HD isn't just a fixture on the showroom floor of your local electronics retailer. It's also hitting the heavens: Cable channels will now deliver HD signals via satellite. PanAmSat is in the midst of that transition with its Galaxy 13 satellite, which serves as its HD delivery hub (or neighborhood). Michael Antonovich, executive vice president, global sales and marketing, discussed the new hub and HD's impact on the satellite business with
Satellite operators always talk about neighborhood. What is it, and why is it important?
To our programmers and their customers, the cable operators, neighborhood matters. They like aggregating the programming in one orbital location. It makes it simpler for the operator because they don't need as many dishes to receive the channels. They want to maximize the money they're making off of their infrastructure.
The Galaxy 13 HD Neighborhood is PanAmSat's recent offering. How are things in that neighborhood?
It's going really well. In the last three weeks, we've signed three new HD channels for our HD neighborhood on Galaxy 13. One is Fox Sports Net HD; another is an unnamed Fox property, a general-interest network; and we just signed NFL HD, which is a big win. We're effectively at a dozen HD channels on Galaxy 13. Of the 23 cable HD channels we know that have launched, we've won 17. We've done a good job of creating that neighborhood with channels like HBO, Cinemax, Starz and TNT, among others.
How much room is left on the satellite?
It's highly occupied right now, but we can support another half-dozen satellite transponders. If we need to, we can move some customers around the fleet to get more inventory.
How many more cable networks will be in HD by the end of next year?
I would wager another 20 or 30 by 2005. Some of the existing networks will launch different flavors and variants of HD services. More international channels will try to get at the U.S. market. Even at only 5 million homes, it's a good market.
The basic-channel guys need to see how they can differentiate themselves. [They have to] decide if HD will do that. Discovery HD is one of the few general-interest basic channels that has launched in HD. They've commanded more market attention. Other general-interest or historical channels with a heavy film library will also look to repurpose content for HD.
If a network hasn't made the move to HD yet, how is it going to impact its satellite infrastructure and costs?
The transition over the next couple of years will involve facilities' making the transition from analog to digital but also having to go HD. For a number of them, they'll have to buy new inventory. Others can do a transition that will have both SD and HD on the same transponder.
What do you think HD will mean to your business?
I don't think the 20-30 new channels I mentioned means 20-30 new transponders. But it does mean some organic growth. Some of our existing customers had space available that they could convert to an HD lease. But most have had to start new inventory to launch HD. That has been very good for us.