD content irrespective of Internet speed at home

Constant quality of service, guaranteeing a UHD experience

Cost effectiveness, flat fee distribution cost irrespective of the audience

Conclusions

20

Thank you

Nicolas Moulin-Fournier, ESOA – Member of the Ultra HD Task ForceEutelsat - Head of the Connected TV Program

@ESOA_SatOp#tvconnect