Bruce Springsteen sang “Fifty-seven channels and nothin’ on,” but that was when satellite technology was in its infancy. The World Teleport Association estimates that there were 13,000 satellite television channels in 2005; the number is projected to more than double to 29,000 by 2013.

That’s sweet music to the folks at RRSat Global Communications Network Ltd. (Nasdaq: RRST). The Omer, Israel-based company operates a “teleport” in southern Israel, with satellite dishes that bounce signals through any of several dozen satellites to reach over 300 television and 80 radio channels in more than 150 countries. 

RRSat managed to evolve with satellite technology. It was founded in 1981 by CEO David Rivel, who still runs the company, to import giant satellite dishes — up to 40 feet in diameter — and install them at Israeli TV broadcast stations.

In 1996, the Israeli government granted the company the first private license to transmit TV and radio signals by satellite, and the company’s life as a video distributor began. Today, RRSat accrues 75% of its revenues by sending TV and radio programs around the world through leased satellite transponders and fiber optic cables. It may beam programming from niche producers who cannot afford their own teleports, such as Fashion TV and the God Channel, to major networks like CBS and Fox. Or it may deliver programs on behalf of media giants such as Fox and CNN to distant stations like Russia Today, Thai Global Network and Al Jazeera.

It also offers content management services: RRSat digitally stores programming and advertising, customizes them (such as adding subtitles), organizes them into broadcast channels and beams the channels to specialized markets that include Russia, eastern Europe and the Middle East.

The total market for teleport services is about $13 billion, although the large broadcasters transmit most of their material themselves. RRSat and two privately owned pure play teleport competitors have a combined market share of just 5%, leaving much room to grow.

The other two competitors are larger than RRSat: Globecast, based in France, is a subsidiary of France Telecom, and has revenues about eight times that of RRSat. Arquiva, based in the United Kingdom, has revenues estimated at three times that of RRSat. But a November 2007 report by Susquehanna Financial Group asserts that “the location of RRSat’s teleport in Israel affords it an unmatched cost advantage” over those two, because its teleport can reach 95% of the world’s population in just one satellite hop.

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