Dish Disney Deal Could Help Speed Cord Cutting Options

Mar 4 2014, 6:43pm CST | by

On Monday Disney and Dish Network signed a long-term agreement that could change the way we watch TV. The deal gives Dish the right to offer Disney channels, like ABC and as importantly, ESPN, online. Although the details haven’t been worked out, Dish could, at some point in the near future, sell the package of Disney channels to viewers who aren’t Dish subscribers as a standalone option.

This would be a huge development and one that other video providers would be pressured to imitate. Disney offers a slew of Watch apps that let authenticated users watch Disney shows on tablets and mobile phones. But the authentication is the key here. You have to already be a subscriber to a cable company, like Comcast or Cablevision, in order to access the app.

Under the new deal with Dish, the satellite provider has the right to deliver the stations online only.

Dish CEO Charlie Ergen ( who ranks 65th on our Billionaires list with $15 billion) hasn’t been shy about his OTT ambitions. OTT just means offering video service in a way other than traditional cable, FIOS or satellite. In a recent conference call he said:

At some point in time, at some point in time, the video business, as we know today, will change dramatically enough that it will go from the mature — the current business will go from mature business to a declining business. And hopefully, we’ll make up for that, right, in an over-the-top business or a wireless business or other businesses that make sense.

As a trade off to Disney for the extended rights, Dish will shut off its AutoHop function (which allows users to skip commercials) on Disney shows that are being watched within three days of the show airing live. That three-day window is important because right now, advertisers buy time based on how many people watch a show up to three days after it airs.

That’s a huge concession considering ABC and other networks had taken Dish to court over the service. Suddenly, AutoHop looks like more than just a clever service to appeal to subscribers, it looks like a bargaining chip.

So could Dish be about to challenge the cable status quo with a national online offering? There are a few stumbling blocks to that future. One is that Dish doesn’t have a real broadband offering. Subscribers who take advantage of the company’s online services, like PrimeTime Anywhere which allows authenticated users to watch live TV on their tablets and phones, are paying for a cable or telco company to provide broadband or phone service. Even if Dish offered a pure Internet video service, subscribers would have to pay separately for Internet access.

One possible solution: a partnership with Verizon. BTIG analyst Walter Piecyk says such a deal would make sense, especially now that Comcast and Time Warner have opened the video consolidation floodgates. Verizon only has 5 million video customers but it already has a broadband service and its getting into the OTT game with the company’s recent purchase of Intel Media’s online video service. Dish has 14 million customers, existing relationships with all of the major content players and the ability to use its AutoHop chip to negotiate online only deals. From his report (subscription required):

Verizon could negotiate with Disney by themselves but we suspect Ergen would be able to secure a better deal given the leverage of his larger customer base and a concession on hopper advertising. Verizon is obviously not going to buy Dish just for its better OTT rights but it is incremental. Dish also offers Verizon a service organization outside of FiOS areas that could help Verizon deploy wireless broadband and service an OTT customer base.

Dish could also be gobbled up by a deep-pocketed tech company looking to get into the video game. Apple and Google are playing around the edges of this space, a big purchase could make either company a real contender.

The bottom line is that customers who want to watch only the stations they really want (instead of a package of networks) and want to watch online instead of through a cable are becoming more important to video companies and that should ultimate be good for consumers.

Follow me at DorothyatForbes.

Source: Forbes Business

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Fitness app games no substitute for actual exercise
Washington, Aug 23 (IANS) There are nearly 31,000 health and fitness apps in the market and most of them use games to increase physical activity. Are they a real substitute for hitting the gym or walking in the park?
 
 
Green tea can protect spinal cord neurons
Beijing, Aug 23 (IANS) Polyphenols found in green tea are strong antioxidants and can protect your brain in case of a spinal cord injury.
 
 
Low-frequency waves help astronomers click faraway galaxy
London, Aug 23 (IANS) A team of astronomers has taken the most sensitive image of a galaxy 30 million light years away via a radio telescope with frequencies just above those of commercial FM radio stations.
 
 
Now, a self-maintaining fish tank
London, Aug 23 (IANS) A British student is close to launch the first fish tank that requires no filter cleaning or water changes.
 
 
 

Latest from the Network

Hannover sign French striker Jimmy Briand
Berlin, Aug 23 (IANS) Olympique Lyon's Jimmy Briand has joined Hannover till June 2015, the Bundesliga football club said. Hannover has strengthened their offence with the Frenchman, who received the jersey No.21...
Read more on Sport Balla
 
Fitness app games no substitute for actual exercise
Washington, Aug 23 (IANS) There are nearly 31,000 health and fitness apps in the market and most of them use games to increase physical activity. Are they a real substitute for hitting the gym or walking in the park?...
Read more on Apple Balla
 
Green tea can protect spinal cord neurons
Beijing, Aug 23 (IANS) Polyphenols found in green tea are strong antioxidants and can protect your brain in case of a spinal cord injury. Chinese researchers have found evidence that polyphenols can protect spinal...
Read more on Apple Balla
 
Low-frequency waves help astronomers click faraway galaxy
London, Aug 23 (IANS) A team of astronomers has taken the most sensitive image of a galaxy 30 million light years away via a radio telescope with frequencies just above those of commercial FM radio stations. The...
Read more on Apple Balla
 
Now, a self-maintaining fish tank
London, Aug 23 (IANS) A British student is close to launch the first fish tank that requires no filter cleaning or water changes. Suzy Shelley from Loughborough University's design school was inspired from her own...
Read more on Apple Balla
 
Santos allay Robinho injury fears
Rio De Janeiro, Aug 23 (IANS) Robinho could be fit for Santos' clash in the Brazilian Serie A football league with local rivals Sao Paulo slated for Sunday after a scan showed no serious damage to his right thigh. It...
Read more on Sport Balla
 
Arthur favourite to take over as West Indies coach
Paramaribo (Suriname), Aug 23 (IANS/CMC) Former Australia and South Africa coach Mickey Arthur has emerged as the favourite to take over as the West Indies cricket coach following the exit of Ottis Gibson earlier this...
Read more on Sport Balla
 
Bayern beat Wolfsburg 2-1 in Bundesliga opener
Berlin, Aug 23 (IANS) German football giants Bayern Munich started their 52nd Bundesliga season with a hard earned 2-1 victory over Wolfsburg, thanks to goals by Thomas Mueller and Arjen Robben at the outsold Allianz...
Read more on Sport Balla
 
St. Kitts has benefited from CPL: Prime Minister
Basseterre (St. Kitts), Aug 23 (IANS/CMC) St. Kitts Prime Minister Denzil Douglas said his country's hosting of matches in the Caribbean Premier League (CPL) will result in millions in earnings for the Federation of St...
Read more on Sport Balla
 
'Mardaani' - makes right noises about child trafficking (IANS Movie Review, Rating - ****)
Film: "Mardaani"; Cast: Rani Mukerji, Tahir Bhasin, Jisshu Sengupta and Anil George; Director: Pradeep Sarkar; Rating: **** A stellar cast only adds to this accomplished film's sense of creative propriety. "Mardaani"...
Read more on Celebrity Balla