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Dish Network Making Hay With Enemy Of My Enemy Is My Friend Strategy

We live in interesting times. Comcast is buying Time Warner, Aereo's existence is on the line in court, Netflix is cutting deals with Comcast, Apple is trying to find a seat at the telecom table, and Dish Network has turned a new leaf as it continues to go on the offensive on adding upstart sports channels amid talks of a sports television bubble and a growing reluctance by chief competitor DirecTV to do the same.

What started as what many thought of as a "rogue" deal in which Dish shocked many by adding the Pac 12 Network while DTV was allegedly circling a deal (word is that by "allowing" Dish to "cut the line", talks between Pac 12 Network and DTV have been mostly non-existent while the relationship has become toxic), Dish has followed up by adding the Longhorn Network as well as the yet to launch SEC Network.

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Suddenly college football and basketball fans with DTV aren't missing out on just a singular channel and conference, but rather 3 2 1/8th channels of college programming. Yes that was a jab at the Longhorn Network and probably my last as the one trick pony has been successfully bundled/muscled onto millions of televisions by owner, ESPN. To me it's basically as impressive yet unnecessary/unproductive as a guy at a bar showing you he can rip a phone book in half.

This is an interesting development for many reasons, mainly because Dish seems to have found a strategy in adding sports subscribers from competitors, once a weakness for the company and something DTV had somewhat of a monopoly on.

Historically one of the first to pick up new channels (with Dish being towards the back of the pack), the roles have switched to some degree and with yesterday's announcement coming a full 6 months before college football season, Dish may find themselves reporting significant subscriber gains throughout 2014, many of which may come at the cost of DTV.

While the LHN and SEC Network came as just a smaller part of a much broader deal between Disney and Dish, the timing gives Dish plenty of lead time to target fans in the SEC footprint as well as Texas and the Pac 12 footprint. That's an awful lot of fans to potentially court in addition to a long period to do so as often deals for yet to launch networks occur in the weeks before or after the launch meaning many customers are unable to make a switch with little notice or lead time. 

DTV's supposed trump card of having the Sunday Ticket exclusively is also interesting as we were told months ago that an extension was basically done yet it's been mostly quiet since. While I don't think you'll find anyone predicting an extension isn't in the cards, a hiccup here would be absolutely disastrous. In fact in light of Dish's new deal, it's possible the NFL gets a little extra leverage with DTV given some football/basketball fans who prefer a particular conference/school may already be contemplating making the switch given DTV has been largely unenthusiastic about carrying any of these channels. Essentially DTV's reliance on the Sunday Ticket to acquire and retain customers has reached a new level.

Another thing to ponder: Is Sunday Ticket really all that it's cracked up to be? The package is getting diluted as more games move to Thursday Nights but more importantly Dish and others now offer NFL Redzone. Sure the displaced NFL fan is going to want the Sunday Ticket to watch their team, but how many Sunday Ticket subscribers rely mostly on The Redzone Channel mainly for fantasy implications and hence could stomach losing the bevy of NFL games (and save some money) by switching to Dish or another provider tempted by additional college programming as well.

But Dish isn't just adding channels that DTV won't add. In Los Angeles, they're saving a good amount of money by not splurging on the new channels carrying the Dodgers and the Lakers (DTV carries the Lakers channel and is believed to be in talks for the pricey Dodgers channel). While you could chop up Dish's decisions based on individual negotiations, clearly it's part of a larger strategy trying to find value as well as opportunities in certain areas.

"They are hanging on to an old model," Shull said, adding that it would not be fair to the majority of Dish subscribers to jam these two expensive channels down their throats.

Dish does carry the Pac-12 channel as well as ESPN. It also just struck a deal with Walt Disney Co. to carry the SEC Network and Longhorn channel. Shull said college sports content is a bigger play for Dish right now. "That is a strategic focus for us," Shull said."

All in all, it's probably good that there are some more defined choices between DTV and Dish in terms of sports programming and pricing. That said, this is moreso the illusion of choice as real choice would entail a-la-carte options for a lot of these expensive channels. Until then and until DTV is motivated to follow Dish's lead on the college front, sports fans will have to weigh the benefits of the Sunday Ticket vs. additional college networks and programming.

Ben Koo

About Ben Koo

Copying and pasting my Twitter bio. I'm also refusing (for now) to write this in the third person. This is me - CEO of @Bloguin, GM at @AwfulAnnouncing, world's greatest chinese jew, proud Buckeye, funny dude, and sports and digital media zealot.

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