You will be redirected back to your article in seconds

Ergen Says Dish Could Launch Internet TV Subscription Service

Satcaster’s chairman says he’s ‘very comfortable’ with Sprint bid relative to SoftBank proposal

Dish Network chairman Charlie Ergen said the satcaster is well positioned to introduce an over-the-top TV service and he maintained that Dish is “very comfortable” with its bid to acquire Sprint in the face of a competing offer from SoftBank.

Ergen, on the company’s earnings call with analysts, said that “as OTT happens, we think that’s something we can participate in… if it becomes a reality.”

However, he added, over-the-top TV services will be several years from coming to fruition. “OTT looks like it’s on a slower growth path than I would have anticipated,” Ergen said. Down the line, “OTT could be a good and growing business for us.”

Dish added 36,000 net TV subscribers in the first quarter — versus a 104,000 net gain in Q1 2012 — ending the first quarter with 14.092 million. The company also added about 66,000 net broadband subscribers in the first quarter, compared with just 6,000 broadband subscribers in the year-ago period.

“Obviously we recognized several years ago that pay TV as a business, in terms of a big package where customers spend $1,000 a year, that’s a relatively mature business,” Ergen said. “I think there’s some opportunities to continue to grow the business but it obviously gets a little tougher.”

Dish is looking for growth in satellite broadband and via its $25.5 billion bid for Sprint-Clearwire, which would let the company offer not only wireless broadband but also mobile video.

If Dish’s bid for Sprint fails, Ergen said his options could include selling the spectrum Dish has accumulated to date — which he said would be worth more than $10 billion — selling the whole company or partnering with a wireless carrier. “We see a huge preference in Sprint-Clearwire,” Ergen said. But “we have to be prepared to win, and we have to be prepared to lose.”

Japanese telecommunications provider SoftBank, in a regulatory filing Wednesday, said it could achieve more than $3 billion in cost savings if it won Sprint. While SoftBank at this point hasn’t raised its bid for Sprint — it has offered $20 billion for a 70% stake in Sprint — if the telecom does Dish would be willing to up its offer as well, Ergen said.

“There’s only so much debt we’d be willing to take on,” he  said. “To the extent the bidding war got higher, we’d have to look at bringing on a partner to do that in a big way… We’d have to cross that bridge if we get to it.”

Overall, Dish reported revenue of $3.56 billion for Q1 2013, down slightly from $3.58 billion a year ago, which the company attributed to declines in its Blockbuster video-store segment. Subscriber-related revenue for Dish rose 4%, to $3.22 billion.

Dish’s net income of $216 million for the quarter was down 40% year over year, primarily due to higher subscriber-related expenses driven by increased programming and subscriber acquisition costs, including better-than-expected demand for the Hopper DVR. In addition, earnings from Q1 2012 got a lift from a non-cash gain of $99 million related to the conversion of certain debt associated with DBSD North America, the satellite provider Dish acquired in 2011.

More Biz

  • Doug Davis and Jodie ShihadehVariety Power

    Jodie Shihadeh Named Partner at The Davis Firm

    Jodie Shihadeh has been named Partner at The Davis Firm, PLLC. She joined the firm in 2011 and rose from associate to Managing Attorney and now partner. She graduated from Boston College and received her law degree from Fordham University School of Law in 2011. While still in law school she interned in the Business [...]

  • Peak TV Saturation TV Placeholder

    Nickelodeon Alum Keith Dawkins Sets Kidvid Partnership With Believe Media Group

    Former Nickelodeon executive Keith Dawkins has partnered with Believe Media Group to develop children’s programming. Dawkins will partner with Believe under his newly formed Rock Hill Media Ventures, which aims to advise companies in media, entertainment and sports on working with diverse and emerging talent. Dawkins previously spent 17 years at Viacom, most of which [...]

  • CBS Studios Exterior

    CBS Credit Union Manager Pleads Guilty to $40 Million Fraud

    The manager of a credit union for CBS employees pleaded guilty in Los Angeles federal court on Monday to a $40 million embezzlement scheme. Edward Rostohar, 62, was arrested in March after the scheme began to unravel. According to prosecutors, he admitted to stealing money from the bank for the last 20 years. Rostohar is [...]

  • Norman Reedus as Daryl Dixon - The

    CAA's Packaging Fee Becomes Flashpoint in 'Walking Dead' Litigation

    The issue that is at the heart of the WGA’s present standoff with talent agencies has flared up as a source of tension in the litigation between AMC Networks and Frank Darabont and CAA over profit participation on “The Walking Dead.” The practice of talent agencies receiving packaging fees for helping to assemble the creative [...]

  • Sony Music to Deliver ‘Real Time’

    Sony Music to Deliver ‘Real Time’ Data, Royalty Payments to Artists

    Sony Music today announced two new payment features for its artists — “Real Time Royalties” and “Cash Out” — through its artist portal beginning this fall. 

A memo sent to artists Monday morning and obtained by Variety says  the initiatives will “allow our artists and royalty participants to view and withdraw earnings faster than ever [...]

  • Whitney Houston

    Whitney Houston Estate Plans Hologram Tour, Album, Musical

    In the seven years since Whitney Houston’s death, there has been relatively little of the asset-exploitation that usually follows the passing of a music icon, apart from a smattering of previously unreleased recordings, a pair of harrowing documentaries and a lot of unflattering press. But according to an article in the New York Times, the [...]

  • rocketman-elton-john-costume

    Elton John Biopic 'Rocketman' Taps Lucky Brand Collaboration as Part of Promo Push

    Paramount has set a May 28 release date for its Elton John-inspired clothing collection with retailer Lucky Brand, which celebrates the performer’s iconic style and new biopic, “Rocketman” (see tickets and showtimes here). The limited-edition collaboration arrives in stores three days before the film hits theaters, though it’s available for purchase right now on LuckyBrand.com. [...]

More From Our Brands

Access exclusive content