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