Paying for video from above

Updated on
The World

SAN FRANCISCO — The world may be mired in recession but people still seem willing to pay for television.

The latest evidence comes from the direct-to-home satellite broadcast industry, which began as a competitor to cable television in North America and Europe and is now widely available in emerging nations. Growing middle classes in these countries are driving the demand for television beamed directly from orbit.

Fifty-three percent of satellite capacity is now purchased by subscribers in regions like Central Europe, Latin America, Africa and large parts of Asia, where terrestrial broadcast or cable television may be nonexistent. Emerging nations represented 70 percent of the growth in demand for satellite television last year, a trend that is expected to continue, according to Euroconsult, a Paris-based market research firm that tracks the satellite television industry.

“You are now seeing satellite television in places like India, Romania, Kazakhstan and Nigeria,” said Rachel Villain, a Euroconsult analyst.

Only a few nations, like Iran and North Korea, prohibit direct-to-home broadcast, while in a handful of others, notably China, state-controlled television systems have not yet offered it. “Satellite television is now available and affordable almost everywhere,” Villain said.

Satellite broadcasting benefits from several trends that continue to make television the world's favorite diversion despite competition from newer media like the internet, said Derrick de Kerckhove, director of the McLuhan Program in Culture and Technology at the University of Toronto.

“Television remains what I call the collective imagination,” said de Kerckhove, whose program traces its roots to media theorist Marshall McLuhan, who popularized the notion of the global village.

“It is the most popular and prevalent way for people to identify as members of some community,” he said, adding that satellite television is one way the medium has adapted to find new audiences.

He said direct satellite broadcast is obviously ideal for reaching people in remote parts of the global village. Less obvious, perhaps, is the fact that direct-to-home broadcast is also a good way to deliver specialized programming to members of ethnic and linguistic minorities who are scattered throughout Europe and North America.

“We now have huge immigrant populations in the developed nations who tune in to satellite TV channels from their native countries as a way to reinforce their cultural identities,” de Kerckhove said.

Villain said there has been a strong growth of native-language entertainment and news programming made available through satellite broadcast to subscribers in Europe and North America.

“Ethnic channels become another form of unique content,” said Villain, adding that satellite television vendors in the developed world had “definitely benefited from the global diaspora.”

Euroconsult says paid satellite television has not yet suffered from the global recession but it does not think the satellite television industry will remain completely immune. With satellites costing $200 million or more to build and launch, and global credit markets remaining tight, the firm says fewer satellites could be launched.

But Villain said there is still enough capacity in orbit to offer new channels as a way to drive demand in the developed world, while the service is still so new in emerging nations that subscriptions should grow despite hard times.

A recent survey by Euroconsult found that the worldwide demand for paid direct television channels grew 9 percent in 2008. Eighteen satellites were launched last year, bringing to 109 the number of broadcast platforms now in orbit. More than 24,000 channels are now offered worldwide, and 2,900 were added last year alone.

According to Euroconsult, the number of satellite television subscribers worldwide has grown from 30 million in 1999 to 112 million in 2008, with more than 150 million expected to sign on by 2012.

“Television is perhaps the last thing that people will cut from their expenditures after necessities,” Villain said.