Executive Profile: Priming The Digital Pump
March 4, 2002
DigitalTV: BT is a venerable company, but how long has BT Broadcast been around? What presence does it have in the U.S.?
Romm: In 1937 we did our first outside broadcast, a sports event via microwave back to the studio. In 1964 we did the first transatlantic service on Telstar. BT Broadcast Services as it is known today started in 1985 in the U.K. Since then the cornerstone of the U.S. business has been laid in the form of the transatlantic traffic. The growth of the U.S. was an offshoot of the fact that BT became independent of [British] government ownership and built an initial niche of services from Britain.
DigitalTV: The Communications Act changed significant things in the U.K. domestic market. Was that a catalyst for BT to ramp up its services in the U.S.?
Romm: It changed who our clients could be for the services we provide. In the U.S. we donât do a lot of services, but it changed our customer base.
DigitalTV: How has BT's presence in the U.S. been built up?
Romm: I've been here for six years and was the initial person who started the operation we have today. That presence now consists of a media center and teleport in Washington, DC. Those facilities provide fulltime service and are interconnected with our three stations in the U.K. and one in Paris.
DigitalTV: Few would argue that the U.S. had lagged behind Europe in the deployment of a fiber-optic cabling to replace copper wire. Are we starting to catch up?
Romm: It has lagged but Europe is also experiencing some of the same problems. That is, the cost for infrastructure is becoming extremely high. Within BT, we are moving more towards satellite-based delivery. We are also taking advantage of the Sky [British Sky Broadcasting] relationships we have because the [landline] build-out costs are so large that, nevertheless there is still going to be changeover from copper to fiber. But, we don't get very involved in the last mile delivery to consumers. We deliver programming content to those who are in turn going to handle the delivery to the last mile and consumers.
DigitalTV: In the emerging transmission infrastructure business, there are pipeline companies like Williams/ Vyvx, satellite distributors like Pathfire.com, and facilitators like Akamai. What is BT's niche? And, who does it consider its strongest competitors today?
Romm: We actually do all the aspects of what you described. We purchase about 2,200 hours of Vyvx capacity each month, outside of our own network. We do compete against them but we also use them. But, we also use our own fiber optic network and see fiber as a big growth opportunity for us in the future. And, we have our own compression kit and network management. As a satellite provider, BT Broadcast Services has an ownership of several satellite providers. For example, we have an 18 percent ownership of EutelSat and are the largest occasional use buyer of PanAmSat capability. We own and operate 45 of our own transponders. We have domestic satellite capacity on Telstar 6 and Galaxy. Akamai represents more the aspects of IP technology, a new direction. We resell their service as well as that of Digital Island. We do it because they can provide the net distribution capabilities. What we provide is the transportable earth stations and fly-aways as well as the satellite capacity.
DigitalTV: Your competitors provide an intermodal delivery service and some, like Pathfire, place their own proprietary server in the customer's affiliate stations to act as a sort of "catcher's mitt" to grab content. This is the case for NBC and ABC sports and sometimes news. Is this the sort of business you are in?
Romm: This is not exactly what we do. What we do is much broader than syndication of an hour here or there. We are in the transmission business. Eighty-five percent of my revenue is full-time, 24-hour-a-day, contribution and distribution of programming. It is the contribution for the foreign bureaus of CBS, NBC, and so on. We do all the distribution for the NBA to Europe and South America, for example. We contract on a long-term basis so that we can create the (transmission) networks appropriately. Where we do overlap a little bit with Pathfire is in the streaming area with content management services that we are rolling out. But our hardware is not at user sites, but at our media centers. The customer has the browser.
DigitalTV: What is your view of what the content distribution business will look like in the next decade? This decade is one of building out the infrastructure and creating the relationships and the new business models. What's the next stage?
Romm: One of the things that is becoming apparent is that the content management is not going to be handled with one particular platform for each competitor. There is a foundation that is that people want some storage, they want to be able to recall it, and each has specific needs and desires for how they want it packaged. And, they know what they want the front-end browser to look like. We shouldn't try to come out with a cookie-cutter solution. It's not going to work. How are we going to roll out Oprah Winfrey every day at 4 p.m.? How do we help someone working on Godzilla's head in NY while in LA someone else is working on his tail?
DigitalTV: What do you think will happen to the existing players today as we go forward? I mean the telephone companies, terrestrial broadcasters, cable operators, and so on.
Romm: Any way the content goes out we stand to benefit because it all speaks to the same phenomena: There is an increased number of channels and volume of content. The change that I see is the convergence between the three separate areas. Who ultimately is going to win remains to be seen.
DigitalTV: What advice would you give regarding long-term technology planning?
Romm: The local infrastructure and fiber ties need attention. And, coming into a digital router is key. There's a need to start investing in such a digital kit. One place that we often get hung up is that we get into a facility and we discover that they have an analog router and they're going to have to convert. Vyvx ran into a similar problem as they tried to roll out a digital fiber network. As they got into their digital points of presence, and found out that those locations didn't have digital routers, they couldn't complete the link. Furthermore, in today's economy, given the cost of digital routers, it is difficult to convince the financial people that it is a necessity to install one.
BT Broadcast Services
Douglas I. Sheer is a contributing writer for DigitalTV. He can be reached at [email protected]