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Cable Technology Feature Article

March 06, 2014

DISHing Out OTT - TV, Movies and (Finally) Live Sports

By Bob Wallace, VP of Content

The DISH Network plan to launch an affordable OTT service with a blend of kids, broadcast network and especially live sports content likely signals the beginning of the end for pay-TV subscribers awaiting a streaming alternative to corded cable with major live and regional sports programming.

Unlike current OTT services which lack the most coveted live content – national and regional sports contests – the DISH option is expected to feature a slew of ESPN channels, the Longhorn Network and a Regional Sports Network (RSN) under construction for the sprawling Southeastern Conference (SEC (News - Alert)) as part of the partnership with ABC Disney.

“This agreement allows us to bring more innovation to the customer experience, including new marketing, packaging and delivery options,” said Dave Shull, DISH Executive Vice President and Chief Commercial Officer, in prepared comments. And if DISH’s comments that it’s looking to demographics often characterized as “cord-nevers,” it’s also looking beyond customer retention to the near and long-term future of customer acquisition.

What’s on Deck?

While it’s more accurate to yell “game on,” than “game over,” for corded TV service providers, DISH’ s acknowledgement of the need for low monthly pricing should deliver a package that offers a blend of content unlike Netflix at a price lower than most pay-TV packages and minus excess channels, a model likely to be copied by others. In fact, without an unannounced launch time, a forward-thinking “fast mover” could pre-empt the OTT offering.

Better still, DISH is in discussions with other content owners whose video assets could make the OTT service more magnetic. We’ll just have to wait and see. But given that most pay-TV subscribers only watch and want about a dozen or fewer channels, adding CBS, NBC and Fox etc., is not a top priority for sports fans, nor is a movie-turned original programming series channel such as HBO, Showtime or Starz.

Pricing will be important to the success of the DISH OTT service, but not the key factor. That’s because sports fans have to buy a package of channels they don’t need, add pay-extra sports channels a la carte or in additional clusters, as well as RSN and broadcast TV fees, (also monthly) to get what they want. Many are paying near or over $100 a month for TV today.

The Web represents a relatively new frontier to professional and college sports leagues and teams that have stuck with corded pay-TV providers, though some have hoped that streaming rights be included in rights deals to carry sports content. That’s a top “want” as live sports channels are among the most expensive to carry on traditional pay-TV services. NOTE-Apple (News - Alert) TV has core ESPN channels and live NHL game casts.

Possible Sports Lineup

DISH’s impact deals with ESPN, SEC and the fledgling Longhorn Network are likely to have other RSNs scrambling to expand their reach via the Web in partnerships with distributors taking OTT as a sports opportunity seriously. Sports channels charge a ton for corded distribution yes, but how much for OTT inclusion?

Expand your Brand with OTT

With the NFL looking to expand its brand and revenues by splitting its game contest lineup among more partners, reportedly including Google (News - Alert), how can the league not look at OTT offerings such as the planned DISH offering as an opportunity to reach further into distribution? The same holds true for other pro sports leagues with many already in RSNs such as New England Sports Network (NESN), which carries the Bruins, Red Sox, Celtics and college sports matches live.

DISH called the ABC Disney (News - Alert) deal an “extensive and expanded rights package” as in covering more content and distribution across more pipelines. Get used to that phrase as content owners and forward-thinking pay-TV subscribers will be using it or a paraphrase when they reach similar agreements with content owners.

An interesting back story is that this groundbreaking deal is the result of a dispute between DISH and the content owner over the former’s Hopper ad-skipping capability. The parties reached an agreement on that front as well. Wouldn’t the video industry evolution be advanced if real change came out of even the most contentious disputes?

Answering Questions

Pricing & Packaging: Can DISH price the OTT service low enough for broad appeal? It can, but that depends on its contents. Don’t expect the satellite TV provider to take a one-size-fits-all approach in packaging and pricing. DISH is smarter and may be looking at a $20-$30 monthly price point, perhaps for cord-nevers and cord-haters. Regardless, expect multiple flavors with varying prices, content and capabilities as other OTT firms have created – Netflix, Hulu (News - Alert) and Amazon among them. Look for innovation and flexibility as well.

Cord cutting Gone Wild: Will the availability of an OTT offering with a sports-infused blend of content touch off industrywide cord cutting? No. But sports-minded TV viewers will take a close look at the sports channel menu and would be among the first to cut cord ties when they see what they like.

Pick (Only) One: Research has noted that many OTT subscribers still use traditional pay-TV services so viewing isn’t really an either/or proposition just yet. Further, other consumers subscribe to multiple OTT offerings to help round out what they seek for content and because of their low monthly prices.

The Levee Breaks? Current OTT services could evolve or other traditional pay-TV service providers could join the fray. The latter likelihood has happened in so many segments of the tech industry, let alone other verticals. There’s a leader and somewhat fast followers whether it’s with new offerings, packaging or pricing. Expect a déjà vu all over again (again).

Stay tuned.

Edited by Rory J. Thompson

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