Dish Cuts NimbleTV to the Quick

NimbleTV is one of several startups trying to speed the progress of TV Everywhere. But Dish Network Corp. dealt a blow to the company earlier this month when it cut subscribers off from the TV source feeding the multi-screen video service.

As a result, NimbleTV is now scrambling to negotiate some kind of carriage deal with Dish. At the same time, it's dishing out refunds to stranded customers in its pilot New York market.

The business model for NimbleTV is quite unusual. While the company pays licensing fees to television programmers (unlike Aereo Inc.), it also relies on pay-TV providers -- in this case Dish -- for core content delivery. Specifically, NimbleTV transcodes the original video feeds from Dish, then streams them out to broadband customers over the Web for an added fee of US$20 per month. It also offers cloud-based DVR recordings of TV programs to subscribers. (See NimbleTV Takes Video Subscriptions Over the Top.)

While NimbleTV has no direct relationship with Dish, it's not really undermining the satellite TV provider's source of revenue. Customers still have to pay for Dish service before they qualify for additional features. It could even be argued that NimbleTV is making Dish's service more valuable by extending the satellite TV provider’s programming to multiple screens.

Unfortunately for the New York-based start-up, Dish doesn't agree that NimbleTV is lending a helping hand. In a statement to AllThingsD, Dish said "NimbleTV is not an authorized Dish retailer, and is not authorized by Dish to market or promote our services."

Currently, NimbleTV doesn't have its service provisioned with any other pay-TV providers, which makes it difficult to drum up fan support. After testing the service in New York, the company aims to expand to several other major U.S. cities, as well as the U.K., Germany and India. But those plans may be delayed now.

In the meantime, both the incumbent pay-TV providers and other startup companies are trying to gain traction with their own TV Everywhere services. If NimbleTV doesn't come up with a solution soon, it could find itself cut out of the market before it really gets started.

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— Mari Silbey, special to Light Reading Cable