SKY Perfectv! All Japanese Digital Tvs Have Built-In Tuners Preset for SKY Perfectv! Enabling Any Viewer to Easily Receive and Enjoy Program Broadcasts
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SKY Perfect JSAT Holdings Inc. Annual Report 2014 SKY Perfect JSAT Holdings Inc. SKY Perfect JSAT For the year ended March 31, 2014 Annual Report 2014 BRIDGE TO NEW ERA Who we are Fiscal 2013 Revenues Total ¥171.7 billion *The percentages are calculated on the basis of the figures of sales to external customers (including internal transactions) Multichannel Pay TV Space & Satellite Business Business 66.1% 33.9% SKY Perfect JSAT is the largest satellite-based multichannel pay TV in Japan and is the largest satellite communications operator in Asia. 01 Annual Report 2014 Multichannel Pay TV Business Media Center Customer Center The media center digitalizes program The Customer Center operators pro- content received from broadcasters for vide customer services in all business satellite transmission. The center also areas from processing subscription produces original programs for its applications, programming requests, broadcast channels. and contract modifications to sub- scription billing and payments. SKY PerfecTV! All Japanese digital TVs have built-in tuners preset for SKY PerfecTV! enabling any viewer to easily receive and enjoy program broadcasts. We provide SKY PerfecTV!, Japan’s Largest satellite based multichannel pay TV broadcast service. We provide a wide variety of content ranging from sports, movies and music to TV dramas and anime. SKY Perfect JSAT Holdings Inc. 02 Space & Satellite Business Mobile Station Mobile stations enable satellite communications from any location using transportable broadcast and Satellite Control Center transmission equipment, such as Mobile Satellite The Satellite Control Center car- antennas that can be mounted on Communications ries out operations to monitor vehicles. Mobile stations are often satellite connection conditions used for on-site gathering of data Mobile satellite communi- and quality and oversees the by TV news broadcasters and for cations enable Internet communications and other ser- communication connections in connections on seagoing vices utilizing the satellites as emergency situations. vessels and airplanes. well as monitors satellite condi- tions and controls orbital slots. Earth Station A terrestrial satellite com- munications facility. The coverage of our 16 communications satellites spans all of Asia, Oceania and North America. We are the largest satellite communications provider in Asia and Oceania. We provide satellite communications services to companies and government agencies in Asia and are actively developing global operations. 03 Annual Report 2014 MARKET & POSITION Multichannel Pay TV Business Largest subscriber base in the Japanese satellite pay TV market The Japanese multichannel pay TV market is slowly but steadily growing as a strong offering of a wide variety of specialty channel needs is appealing to diverse viewer interests and preferences. Multichannel Pay TV Market in Japan (Unit: Thousands of subscribers) CATV IPTVs 3.7 million subscribers 15,000 1,090 980 970 12,000 900 462 695 3,814 3,829 3,717 9,000 3,666 3,688 3,725 6,000 7,429 7,940 7,950 8,000 3,000 7,142 7,243 0 2009 2010 2011 2012 2013 2014 Years ended as of March 31 Sources: Materials from the Ministry of Internal Affairs and Communications, HOSO JOURNAL, and our own research. A Market with substantially more room to grow The Japanese Pay TV market still has substantial room to grow as the household penetration rate for multichannel pay TV broadcasts is still lower in Japan than in Europe and the United States. Penetration Rate of Multichannel Pay TV Major Pay TV Services in Japan (%) 100 J:COM TV 90 80 Type DTH DTH Cable TV IPTV (and FTTH) (and FTTH) (FTTH) 2.05 1.57 60 Subscribers* 3.11 n/a millions millions millions 50 40 channels 80ch 70ch 170ch 77ch (Basic) 20 24* STB Not required Required Required Required 0 JAPAN UK USA VOD SKY PerfecTV! J:COM Video Service * Multichannel pay TV subscribers for Japan as above refers to the sum total of On-Demand On-Demand Service multichannel cable TV subscribers, SKY PerfecTV! subscribers, IPTV subscribers (except for NHK BS subscribers). *The number of subscribers is as of March 31, 2014. See a November 2011 report from Goldman Sachs on household penetration rates for pay TV in the UK and US. SKY Perfect JSAT Holdings Inc. 04 Space & Satellite Business The No.1 satellite operator in Asia, No.5 in the world Our 16 satellites make us the largest satellite operator in Asia and fi fth in the world. Satellite Operators Ranking*1 in the Global Satellite Market Luxembourg Luxembourg France Canada Japan Fiscal 2013 Revenues*2 2,640 2,560 1,790 839 608*3 (US$ in millions) Satellites in orbit 55 55 37 10 16 *1 Companies listed here are fi xed satellite services (FSS) operators (exluding MSS operators) *2 The above revenues are in millions of U.S. dollars for the year ended Dec. 31, 2013, exluding SKY Perfect JSAT. Figure for the company is only for the year ended Mar. 31, 2014. *3 The revenue fi gure for SKY Perfect JSAT represents sales of its Space and Satellite Business only. The translations of yen amounts into U.S. dollar amounts are for the convenience of readers outside Japan and have been made at the rate of JPY102.92 to $1, the approximate rate of exchange at March 31, 2014. Source: Spacenews dated July 7th, 2014 Global market growth led by Asia and Oceania Satellite communications business is expected to continue growing, with Asia at the forefront of the growth. We will expand operations by leveraging our strong position as the largest satellite operator in Asia and enter into collaborations and partnerships with other operators to promote our global development. Demand Forecast in Global Satellite Market (2012–2019E) Satellite Transponders Demand Forecast in the world: Ku/C-band in TPEs* Western Europe Russia CIS North America 675 to 664 393 to 647 905 to 866 CAGR:(0.2)% Eastern Europe CAGR:7.4% CAGR:(0.6)% 334 to 420 CAGR:3.3% South East Asia ME & North Africa 419 to 618 545 to 585 CAGR:5.7% Sub Saharan Africa Australia & Pacific Latin America CAGR:1.0% 696 to 857 225 to 250 838 to 1,176 CAGR:3.0% CAGR:1.5% CAGR:5.0% * Equivalent to 36MHz Transponder Sources: Euroconsult – Satellite Communications and Broadcasting Market * : Service areas of SKY Perfect JSAT Corporation. Survey by way of Goldman Sachs’s discussion materials 05 Annual Report 2014 BUSINESS MODEL & STRENGTHS Multichannel Pay TV Business SKY PerfecTV! is a multichannel pay TV platform linking broadcasters and subscribers and with comprehensive operations in the multichannel pay TV business, from TV channel broadcasting to customer management and sales promotion operations. Business Framework Broadcasters/Program Providers Subscribers 0LATFORM3ERVICE Program/ Program Packages Offering various content from s4RANSMISSIONDELIVERYOFPROGRAMS Programs/packages that fit their entertainment such as music, movies, s-ANAGEMENTOFSUBSCRIBERS lifestyle and tastes. sports and documentaries to s0ROVISIONOFPROGRAMINFORMATION information, shopping and education s0ROMOTIONSTOATTRACTSUBSCRIBERS Service Portfolio SKY PerfecTV! offers three service menus based on reception environment and channel lineups and differentiates its products from cable TV and other providers by specially priced basic subscription packages as well as subscription contracts for as few as a single channel. Number of Subscribers*1 (Thousands) 2,055 1,570 90 Channels (HD) 70 (35) 170 (120) 150 (120) STB Not Required Required Required *1. The number of Subscribers is as of March 31, 2014. Content catering to myriad devices Users of our SKY PerfecTV! On-Demand (video-on-demand) service are steadily growing as we develop content, led by live broadcasts of J-League games (professional Japanese soccer) in particular, and other sports, catering to myriad devices such as smart phones and tablets. SKY Perfect JSAT Holdings Inc. 06 SKY PerfecTV! available to Unparalleled number of virtually every household HD channels All Japanese digital TVs have built-in tuners, enabling any The SKY PerfecTV! Premium Service offers some 120 viewer to easily receive SKY PerfecTV! broadcasts via a high-defi nition channels that meet the highest image qual- satellite antenna. This is a formidable advantage over cable ity expectations of viewers in a wide range of genres from TV and other operators where reception requires purchase sports, including 900 Japanese professional soccer league or rental of an external set-top box. games each year, to movies, music, and foreign TV dramas. Cumulative Subscriber Growth* for the Basic Number of HD Channels SKY PerfecTV! Service for TVs with a Built-in Tuner (ch) (*this figure does not include SKY PerfecTV! premium service subscribers) 150 (Subscribers) 2,500,000 121ch 120ch 2,000,000 100 CAGR: 23.2% 88ch (2008.4-2014.3) 1,500,000 72ch 1,000,000 50 500,000 15ch 0 0 Apr. 2008 Mar. 2014 Aug. 08 Oct. 09 Feb. 11 Sep. 12 Mar. 14 Viewership boosted by Advantages of satellites to seniors next-generation Ultra HD In Japan, free-to-air TV programming largely focus on creating Satellite broadcasting is considered the best choice for Ultra programs for the trend-setting younger viewers but Japan’s HD (4K/8K) since it is able to transmit a large volume of high aging demographic is boosting our subscriber numbers as resolution pictures at very high speed across the country. active seniors are attracted to our diversity of specialty channels providing entertaining viewing in their various areas of interest. Percentage of Subscribers by Age Distribution 1% 10S 12% 20S 60S 18% 23% 30S 50S 20% 40S 26% 4K broadcast with breathtaking high-resolution images 07 Annual Report 2014 BUSINESS MODEL & STRENGTHS Space & Satellite Business Our satellite communication system employs the Business Frameworkmework optimal method for communicating large volumes Data, Video, Audio of real time data to a multitude of reception sites, uplinking data from the ground to communications satellites in geostationary orbit 36,000 kilometers Signals above the equator then downlinking to reception sites back on earth.