DISH Networks

Will MPEG-4 Help DISH Stop the Bleeding?

Bernie — Mon, 25 Aug 2008 22:53:36 -0400

DISH Networks has made much noise with HD recently, culminating with their launch of an all HD package, branded TurboHD. Now comes word that they are the “first” pay-TV provider to go all MPEG-4 with standard and high definition programming. “New customers in 21 designated markets in the eastern half of the U.S. who sign up for any DISH Network HD package will be the first in the nation to receive the industry's most advanced delivery system on all televisions connected to DISH Network service,” said DISH in a company statement. The moves come on the heels of a couple dismal quarters for DISH, including 2Q08, where they lost subscribers for the first time in history.

So will these moves be enough? Maybe. You have to give DISH credit. They faced a major setback in HD earlier this year when they lost a satellite shortly after launch. They’ve managed to get past that hurdle. The MPEG-4 announcement makes for a great press release, but I’m not sure how much of an impact it will have on everyday consumers and their choice in pay-TV service. The TurboHD offering has a better chance of moving the needle for them. In addition, they announced new value programming options of $10/month and $20/month, tied to the DTV transition, echoing similar DTV exploitation strategies being pursued by cable competitors. DISH is feeling competitive heat from all angles, including telcoTV providers. It appears as if they are making some real efforts to meet those competitors head on, and reverse the trend of the past two quarters. Will it work?

DISH Networks is the Biggest Loser

Bernie — Mon, 04 Aug 2008 22:24:13 -0400

Sorry DISH, this isn’t a reality show. DISH revealed their first ever quarterly loss of subscribers, losing 25K subscribers in 2Q08. Seems like the competitive heat continues to rise for them. They’re losing subscribers to the competition, but also to an anemic housing sector, where slower housing starts and soaring foreclosure rates are creating a perfect storm which negatively impacts subscriber growth. It will be interesting to compare these results to DirecTV’s, since DISH cites HD competition as a reason for their decline as well. It makes their HD announcement from earlier this week all that more important. DISH will have its challenges to reverse the trend. It’s particularly scary for them because they are seen as a “value” play against their competitors. If these hard economic times don’t push subscribers to DISH over their more expensive competitors, what will?

DISH Goes All In With HD

Bernie — Thu, 31 Jul 2008 19:15:16 -0400

DISH Network announced some significant enhancements to their HD offering, including “…becoming the first in the industry to offer high definition programming in 1080p, the highest and best HD resolution available.” DISH also says they will have 150 HD channels live on their system by the end of the year, starting with the availability of 17 new HD nets on August 1. DISH is obviously trying to catch up with their chief rival, DirecTV, who has done a decent job of establishing themselves as the premier HD service provider. If DISH delivers on all of these promises, they will surpass DirecTV and their cable and telcoTV competitors with more HD options and features (at least temporarily).

The 1080p feature will only be available on MPEG-4 HD DVR receivers. It remains to be seen if this advantage can translate into tangible subscriber additions (and defections from competitors), since the average consumer probably doesn’t understand the difference between 1080p and 720p. DISH will have to do a fairly decent marketing job to get people to notice and understand the difference. But give them credit for trying something. DISH has seen its fair share of competitive challenges recently. They also experienced an HD setback through the loss of a satellite earlier this year. They’ve apparently managed not to let that set back materially impact their HD efforts. DISH also reiterated their new all HD programming package, labeled TurboHD, which is priced at $25/month. Will these moves help DISH recover from their recent underwhelming growth results?

DISH Networks Recovers From HD Setback

Bernie — Thu, 17 Jul 2008 10:33:16 -0400

DISH Networks moved quickly from their major March 2008 setback, when they lost a satellite designated to add HD capacity shortly after launch. Since then, they haven’t had the best of times adding new subscribers, and have been feeling competitive heat from their chief rival, DirecTV, and from cable and IPTV players as well. They hope to reverse these trends, and soon. They just got a new tool to help in that effort. They successfully launched EchoStar XI, a satellite designated to add HD capacity. The launch comes shortly after DISH made several HD announcements, including the addition of 17 new HD nets, and a new HD only programming package, branded as TurboHD. They’ll need it. Both DirecTV and Verizon FiOS are aggressively pursuing a 150 HD channel bogey, and cable competitors are notching up their HD efforts as well. The HD war continues.

AT&T Fires DISH: Let the Sweepstakes Begin

Bernie — Tue, 01 Jul 2008 22:56:12 -0400

AT&T notified DISH Networks that it will sever their existing resale arrangement at the end of this year. AT&T has been reselling DISH’s video services since 2003 and expanded the relationship further after their Bellsouth acquisition. It’s widely believed that through this move, AT&T is forcing DISH’s hand into a bidding war with DirecTV for a long term resale arrangement with them. AT&T will need a DBS resale partner, just like every major telco in the U.S. currently has. Despite all the hype surrounding U-Verse, AT&T will need a DBS partner to field a competitive triple play bundle for years to come. Even after the current billions of dollars that are committed to U-Verse have been spent, it will still only reach a large minority of AT&T customers. The mid to long term strategy for AT&T and other telcos is to use DBS to fill the gaps. Of course, AT&T may have something else up its sleeve as well – a possible acquisition of DirecTV. Is this DISH development a pre-emptive merger move, with DirecTV being the acquisition prize?

Telcos: More Net New Video Subscribers Than DBS

Bernie — Tue, 27 May 2008 22:52:12 -0400

An important milestone was reached for the first time last quarter. Telcos like AT&T and Verizon collectively added more video subscribers than DBS providers. AT&T and Verizon collectively added 411K new video subs, while DirecTV and DISH added only 310K. DBS has historically been the leader in new net video subscriber additions for the past few years, mostly at the expense of cable companies. Expect that trend to change. TelcoTV providers will probably take that quarterly “growth crown” for the next few years, as they ramp up their triple and quad play offerings. In fact, as Investors Business Daily accurately points out, telcos haven’t even begun rolling out in the largest cities yet. As they do, their growth rates should accelerate. Verizon’s recent news about offering FiOS in New York City, should it actually materialize, will be a good indicator on the growth impact caused by extending their reach into larger cities.

Interestingly enough, DBS providers are taking a double hit from the telco’s video progress. A good portion of the new telco video adds are coming at the expense of DBS, as evidenced by DISH’s poor first quarter for net new adds. In addition, telcos are slowing down there DBS resale efforts (AT&T – DISH and Verizon – DirecTV), as they ramp up their own video efforts. Those telco resale arrangements have been a good source of growth for DBS providers. As their telco partners get distracted with their own video launches, DirecTV and DISH will have to work much harder to replace those lost resale additions. Part of DirecTV’s strategy is to try to attract higher value subscribers with advanced feature portfolios and more robust HD content packages, hoping their higher ARPU will help replace revenues lost by smaller gains in net new subscriber additions.

DISH Networks Feeling Competitive Heat

Bernie — Mon, 12 May 2008 22:25:56 -0400

DISH Networks reported disappointing results for the first quarter 2008 in a SEC filing. DISH indicated competition from cable and telecom carriers are main factors in their 89% decline in subscriber growth, which netted only 35K net subscribers. In the 10-Q filing DISH says, “We believe that this declining subscriber growth has been driven in part by competitive factors including the expansion of fiber-based pay TV providers, the effectiveness of certain competitors’ promotional offers, the number of markets in which competitors offer local HD channels, and their aggressive marketing of these differences.” This report offers a strikingly different result from DirecTV’s recent results which reported 275K net new subscribers, a 17% increase. DISH will officially report their quarterly results on Tuesday.

DISH appears to be falling victim to both telco and cable triple play success, and to DirecTV’s continued HD superiority. DirecTV is maximizing its HD lead over all competitors, and in DISH’s case, their advantage appears to be widening. Add telco and cable’s triple play competitive advantage, and DISH looks like it is in for a rough few quarters. They’ll have a difficult time reversing the trend, because their historical value play of low cost is vulnerable to the savings perception of the triple play bundle. Adding insult to injury, they have no trump card like DirecTV does with HD and high end sports programming. They even face a HD setback, whose timing couldn’t be worse, caused by a recent satellite launch mishap. It all adds up to an ugly situation from a DISH investor point of view. Their competitors are salivating at the prospects of luring DISH’s 13.8 million subscribers.

AT&T Ditches DirecTV for DISH Networks

Bernie — Thu, 03 Apr 2008 11:15:55 -0400

AT&T has announced they are expanding their DISH Networks resale relationship to their former Bellsouth territory. Bellsouth had a resale arrangement with DirecTV, and AT&T let it expire after their acquisition of Bellsouth. AT&T has slightly over 2 million DBS subscribers from both their DirecTV and DISH resale arrangements. AT&T has also said they will reevaluate their entire DBS resale strategy in 2009.

Verizon Expands HD VOD

Bernie — Wed, 02 Apr 2008 13:32:12 -0400

Verizon announced the expansion of high definition VOD service to eight additional states. With the expansion, Verizon’s HD VOD service is now available in California, Delaware, Florida, Indiana, Maryland, Massachusetts, New Jersey, Pennsylvania, Rhode Island, Texas and Virginia. Verizon says they will average about 1,000 HD VOD titles per month. Verizon joins other "terrestial" video operators trying to leverage HD VOD against the perceived HD advantage for linear channels offered by DirecTV and DISH Networks.

700 MHz Results: Usual Suspects with a Twist

Bernie — Fri, 21 Mar 2008 09:16:31 -0400

The FCC released results from the 700 MHZ auction and it looks like the pre-release consensus was right. Verizon Wireless and AT&T were the big winners, with Verizon gaining a national 700 MHz footprint. They both bid a combined $16.3 billion, with AT&T bidding $6.64 billion for 227 B-block licenses and Verizon Wireless bidding $9.63 billion for the large C-block regional licenses. An additional 99 bidders won 754 licenses, including familiar names like Echostar (DISH Networks) and Cox. The outcome of the auction did not produce a viable national wireless competitor, as many had hoped, but there are some interesting twists.

Echostar bid $711 million for 168 E-block licenses, which covers a large portion of the U.S. Cox bid close to $305 million for 22 licenses in the A and B blocks. Their licenses will include areas of California, Virginia, Georgia, Florida, Louisiana, Arkansas, Kansas and Oklahoma. These two winners will probably be the most interesting to watch from a competitive angle. Echostar now has a conceivable way to offer broadband, although speculation is that they have their eyes on mobile video, which the E-block spectrum is much better suited for. Among smaller service providers, CenturyTel won 69 B-block licenses for $149 million, raising the potential for CenturyTel to launch its own wireless service. Several tier 3 carriers won licenses including Horry Telephone of South Carolina, Pioneer Telephone in Oklahoma, and PVT Networks in New Mexico. While the auction failed to bring a competitor to the national stage, and may have fallen somewhat short from an overall competitive standpoint, it did empower several entrants into the wireless space. Time will tell whether those entrants can actually have a competitive impact in their respective territories, but it will be interesting to observe over the coming months and years.