Ed Horowitz Interviewed by Scott Chase, Conference Chairman of SATELLITE 2011

Ed Horowitz, Director, U.S. Space LLC, discusses key developments in the satellite market

In just two months the world’s satellite-enabled marketplace will gather once again at the Walter E. Washington Convention Center for SATELLITE 2011. Conference chairman Scott Chase recently covered key developments with industry veteran Ed Horowitz. Ed will present the luncheon keynote address on Monday, March 14, during the Satellite Finance Forum and other SATELLITE 2011 pre-day sessions.

Interview with Ed Horowitz, Director, U.S. Space LLC

Scott Chase: As we celebrate 30 years of the SATELLITE show, you note that the decade just passed has been one of disruption. What do you mean by this?

Ed Horowitz: Let’s review what transpired since 2000: The transition to digital using MPEG 2 was virtually complete, leading to a period of softened demand. MPEG 4 started to deploy with an attendant potential to further soften market demand. However, flat screens came within reachable price points, first plasma, then LCD, now LED. Screen sizes expanded virtually overnight and all of a sudden HDTV, after 20 years of incubation, looked like it was ready for prime time. These factors triggered a massive transition, which, once again, increased demand for capacity. Today the deck chairs are again being rearranged with a transition to IP and maybe 3D.

Let’s not forget the operator consolidation/transactions that occurred. PanAmSat, Intelsat, GE Americom, New Skies, Wildblue, Satmex, Telesat, Iridium, Sirius-XM, and more underwent a major change in ownership or status.

DTH for video and broadband blossomed all over the world: India, Latin America, North America, Eastern Europe, CEMEA and South Asia. For example, Hughes Network Systems and WildBlue are poster children for broadband to the home. Eutelsat and Astra platforms for Europe and CEMEA, DirecTv, EchoStar in the Americas are all platforms for change to legacy distribution systems.

C-band gave way to Ku-band, X-band sputtered, Ka-band gained legitimacy.

SC: What were the seismic forces in the satellite-enabled marketplace that “changed the game” for providers?

EH: One, the U.S. government emerged as the largest single satellite user and customer. Two, IP and the Internet signaled the launch of the next revolution. Building on the experience gained in the DTH delivery of data in combination with terminal development (and, yes, I will say it again, the transition to IP) satellite is now ready to serve “things that move” with meaningful data rates. Examples include, in the air, UAVs (video and data) and broadband to planes, for ships at sea (IP video, voice and data) and on the ground, COTM for video and data.

SC: How have end-users benefited from these changes and disruptions?

EH: Ubiquity: Satellite has always been the most efficient and reliable one way “point to mass” distribution vehicle. Put a signal up once and it is within reach of anyone in the footprint. The transportation cost to reach an end customer is negligible. Choice: Content providers can now experiment and create additional niche content offerings. DoD users can instantly share situational awareness regardless of distance from the collection point.

SC: What will commercial and government customers require in the decade that has just commenced?

EH: General Cartwright, Vice Chairman of the Joint Chiefs of Staff, has challenged every corner of the military and its suppliers to reduce time to market and the time it takes to bring appropriate assets to any place on earth. This means finding new ways of obtaining capability, examining procurement cycles, building cycles, improving coordination between space and ground systems and terminal delivery, etc.

SC: What changes do you predict in customer competitive and business environments that will drive resulting change in the satellite community’s economic model?

EH: New entrants will challenge incumbent business models in unexpected ways. Think about what the remote control did for channel surfing, which, in turn, caused a sharp decline in the importance of channel position. Cable channels suddenly rivaled the status of the broadcast networks. Today’s new entrants include companies with no legacy infrastructure restrictions. At the top of the list we find Google, Apple, Netflix, Facebook and their equivalents around the world. But also think about what is going on within consumer electronics: TVs with browsers, Apple TV, Boxee. The revolution is global. The convergence between TV and computer is at hand. Add the potential of wireless devices supported by LTE, 4G. The environment for innovation is fertile. Lastly, let us not forget the generation that has grown up with this empowerment. They are unforgiving. Either you serve them as they want to be served or you die. Witness AOL and MySpace.

SC: Lastly, do you foresee any technology or operational improvements that will fuel the satellite solution as a cost-effective component of various network architectures?

EH: I think this is the wrong question. It suggests that satellites are peripheral devices. The question we need to work on is how we make satellite an indispensible component of a customer’s business or operational plan. I think this requires some sort of bundling.

Interview at Satellite 2011 website