Integrating with JSAT under a holding company, and absorbing Space Communications (2007)

The plant built to create demand becomes the main act

This integration was different in character from the work the word “merger” calls to mind — making two things into one. It set two businesses with no overlap side by side under a holding company, so that the earnings of one could fund the investment of the other. It is no surprise that most of the industry saw no benefit when it was announced: from the broadcasting side there was an argument for reducing dependence on satellites, and from the satellite side it looked like nothing more than taking a large customer in-house. Yet set against the fact that the business of accumulating subscribers and collecting fees had turned to net decline in 2004, there was little alternative to preparing a second source of earnings.

For a satellite company born in 1985, multi-channel broadcasting had always been a device for creating demand to fill empty transponders. That broadcasting has now plateaued, and the plant that was supposed to exist in order to create demand has, forty years on, become the group’s main act. The 2026 decision to dismantle the holding-company structure and return to the operating company’s name is an expression of the same thing: there is less need to keep broadcasting and satellites standing side by side. What supports profits today, though, is defence and security demand, and commercial demand has yet to take off. Whether the 2007 choice to be the side that owns the plant will withstand the next shift in demand remains an open question.