Broadcasting Operators Opinion Satellite Vertical Markets

“Still launching, not just speaking”

Jean-Yves Le Gall, Chairman and CEO of Arianespace, underscores the evolutionary process of change in the satellite industry and broadcast vertical over the next decade


Jean-Yves Le Gall, Chairman and CEO of Arianespace

Arianespace is at the very centre of the world’s commercial satellite industry. While the TV industry has expanded wonderfully thanks to the growth and availability of satellite and cable broadcasting, I am not so sure we will see the same dramatic changes over the next 10 to 15 years.

In my own launch industry, we have seen some severe changes over the past few years. We have had companies struggling to achieve their business plans and entering Chapter 11 reorganisation, for example. This has had a dramatic influence on the launch business, creating many issues for satellite operators. While I hope we do not suffer too many of these sorts of challenges, we cannot ignore further brutal events like this in the future.

The very nature of the launch business takes time to develop the thousand and one technologies involved, and the risks are always high for any new entrant. In other words, I do not expect any newcomer to go suddenly from zero to making a huge impact in the business.

“Concepts [to be] flight proven”

Ten years from now my view is that the launch industry will have much the same layers as it has today. The barriers to entry are high, and our customers at Arianespace are cautious in their adoption of brand new and unproven technologies.

Indeed, there is a risk that some players might even exit the business given the neverending downward pressures on launch prices.

Technology improvements are taking place every day, and while some countries promise breakthroughs in their launch operating systems, or can enjoy lower cost component manufacturing, I do not expect these aspects to create any sort of revolution in the launch industry. It takes years and years to perfect a launch system, and while in 10 or more years we might see new developments emerge, I suspect that our clients and their insurers will want to see these concepts flight proven before giving them complete acceptance.

“Look at the past to predict the future”

I like to say that if you want to predict the future then look at the past. Go back in time 10 or 15 years and the picture was not so very different for the satellite launch industry to today. Ten years ago all my partners told me that the country to watch – so far as our industry was concerned – was China.

Today it is still China. There has been no real change despite the talk and work being done by other countries.

I’ve one other word on some of the competitive pressures we are said to face in the launch industry. For many years now, I have been saying “there are people who launch, and there are people who speak”. I want all our competitors to be successful, because competition is good for everyone, but year after year we are still launching, and not just speaking!

“Explosion of demand for broadband”

So far as growth in demand is concerned, everywhere on the planet the focus is on broadband, and satellites are tapping into this huge explosion of demand. Great work is being done by satellite operators everywhere and we will also continue to see replacement satellites being launched for DTH television. And all its associated needs. Indeed, it is quite likely that it is only satellite technology that can help supply the capacity that some people suggest is going to be needed, even in urban centres.

I certainly expect there to be a greater demand in the mobile sector for capacity, and the way teenagers are seemingly soaking up every space slice of bandwidth, the world is going to have find new methods to satisfy this demand. One theory suggests that we might need a new type of satellite constellation just to handle the growth in SMS demand.

It isn’t that SMS messaging is a new technology, only that the growth in demand is enormous. I don’t think this demand is the only one. Technology is growing so fast that I am confident that other demands will also come to the forefront, and I am equally confident that satellite-based solutions will emerge.

Just look at the way people are using iPhones and other ‘smart’ devices. People are expecting more and more functionality from these devices. It isn’t just a device for telephone calls or even SMS, but a complete receiver for just about everything you want to live your life. They are wonderful devices, but they need greater connectivity.

These ‘smart’ applications are just a year or two old. The next 10 to 15 years will see other developments that we cannot begin to imagine. I am confident that satellites will play their part in these, too.

Broadcasting is also part of this evolution. We are already seeing 3D television, and the Japanese are well ahead with their Ultra- HDTV developments. When you increase the size of a TV screen, and at the same time lower the cost of buying a unit, then consumers will buy larger TV sets. This means that the definition on these displays must also be improved.

One of our Japanese customers was recently showing a very large screen with a definition that’s quite unbelievable. I am sure this sort of even-higher definition will soon be commonplace around the word.

“Evolution, not revolution: Reliability is key”

At Arianespace, we are original in terms of innovation. We have added new launch systems to satisfy specific demands from clients. However, let us be clear on one aspect: most of our customers are not seeking innovation for the sake of innovation.

They just want readiness and reliability.

Our launch calendar backlog continues to grow, and for us the future is clear – customers want us to launch their satellites when they are ready, and with reliability. Of course, they speak about affordability, as would any client.

But nobody asks us for ‘next generation’ launches. They leave us to worry over those elements, and I do not see this changing.

We are very much focused on evolution, not revolution! Reliability is the key to our offer.

What is exciting about the television and media industry is being connected. I have to confess that I spend a lot of my time, perhaps too much time, reading my email and being in contact with my team and customers like everyone else. I enjoy having a window on the world in real time. It might be a new broadcast or financial news, a personal message from the family or a clip on YouTube.

This, to my mind, is the most important part of the information revolution, and being in direct contact.

Video connectivity is not so popular today but I see that changing. What video connectivity needs is an easier system, so that it becomes as easy as making a phone call. In theory, it exists today but it isn’t very user-friendly. This will change and I look forward to it.

Predicting changes in video demand, or even in hot topics such as social media, is very difficult. We can all see the impact on smart phones of the tiny Apps that make life so easy and fun. They barely existed two years ago, and so what might the next development be?

I am not the expert here, but I am confident that as long as there’s a demand for extra bandwidth, then satellites will be playing their part. And if satellites are around, then we’ll be around, playing our part in what I see as a very robust future. But

I am also fairly sure that while our business at Arianspace will grow, develop and change, so will the role of broadcasters.

Ten and more years from now I am confident that most of today’s major broadcasters will still be around, although their businesses might have changed quite significantly. The survivors will be the ones who, like us, adapt to changing market demand.

Excerpt from the book titled Even Higher: The Future of Broadcasting, by Chris Forrester

– Jean-Yves Le Gall is Chairman and CEO of Arianespace. Le Gall is also chairman and CEO of Starsem, the company’s European-Russian subsidiary in charge of operating and marketing the Soyuz launch vehicle.