Dish Hops over the top

[Commentary] Dish Network’s landmark retransmission and TV Everywhere deal with Disney was in large part an out-of-court settlement of litigation between the companies that both sides had an incentive to settle. Yet for all that effort and angst, Dish’s Hopper was essentially a workaround for the fact that the satellite TV provider cannot offer its subscribers interactive features such as video-on-demand on its own platform because of the lack of a direct return path, putting Dish at a disadvantage to the cable TV providers with which it competes.

Don’t expect the floodgates to be thrown open generally quite yet, though. Dish and DirecTV occupy a unique niche in the pay-TV world in that their existing carriage deals are premised on a presumptively national footprint. In the wireline cable world, rights are typically limited territorially to the operator’s physical footprint. While those deals generally are not exclusive, licensing another operator to offer the same programming in that market would affect the rate the incumbent paid.

The one exception is for satellite providers, whose signals reach everywhere by the nature of the technology. Incumbent cable operators won’t like it, but forcing them to compete with Dish and DirecTV, even if their signals are sent over-the-top instead of out of the sky, would not fundamentally change the competitive balance in the pay-TV business.

[Sweeting is Principal, Concurrent Media Strategies]

[March 7]