Locals theory

[Jacob S]

MY THEORY......

I think a lot of it has to do with which stations are willing to give Dish the best deal within a certain DMA number range such as the top 125 or something like that. Them getting a good deal on the local channel retrans could make up for the smaller number of people in which for Dish to collect money from to make a profit. That means that it would not take as many subscribers to make as much of a profit on it (or at least not lose anymore money) than they would on the lower DMA #'ed markets.

Sometimes you got to think like a CEO to know what is going on and this is my theory on the matter. It may not be the DMA# anymore making the difference by their profit margins because after a certain DMA# this may be the way to determine which ones would be added, in which may be a different approach than Direct is taking. I personally think that Dish should get some local markets while Direct should get the others, that way there will be more markets served, by one service or the other. Dish and Direct could work together on this without affecting their profit margins, but possibly helping them.

[bryan27]

Also when you look at markets 100-125 there are:

Not as many stations to deal with.
Not as many stations to carry.
You can charge $5.99 for 3 or 4 stations and offset the cost of uplinking 10-20 stations for the larger markets.

Think of it this way. E* decides to carry Youngstown. There is only ABC, NBC, CBS, PBS. Each net station asks for 5 cents per sub per month or 15 cents total. Say the total cost for carrying a station is 50 cents per month per sub so the cost of carrying the market is $2.15/per sub per month. 1,000 subs take the Youngstown for $5.99 which is $5,990/month - $2,150 that it costs for 1,000 Youngstown locals subs and E* has $3,840 to apply to the costs of a more expensive to carry market.

[Jacob S]

I never thought about that, using the money they make to carry a more expensive market, in which would help level out the costs. I think they will carry the cheaper markets first. You have to think of the cost of the satellite as well. Getting additional subs from having the locals help too even if it cost Dish a little or did not make anything.

[lee635]

Originally posted by bryan27
Also when you look at markets 100-125 there are:

Not as many stations to deal with.
Not as many stations to carry.
You can charge $5.99 for 3 or 4 stations and offset the cost of uplinking 10-20 stations for the larger markets.

Think of it this way. E* decides to carry Youngstown. There is only ABC, NBC, CBS, PBS. Each net station asks for 5 cents per sub per month or 15 cents total. Say the total cost for carrying a station is 50 cents per month per sub so the cost of carrying the market is $2.15/per sub per month. 1,000 subs take the Youngstown for $5.99 which is $5,990/month - $2,150 that it costs for 1,000 Youngstown locals subs and E* has $3,840 to apply to the costs of a more expensive to carry market.

I like your line of thinking. ;) Except that the cost of locals is probably some fixed amount per month per local channel regardless of royalties or the number of subs. THis covers the uplink costs, satellite time and is not a variable cost. So the expanded formula might be:

$150,000 fixed cost plus $.15 per sub for royalties plus say $2.00 per sub for normal overhead/billing costs etc.

So at $5.99 per sub, you net $3.84 per sub after variable costs, so you need to sign up at least 39,063 subs before the DMA covers its fixed costs and starts to turn a profit.

Anyway, the $150,000 fixed and $2.00 overhead are just plug figures. Someone with better info could surely post some reasonable approximations.

[dishrich]

http://www.skyreport.com/skyreport/nov2002/112502.shtm#four

I think this part makes sense: (from the 11/25 skyreport)

"None of those towns are among the top 50 DMAs. Reno isn't even in the top 100. So why spend precious bandwidth there? Easy, these are regions where cable's pipes tend to be thinner. And, not surprisingly, many cover areas held primarily by NRTC operators - meaning that DirecTV has little incentive to use its bandwidth in local delivery. So DISH racks up the subscribers. And the window looks wide open."

[Mike123abc]

Also, you have to consider where Dish has spot capacity. Out west spots can be placed without much DMA overlap. Like look at west coast, both E7 and E8 both have 3 spots with 2 or so transponders each in them. This gives them huge capacity for for the west coast where there are not that many DMAs... Compared with the NE where tons of DMAs are in a very small space, so they do not work well with spot beams.

Same goes for TX where a bunch of spots can fit in the state with just a few DMAs in it, so they can pick up a bunch of small markets.

[jeffcarp]

Also, in the smaller DMA's there is likely only 1 cable company and it is likely a 450 MHZ system. Therefore, even with though the market is smaller, Dish stands to get a higher percentage of subs.

[Jacob S]

How many markets right now have a spot beam over them and how many does not? I know mine has a spot beam getting 125% on those transponders, I am right in the center and DMA#62 so I would think I would have good odds. Cable penetration is not that great either. People have a hard time getting a signal bc of the trees and hills/mountains. Stations are wanting the locals on satellite because I wrote to the managers. Knowing which ones have spotbeams over them and how many does not have them available may help tell us who is more likely to get their locals as well in the near future.

[Mike123abc]

Jacob your problem is that there are a lot of other big markets under your spot. The spot over WV is serving Pittsburgh (8), Cleveland(8), Cincinnati(7), Buffalo(7), and Detroit(8) already... all big DMAs with 7-8 stations in each one in each one.

[Mike123abc]

Dish currently has more capacity for LIL than DirectTV. Dish has 2 satellites up right now, and Direct 1. Next year Direct will launch a second satellite and then they will have pretty close to the same capacity for LIL.

DirectTV has a much more aggressive spot beam satellite than E* so they get more markets on a single satellite. But, when they launch their second satellite they will have it at 119 where they are very limited in transponders (they have only 11 transponders for that slot), so they will not be able to use all the spots. Thus they will have about the same number of transponders as Dish in spots.

[Jacob S]

How many markets (stations) can be served on a spot beam?

[Mike123abc]

Depends how many transponder frequencies in the spot. Each transponder can server up to 12 channels, but that is pushing it with compression quality, 8-10 works better. In the WV spot there are 3 freqencies so they can do 30-36 stations. Note that Dish puts some on the wing satellites too. So, you need to check the channel chart to see which stations are on the main birds, and which are on the wing satellites.

[bryan27]

The beam over WV won't hold any more channels. TP2 & TP8 both hold 11 channels and TP10 holds 10 channels. Huntington/Charleston couldn't be added to the beam even if they tried. The market has 8 eligible stations that may have to be carried.