Light Reading

No Mickey Mouse Deal for Dish

Alan Breznick
3/4/2014
50%
50%

With just a couple of pen strokes, the Walt Disney Co. and Dish Network have altered the landscape for the streaming of traditional TV programming to multiple screens inside and outside the home.

Walt Disney Co. (NYSE: DIS) and Dish Network LLC (Nasdaq: DISH) announced a landmark pact Monday night that will allow Dish to become the first US pay-TV provider to stream ESPN, Disney Channel, ABC, ABC Family, and other popular Disney-owned networks to broadband subscribers. Thus, the deal enables Dish, the third-largest pay-TV provider in the US, to establish its own, over-the-top (OTT) video subscription service that could potentially compete with conventional pay-TV services.

As spelled out in the Disney press release announcing the agreement, the deal "grants Dish rights to stream cleared linear and video-on-demand content from the ABC-owned broadcast stations, ABC Family, Disney Channel, ESPN, and ESPN2 as part of an Internet-delivered, IP-based multichannel offering." Further, "Dish customers will be able to access Disney's authenticated live and video-on-demand products, including WatchESPN, WATCH Disney, WATCH ABC Family, and WATCH ABC using Internet devices in the house and on the go."

While Dish officials have not spelled out when they will launch such an OTT service, they are clearly working on it. On the company's fourth earnings call with financial analysts late last month, Dish Chairman Charlie Ergen said the company is also negotiating with other major programmers for multiscreen streaming rights so it can go OTT. "When they're ready, we'll be ready," Ergen said.

In a note to clients Tuesday morning, Craig Moffett, a principal and senior analyst for MoffettNathanson, said it appears that a Disney-Dish OTT service would initially target just the 5 million to 10 million US broadband homes that don't subscribe to a traditional pay-TV service. That way, he said, Dish would deliver Disney content to more homes without cannibalizing Disney's huge cable, satellite, and telco TV customer base. "As we have heard in our prior discussions with other OTT startups, content owners have been focused on creating bundled structures that limit the risk of a la carte disintermediation," Moffett wrote.

Even if that's so initially, though, the genie will be firmly out of the bottle. Once such an OTT service gets off the ground, it will be difficult, if not impossible, for Dish and Disney to restrict it to just broadband-only subscribers. Plus, there would be nothing stopping existing pay-TV subscribers from simply cutting the video cord and then opting for the broadband video bundle instead.

The ground-breaking deal between Dish and Disney also sets the stage for Disney to strike similar multiscreen streaming deals with other major service providers, such as Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC), DirecTV Group Inc. (NYSE: DTV), Verizon Communications Inc. (NYSE: VZ), and AT&T Inc. (NYSE: T). Several of those provides have already indicated interest in going OTT at some point, especially Verizon with its recent purchase of Intel Media's OnCue cloud TV platform. (See Verizon Snatches Intel Media Assets.)

None of those providers may have the exact same leverage as Dish, which has been battling with Disney for months over the AutoHop ad-skipping feature of the satellite TV provider's Hopper DVR. In return for the OTT rights to the Disney channels, Dish agreed to disable the AutoHop functions for ABC content within The Nielsen Co. 's three-day TV ratings window. In turn, Disney agreed to drop its lawsuits over AutoHop. (See DISH Upgrades Hopper Software.)

But, like Dish, the other major pay-TV providers should still have plenty of clout in their negotiations because Disney is also seeking to gain greater carriage of some of its younger networks, especially its latest college sports networks, SEC ESPN Network. In the deal with Dish, for example, Disney won satellite TV carriage of such newer digital channels as Disney Junior, Fusion, ESPN Goal Line, ESPN Buzzer Beater, Longhorn Network, and the soon-to-be-launched SEC ESPN Network.

Likewise, the Dish-Disney deal clears the way for other major programmers to strike streaming pacts with the big pay-TV providers. Although several programmers have already moved in that direction, others have held off, fearful of cannibalizing their existing pay-TV customer bases.

So it's no longer a question of whether pay-TV providers and programmers will go over-the-top. The real questions are who will go first and how soon. And the answer to the first question appears to be Dish Network.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

(6)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
DHagar
50%
50%
DHagar,
User Rank: Light Sabre
3/6/2014 | 12:47:48 PM
No Mickey Mouse Deal for Dish
@albeznick, that would be interesting; they are certainly in a position to move that way.  They have several moves they can make to increase their market position - all favorable as I see it.

DHagar
albreznick
50%
50%
albreznick,
User Rank: Blogger
3/5/2014 | 9:42:21 PM
Re: No Mickey Mouse Deal for Dish
OK. So to me the big question is whether Dish will take this budding OTT service nationwide and actually compete with its own satellite TV service, as well as all other traditional pay TV providers. Wouldn't it be fun to see Charlie Ergen compete with himself? 
DHagar
50%
50%
DHagar,
User Rank: Light Sabre
3/5/2014 | 12:10:33 PM
No Mickey Mouse Deal for Dish
@kq4ym, interesting question.  I vote that it is that they are taking this road to retain customers plus attract the untapped market of customers not paying for TV.

DHagar
kq4ym
50%
50%
kq4ym,
User Rank: Light Sabre
3/5/2014 | 10:55:13 AM
Re: No Mickey Mouse Deal for Dish
One might wonder is the Disney/Dish deal was just a way to settle the lawsuit over Dish equipments ability to scrub commercials. Or, a way to allow Dish to gain or reatain customers who might be thinking of cutting the cable. But, unless a new tech overruns streaming content, the probable future of enterainment programming, the cable/satellite companies have to be alert to find ways to maintian their high profit margins.
DHagar
50%
50%
DHagar,
User Rank: Light Sabre
3/4/2014 | 10:41:44 PM
No Mickey Mouse Deal for Dish
@MikeP688 - Exactly, This Disney/Dish deal changes the context and level of competition.  I believe they will set a higher standard of options and the bundled combination will be highly attractive.  This could be a win/win for everyone.  While Comcast is focusing on dominating, this appears to be a new model of offerings.

DHagar
MikeP688
50%
50%
MikeP688,
User Rank: Light Sabre
3/4/2014 | 8:57:56 PM
..and Dish will have the bandwith to deal with it...:-)
Dish swept all the latest wireless spectrum access which will give it further capabilities as it broadens its reach and creates the alternatives,  I have to wonder how  the new "Comcast/TWC" juggernaut emerging will deal with this challenge. 
More Blogs from Breznick Unbound
Comcast co-founder and longtime CEO Ralph Roberts leaves behind a lasting legacy of business success and integrity after passing away Thursday night at the age of 95.
Light Reading and SCTE are joining forces to create multimedia content about a number of key cable tech topics, starting with DOCSIS 3.1, WiFi and IP video.
In LR's inaugural BTE Video Summit, speakers will look at how the video industry is changing and how service providers can cope with those changes.
At the Gigabit Cities Live confab in Atlanta, speakers and participants float suggestions for the nation's first Gigabit State.
Despite the dire warnings of top telco and cable execs, Gigabit service rollouts and announcements have only sped up since the FCC passed its Title II rules less than three months ago.
Flash Poll
From The Founder
Anshul Sadana answers questions from Steve Saunders, Light Reading's founder and CEO, about Arista's CloudVision, a global cloud network controller for workload orchestration and workflow automation delivering a turnkey solution for cloud networking.
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
LRTV Huawei Video Resource Center
Huawei ONS Product Demo

8|3|15   |   6:01   |   (0) comments


Huawei shows at Open Networking Summit 2015 in Santa Clara how its SDN and NFV solutions embrace openness.
LRTV Custom TV
End-User or Enterprise Benefits to the New IP

7|30|15   |   04:27   |   (1) comment


Andrew Coward discusses what the New IP means to end users or enterprise customers. He explains compelling reasons, including how every customer can get their own network, from the transformation to the New IP.
LRTV Custom TV
Network Visibility & the New IP

7|30|15   |   02:23   |   (0) comments


Mukund Srigopal provides an explanation of what network visibility is and how it is essential as service providers transition to the New IP. In addition, the importance of the network packet broker is discussed.
Between the CEOs
Video Exclusive With Basil Alwan, Alcatel-Lucent

7|24|15   |   26:44   |   (5) comments


Basil Alwan, President of IP Routing & Transport at Alcatel-Lucent, discusses virtualization, cultural challenges, the capex crunch and more with Light Reading founder and CEO Steve Saunders.
LRTV Custom TV
VDF: Enable the Financial With Mobile Money

7|20|15   |   06:53   |   (0) comments


Ian Ravenscroft discusses how operators can expand to occupy the entire digital services value chain through service innovation.
LRTV Custom TV
Telefónica on OSS Transformation

7|20|15   |   06:01   |   (0) comments


Jose Gonzales discusses the details of Telefónica's operation transformation program.
LRTV Custom TV
Judi Achmadi on Huawei's Cloud Storage Solution

7|20|15   |   03:33   |   (0) comments


Judi discusses the key business goals of TelekomSigma's public cloud service and how Huawei's solution helps them address challenges.
LRTV Custom TV
KPN Enlightening Digital Business & IT Transformation

7|20|15   |   06:19   |   (0) comments


Rob de Beer discusses the changes that operators need to make with service innovation now coming from the Internet world.
LRTV Custom TV
Stratus Telco-Grade Cloud Solutions & NFV

7|20|15   |   07:34   |   (0) comments


Ali Kafel from Stratus Technologies addresses high-availability concerns within the telco industry with a solution that enables telcos to provide high-availability and stateful fault-tolerance using a software-based approach.
LRTV Documentaries
The Six Million Dollar Business Man

7|20|15   |   01:52   |   (0) comments


Steve Saunders, publisher. A man barely alive after an acquisition malfunction imploded the company he founded. Gentlemen, we can rebuild Light Reading. Better, faster, stronger.
Between the CEOs
CEO Chat With Anukool Lakhina, Guavus

7|20|15   |   38:51   |   (1) comment


Guavus CEO Anukool Lakhina talks to Light Reading founder and CEO Steve Saunders about the role of operational analytics in the communications services and networking sectors, particularly in relation to IoT.
LRTV Custom TV
IBM's Flash Storage With Intel QuickAssist

7|20|15   |   03:18   |   (0) comments


Intel's Bev Crair and IBM's Eric Herzog discuss how IBM's V9000 Flash Storage System has helped customers around the world. Featuring real-time compression powered by Intel QuickAssist Technology, the V9000 is a next-gen flash storage solution.
Upcoming Live Events
September 16-17, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
November 5, 2015, Hilton Santa Clara, Santa Clara, CA
November 17, 2015, Santa Clara, California
December 1, 2015, The Westin Times Square, New York City
All Upcoming Live Events
Infographics
Network operators start seeing savings from NFV in the first year, according to a study by Affirmed Networks and ACG.
Hot Topics
Cable Feuds With Senate Dems Over STBs
Alan Breznick, Cable/Video Practice Leader, 7/31/2015
Verizon Small Cells Ready to Rock in Chicago
Sarah Thomas, Editorial Operations Director, 7/31/2015
RJio to Launch Its Own 4G Devices Brand
Gagandeep Kaur, Contributing Editor, 7/27/2015
Like Us on Facebook
Twitter Feed
September 22, 2015
Media Begins With “Me”
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Basil Alwan, President of IP Routing & Transport at Alcatel-Lucent, discusses virtualization, cultural challenges, the capex crunch and more with Light Reading founder and CEO Steve Saunders.
Guavus CEO Anukool Lakhina talks to Light Reading founder and CEO Steve Saunders about the role of operational analytics in the communications services and networking sectors, particularly in relation to IoT.
Cats with Phones
Comes With Free Phone Stand Click Here
Who says cats don't have any skills?