—Following a milestone carriage agreement with
the Walt Disney Co. locked up, and more deals with unnamed content owners
come soon, Dish Network Chairman Charlie Ergen is contemplating a
video-over-IP service that would launch by the end
of the year. Looking at the ever-expanding landscape for IP-delivered
video services, he clearly has little choice if he wants Dish to remain
Since May 2012, Dish Network has dabbled in IPTV video streaming;
offering foreign-language programing from around the world with no
satellite dish required. DishWorld IPTV uses a broadband Internet
connection to deliver top International programming to a TV set with a
compatible Roku player or directly to an IP-enabled device. So, the
company has experience with serving video globally and leveraging user
analytics in order to generate new kinds of revenue.
On a recent conference call to report the company’s first-quarter
2014 earnings, Ergen said he sees an opportunity to attract “cord
nevers” or cord-cutters that don’t want to pay for channels they never
watch. The over-the-top IPTV service would allow users to pick
only the shows they like and order them on-demand individually, or pay
for streamlined packages.
Dish needs a lot of variety in its content offering if it is to be
successful and says that although it now has several deals in place, it
is looking for more. The plan is to offer bundles of TV channels that
skew to urban adults 18-35 for $20-$30 per month.
Network has dabbled in IPTV before; offering foreign-language
from around the world with no satellite dish required.
”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.”
He also said he isn’t sure that Dish can make money on the new
service today, but sees it as an investment in the company’s future.
“OTT is not going to move the needle this year for anybody,” Ergen said.
“It’s a precursor to where we think the industry is going.”
When the Disney deal was announced in March of this year, Anne
Sweeney, then president of Disney/ABC Television Group and co-chair of
Disney Media Networks, told an audience at the Financial Times Digital
Media Conference in London that video delivery via IP was central to
Disney’s strategy going forward.
”In addition to providing Dish customers with access to our content
across multiple devices, this deal offers for the first time ever a pay
TV provider the rights to stream clear, linear video-on-demand content
as part of its internet delivered, IP-based personal subscription
service,” she said.
The Watch ABC, Watch ABC Family, Watch Disney Channel, Watch Disney
XD and WatchESPN apps are now available to Dish’s 14 million video
subscribers, who can access live and on-demand news, entertainment and
sports programming on computers, smartphones, tablets, gaming consoles
and connected devices. Access to Watch Disney Junior as well as
authenticated services from SEC ESPN Network and Longhorn Network will
launch later this year.
Under terms of the agreement, Dish customers can now watch live
programming from ABC Family, Disney Channel and Disney XD as well as
live network streams of ABC; which are currently available in New York,
Los Angeles, San Francisco, Chicago, Houston, Fresno, Philadelphia and
Raleigh-Durham. In addition, live events and programming from ESPN
networks—including ESPN, ESPN2, ESPN3, ESPNU, ESPNEWS and ESPN
Deportes—are now also accessible. ESPN Goal
Line and ESPN Buzzer Beater
are available on WatchESPN when those channels are in season. Video
subscribers are required to log in with their Dish online IDs and
passwords to access all services.
Network Chairman Charlie Ergen envisions new revenue from video services
offered over the Internet.
In addition to live streaming, Dish video subscribers can watch
current episodes of ABC and ABC Family original series the day after
they air online at ABC.com and ABCFamily.com
or on smartphones and tablets via the WATCH ABC and WATCH ABC Family
apps (which are available free in the App Store, Google Play Store,
Amazon Appstore and Windows Store). WATCH ABC is also accessible on
The proposed Dish Network IPTV service will be available to a variety
of IP-enabled devices, including smart TVs, Google Chromecast, Roku
boxes, Xbox One, Plat Station and other videogame consoles as well as on
the new Kindle Fire tablets, according to Ergen.
He added that the IPTV service could provide additional revenue for
both Dish and content owners by targeting specific households with
interactive advertising and other promotions. It also strengthens Dish’s
on-going wireless strategy, as the company has spent six years
acquiring spectrum for mobile Internet services, Ergen said.
While the Dish OTT service will include on-demand content,
fast-forwarding will be disabled so that users can’t skip ads—a major
provision of the agreement with Disney—and is limited to a single
stream per subscriber.
For Q1, Dish added a net 40,000 TV subscribers, and reported
quarterly revenue of $3.59 billion, up 6.5 percent. Q1 2014 net income
was $175.9 million, down 18 percent from the 2013.
In the face of declining TV service revenue and the proposed
purchases of DirecTV by AT&T, and Time Warner Cable by Comcast, it
would appear Dish has no option but to consider a national IP footprint,
whereby affordable video and data services could be offered to remote
areas not accessible by cable operators (a vision shared by