• Year-End Target for Dish's OTT Launch Looks Questionable

    With time ticking away to December 31st, it's looking increasingly questionable whether Dish Network is going to meet its self-imposed year-end deadline to launch its $30/month virtual pay-TV service ("vPop"). Dish's chairman Charlie Ergen, reiterated the company's commitment to the year-end deadline in his Q3 '14 earnings call comments.

    But he also lowered expectations for the new service, citing numerous technical and operational challenges. I think it's fair to add to that list significant programming challenges, which always existed and have no doubt only increased given Dish's recent and current skirmishes with big TV networks.

    Currently Fox News Channel and Fox Business Network are blacked out for Dish subscribers, due to the companies' inability to negotiate a new contract. The Fox blackout follows a short-lived one with CBS a few weeks ago before a new contract was negotiated. And the CBS blackout followed yet another one, in October, of key Turner channels including CNN, Cartoon Network, HLN, TCM, etc.)

    In one sense, Dish is fighting an important fight to control escalating programming expenses. These are in turn driving up subscriber rates and pressuring margins across the pay-TV industry, even as would-be cord-cutters and cord-nevers are presented with more and better OTT video options.

    However, Dish's tough stance with TV networks is almost certainly making it harder to obtain rights for the vPop service. It was never going to easy for Dish to carve out just those channels it wanted to carry/pay for to keep the $30/month vPop fee economic (especially since it has already committed to carrying super-expensive ESPN). But the new disputes must be making programmers even more hesitant to grant OTT rights to Dish.

    As VideoNuze readers know, I've long been skeptical about the vPop concept, going back to Intel Media's short-lived foray. Consumers would welcome lower rates, but not if the vPop service is missing many key channels. Dish can, at some point, surmount technical and operational challenges to get the OTT service going. But getting the programming deals done and building a robust lineup for $30/month still seem like the biggest hurdles to me.