A Deeper Dish

Dish Network Corp. received a great deal of press this week after Bloomberg published a story speculating that Dish might offer a micro subscription of cable channels over the internet for a reduced fee.  It is speculated that Dish is in talks with Viacom, Scripps, and Univision to offer consumers a suite of their channels via the internet allowing for consumers to only pay for those channels they are truly interested in.  As sports channels command the highest per sub fees, this could significantly reduce content costs for non-sports fans.   

There are many issues at play here that stand in the way of such an offering coming to fruition.  For instance, the value of the Viacom networks relies largely on the ability of its major brands to leverage carriage for its smaller channels.  In a micro subscription world, one is likely to still subscribe to MTV but might drop MTV2, MTV Tres, or VH1 Classic.  If MTV were to allow for this, they would undoubtedly charge the consumer more for MTV in order to make up for the foregone ad revenue resultant of the diminished carriage of its secondary networks.  In fact, were this trend to take place across all distribution channels, those secondary networks might cease to exist entirely.  Another hurdle for Dish is the fact that the license agreements for a great deal of the Viacom Networks content likely do not guarantee the right for distribution via the internet.  This could preclude a number of studio movies from airing on the networks via the new Dish service. 

It is great to see Dish’s management looking forward for opportunities to evolve with the times.  At this point I believe the giant channel groups like Viacom still hold all of the leverage in these situations, but if Nickelodeon’s ratings slide is a sign of things to come for all cable networks, perhaps this Dish proposal is worth a serious look. 

- TC