SatCon Delivery Workshop

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SatCon Delivery Workshop
February 15, 2000
Atlanta, GA
SatCon WG White Paper
 Airline Survey - defines airline interest in
SatCon Delivery
• Live TV --- connectivity
• Increased content --- passenger choice
 Vendor Profile - who does what
 Reference Model- step-by-step walk
through the supply chain
Table of Contents - White Paper
1.0 Introduction
1.1 Objective
1.2 Methodology
1.3 Background & Participants
1.4 Issues
1.5 Glossary of Terms
1.6 Reference Model
Table of Contents - White Paper
2.0 The Nature of Satellite-Delivered Content
2.1 The Supply Chain:
Production Vs. Distribution
2.2 Content Tiers: “Premium”, “Basic”, & “PPV”
2.3 Time Frames in the Infrastructure of
Channels
2.4 Reference Model - Broadcast, Cable, &
Satellite TV
Table of Contents - White Paper
3.0 Copyright Law
3.1 U.S. Copyright: Private Home Use Vs. Public
Performance
Table of Contents - White Paper
4.0 Regulatory Considerations
Table of Contents - White Paper
5.0 Business Practices of Content Owners
5.1 Windows of Availability
5.2 Secondary Use
5.3 Rights Strategies
5.4 Distribution of IFE Rights
Table of Content - White Paper
6.0 Implementing Satellite Delivery
6.1 Pricing Dynamics
6.2 Administrative Costs
6.3 Advertising Costs
6.4 Editing
Summary
Airline Survey
80% of respondents were interested in both live
content and delivery of pre-recorded content via
SatCon
 60% see SatCon as replacing other forms of
delivery
 40% became interested in SatCon because they
thought content would be free
 100% now know that content requires license
fees

Copyright Laws...
 Distinguish between
• Private Home Use
• Public Performance Exhibition
 Grant exclusive rights to copyright owners
to perform their works publicly
 Require airlines to obtain licenses to utilize
satellite-delivered content onboard
1976 Copyright Act, Title 17
To perform a motion picture “publicly”
under the law means “to perform or display
it at a place open to the public or at any
place where a substantial number of
persons outside a normal circle of family
and its social acquaintances are gathered.”
- (section 106 [4])
Public Performance Licenses...
… must be obtained from copyright owners or
their beneficiaries
 Content Provider… seller
 Content Aggregator… buyer
A content provider sells content… a content
aggregator uses content to sell a service.
Deregulation...
… is resulting in a proliferation of content
… which in turn is fragmenting the audience
Prime time series drawing 20% or more of
sets in use:
1993
2000
35
6
Regulation
 National Radio Act in U.S. nationalized the
airwaves in 1927
 FCC was created in 1934 to regulate telephone
& telegraph common carriers, allocate radio
frequencies, & license radio & TV stations
 Significantly impacts content supply &
demand
 Governs technical standards such as ATV &
HDTV
Production Vs. Distribution
Two separate functions:
1. Production is more capital intensive
than distribution
2. Regulatory agencies limit broadcasters
from owning their own content
Direct Broadcast Satellite (DBS)
… an alternative delivery method for cable
television
 Cable & DBS offer the same content
 Originally, the content for cable & DBS was
all created for another medium
 Subsequently, content was created
specifically for cable & DBS
Movies, off-network
series
Bigger budgets; rights
widely-dispersed; IFE
market established
24-hour news
& sports
Medium budgets;
rights largely contained
by single source;
IFE market established
Special-interest,
single-topic,
documentary
Lower budgets; rights
either contained by single
source or available to
aggregator since IFE
not established
Movies, off-network
series
Bigger budgets; rights
widely-dispersed; IFE
market established
24-hour news
& sports
Medium budgets;
rights largely contained
by single source;
IFE market established
Special-interest,
single-topic,
documentary
Lower budgets; rights
either contained by single
source or available to
aggregator since IFE
not established
Channel Output Agreements
… all of the output of a channel can be
licensed from a single source.
 Content aggregators are limiting
acquisitions to channel-output agreements
 Content providers are retaining as
exclusive the rights to content with
established IFE value
Movies, off-network
series
High audience
viewership rating;
limited repeat factor
24-hour news
& sports
Medium audience
viewership rating; high
repeat factor & time
multiplexing
Special-interest,
single-topic,
documentary
Low audience
viewership rating; high
repeat factor & time
multiplexing
Reaching Critical Mass
… that level of content which assures
optimum quantity
Some channels make a lesser contribution
to critical mass than others due to time
multiplexing
Modified Content
Terrestrial Channels
IFE Channels
A
B
C
D
E
1
2
Critical Mass is the Critical Issue
Movies, off-network
series
24-hour news
& sports
Special-interest,
single-topic,
documentary
Content Licensing Issues Summary
1. IFE is a public performance exhibition governed
by copyright laws.
2. Satellite delivery of content is regulated by
government agencies whose policies impact IFE.
3. Rights to “traditional” IFE content are so widely
dispersed as to make their aggregation to match
satellite channel configurations largely
prohibitive, except on a channel-output basis,
outsourced to content aggregators & service
providers.
Content Licensing Issues Summary
4. Content available on a “channel-output” basis is
designed for residential consumption on a
different time-frame, and may require
modification for optimum IFE application.
5. Very little satellite-delivered content is truly live;
live TV and SatCon delivery may need to be
considered separately.
6. Reaching critical mass for 24, 30, or largerchannel systems involves a value proposition
which is subject to different opinions.
IFE Fortune Cookies
Content, not delivery,
drives IFE
Involve the core
competence of content
experts in your
planning.
The “value chain”
doesn’t work in IFE.
Find IFE success in
horizontal partnerships.
IFE Fortune Cookies
IFE cannot be
vertically integrated.
Those who try to
build a business using
someone else’s content had
better know the content
issues.
Content cannot be
commoditized.
Design the system
around the content, not the
content around
the system.
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