Dish Paves Way for Streaming-Only Option

While stopping short of announcing plans to develop an Internet video product that mimics Dish Network LLC (Nasdaq: DISH)'s satellite TV programming service, company chief Charlie Ergen says Dish is talking to programmers about obtaining rights that would allow it to stream their cable channels to Web surfers.

Noting that some programmers such as Starz Entertainment LLC have experimented with delivering content to over-the-top (OTT) video services such as Netflix Inc. (Nasdaq: NFLX), Ergen told analysts on Dish's fourth-quarter earnings call Thursday that he expects more networks to grant rights to go OTT. (See Dish Network Bleeds 156,000 Subs.)

He warned that some programmers risk hurting their core pay-TV distribution business by striking deals with OTT providers, but that Dish is positioning itself to compete in a world where viewers rely on Web video for home entertainment.

"My gut feeling is that some programmers will grant some over-the-top Internet rights and probably undermine their core business, and I think Starz is probably a good example of where they sold some over-the-top rights for fairly inexpensively, and we know that's hurt our premium business for them far more than they’re getting paid for it," Ergen said. (See TW Cable Chief Disses Netflix Streaming.)

Comcast Corp. (Nasdaq: CMCSA, CMCSK), Verizon Communications Inc. (NYSE: VZ) and other Dish rivals have been attempting to negotiate rights to distribute online video from the pay-TV networks they license for products like Comcast's Fancast Xfinity TV Internet video service. Dish Network EVP Tom Cullen said his company is striking deals with major programmers that would give it the same rights as its competitors. (See 2010 Top Ten: TV Everywhere Moves.)

"Regarding programming contract renewals, yes, we are pushing for expanded digital rights. Not every programmer has made that decision, but we're comfortable that we will have parity at least with the other players in the industry as we move forward," Cullen said.

Few pay-TV providers have launched TV Everywhere online video portals such as Comcast's Fancast Xfinity, and some MSOs such as Charter Communications Inc. and WideOpenWest Holdings LLC (WOW) have complained that a lack of deals with programmers has hindered the launch of TVE sites. (See Charter's TV Everywhere Rollout on Hold.)

In addition to pushing programmers for rights to distribute online video versions of their content, Dish also relies on place-shifting hardware from corporate sibling Sling Media Inc. to allow its subscribers to watch content from their pay-TV subscriptions on Web and mobile platforms. (See Dish Starts Selling 'Sling-Loaded' HD-DVR .)

While it's not clear if major programmers such as Walt Disney Co. (NYSE: DIS), Time Warner Inc. (NYSE: TWX) and Viacom Inc. (NYSE: VIA) will cut deals with Dish and other providers to stream content directly to viewers, Ergen said Dish will be ready if it happens.

"I like that kind of environment. I like change. I like those things. I think as a company we're prepared for change," he said.

— Steve Donohue, Special to Light Reading Cable

DCITDave 12/5/2012 | 5:12:01 PM
re: Dish Paves Way for Streaming-Only Option

I was browsing Blu-Ray players the other day and noticed the every single manufacturer has made deals with Netflix, Starz, Blockbuster, and so on to provide some OTT service.

Is it an opportunity for a company like Dish to use that same distribution method to provide a complementary steaming service with a handful of live channels at a low rate -- say $5 a month?

If I had ESPN, USA, TNT and a couple of other things streaming + I had Netflix (total monthly fees less than $20), I'd be a happy camper. It wouldn't matter to me if it all came via my DVD player, a set-top or the TV itself.

The problem? I doubt ESPN would allow it. But it would be cool, right?


Jeff Baumgartner 12/5/2012 | 5:12:01 PM
re: Dish Paves Way for Streaming-Only Option

Interesting position Dish is now taking if it truly does intend to offer subscription video programming over the top.  They sort of do that now with Sling technology, which has somehow escaped any lawsuits from programmers claiming that the place-shifting technology retransmits their signals without permission. 

Dish doesn't go through the trouble to get the rights for the Sling scenario, but it will need to if it's going every going to try to sell OTT packages that are not bundled with its satelite TV packages.

However, the EchoSTar unit is taking a different tack with its Verizon LTE phone  deal... there are rights involved and it's going to be sold as a separate subscription package. JB

Jeff Baumgartner 12/5/2012 | 5:12:00 PM
re: Dish Paves Way for Streaming-Only Option

I think it presents a nice opportunity for just about any SP. The cable guys (okay, just TWC and Comcast at this point) are essentially going to amount to an app on connected Samsung TVs ( with TWC getting a badge on Sony sets later), but that leaves them woefully behind the kind of retail CE presence Netflix has.

Plus, as a first step, he MSOs are trying to offer a service that replicates their cable service in franchise areas, which doesn't give them much upside other than giving the FCC something to chew on as it considers turning Allvid into a proposed rulemaking.

But I also think it's a matter of time before they take their acts of of market, if they can get the rights.  They need to seek out video growth somewhere as they continue to lose subs in their franchise areas.

But if they can't get the rights to do it all out of market, it might make some sense to offer a more limited vod-only streaming subscription service, like you suggest.. and maybe try to get some traction with pricing and selection that undercuts or at least offers parity with Netflix. JB

SteveDonohue 12/5/2012 | 5:11:52 PM
re: Dish Paves Way for Streaming-Only Option

I think the major cable programmers may be more open to cutting streaming-only deals with Dish and other pay TV distributors once they begin to see their total subscriber growth stall or begin to decline. Until then, they may focus more on the TV Everywhere model of only allowing subscribers to view prevmium Web video if they subscribe to the pay TV version of a channel. 

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