AllThingsD » Dish

Is Dish Punching the Networks With Its Supersized DVR?

Peter Kafka — Mon, 09 Jan 2012 21:43:07 +0000

Per earlier reports, Dish Networks’s big rollout at the Consumer Electronics Show today is focused on “The Hopper,” a supersized video recorder that lets users store two terabytes of data. In English, that means about 250 hours of high-def shows, or 1,000 hours of regular shows.

There are a slew of other bells and whistles, and Dish had other stuff to announce, too, like an expanded deal with Time Warner’s HBO to offer more programming to Dish customers who also pay for the premium TV service, more programing for its Blockbuster movie service, and a broadband Internet via satellite option.

Oh, and a kangaroo, which did duty as both mascot and onstage prop.

But if you were looking for an “over the top” service that lets you get pay television over the Web without getting the standard pay TV bundles, this isn’t it. It’s possible that Dish CEO Joe Clayton will offer that one day, but it’s not here now.

The chief focus here is on the DVR, which doesn’t seem like it’s the kind of thing that will attract new customers, but might keep existing ones happier. Nothing wrong with that.

The most interesting wrinkle here is the Hopper feature that will let customers automatically record the primetime lineup of the four broadcast networks — News Corp.’s Fox, Disney’s ABC, Comcast’s NBC and CBS — and store the shows for up to eight days.

Anyone with a DVR is already able to record any show they want, and keep it as long as they have space, so this isn’t an earth-shifter. But it seems clearly designed to poke a bit at other playback options, like the video-on-demand offerings that many broadcasters offer for free, or the Hulu/Hulu Plus service co-owned by Disney, Comcast and News Corp. (News Corp. also owns this Web site).

All of those options, for instance, make you wait at least a day after a program airs before they let you see it. And the networks only offer some of their shows through those options (and CBS doesn’t work with Hulu at all).

My understanding is that Dish didn’t ask the broadcasters for permission on this one, and the way it’s constructed — broadcast-only, with a time limit, etc. — make me think it believes it has created something that doesn’t require a signoff, at least legally speaking. But since all of the big pay TV providers — Dish included — are signing “retrans” deals with the broadcasters and their owners, and those deals include restrictions on how the broadcast shows can be used, it seems like Dish would want to make sure its partners are okay with this.

And they might be! As a network executive pointed out to me this afternoon, this doesn’t have to be negative for the broadcasters. If Dish, for example, can get Nielsen to give the programmers full credit for the shows stored on the Hopper, then that’s a good thing — they’d rather get paid for that eyeball, for instance, than one they sell on the Web.

But it still seems like Dish is playing this one deliberately close to the line.

[Shutterstock/Anna Jurkovska]

Starz Says It Won't Renew Giant Netflix Deal

Peter Kafka — Thu, 01 Sep 2011 21:13:00 +0000

Satellite TV channel Starz says it won’t renew its distribution deal with Netflix when it expires next February.

If the company follows through on that statement, it will mean Netflix won’t be able to provide digital access to movies from Sony and Disney — a scenario Reed Hastings and company have been trying to avoid for years.

Here’s the statement from Starz:

Starz Entertainment has ended contract renewal negotiations with Netflix. When the agreement expires on February 28, 2012, Starz will cease to distribute its content on the Netflix streaming platform. This decision is a result of our strategy to protect the premium nature of our brand by preserving the appropriate pricing and packaging of our exclusive and highly valuable content. With our current studio rights and growing original programming presence, the network is in an excellent position to evaluate new opportunities and expand its overall business.

UPDATE: Here’s a comment from Netflix, which is acting as if Starz’ decision is final:

Starz has been a great content partner since 2008 and we are thankful for their support.

While we regret their decision to let our agreement lapse next February, we are grateful for the early notice of their decision, which will give us time to license other content before Starz expires.

While Starz was a huge part of viewing on Netflix several years ago because it was some of the only mainstream content Netflix offered, over the years Netflix has spent more and more licensing great TV shows from all four broadcast networks and many cable networks, and we have licensed 1st run movies from Relativity, MGM, Paramount, Lionsgate and others. Because we’ve licensed so much other great content, Starz content is now down to about 8% of domestic Netflix subscribers’ viewing. As we add even more content in Q4, we expect Starz content to naturally drift down to 5-6% of domestic viewing in Q1. We are confident we can take the money we had earmarked for Starz renewal next year, and spend it with other content providers to maintain or even improve the Netflix experience.

We have tremendous respect for the Starz creative team, and we look forward to someday licensing some of their original or licensed content.

Netflix shares dropped nine percent in after-market trading after Starz put out its press release.

Netflix has been preparing to live without programming from Disney and Sony by broadening its library, particularly via deals that have brought it TV shows from the likes of CBS and other networks. The company has also announced a move into original programming, via an expensive mini-series starring Kevin Spacey.

The company has already been living without Sony movies since June, when they were pulled off the streaming video service because its subscriber growth had tripped off a contract violation. At the time, Netflix described the Sony absence as “temporary.”

The fact that Netflix had access to Sony and Disney’s digital library at all has often rankled Hollywood, since the company paid a pittance for them back in 2008 — something like $30 million a year. Netflix has signaled that it would be willing to pay much more than that now — at the D9 conference in June, Reed Hastings said that it “wouldn’t be shocking” if he paid $200 million a year or more to renew the deal.

The Starz/Sony/Disney deal also symbolizes big media’s conflicted feelings about Netflix. On the one hand, Hollywood and TV executives worry that Netflix is training its 25 million subscribers to expect all the video they want, at very little cost, piped directly into their house.

On the other hand, they’ve been very happy to cash the significant checks that Hastings has been handing them for access to their stuff. Hastings has clearly been betting that short-term cash would trump long-term business model worries. “The whole relationship thing is over-stated,” he said at the All Things Digital conference. “If you have a big checkbook, you can do business.”

If Starz does end up staying away from Netflix, it will be interesting to see who ends up with its digital rights. Satellite TV provider Dish Network has talked openly about creating a video subscription that could rival the one Netflix has built, and Amazon is building up its library of digital video, which it is giving away free to some users.

Meanwhile, Google — which has struggled to land much premium content for its YouTube site — has recently started signaling that it might pay big money to get some: The company is one of several bidders interested in Hulu, the video site joint venture co-owned by Disney, News Corp. and Comcast. (News Corp. also owns this Web site).

And of course there’s yet another scenario, where Starz just hangs on to its rights for itself, and tries to boost the value of its own service via a digital extension.

Here’s Hastings onstage at D9 a few months ago, discussing his deals with Starz and the rest of the big media companies. And here’s Hastings’s D9 entire interview, in video form and via notes I took during his presentation.

[ See post to watch video ]

Dish, EchoStar Settle TiVo Patent Fight For $500 Million

Peter Kafka — Mon, 02 May 2011 12:25:39 +0000

Dish and EchoStar are paying TiVo half a billion dollars to settle a long-running patent fight over DVR technology. The two satellite TV companies will pay TiVo $300 million up front, and the remainder over 6 years, to settle suits that started in 2004. The settlement follows an April 20 legal victory for TiVo.

Fox, DISH–But Not Cablevision–Work Out Rights Deal

Peter Kafka — Fri, 29 Oct 2010 21:08:38 +0000

One down, at least one more to go: Fox has solved one programming fee dispute by patching things up with the DISH satellite TV network. That means News Corp.’s TV arm will restore some channels that it had yanked from DISH subscribers earlier this month. And it’s a safe bet that DISH subscribers will end up with higher bills, as the service has agreed to pay Fox and its News Corp. parent more money for its shows. No word on the similar 14-day standoff between Fox and Cablevision, though. (News Corp. also owns Dow Jones, which owns this site.)

Dish's Tivo Bill: $328 Million and Counting

Peter Kafka — Mon, 09 Nov 2009 14:27:07 +0000

You think you’re paying too much for cable TV? Check out this nugget, buried in satellite TV provider Dish Networks’ (DISH) quarterly filing: The company has spent $328 million in its legal battle against Tivo (TIVO) this year, and that bill could keep growing.

Dish has rung up the tab while fighting one of the many patent suits Tivo has brought against cable and satellite providers, accusing them of ripping off its DVR technology. Tivo has won an initial series of rulings against Dish, forcing the company to hand over a slug of cash, but more could be coming, the satellite company noted today. What would that mean? In Securities and Exchange Commission legalese:

Depending on the amount of any additional damage or sanction award or any monetary settlement, we may be required to raise additional capital at a time and in circumstances in which we would normally not raise capital. Therefore, any capital we raise may be on terms that are unfavorable to us, which might adversely affect our financial position and results of operations and might also impair our ability to raise capital on acceptable terms in the future to fund our own operations and initiatives. We believe the cost of such capital and its terms and conditions may be substantially less attractive than our previous financings.

Gulp. On the other hand, as Barclays Capital’s Vijay Jayant notes this morning, if Dish were really worried about a coming legal bill, the company probably wouldn’t want to hand its shareholders a $900 million dividend. Let’s see how investors react today.

TiVo to DISH: Let's Do the Time Warp Again

John Paczkowski — Fri, 04 Sep 2009 22:00:20 +0000

It’s not the $974.5 million TiVo had been looking for, but the $200 million in sanctions against EchoStar’s DISH Network the company has been awarded isn’t exactly petty cash, either. On Friday, a U.S. District Court judge for the Eastern District of Texas ordered the satellite broadcaster to cough up that sum for its continued infringement of TiVo’s “multimedia time warping system” patent. This in addition to the $192.7 million EchoStar was ordered to pay for violating that same patent up to April 2008.

You see, DISH, though it had been barred from shipping DVRs with the patent-infringing functionality, continued to do so, justifying its behavior by claiming it had implemented a noninfringing workaround. But in June of this year, a court found that not to be the case. The court again reprimanded EchoStar (SATS) and ordered the company to pay TiVo (TIVO) $103 million in additional fines for the violations that occurred during the time in which the “workaround” was implemented. And now, it has added another $200 million to that.

TiVo, as one might imagine, was overjoyed by the ruling, which leaves open the possibility of further sanctions if EchoStar does not abide by the injunction.

“We are pleased by the Court’s ruling to impose contempt sanctions of approximately $200 million against EchoStar for its continued violation of a Court-ordered permanent injunction, and to award TiVo its attorney fees and costs incurred during the contempt proceedings,” the company said in a statement. “This brings total damages and sanctions in this case to approximately $400 million through July 1, 2009, plus attorney fees, and is exclusive of potential further damages and sanctions. Additionally, we are pleased that the Court ‘will seriously entertain the award of enhanced sanctions’ if ‘EchoStar is unsuccessful on appeal and nevertheless continues to disregard this Court’s orders.’”

Who knows, if DISH keeps it up, TiVo may get that $974.5 million yet.

TiVo to DISH: Let's Do the Time Warp Again

John Paczkowski — Fri, 04 Sep 2009 22:00:20 +0000

TiVo, as one might imagine, was overjoyed by the ruling, which leaves open the possibility of further sanctions if EchoStar does not abide by the injunction.

Who knows, if DISH keeps it up, TiVo may get that $974.5 million yet.

Sirius: Sorry, Charlie

John Paczkowski — Tue, 17 Feb 2009 14:09:46 +0000

Looks like Sirius XM can shelve that bankruptcy filing it’s been preparing these past few weeks–for the time being, anyway. This morning, the struggling satellite radio company announced an 11th-hour deal with John Malone’s Liberty Media that will allow it to meet a Feb. 17 debt deadline that might otherwise have forced the company into Chapter 11 bankruptcy protection. Under its terms, Liberty will provide Sirius (SIRI) with $530 million in loans, a portion of which will be used to repay $171.6 million of its maturing convertible notes, due today. In return, Liberty (LINTA) will receive 12.5 million shares of Sirius XM preferred stock and a couple of seats on Sirius XM’s board.

Not the greatest of terms. Still, Sirius CEO Mel Karmazin has managed to save the company from bankruptcy and from satellite mogul Charlie Ergen without accepting a change in control for the company. And the deal is not subject to the approval of the Federal Communications Commission.

“This agreement enables Sirius XM to continue to develop the opportunities first outlined in the merger of Sirius and XM,” said Sirius CEO Mel Karmazin. “By strengthening our capital structure and enhancing our financial flexibility, this investment allows us to continue providing the great content and innovative programming our subscribers know and love.”

At 20 cents, Sirius shares are up an astonishing 85.89 percent on news of the deal.

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Call Me Mel "Save-My-Own-Keister" Karmazin

John Paczkowski — Fri, 13 Feb 2009 15:49:06 +0000

Sirius XM (SIRI) is ready to seek bankruptcy protection. The company has warned investors that it’s prepared to file Chapter 11. It has hired bankruptcy and restructuring advisers. And it has filled out the necessary paperwork. But it may never file it.

“People familiar with the situation” tell The Wall Street Journal that Sirius CEO Mel Karmazin and satellite mogul Charlie Ergen are moving closer to an accord that would save the struggling satellite radio outfit from having to file Chapter 11. Apparently, Ergen has agreed to allow Karmazin to keep his job if he agrees to a deal, and that’s been concession enough to keep him at the negotiating table, though he continues to pursue an alternative, and perhaps fantastical, deal with Liberty Media (LINTA).

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Call Me Mel "Save-My-Own-Keister" Karmazin

John Paczkowski — Fri, 13 Feb 2009 15:49:06 +0000

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Sirius-EchoStar-Liberty: Ménage-à-Blah

John Paczkowski — Thu, 12 Feb 2009 20:16:56 +0000

As entertaining as news of a Sirius XM-EchoStar-Liberty Media three-way might be, research houses don’t appear to be giving it much credence. Already a few have issued reports dubious of the idea of Liberty accepting the white knight role in this debacle.

In a note to investors this morning, Collins Stewart analyst Thomas Eagan described the possibility of Liberty acquiring or even investing in the struggling satellite radio concern as “highly doubtful.” Explaining his skepticism, Eagan notes, “We do not believe that Liberty initiated the dialogue with [Sirius]. Additionally, we believe [DirecTV] management does not want [Sirius] combined with its operations. [DirecTV] certainly does not need it. Their operations lead the industry.”

Over at Barclays Capital, James M. Ratcliffe and Vijay Jayant are equally skeptical of an alliance between Sirius (SIRI) Liberty (LINTA). “Liberty involvement is more likely an effort by Sirius XM to attract a competing bidder, in our view–we don’t believe the company is fundamentally interested in becoming involved in the satellite radio business,” they wrote, adding that a Sirius bankruptcy is still a distinct possibility. “Chapter 11 would allow the restructuring of above-market OEM revenue share contracts and branded programming contracts, improving operating cash flows,” they explained. “On the other hand, it would result in aggressive competition among the various capital stakeholders and create a significant management distraction for as much as eighteen months.”

For Sirius, bankruptcy may be a more attractive option than cutting a deal with EchoStar’s (SATS) Ergen, but that’s not really saying much. Anyway, Sirius has about a week to decide between the two.

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Sirius: Give Me Liberty or Give Me Ergen

John Paczkowski — Thu, 12 Feb 2009 13:44:01 +0000

The Sirius XM fiasco is fast becoming high drama. Hoping to avoid bankruptcy and fend off an unsolicited takeover attempt from satellite mogul Charlie Ergen’s EchoStar, which has been acquiring its debt, Sirius has approached Liberty Media about a possible transaction. “People briefed on the negotiations” say talks between the two companies are advanced, but it’s not yet clear how much Liberty would be willing to invest in Sirius and whether it’s even interested in taking control of the company.

Like EchoStar (SATS), Liberty Media’s interest in Sirius (SIRI) revolves around the company’s physical assets–satellite and terrestrial repeaters, towers that bolster satellite radio services with Liberty’s DirectTV (DTV) satellite television services. Said Stanford Group analyst Fred Moran: “All of these companies are satellite-delivered media. If you can cross-market, cross-promote and intertwine services between satellite video and satellite audio, you could strengthen your competitive position.”

Question is, is Liberty Media (LINTA) interested in such a thing and is it willing to repay Sirius XM’s debts and buy out the company’s existing shareholders to do it? If it’s not, Sirius may well be forced into bankruptcy, which company officials reportedly claim is preferable to inking a deal with Ergen and EchoStar. Seems Sirius CEO Mel Karmazin can’t bear the thought of giving up control of the company to Ergen.

Sirius shares are trading higher this morning on the news after being viciously beaten down Wednesday by reports that the satellite radio company is mulling a Chapter 11 bankruptcy filing.

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Sirius Rolls Out New 24 Hour Investor Keening Channel

John Paczkowski — Mon, 09 Feb 2009 17:50:34 +0000

Apparently satellite mogul Charlie Ergen’s run at Sirius XM has been in the works for quite some time. Indeed, “people familiar with the situation” tell The Wall Street Journal that Ergen made an offer late last year to take control of struggling satellite radio outfit, but was rebuffed. His proposal: that one of his two satellite companies, EchoStar (SATS) or Dish Network (DISH), supply Sirius with enough capital to meet its debt obligations and avoid a bankruptcy filing. Clearly, then, Ergen isn’t looking to force Sirius into bankruptcy in order to claim its assets on the cheap, but rather because he sees it as a natural complement to his television operations.

Sirius CEO Mel Karmazin obviously doesn’t share that view, though he may soon come round.

With just a week or so left until its first round of debt obligations come due, Sirius (SIRI) is in a tight spot. As Karmazin told investors last week, the company needs to raise $175 million, and quickly. If it can’t, it will end up either filing for bankruptcy or cutting a deal with Ergen. Given that Karmazin himself invested $2.7 million in Sirius stock last summer, Karmazin may well opt for the latter. Unless, of course, another potential investor–say AT&T (T) or Liberty Media (LINTA)–comes sniffing around. Either way, it’s going to be a volatile and stressful week for Sirius investors.

Yahoo Shares Trade South for Winter

John Paczkowski — Wed, 03 Sep 2008 20:44:31 +0000

[ See post to watch video ]

TiVo Time-Shifts DirecTV Partnership

John Paczkowski — Wed, 03 Sep 2008 18:44:45 +0000

So, TiVo’s on-again, off-again relationship with DirecTV? It’s on again. After ditching the TiVo (TIVO) platform in Feb. 2007 for a competing personal video recorder made by sister company NDS Group (NNDS), DirecTV (DTV) has circled back to embrace the PVR pioneer’s platform once again. This morning the two companies announced plans to build a version of TiVo’s PVR that can capture DirecTV’s entire lineup of digital and high-def channels. The device will arrive at market by 2009, when it will be offered alongside DirecTV’s existing line of set-top boxes.

Why the sudden interest in a renewed partnership? Could be the recent change in management at DirecTV, which was taken over by Liberty Media (LINTA) in an $11 billion asset swap with News Corp. (NWS) (News Corp. is the owner of Dow Jones and of this Web site). Or could it be that DirecTV simply saw the writing on the wall after TiVo successfully sued Dish for infringing on its patented time-warp technology?

Perhaps a little of both, hmm?