In looking at the current blackout of AT&T’s HBO from the Dish Network system, Michael Nathanson, senior research analyst, MoffettNathanson Research, says: “The steady drip, drip, drip of lost programming sends a rather unsettling message, both to their subscribers and to their equity investors: Dish is exiting the video business in steps.”
Dish is active in pursuing lower carriage deal costs among all its programming networks, which in theory will be passed on to its consumers.
But it has no problem taking big risks at well -- including blackouts or potential blackouts, with TV networks and stations including Univision, and, before that, Fox, Viacom, CBS, and Sinclair Broadcast Group.
And it may not just be Dish Network. Other traditional pay TV providers remain concerned about rising costs.
“It’s not just that individual pieces of programming don’t make sense. It’s that the economics of the whole bundle don’t make sense,” notes Nathanson.
But of course, pure-play pay TV provider Dish is in a different place from most other pay TV businesses. “De-emphasizing video is fine for cable operators; they have broadband to fall back on. Dish Network doesn’t.”
Back to HBO: This is perhaps a different kind of network, one Dish can’t support anymore -- a premium pay TV cable network.
Nathanson guesses Dish isn’t hitting its goal in carrying HBO -- getting to minimum distribution levels. “Our estimate is that Dish has only about 20% HBO penetration. Most MVPDs have something like 30%.”
Why? Dish’s household demographic is at a lower income than DirecTV. It becomes harder to pull off in an age of “skinny” TV bundles.
Big network selling leverage? HBO is part of WarnerMedia, which also includes Turner networks -- TNT, TBS, CNN, Cartoon Network and others. But as a non-ad-supported network, HBO is a different animal.
What about monopolistic concerns -- AT&T also owns Dish Network competitor, DirecTV?
Critics say their concerns are now being validated. HBO's suite of channels has been “blacked out” for the first time ever as the result of a failure to reach a deal with a pay TV provider -- cable, satellite or telco.
Still, an HBO executive told Wired: "We offered them lower rates, a deal that would have allowed them to pay substantially less."
Less is less -- unless it’s more. Well, it’s not TV. It’s HBO -- still a network wildcard.