The cash and stock deal would give Sprint owners $7 per share — $4.76 in cash, with the remainder in Dish stock.

“We are confident that the Sprint Board will share our view that this proposed merger offers an excellent opportunity for the equity holders of Sprint to realize a superior value for their shares that is unavailable to them under the SoftBank proposal,” Dish Chairman Charlie Ergen said in a letter to Sprint’s board.

In addition to what it says are better financial terms, Dish also brings its own wireless spectrum holdings.

“The DISH proposal clearly presents Sprint shareholders with a superior alternative to the pending SoftBank proposal,” Ergen said. “Sprint shareholders will benefit from a higher price with more cash while also creating the opportunity to participate more meaningfully in a combined DISH/Sprint with a significantly-enhanced strategic position and substantial synergies that are not attainable through the pending SoftBank proposal.”

Sprint acknowledged that it had received the Dish offer and said only that the company’s board would “evaluate this proposal carefully and consistent with its fiduciary and legal duties.”

For Dish, the move would allow it to offer a combination of wireless service, in-home and on-the-go video, as well as broadband and voice service.

Dish, which has set up a website to tout its offer, promised some $11 billion in cost savings through its deal.

The move comes amid consolidation efforts that have included AT&T’s failed bid for T-Mobile, as well as T-Mobile’s current effort to acquire MetroPCS, which is due for a rescheduled shareholder vote on April 24.

Ahead of its Sprint bid, Dish had offered to buy Clearwire, the wireless network operator that Sprint is itself in the process of trying to buy.

Ergen said at our D: Dive Into Media event in February that Dish had hoped to have its own wireless network up and running by now, but that, given the delays, it would probably need to partner with someone already in the business.

Here’s Ergen’s full letter to Sprint’s board:

On behalf of DISH Network Corporation (“DISH”), I am submitting this proposal for a merger between DISH and Sprint Nextel Corporation (“Sprint”). Our proposal provides Sprint shareholders with a superior alternative to the pending SoftBank Corporation (“SoftBank”) proposal. It provides more cash and affords your shareholders the opportunity to participate more meaningfully in a combined DISH/Sprint, which will benefit from a significantly enhanced strategic position and substantial synergies that are not attainable through the pending SoftBank proposal.

We are offering Sprint shareholders a total consideration of $25.5 billion, consisting of $17.3 billion in cash and $8.2 billion in stock. Sprint shareholders would receive $7.00 per share, based upon DISH’s closing price on Friday, April 12, 2013. This consists of $4.76 per share in cash and 0.05953 DISH shares per Sprint share. The cash portion of our proposal represents an 18% premium over the $4.03 per share implied by the SoftBank proposal, and the equity portion represents approximately 32% ownership in the combined DISH/Sprint versus SoftBank’s proposal of a 30% interest in Sprint alone. Together this represents a 13% premium to the value of the existing SoftBank proposal.

Our proposal provides a highly-compelling and unique opportunity for Sprint shareholders. We are offering an ownership interest in a combined company with a comprehensive product and services suite, a significantly enhanced subscriber base, considerable financial and operating scale, as well as a spectrum portfolio that would lead the industry. As a result, this merger creates sizable cost and CAPEX savings and promises extensive new revenue opportunities.
Leveraging both companies’ existing assets and expertise, we will be the only company able to offer a fully-integrated, nationwide bundle of in- and out-of-home video, broadband and voice services to meet rapidly evolving customer preferences. The new company’s assets will immediately establish national cross-platform leadership and will position the company to deliver innovative services while expanding our collective subscriber base.

The proposed combination will result in synergies and growth opportunities estimated at $37 billion in net present value. This includes an estimated $11 billion in cost savings, representing approximately $1.8 billion in annual run-rate cost synergies by the third year after closing.

Further, our combined national footprints and scale will allow us to efficiently develop our joint spectrum assets to provide advanced services to the millions of homes with inferior or no access to competitive broadband services.
I am proud of the company we have built and believe we will be an excellent partner to Sprint. Like Sprint, DISH possesses a strong tradition of innovation and industry leadership. We created the third largest pay-TV provider while competing with incumbent cable monopolies and other entrenched operators. DISH has consistently led our industry in service and technology delivery with award-winning innovations like Hopper with Sling. Our history of value creation is outstanding. Investors in our 1995 initial public offering have enjoyed a total return of 27 times their original investment, significantly outperforming the broader markets and our peers. We also have a proven track record of responsible capital management.
DISH has significant experience structuring and consummating strategic transactions and only needs to complete confirmatory due diligence, which we believe can be done quickly with your cooperation. We have examined your merger agreement with SoftBank and we would be prepared to execute a definitive merger agreement on substantially similar terms and conditions. Though not a condition of our proposal, we anticipate that the pending transaction with Clearwire would be completed. We are confident that we can obtain all necessary approvals within a reasonable timeframe.

We intend to fund the $17.3 billion cash portion of the transaction using $8.2 billion of our balance sheet cash and additional debt financing. We have a proven track record in raising capital to fund strategic initiatives and have received a Highly Confident Letter from our financial advisor, Barclays, confirming our ability to raise the required financing.

We would be pleased to discuss our plans for the combined company and we are available at any time to meet with the Sprint Board, management and advisors to answer any questions about our proposed merger. We are confident that the Sprint Board will share our view that this proposed merger offers an excellent opportunity for the equity holders of Sprint to realize a superior value for their shares that is unavailable to them under the SoftBank proposal.
While it would have been our preference to have confidential discussions regarding this proposed merger, your existing agreement with SoftBank and the impending deadlines associated with your shareholder vote, will compel us to confirm our intentions publicly.

We look forward to hearing from you.

Very Truly Yours,
DISH Network Corporation
Charlie Ergen
Chairman

Aereo, which streams local TV broadcast signals over the Web for a fee, is now available only in the New York City region. It could expand its reach significantly if it joins forces with cable, satellite or phone concerns.

Talks between Aereo and telecom operators haven’t yet yielded any agreements. One big issue is the legal uncertainty surrounding the startup. Aereo is battling a suit by broadcasters, which say it is violating copyright law, in part because it reformats and retransmits their signals without permission—and then charges a fee to its subscribers.

Read the rest of this post on the original site »

That also isn’t a surprise, since it fits the no-growth trend we’ve seen from pay TV for several years now.

For the record, SNL Kagan figures that the U.S. pay TV industry — cable, telco and satellite — grew by a teeny-tiny 46,000 subscribers last year.

That’s basically negligible given an installed base of 100 million pay TV households. But it’s not a decline.

And it’s also in line with what we’ve seen from the industry for a while, where subscriptions go up and down each quarter — usually up in Q1 and Q4, and down in Q2 and Q3. And as always, it’s important to note that this is for all the pay TV platforms.

You might read today, for instance, that Kagan says the cable guys — Comcast, Time Warner Cable, etc. — lost 1.66 million customers this year. True! But the telco guys — Verizon and AT&T — and the satellite guys — Dish and DirecTV — added the same number. Hence, no growth.

As always, the real debate is about why there’s no growth. There are three standard answers, which don’t necessarily negate one another:

• 100 million pay TV customers is the size of the U.S. market, period. It’s just not going to get bigger.
• The market would be bigger if the economy was better, and more people were buying homes instead of “doubling up.”
• People are ditching pay TV for the Internet and some combination of Netflix, iTunes, Hulu, etc. And/or the population of “cord-nevers” — college grads who have grown up with Web TV and see no reason to pay for cable — is growing.

The last one is certainly worrisome for the pay TV guys, and the ones who used to boast that they see no evidence of cord-cutting are a lot more muted about it these days.

You’ll occasionally hear a top pay TV executive — like Dish’s Charlie Ergen — talk candidly about the fact that there are lots of kids, like his own, who aren’t paying for TV anymore. But as always, for right now, cord-cutters are like vegans — you may know a lot of them, but the rest of the country still eats a whole lot of Big Macs.

The Houston-based investment company owns 3.9 percent of Clearwire and has already sued Clearwire and its directors, arguing that they have breached their fiduciary duties in accepting Sprint’s offer.

The deal still requires the approval of shareholders representing a majority of the shares not held by Sprint. In hiring proxy-solicitation firm D. F. King & Co., Crest is signaling its intent to extend its opposition into a full-on proxy fight. Crest also demanded that Clearwire make available its list of shareholders.

“Crest Financial believes that Clearwire’s shareholders will reject Sprint’s unfair offer for Clearwire,” Crest general counsel Dave Schumacher said in a statement. “Crest is determined to do whatever it can to stop Sprint’s efforts to extract for itself the value of Clearwire’s trove of wireless spectrum and to harm minority shareholders and the public interest.”

Satellite TV company Dish Network has made its own bid for Clearwire, which holds a significant amount of spectrum in addition to operating a wholesale wireless network.

But that was then! This year’s Deloitte survey reports that a mere 8 percent of Americans are cord-cutters, or would like to be.

If you compare the two reports side by side — and don’t look closely at the wording of the questions — you’d conclude that the cord-cutting population had decreased by about 6 percent of TV households, or six million people.

2012:

2013:

What happened? Clearly, people didn’t get more excited about paying for TV in the last year — based on industry reporting, the total number of subscribers remained about flat, just like it has been for the past few years.

The most likely answer is the one that occurred to me in 2012: That the wording in last year’s survey confused respondents, and that many of them thought the question was about dropping a pay TV channel, like HBO — not cutting the cord altogether.

After I wrote about last year’s numbers, I ended up on the phone with a Deloitte executive who had overseen the research. We went back and forth a little bit, and he allowed that polls like this — and poll questions — are a work in progress.

And this year’s report looks like a tacit acknowledgement of that. Deloitte made the effort to tweak the question, but it looks like it didn’t feel strongly enough about the data to include it in the main “State of Media Democracy” report (though it did furnish it to me upon request, which I appreciate). Perhaps next year it will include it, and show change over time.

Until then, hard to use these numbers to draw a conclusion about cord-cutting, one way or another. Not that it will stop you folks from sounding off in the comments. Have at it!

That’s separate but related to the lawsuit the big broadcasters have already filed against Dish for last year’s version of the Hopper, which lets users automatically skip commercials.

The new version of the Hopper incorporates some of the Sling “place-shifting” technology that Dish has offered for years, so some TV observers have thought Ergen and company might be able to roll this out without a lawsuit.

On the other hand, Fox (which, like this website, is owned by News Corp.) and the other networks are hammering out Internet and mobile rights with TV distributors on a slow, case-by-case basis. So having Dish offer those capabilities without a deal would pose a problem for programmers, to say the least.

And the Dish guys knew it: “We’re trying to be at the forefront of existing technology,” Dish CEO Joe Clayton said when the company showed off the new Hopper in early January. “If that means some lawsuits, okay.”

And Ergen’s very happy to take his chances in court — or at least move the negotiations there for a while. For more on his take on litigation, and everything else, see our hour-long interview with him from last week’s D: Dive Into Media conference.

And if you missed the whole thing? Your loss!

But no worries: This week, we’ll start running complete videos of each of our onstage interviews and demos, so you can review them anytime you want. We’re kicking off today with Dish Chairman Charlie Ergen, who rarely speaks in public, but sat down with us for an hour.

We’re so glad he did, because he has got one of the most interesting perspectives on the way technology is reshaping the TV business — and the ways that the TV business is stubbornly and successfully resisting change.

Some of this stuff parallels thoughts you’ve heard from other people — but usually not those with this much skin in the game. Ergen is a billionaire with the third-largest pay-TV business in America. So getting this stuff right matters a whole lot to him.

There’s a lot of great stuff in here. Like:

• Ergen’s assessment of his odds as he tries to grab Clearwire’s spectrum out of Sprint’s clutches (low), and why he’s taking on CBS and every other broadcaster with his ad-skipping Hopper DVR (both for leverage and because his customers want it).
• His explanation of why he bought Blockbuster (real estate) and why he failed to challenge Netflix (too late, too timid).
• His take on cord-cutting, which you never hear pay-TV bosses say out loud. (Yep, it’s real. And cord-nevers — kids like his who don’t have pay TV and never had — are even real-er.)
• What he thought of the Bloomberg Businessweek piece that described Dish as “The Meanest Company in America,” and whether his company’s work culture will let it compete with the likes of Google and Facebook. (Dish is not going to be supplying private buses for its workers anytime soon).

And the nice thing is that you get to sample as much, or as little, as you like. Enjoy, and come back for more over the next few weeks:

]]> http://allthingsd.com/20130219/dish-networks-charlie-ergen-gets-real-the-full-dive-into-media-interview/feed/ 0 http://allthingsd.com/20130212/dishs-charlie-ergen-on-ads-wireless-cord-cutting-culture-and-blockbuster-video/ http://allthingsd.com/20130212/dishs-charlie-ergen-on-ads-wireless-cord-cutting-culture-and-blockbuster-video/#comments Tue, 12 Feb 2013 18:59:36 +0000 Liz Gannes http://allthingsd.com/?p=294033 Dish chairman Charlie Ergen has a lot to say, and if you missed the livestream of his punchy and wide-ranging interview at D: Dive Into Media, you really missed out.

Here’s the full video of Ergen’s interview with Peter Kafka:

And here’s our coverage of what he said (but again, it’s worth watching the whole thing):

Dish’s Charlie Ergen Says He Doesn’t Want to Kill Ads, for Real

“I don’t want to kill ads. I think advertising is great, and I’m very aware that there’s multiple revenue streams in television, subscription and advertising. But I also don’t want to put my head in the sand, and I think the world is changing.”

Dish Chairman Ergen on Why the Company Needs a Wireless Network Anyway

“We want to compete against both the cable guys and the wireless guys, and we want to do it inside the house and outside the house, and that’s why we think we need wireless spectrum.”

Dish Chairman: “I Think People Are Cutting the Cord”

“I think we ought to be hooking people on pay TV when they are young. If we are getting run out of town, I want to get in front of that.”

Charlie Ergen on Dish’s Company Culture: It’s Not That We’re Mean, It’s That We’re Like an Indiana Jones Movie

“There are only two kinds of employees that I’ve run across in 30 years. There are ones that get results, and ones that make excuses. If you’re in that second camp, you’re not going to like Dish.”

Dish Bought Blockbuster to Open Wireless Stores

“We were too late on the Netflix thing. I feel stupid that we didn’t think of it first, but I am a fan.”

]]> http://allthingsd.com/20130212/dishs-charlie-ergen-on-ads-wireless-cord-cutting-culture-and-blockbuster-video/feed/ 0 http://allthingsd.com/20130211/charlie-ergen-on-dishs-company-culture-its-not-that-were-mean-its-that-were-like-an-indiana-jones-movie/ http://allthingsd.com/20130211/charlie-ergen-on-dishs-company-culture-its-not-that-were-mean-its-that-were-like-an-indiana-jones-movie/#comments Tue, 12 Feb 2013 03:32:52 +0000 Liz Gannes http://allthingsd.com/?p=293918 Dish Chairman and co-founder Charlie Ergen is well-known for being combative both inside and outside the office.

In an onstage interview at D: Dive Into Media, Ergen specifically addressed the description in a recent Businessweek story of Dish as “the meanest company in America,” and himself as the meanest boss.

Ergen called the story a superficial take on Dish. It’s not a good thing that Dish was the single worst-rated employer on Glassdoor last year, he said, but Dish’s culture of hard work has its own merits.

“It takes a lot of guts to work at this company,” Ergen said. “We’re a little bit like an Indiana Jones movie, where we’re always in trouble and we always get out of it. We’re going from alligators to arrows to snakes.”

Dish’s culture is about pride, adventure, hard work and personal responsibility, according to Ergen. But no, it’s not a place that charges five cents for a fork in the cafeteria, he said.

At that point, the Ergen session turned into a military pep talk. “There are only two kinds of employees that I’ve run across in 30 years,” he said. “There are ones that get results, and ones that make excuses. If you’re in that second camp, you’re not going to like Dish.”

“I care about our employees more than anybody in my company. I care about my kids, too, but that doesn’t mean I give them everything that they want.”

]]> http://allthingsd.com/20130211/charlie-ergen-on-dishs-company-culture-its-not-that-were-mean-its-that-were-like-an-indiana-jones-movie/feed/ 0 http://allthingsd.com/20130211/dishs-charlie-ergen-says-he-doesnt-want-to-kill-ads-for-real/ http://allthingsd.com/20130211/dishs-charlie-ergen-says-he-doesnt-want-to-kill-ads-for-real/#comments Tue, 12 Feb 2013 03:04:28 +0000 Liz Gannes http://allthingsd.com/?p=293944 The new version of Dish’s Hopper lets customers watch any show they’ve paid to see, on any device they want, when and where they want to watch it. Broadcasters were already suing Dish over the device, and in the case of CBS, it prevented subsidiary CNET from awarding the device top prize at CES. (For his part, Walt Mossberg preemptively awarded the gadget the D: Dive Into Media best-in-show award, which is fictional.)

Dish Chairman and co-founder Charlie Ergen said tonight that he’s not out to kill ads, and he’s not seeking leverage over broadcasters. He’s simply pushing past old one-size-fits-all TV modes of advertising — while being careful to stay within the lines by fully recording original broadcasts from satellite transponders before enabling ad-skipping.

Speaking at D: Dive Into Media this evening, Ergen said, “I don’t want to kill ads. I think advertising is great, and I’m very aware that there’s multiple revenue streams in television, subscription and advertising. But I also don’t want to put my head in the sand, and I think the world is changing.”

He added, “If we’re going to take a side, let’s take the side of the consumer.” That means doing things like letting watchers choose between ads, as Hulu does, Ergen said.

“A single mom may not need that testosterone ad that runs time and time again; she may want something about fashion,” he said.

Ergen posed his ongoing litigation with broadcasters as a battle for the future of commercials. “If the broadcasters were to win on their claims, they’d outlaw the DVR,” he said.

Dish is a different breed, according to Ergen. “As a company, we’re hobbyists. We hope to make money, but if we make good products, we’ll make money. As a company, you have two choices — you can fight change or you can embrace change. And I believe it’s less risky long-term to embrace change.”

]]> http://allthingsd.com/20130211/dishs-charlie-ergen-says-he-doesnt-want-to-kill-ads-for-real/feed/ 0 http://allthingsd.com/20130201/dishs-clearwire-offer-lives-on/ http://allthingsd.com/20130201/dishs-clearwire-offer-lives-on/#comments Fri, 01 Feb 2013 15:42:18 +0000 Spencer E. Ante and Anupreeta Das http://allthingsd.com/?p=290750 Clearwire Corp. kept alive its consideration of a merger proposal from satellite television operator Dish Network Corp., as a vocal group of shareholders continues to oppose the wireless broadband operator’s deal to be bought by Sprint Nextel Corp.

In a regulatory filing Friday, Clearwire said it opted not to tap financing made available by Sprint for February — a step that could have caused Dish to withdraw its proposal to buy Clearwire for $3.30 a share. Clearwire has agreed to sell itself to Sprint for $2.97 a share.

Read the rest of this post on the original site »

]]> http://allthingsd.com/20130201/dishs-clearwire-offer-lives-on/feed/ 0 http://allthingsd.com/20130131/that-cbscnetdish-story-wont-go-away/ http://allthingsd.com/20130131/that-cbscnetdish-story-wont-go-away/#comments Thu, 31 Jan 2013 20:22:25 +0000 Peter Kafka http://allthingsd.com/?p=290614 Four weeks and counting.

That’s how long the story about CBS and CNET and Dish’s Hopper DVR has been percolating.

And today the story’s half-life got a little longer, courtesy of the Consumer Electronics Association: The CEA, which produces the annual CES show, announced that it was retroactively awarding the Hopper a “Best of Show” award — the designation that CNET staff had originally awarded the gadget before their corporate owners at CBS overruled them.

You can read the CEA’s press release, which includes words like “media firestorm,” here. Also in the release: A pronouncement that it won’t be working with CNET for its “Best of Show” awards next year. Per Tim Carmody, CNET had already announced that it wouldn’t be working with the CEA next time around.

But no matter the particulars, the news is an occasion to revisit, yet again, CBS’ baffling decision to meddle with the editorial operation of one of its best-known Web assets. Which my fellow typers are happy to do — make sure to click on the down arrow button on the side of this Techmeme block to see a roiling Twitter debate.

]]> http://allthingsd.com/20130131/that-cbscnetdish-story-wont-go-away/feed/ 0 http://allthingsd.com/20130120/dish-toots-its-own-horn-since-cbs-wont/ http://allthingsd.com/20130120/dish-toots-its-own-horn-since-cbs-wont/#comments Sun, 20 Jan 2013 21:46:24 +0000 Peter Kafka http://allthingsd.com/?p=287094 Maybe the Dish/CBS/CNET imbroglio will fade away. But not if Charlie Ergen and company can help it. And the New York Times’ ad department is happy to help.

Here, via  Nieman Journalism Lab’s Justin Ellis, is the full-page thumb-in-the-eye Dish ran in the Times’ Sunday “A” section today. As Ellis notes, some people still see value in print ads.

]]> http://allthingsd.com/20130120/dish-toots-its-own-horn-since-cbs-wont/feed/ 0 http://allthingsd.com/20121107/cord-keeping-pay-tv-shrinks-for-the-quarter-stays-steady-for-the-year/ http://allthingsd.com/20121107/cord-keeping-pay-tv-shrinks-for-the-quarter-stays-steady-for-the-year/#comments Wed, 07 Nov 2012 19:53:23 +0000 Peter Kafka http://allthingsd.com/?p=267617 What with the crazy weather and Nate Silver’s ascension to geek heaven and everything else, not a surprise that we didn’t get to this yesterday. But, for the record: The pay-TV business lost 127,000 subscribers last quarter.

So, once again: Does that mean people really are ditching Comcast, Verizon and Dish, etc., in favor of Netflix, iTunes and Hulu?

And, once again: Maybe. But you can’t prove that based on last quarter’s numbers.

As we’ve pointed out before, there’s a seasonal cycle to the pay-TV business: The cable, telco and satellite guys usually add a bunch of subscribers in Q1, lose a bunch in Q2, lose a few more in Q3 and then gain some back in Q4.

Tally up the first nine months of 2012 and the pay-TV guys are basically flat — just like they have been for the past couple years, notes Bernstein Research’s Craig Moffett (click chart to enlarge):

For the past few years, the pay-TV guys could point to the cruddy economy as the reason for their nongrowth. But now that argument doesn’t work as well. Moffett: “Household formation, while still anemic, is showing signs of recovery. Pay TV industry subscriber metrics are not. Pay TV penetration of America’s households is therefore falling, even while the number of Pay TV subscribers is still inching higher.”

So, if you’re in the “everyone I know uses the Web instead of cable” camp, that sure sounds like the data supports your argument. Moffett is still unconvinced, though: He figures the net losses come from subscribers who simply can’t afford to pay for TV or the Internet, and are getting their fix from old-fashioned rabbit-ear antennas.

Plausible?

]]> http://allthingsd.com/20121107/cord-keeping-pay-tv-shrinks-for-the-quarter-stays-steady-for-the-year/feed/ 0 http://allthingsd.com/20121016/a-new-era-in-tv/ http://allthingsd.com/20121016/a-new-era-in-tv/#comments Tue, 16 Oct 2012 21:19:40 +0000 Daniel Leff http://allthingsd.com/?p=260624

TV image via Tomislav Pinter

We have entered a new era in TV. My parents grew up in the 1950s and 1960s watching broadcast/network TV. I grew up in the 1970s and 1980s watching cable (and satellite) TV. My children and are growing up watching TV delivered “Over The Top” (OTT), or over IP-based networks, and they are doing so on a multitude of devices (TVs, tablets, smartphones, etc.). We are in the early stages of a video creation, distribution, consumption, content bundling and pricing paradigm shift that will lead to fundamental and transformational shifts in the $150 billion U.S. pay-TV ecosystem.

Such a dramatic transformation provides opportunities as well as challenges for today’s incumbents. It also provides compelling opportunities for innovative new entrants, large and small. When all is said and done, consumers will be the winners.

There are approximately 100 million pay-TV subscribers in the U.S. who receive multichannel video service from providers such as Comcast, Time Warner Cable, DirecTV, Dish and Verizon. These subscribers watch an average of almost five hours of live TV per day or approximately 44 billion hours per month. That’s a lot of TV! But video consumption habits are changing. People today want to consume their video content anywhere and anytime, however they choose. They also wish they didn’t have to pay so much for the premium content that they currently pay for and/or don’t actually watch (the average video subscription service costs are approximately $75/month in the US). In addition, consumers have indicated that they might actually be willing to pay for different types or “bundles” of content than studios and programmers either realize or are currently willing to offer. But that’s another article unto itself, in which I’ll provide an overview of what I refer to as the coming “atomization of content.”

All of these changes in video consumption habits and desires — combined with increased broadband penetration and mobile device usage — have led to several evolving dynamics in the pay-TV ecosystem. These include an increase in cord-cutting/cord-shaving (this term refers to a consumer’s decision to completely cancel or significantly reduce their pay-TV package), a dramatic increase in online/Internet TV viewing over the last few years (today, greater than 640 million hours per month) and the creation of a parallel video ecosystem consisting of emerging TV and digital media services platforms as well as OTT/Internet TV Networks.

There are several companies leading the charge on innovation in the pay TV ecosystem. On the digital media services platform front, Roku and Apple TV are the two that have garnered the greatest consumer adoption, with approximately 90 percent combined market share in the US — and each of them has sold several million set-top boxes and a large amount of digital content. However, each one possesses a distinctive value proposition with different price points, content offerings and use cases (a comprehensive review by CNET of both Apple TV and Roku can be found here).

Regarding Internet TV networks, Netflix, Hulu and Google/YouTube have all built significant businesses to date, albeit with different content offerings, business strategies and use cases (combined, they had revenue greater than $4 billion and several hundred million users globally in 2011). Each of these entities, as well as Amazon, has also been quite aggressive at building out online video capabilities, not only by increased licensing of premium streaming video content, but also via the allocation of hundreds of millions of dollars dedicated to creating/producing new video content exclusively for distribution over the Internet.

Other technology behemoths, such as Intel and Microsoft, are also working on their own product and service offerings to participate in and help drive change in the pay TV ecosystem. Intel has had a number of Digital Home initiatives over the last decade, and now it’s intending to launch a pay TV service. The rumors about this effort include claims that Intel will deliver the service via an Intel-designed proprietary set-top box. Microsoft is aiming to have an integrated HW and content services TV offering, using Xbox as its set-top box or gateway in the home, supposedly delivering a wide range of licensed content as well as originally-produced content.

While the big technology incumbents evolve their strategies, a number of young start-up companies are innovating as well. Companies such as DecaTV, Awesomeness TV, Machinima, Filmon and others are essentially growing up as Internet TV networks, channels and/or media companies — each, in large part, developing its own video content focused on specific interest themes and demographic targets. For example, DecaTV is producing original video content for “engaged, affluent and educated women online.” Machinima has emerged as the leading video gaming entertainment network for gamers around the world, showcasing gameplay, original shows, game trailers and news. Awesomeness TV is a new Internet channel focused on teens and tweens, founded by former Nickelodeon and WB producer/director Brian Robbins. Filmon, founded by Alki David, is a global Internet TV network with a host of licensed as well as produced and owned content, and has one of the most extensive international content offerings.

Companies like Maker Studios, SkyChannel, Nimble TV, YapTV, Zeebox and others are innovating on the tools, infrastructure and services side. Maker Studios is essentially a one-stop shop for Internet TV development, production, promotion and distribution. SkyChannel is providing the most comprehensive and straightforward suite of tools for content owners to publish and charge for their content libraries on a multitude of devices, platforms and operating systems. Nimble TV is pioneering true “TV Anywhere” service with elastic cloud DVR capabilities as well as place-shifting (e.g., Slingbox-like) functionality. YapTV and Zeebox are two of the more impressive “Social TV” apps that provide a robust multi-screen, real-time viewing experience to consumers.

With the aforementioned transformations taking place in the pay-TV ecosystem, who will be the winners when all is said and done? Anyone who tells you they know for certain is wrong. What I can tell you is that although the incumbents will be challenged in a number of ways, you should not expect them to disappear anytime soon. They have tremendous resources, a history of competing vigorously in the marketplace and have shown the ability to evolve their existing businesses just enough to remain dominant. However, I do expect that there will be some new and innovative companies that will emerge as next-generation leaders in practically every part of the pay-TV ecosystem. I have my own ideas of which companies may be included in this group, but it will be the consumers who will really win — with increased content choices, more advantageous pricing schemes and the true capacity to watch whatever, wherever and whenever they want.

Daniel Leff is a Venture Partner at Globespan Capital Partners, a technology-focused venture capital firm with offices in Palo Alto and Boston. He invests in digital media companies, among other things, and is an investor in and on the board of Roku. He tweets at @dr_daniel_leff.

]]> http://allthingsd.com/20121016/a-new-era-in-tv/feed/ 5 http://allthingsd.com/20121001/oops-new-slingboxes-show-up-on-best-buy-shelves-ahead-of-launch-date/ http://allthingsd.com/20121001/oops-new-slingboxes-show-up-on-best-buy-shelves-ahead-of-launch-date/#comments Mon, 01 Oct 2012 16:13:58 +0000 Lauren Goode http://allthingsd.com/?p=255737 Two new Slingboxes — the 350 and the 500 — have appeared at a Best Buy in Virginia, about two weeks ahead of the products’ official launch. The devices, which a Sling Media representative said are still receiving firmware and software updates and are currently unusable, were first spotted by digital media Web site Zatz Not Funny. There were no prices listed for the new boxes, which will be the first new Slingbox hardware since the Slingbox Pro HD came to market in 2008.

]]> http://allthingsd.com/20121001/oops-new-slingboxes-show-up-on-best-buy-shelves-ahead-of-launch-date/feed/ 1 http://allthingsd.com/20120930/dish-network-adds-internet-service-aimed-at-rural-areas/ http://allthingsd.com/20120930/dish-network-adds-internet-service-aimed-at-rural-areas/#comments Sun, 30 Sep 2012 13:02:08 +0000 By Shalini Ramachandran http://allthingsd.com/?p=255544 Dish Network Corp. plans to launch a nationwide broadband service next Monday under the brand dishNET, hoping to add a new revenue stream on top of its pay-television business.

The satellite-TV company on Thursday is expected to disclose plans to sell broadband, at a speed of between five and 10 megabits per second, for between $39.99 and $69.99 a month for customers who also take Dish’s TV service. Those who aren’t TV customers will pay $10 more a month, a similar pricing approach to that used by cable operators.

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