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
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
Now that USTelecom and a Texas-based ISP have filed the first lawsuits against the FCC's new Title II rules, will cable, wireless and other trade groups join in the fun?
The heads of AT&T, Verizon and Time Warner Cable all warn that the imposition of a common carrier regulatory regime could chill US broadband investment.
As expected, US cable broadband subscribers pass cable video subs for the first time in latest report from Leichtman Research Group.
While the No. 2 US MSO is accelerating plans for all-digital video and broadband speed upgrades, it's still desperately playing catch-up.
In yet another attempt to conquer the TV set, Google is launching its Android TV operating system for the big video screen. But will it succeed where other attempts have failed?
Flash Poll
From The Founder
Networks of the future will rely on "white box" switches and servers rather than proprietary hardware and that's going to alter the shape of the communications industry. Who says so? John Chambers.
LRTV Custom TV
The Benefits of HyperScale Clouds for NFV

3|27|15   |   01:50   |   (0) comments


Hyperscale cloud has been developed by the Internet giants to support the creation and delivery of software-based services at blistering speeds, and at the lowest possible cost. The original ETSI NFV vision was to adopt hyperscale cloud architecture and practices. This vision has become somewhat obscured along the way, due to misunderstandings about the hyperscale ...
LRTV Huawei Video Resource Center
eLTE Rapid Meets the Need for Speed

3|26|15   |   4:45   |   (0) comments


Designed especially for emergency and dedicated ad hoc local mobile communications coverage, Huawei's eLTE Rapid solution can deliver trunked voice, video and data coverage for multiple users over a 6km range and be set up in just 15 minutes, explains Huawei's Norman Frisch.
LRTV Huawei Video Resource Center
On Videos: Challenges & Opportunities

3|26|15   |   5:56   |   (0) comments


Most everything is now connected. And along with 4K and 4G technologies, everyone could be creating and broadcasting video contents. Users are expecting better video experience with any screen, anywhere and anytime. Operators will meet new challenges, but also see some big opportunities.
LRTV Custom TV
JDSU: Delivering Dynamic Networks for a Personalized Experience

3|26|15   |   5:59   |   (0) comments


Light Reading speaks to JDSU at Mobile World Congress 2015 about new solutions in the areas of HetNets, VoLTE, backhaul, virtualization, big data analytics, and real-time intelligence.
LRTV Custom TV
Smarter Service Chaining & New Ways to Benefit From Qosmos Technology

3|25|15   |   03:11   |   (0) comments


David Le Goff, director of strategic and product marketing at Qosmos, explains how the company has added application awareness to subscriber information to make service chaining more efficient and reduce costs for networking and infrastructure. In addition, Qosmos technology, which has been delivered as C libraries, is now also available as a virtual machine, ...
Between the CEOs
Qosmos CEO: The Changing Face of DPI

3|24|15   |   13:53   |   (0) comments


LR CEO and Founder Steve Saunders sits down with the head of Qosmos to talk about the changing state of the art in deep packet inspection technology, including its role in SDN and NFV architectures. Also, how the comms market is becoming more like the automotive industry.
LRTV Huawei Video Resource Center
FC Schalke Scores With Its Agile Stadium

3|24|15   |   6:23   |   (0) comments


Top German soccer club FC Schalke 04 has deployed a new, agile WiFi network from Huawei in its Veltins-Arena stadium and is reaping the benefits in terms of customer satisfaction and business opportunities, explains marketing chief Alexander Jobst.
LRTV Huawei Video Resource Center
Huawei’s Insights on Mobile Video

3|24|15   |   7:51   |   (0) comments


More people than ever are now watching videos on smartphones. Seventy percent of mobile traffic will be video traffic until 2018. In this video, Huawei's exports give their insights on mobile video in terms of business model, network planning and 4G network construction.
LRTV Documentaries
The Rise of Industry 4.0

3|24|15   |   02:26   |   (9) comments


Are you ready for the fourth industrial revolution? It's a big deal for influential operators such as Deutsche Telekom.
LRTV Huawei Video Resource Center
Getting Connected With eLTE

3|23|15   |   06:04   |   (0) comments


Trunked radio communications have entered the 4G LTE world, and with Huawei's eLTE solution, can now deliver a full range of data and video services as well as push-to-talk voice, explains Huawei's Norman Frisch.
LRTV Huawei Video Resource Center
Funkwerk’s on Track With Huawei

3|19|15   |   3:23   |   (0) comments


GSM-R technology specialist Funkwerk and Huawei have forged a partnership that is benefiting both parties, notes Funkwerk's Gottfried Winter.
LRTV Documentaries
How EANTC Tested Cisco's Virtualization Solutions

3|18|15   |   5:49   |   (0) comments


Carsten Rossenhövel, managing director of independent test lab EANTC, tells Light Reading founder and CEO Steve Saunders about the innovative approach his team had to take when validating Cisco's service provider virtualization and cloud solutions.
Upcoming Live Events
April 14, 2015, The Westin Times Square, New York City, NY
May 5, 2015, Hyatt McCormick Place, Chicago, IL
May 6, 2015, Georgia World Congress, Atlanta, GA
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 10, 2015, Chicago, IL
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
All Upcoming Live Events
Infographics
Hot Topics
AT&T Woos SMBs With Small-Scale WiFi
Sarah Thomas, Editorial Operations Director, 3/26/2015
The Rise of Industry 4.0
Ray Le Maistre, Editor-in-chief, 3/24/2015
Google Hires Wall Street's Most Influential Woman as CFO
Dan Jones, Mobile Editor, 3/24/2015
Just Don't Say IBM Is 'Relaunching' Networking Business
Mitch Wagner, West Coast Bureau Chief, Light Reading, 3/26/2015
Average US Broadband Speeds No Great Shakes
Mari Silbey, Independent Technology Editor, 3/25/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
LR CEO and Founder Steve Saunders sits down with the head of Qosmos to talk about the changing state of the art in deep packet inspection technology, including its role in SDN and NFV architectures.
Chattanooga’s EPB publicly owned utility comms company has become a poster child for how to enable a local economy using next-gen networking technology. Steve Saunders, Founder of Light Reading, sits down with Harold DePriest, president and CEO of EPB, to learn how EPB is bringing big time tech to small town America.
Cats with Phones
Interspecies Phone Love Click Here
"No, you hang up."
"No, YOU hang up."
Latest Comment