There has been much discussion about Dish Network speaking to Viacom and other content providers regarding the launch of an Internet TV service. Most people commenting on the news seem to be missing the big picture about the possible Internet TV solution Dish Network may be assembling and how it has the chance to change how we watch TV for all-time.
First question that needs to be asked is "what is Internet TV"? Secondly, "What are the pieces that go into a successful Internet TV solution"?
Simply put Internet TV could be defined as the ability to watch broadcast quality video over the Internet. But by saying that you could argue it already exists today in YouTube, Hulu, Vudu or Netflix form. So more people would say that to be a true game-changing Internet TV solution you would have to offer enough services to challenge the existing cable solutions and make people willing to "cut the cord" for your new Internet TV.
Well what goes into the average cable package? There are the local channels (which are the most watched). There are live sports. There are content choices appealing to most groups like kids, pre-teens, college kids, foodies, history geeks, etc. Then there are the movie channels. Assuming this broad bush painted enough of what makes up a 200 channel cable package - what would a Dish Network Internet TV package have to rival that?
Dish (and DirecTV for that matter) already have many of the major metropolitan local channels up and on their transponders. It would take a simple addendum to most of the retransmission agreements to allow Dish to offer up these local channels a la carte to potential Internet TV customers. The carrot would be that each of these new subscribers would be paying the full rate retransmission agreement rights. The stick is the potential success of companies like Aereo where the local channels would get nothing for their off-air signal. Why not make a deal with Dish if those are the options?
Sports? Everyone seems to think ESPN is the end all and be all but it is not. NBC Sports is struggling to survive and CBS Sports is looking to make inroads (they have been spending big for on-air talent like Jim Rome). They might be very willing to do a deal with Dish. Also consider the RSN's (regional sports networks). I'd be willing to pay an extra dollar or so for the privileged of Dodger baseball if it meant watching Vin Scully announce the games. The RSN carrying Dodger games benefit would be to get access to millions of potential subscribers outside their normal viewing area. Red Sox fan living in California? I'm guessing they would be willing to pay to watch NESN. There are plenty of RSN's out there that could fill any sports fan's requirements. Subscribers within the normal broadcast zones? Just charge them the going rate. Cable companies in New England are not going to drop NESN if they make a deal with Dish. They need the Red Sox (and Bruins) games.
Premium movies? Blockbuster at Home is owned by Dish and they have over 25,000 titles in their library. Stream movies on demand and have a new DVD or game for your X-Box, PS3, Wii or other console. One disk at a time and streaming on demand will fill most people's entertainment needs. Every person I've seen writing about Dish looking into Internet TV has neglected to mention Dish's ownership of Blockbuster at Home. That is a HUGE oversight!
That leaves the niche channel viewing of kids, pre-teens, foodies and others. That's where the deals with Viacom (Nickelodeon, Comedy Central, MTV) and Scripps (HGTV, the Food Network, etc) would come in. That's the part of the story most people are commenting on but by doing so miss the bigger picture.
Dish has an investment in Roku and they have already made a trial run with Internet TV with their launch of DISHWorld. An inexpensive, proven delivery platform - done! Easily replicated for game console platforms? Sure - absolutely!
Probably most important - Dish already has the back-office components in place. They have ways to insure the signals only go to paying customers and a system to pay the content providers for their products. They have 14 million people already in their billing system!
Internet TV - the pieces are almost in place. Soon I will be detailing Dish Networks real "killer app" when it comes to Internet TV. (Do people still say "killer app"?)
DISH's internet service allows customers to bundle everything in one. Almost everyone I know has internet, and it was a smart move on DISH's part to give their customers the option to bundle everything together. I got DISH's Blockbuster@Home service earlier this year, because my DISH coworker told me that if I connect my internet connection to my DVR I would be able to stream 3,000 movies straight to my DVR! I get all of the new releases before anyone else does, because Blockbuster gets new releases 28 days before Netflix and Redbox.
ReplyDeleteGreat point about being able to stream all the content right into the DVR. I say Blockbuster @Home is one of the most under-rated services going!
ReplyDelete(Very strange how I can use the "@" symbol in the comments on Blogger but not in the actual posts.)