[opendtv] Dish’s Ergen Says Satcaster Has Critical Mass of OTT Deals, Eyes Launch by End of 2014 | Variety
- From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
- To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
- Date: Fri, 30 May 2014 07:19:33 -0400
http://variety.com/2014/biz/news/dishs-ergen-says-satcaster-has-critical-mass-of-ott-deals-eyes-launch-by-end-of-2014-1201175489/
Dish’s Ergen Says Satcaster Has Critical Mass of OTT Deals, Eyes Launch by End
of 2014
Dish Network chairman Charlie Ergen said the company has landed over-the-top
rights deals with several programmers – in addition to Disney — for a viable
Internet TV service, but said the satcaster is looking for more partners and
expects to launch near the end of the year.
Dish sees an opportunity to market a slimmed-down TV package to “cord nevers”
or cord-cutters who are loath to pay $100 per month for a standard pay-TV
service, Ergen said on the company’s first-quarter 2014 earnings call. The
satcaster is aiming at a price point for the bundle of $20-$30 per month, with
a package that appeals to urban adults 18-35.
“OTT is an experiment,” Ergen said. “It’s a skinnied-down version of pay TV
targeted at a different class of people that we don’t believe we or Disney are
getting today.”
While the goal of the initiative is to generate incremental revenue on top of
Dish’s traditional satellite TV biz, Ergen said he isn’t sure whether Dish can
make money on the offering. “OTT is not going to move the needle this year for
anybody,” and probably won’t in 2015, Ergen said. “It’s a precursor to where we
think the industry is going.”
Ergen didn’t identify which programmers Dish has signed deals with. “We
wouldn’t launch with Disney channels alone… We would want to have enough
critical mass between general entertainment and sports and children’s
(programming) to launch (and) we believe we have enough to do that,” he said.
In March, Dish reached a broad, multiyear distribution pact with Disney, which
included unprecedented rights to offer linear and video-on-demand content from
ABC-owned broadcast stations, ABC Family, Disney Channel, ESPN and ESPN2 as
part of an Internet-delivered TV service.
The Dish OTT service will be accessible on a range of devices, including smart
TV, Google Chromecast, Roku boxes, videogame consoles and Kindle Fire tablets,
according to Ergen.
The Internet TV service can make more money for programming partners — and Dish
— by being able to narrowly target interactive ads to users, said Ergen. It
also reinforces Dish’s wireless strategy, as the company has spent six years
amassing spectrum for mobile Internet services, he said. As for whether the
Dish service might incorporate other OTT services, like Netflix, Ergen said the
company hasn’t made the decision yet.
Other companies developing virtual pay-TV services delivered over the Internet
include Sony, which announced plans at 2014 Consumer Electronics Show to launch
a trial of a service combining live TV and streaming VOD services like Netflix
in the U.S. later this year.
Ergen compared OTT to the state of dial-up at the dawn of the Internet. Dish
wants to get ahead of the curve so it can adjust to the changing dynamics in
the TV industry, as pay-TV subscriber growth levels off or declines. “It’s a
bit like the lobster that gets boiled… which is, you don’t really know you’re
dead and boiled until too late,” he said.
While the Dish OTT service will include VOD content, fast-forwarding will be
disabled so that users can’t skip ads. It also will be limited to a single
video stream per subscriber, under the terms of Dish’s agreement with Disney.
Also on the call, Ergen reiterated his concern about Comcast’s $45 billion bid
to acquire Time Warner Cable, which he said would be an “unprecedented
consolidation of broadband” that would create a “virtual monopoly” in the
market. Asked if Dish will oppose Comcast-TW Cable deal, he said: “We’re not
opposed to being opposed to something if it’s not the right thing to do.”
Meanwhile, Ergen addressed the reported talks between DirecTV and AT&T, which
is exploring a $40 billion or more acquisition of the No. 1 satcaster. DirecTV
has hired Goldman Sachs to advise it on the AT&T offer, the Wall Street Journal
reported.
The Dish chairman said “We have no shot” in outbidding AT&T or Verizon for
DirecTV. “We don’t want to pay a value for something that’s purely financial,
not strategic,” he said.
For Q1, Dish added a net 40,000 TV subscribers, versus analyst estimates of
31,000. The company posted quarterly revenue of $3.59 billion, up 6.5%, largely
driven by pricing increases, in line with Wall Street expectations of $3.57
billion. Q1 2014 net income was $175.9 million, down 18% from the year-earlier
period.
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