Interesting merger discussion...

[Richard King]

http://www.thedeal.com/NASApp/cs/ContentServer?pagename=TheDeal/TDDArticle/TDStandardArticle&c=TDDArticle&cid=1029965977610&Box1=Variables.Box1&Box2=Variables.Box2&banner=Variables.banner
From the perspective of the investment market. "All indications are that the staff wants to block the deal, he said."

[James_F]

Sounds good to me. :D (snobbish DirecTV sub)

[Richard King]

I would like to see it happen, but I doubt very much that it will for the reasons expressed in the article. The spread between Dish and GMH stock is just too wide at this stage. No one on Wall Street believes that it will happen. A real gamble for anyone interested would be to buy some GMH calls expiring right after the time of the announcement. If the announcement is a go ahead, these will probably more than double in short time. Pretty good theory coming from a bad capitalist.

[Mike123abc]

A blocked merger does not mean good news for D* subscribers. GM wants to get rid of Hughes, the next person to bid on it may not be better than E*. Sometimes the devil you know is better than the devil you do not know.

D* also has the current problem that E* has a lot more transponders. E* has 85 transponders, D* has 46. While one can argue that D* has done a lot better managing transponders than E* has done in the past (better spot sattelite, etc), eventually D* will have a problem.

[James_F]

My arguement is more with choice than management. I think that two DBS providers allows both subs of Dish and DirecTV to gain.

[Chris Freeland]

Choice is why I am in favor of the merger, more choices on one platform. I want to have the choice of getting my locals on satellite. With the merger I would expect to eventually have a choice of core, NFLST and other sports packages, my locals, broadband, SA, Supers, all on a single platform. With the merger and the eventual consolidation to one platform I would also expect to see more channels to choose from then what is currently available on a bandwidth limited E* and D* separately or on cable and for a better price then cable.

[James_F]

How do you figure thats choice???? I have every channel that I need. Yea, I'd like more HDTV, but what does Dish bring to the table that would help me? Raise in subscription fees? Crappy hardware? Idiotic Chucky chats? Come on, its a joke for the consumer.

[Karl Foster]

The only people who will benefit are the E* subs who want sports subscriptions. They can keep WB and UPN supers, I get them locally. Other than supers, E* doesn't offer D* subs anything they don't already have.

[Rusty]

Originally posted by Mike123abc
A blocked merger does not mean good news for D* subscribers. GM wants to get rid of Hughes, the next person to bid on it may not be better than E*. Sometimes the devil you know is better than the devil you do not know.


Mike, I agree with you that, if the merger is blocked, the next suitor could be worse than E*. But, my reason for continuing my opposition to this merger is that a merger with E* is the only one that will, basically, reduce the number of viable small dish DBS providers to one. IMHO that is an unacceptable situation. Not too many years ago this merger would not even have been attempted because it would have, almost automatically, been rejected because it removes all viable competition.

[Mike123abc]

Well one really cannot count Sky Angel as competition to the other DBS markets. Unless they suddenly decide to change their programming, they will remain a specialty DBS provider in a narrow market.

SES and R/L DBS are much strongest potential, but both would have trouble competing against a combined E*/D*.

DirectTV has the problem now of having a great system, but lack of commitment of their parent company. They need someone to buy them to keep them going for the future. If not E* then maybe FOX or other comitted company. If the merger does not go through at this time, DirectTV runs the risk of losing its market leadership as it casts about for a buyer. Nothing like uncertainty for the next few years to keep management from spending the tons of capital needed to stay ahead.

[Ryan]

NewsCorp is the other suitor, unless one of these newcomers is a sleeper.

I find it hard to believe that new interests are getting involved in the basic DTH market. Standard Def locals are the bane of DTH satellite TV. Maybe the move to D(igital)TV will force the locals off satellite again. Since it's digital, couldn't the signal be delivered via a fat (wired) pipe like DSL? I think one of the Canadian providers has considered a combo satellte/DSL box. That would fit well with DirecTV's DSL unit here in the states. I even bought my first PVR, a first-gen ReplayTV, because it could handle multiple sources out of the box. (I had both DirecTV and Comcast cable due to the Comcast Sportsnet screwjob.) But it did the job of getting me both my local TV and all the best of satellite via one device.

Locals on satellite just chew up precious hardware (in space) and bandwidth, largely repeating the same programming over and over again. The PVR has got to fit in here somewhere to solve the problem. Just pre download separate advertising by market, then broadcast the same programs nationwide to PVRs and insert separate local ads as needed. Easier said then done, but there's currently a ton of money floating 22K miles up that can 'see' the whole country but only 'talks' to a small part of it. Seems to be a big waste to me.

How could any newcomer possibly see vast profit in repeating the same-same. In this market, the market shapes the business model. The market wanted locals, we got locals.

[Charlie\'s Butler]

TARBS is already testing on the ku part of G10R. They have 32 foreign language FTA until January. They will then launch up to 40 US channels and encrypt. Price $34.95/month with TARBS receiver

[Jacob S]

Why would DirecTv say something against the merger after wanting the merger? This is defeating the purpose and/or just does not make sense whatsoever. It contradicts itself.

[Chris Freeland]

Originally posted by karl_f
The only people who will benefit are the E* subs who want sports subscriptions. They can keep WB and UPN supers, I get them locally. Other than supers, E* doesn't offer D* subs anything they don't already have.

And D* subs would not benefit from more bandwidth? D* subs would not benefit from better pq and more premium movie channels then what D* and E* currently offer separately? In order to stay competitive with cable DBS needs more bandwidth which cable has more of. Are you telling me that their are not D* subs that live in small markets who will never get their locals on satellite unless their is a merger? Don't tell me they can simply put up an antenna, that is the equivalent as saying they can eat cake. Many people, myself included already have an antenna and still can not receive a decent picture or receive waivers from some stations. As far as the Supers go, they are a major reason that I have E*, many of us can not receive these WB and UPN stations ota and the Supers have lots of syndicated programing and sports that are not available other then the expensive sports packages. Are you telling me that their are not D* subs out their that wold would not purchase the Supers if they where made available on the same platform. It seams to me that it is vary arrogant for some D* subs to claim that this merger would only benefit E* subs. :shrug:

[Chris Freeland]

Originally posted by James_F
How do you figure thats choice???? I have every channel that I need. Yea, I'd like more HDTV, but what does Dish bring to the table that would help me? Raise in subscription fees? Crappy hardware? Idiotic Chucky chats? Come on, its a joke for the consumer.

Yes you might have every channel you want now, but what about the future? With both DBS company's close to being maxed out on bandwidth and cable having an abundance, to stay competitive with cable in the future not only in price but also in the number of channels and services we need the merger. If bandwidth were not at such a premium and if I thought their was a snowballs chance of my area, dma #85 getting its locals on satellite, I too would prefer having the additional competition. I just feel because bandwidth is so tight that the merger is the best way for satellite to stay competitive with cable in the future.

[James_F]

How do you figure they will be able to add any new channels. Bandwith is always going to be a problem with DBS. Bandwith is tight no matter what. They are going to waste any of that bandwith gains by offering locals to 210 markets. Net result, no new channels, no new HDTV channels.

DBS is destined for people who don't have availabity of Digital Cable. Digital Cable is offering HDTV, PVRs and more channels than DBS. There will always be people leaving for DBS that are pissed with their cable companies, but not the millions that this new company will need to make it work.

Look around guys, this is as good as DBS will ever get. Mark my words!

[James_F]

Originally posted by Chris Freeland
It seams to me that it is vary arrogant for some D* subs to claim that this merger would only benefit E* subs. :shrug:

You are missing the point. I have my locals, why do I need some crappy Super? Don't waste bandwith. As I said, DBS is only going to be for people in the sticks. Why do they need to add locals for every redneck town. Keep it at the to 25 markets and let everyone else get it OTA or get the NY/LA nets.

[Chris Freeland]

Originally posted by James_F
How do you figure they will be able to add any new channels. Bandwith is always going to be a problem with DBS. Bandwith is tight no matter what. They are going to waste any of that bandwith gains by offering locals to 210 markets. Net result, no new channels, no new HDTV channels.

DBS is destined for people who don't have availabity of Digital Cable. Digital Cable is offering HDTV, PVRs and more channels than DBS. There will always be people leaving for DBS that are pissed with their cable companies, but not the millions that this new company will need to make it work.

Look around guys, this is as good as DBS will ever get. Mark my words!

Easy, once everything is on one platform the duplicate channels will be eliminated providing more bandwidth for additional national channels. Granted this will may take 3 or 4 years to accomplish but it will happen. The 210 dma's will be handled easily by re-useing the same set of frequency's with the spot beam satellites already up and planned for in the future. With platform consolidation cities currently using up 2 TP's because of separate DBS company's will only need 1 TP freeing up one for another dma. Once the platform is consolidated and every DMA's locals are on on satellite their will be enough cable subs willing to make a switch for more channels at a lower cost to make it work. If the merger is blocked, then I agree with your final statement that now is the best DBS will ever be. If the merger is approved however I believe DBS has a brighter future indead.

[Chris Freeland]

Originally posted by James_F


You are missing the point. I have my locals, why do I need some crappy Super? Don't waste bandwith. As I said, DBS is only going to be for people in the sticks. Why do they need to add locals for every redneck town. Keep it at the to 25 markets and let everyone else get it OTA or get the NY/LA nets.

No I did not miss your point, my point is that many of us in the smaller DMA's would like to have are locals on satellite too. As I stated earlier that not all channels can be received clearly ota but still can not qualify for distant nets. It is very arrogant on your part that only people in the large metro areas deserve to have their locals on satellite. I also resent you calling smaller DMA's as a redneck town:mad:. Just because some of us live in the sticks does not make us a redneck.

[James_F]

Originally posted by Chris Freeland
It is very arrogant on your part that only people in the large metro areas deserve to have their locals on satellite.

I disagree, why shouldn't I get better service than you if I live in a bigger city? Large markets drive everything. You can live with the NY/LA locals and let us have our HDTV. How can you have that kind of attitude? You are ruining it for us in large markets... :nono:

[James_F]

Originally posted by Chris Freeland
Easy, once everything is on one platform the duplicate channels will be eliminated providing more bandwidth for additional national channels. Granted this will may take 3 or 4 years to accomplish but it will happen.
OK, then Cable will eat them up. That too long. In the mean time, Digital Cable is offering a larger selection of HDTV and locals than DBS will ever be able to. The opportunity has passed them by.
The 210 dma's will be handled easily by re-useing the same set of frequency's with the spot beam satellites already up and planned for in the future. With platform consolidation cities currently using up 2 TP's because of separate DBS company's will only need 1 TP freeing up one for another dma. Once the platform is consolidated and every DMA's locals are on on satellite their will be enough cable subs willing to make a switch for more channels at a lower cost to make it work.
What cable sub is going to give up better selection to go with DBS? None, yea there might be a few thousand who get bad service, but DBS isn't that great either. Why would I leave Cox if they had more locals, more HDTV and a PVR? MAYBE Dish will release a HDTV PVR in the next year, but by that time, I'm sure many people will leave for cable. HD Discovery, HD HBO don't keep people from leaving. If I can get my HDTV locals though cable, why would I stay here?[/b][/quote]
If the merger is blocked, then I agree with your final statement that now is the best DBS will ever be. If the merger is approved however I believe DBS has a brighter future indead.
Oh OK, combine two companies with lots of debt, no future and see what happens. Raise prices to pay down the debt. That will draw customers in. :rolleyes:

[Testor1]

"I disagree, why shouldn't I get better service than you if I live in a bigger city? Large markets drive everything."


I guarantee you that if it wasn't for the farmers in those redneck towns providing your FOOD you wouldn't be CITY BOY!!

[James_F]

:lol: You don't know a thing about food supply. The US would be FAR better off if we got our food from South America rather than give farmers tax breaks to produce food at a higher cost. Thats the dumbest argument I've ever heard. Anyway, big city corporations own most of the farms here in the US, not average joes... How about you come up with a better argument with that. I get most of my food here in Phoenix from Mexico.

[Karl Foster]

Originally posted by Chris Freeland


Are you telling me that their are not D* subs out their that wold would not purchase the Supers if they where made available on the same platform. It seams to me that it is vary arrogant for some D* subs to claim that this merger would only benefit E* subs. :shrug:

I might be arrogant, but it "seams" to me that in my case (and most people in urban environments) that supers are a complete waste of bandwidth. Our market here has WB and UPN stations available - and I live in DMA #36 - not exactly the top of the list.

Here's what I see happening if the merger is approved.

Them: Hello Mr. Foster, I am Joe Schmucky from the New Directv. We'd like to welcome you to our new service and talk to you about your equipment needs.

Me: OK, I am currently an Ultimatetv subscriber with Directv. I have two UTV units and a top of the line standard receiver with DD output. What kind of equivalent equipment will you be providing me today?

Them: Well, Mr. Foster, We at the new Directv have decided that your equipment will not be supported in the new company, so we will be replacing your two Ultimatetv receivers with shiny new PVR 501's and a brand new 301.

Me: But I was under the understanding I'd be getting at least the same level of equipment I had before. I don't want Dish Network PVR's and the 301 doesn't have DD output. The PVRs have not proven to be as reliable or feature-filled as what I currently have - so it isn't equivalent.

Them: Well, Mr. Foster. If you don't like it you can do nothing as we are the only game in town now. We realize that your area does not have digital cable available, so if you want digital quality television, you will stay with us.

Me: But I have spent hundreds of dollars on satellite equipment over the years, and I like the equipment that I have.

Them: Tough!

This merger offers me nothing. It might benefit those in the smaller DMA's, but then those of us in the larger DMA's will be totally subsidizing the smaller DMA's, as they won't have enough subscribers to break even.

BTW - was your DMA on satellite for locals when you signed up? What has changed then? Why does satellite "owe" you your locals. They need to be profitable and this promise to give everyone their locals is a money-loser for the new company. Rates are destined to go up IMHO. Charlie isn't in business to be charitable to the rural areas, he is in business to make craploads of money. If you think E* is so great at handling locals, talk to someone in Hartford, Baltimore, or Memphis, and see how great the E* locals are there. If they can't get those large cities up anytimg soon, what makes you think your town is going to come up anytime soon?

[Jacob S]

I guarantee that if you lived out in the country where your locals were not up that you would look on this a bit differently.

[James_F]

Karl, they'll get them up, but at the cost of service, quality and choice. So Laredo, TX will get locals (they are the 210th largest market in U.S.). How is that good for anyone? But poor Bangor, ME won't get in because they are 213. This is such a joke!

[James_F]

Originally posted by Jacob S
I guarantee that if you lived out in the country where your locals were not up that you would look on this a bit differently.

If I lived in Wheeling, WV I wouldn't expect them.

Oh I get it, you want to kill DBS for all just because you want locals in State College, PA. Come on, be realistic here. Should be Top 50 markets tops (Buffalo, NY would be #50). How can any town smaller than that be worth sacrificing picture quality for. :rolleyes:

[Karl Foster]

Originally posted by Jacob S
I guarantee that if you lived out in the country where your locals were not up that you would look on this a bit differently.

When I signed up for DBS service with Directv, my locals were available. If they hadn't, I probably would have switched from cable anyway, knowing that my local channels would have to be obtained by another source. When you signed up for DBS service, your locals were not included and still are not. Where in your contract does it say that you will receive your locals at any point? You are getting what you are paying for. They don't owe you your locals. Locals are not an entitlement. Not trying to be an a**, but that is the reality.

If I use available statistics, and 10% of Los Angeles DMA households have Directv, that would amount to probably 500,000 subscribers. At an average of $5 per month ($4 for TC+ subs and $6 for TC subs) that would be about $2,500,000 per month income for Directv. A smaller market such as Cheyenne (#197 on the DMA chart) has about 4,000 subscribers would bring in an average of $20,000 per month. There is no way the LA subs won't be subsidizing the Cheyenne subs. It doesn't cost any less to rebroadcast the Cheyenne locals, but the profit margin is non-existent. Why should the LA subs be forced to pay for Cheyenne to receive their locals. There has to be a point at which locals aren't profitable. The new company owes it to their stakeholders (subs, shareholders, and employees) to turn a profit and make business decisions that will bring a positive return for the stakeholders.

[J Rath]

Ok, all this bickering about locals is silly and makes my head hurt. :shrug:

At present we know two things about locals:

#1 Merger - New E* says it will provide all 210 DMA's (within 4 years?)
#2 No Merger - E* and D* won't be able to do much more than 50-60 DMAs

There isn't really anything else to discuss about this until the FCC and DOJ make thier rulings for or against, then the situation with the locals will be much clearer.
--------------------------

BTW the 210 markets are derived from Nielsen Media and are listed here. (http://www.nielsenmedia.com/DMAs.html) If you use the markets referred to in this:

So Laredo, TX will get locals (they are the 210th largest market in U.S.). How is that good for anyone? But poor Bangor, ME won't get in because they are 213.

Bangor, ME is actually a bigger DMA (#153) than Laredo, TX (#192)
---------------------------

One more point. What makes a DBS sub in a city any better than a sub in one of these so called "redneck towns" and therefore privy to better service? That is the beauty of DBS, it is available to EVERYONE who wants it, not just the people living in the larger markets. And as far as the larger markets subsidizing the smaller market locals, I just don't buy that. There are many things that go into the equation when determining the profitabilty of uplinking the locals besides the number of subs in a given market, and I am sure that both companies have had many a discussion on creative ways to make the 210 DMA plan work

[James_F]

Sorry about the Bangor, ME/Laredo, TX reference. I had an Arbitron Raitings sheet in front of me, not Neilson. My mistake. :rolleyes:

But who cares who the 210th market is. Thats not my point, the point is why should I sacrifice my quality service so that some person in Yuma, AZ can get some bad local station? Come on, how many Infomercials for the Pocket Fisherman do they need? Why not give them NY/LA and put HDTV channels on there. :shrug:

Those people don't deserve locals since they don't add enought to the bottom line. Granted percentage might be higher because of lack of Cable TV, but their dollar amount is worthless. So we add some fishing show. How does that add to my enjoyment? It doesn't, so why the hell shouldn't I be pissed. "Creative ways to make the 210 DMA plan work"? I got one for you. Reduce service and raise prices. Thats the only way these yahoos at Dish could possibly come up with.

[Chris Freeland]

Originally posted by J Rath
Ok, all this bickering about locals is silly and makes my head hurt. :shrug:

At present we know two things about locals:

#1 Merger - New E* says it will provide all 210 DMA's (within 4 years?)
#2 No Merger - E* and D* won't be able to do much more than 50-60 DMAs

There isn't really anything else to discuss about this until the FCC and DOJ make thier rulings for or against, then the situation with the locals will be much clearer.
--------------------------

BTW the 210 markets are derived from Nielsen Media and are listed here. (http://www.nielsenmedia.com/DMAs.html) If you use the markets referred to in this:



Bangor, ME is actually a bigger DMA (#153) than Laredo, TX (#192)
---------------------------

One more point. What makes a DBS sub in a city any better than a sub in one of these so called "redneck towns" and therefore privy to better service? That is the beauty of DBS, it is available to EVERYONE who wants it, not just the people living in the larger markets. And as far as the larger markets subsidizing the smaller market locals, I just don't buy that. There are many things that go into the equation when determining the profitabilty of uplinking the locals besides the number of subs in a given market, and I am sure that both companies have had many a discussion on creative ways to make the 210 DMA plan work

Well said, another point, according to papers filed with the FCC and or DOJ(can not remember which one)it was stated that a combined DBS company could start making a profit quickly on the top 200 dma's. The same report also stated although the bottom 10 would be a loss for the first 6 years or so(I think that is the correct number), after that first few years even those smallest 10 will become profitable. You snobs in the larger markets will not have to subsidize us "rednecks" in the sticks.

When I first got into DBS, no one had their locals and it was much easier to qualify for distant nets (Prime Time 24 back then), I received East and West feeds and Supers were part of AT40, I was happy with that then. But that was in 1996 and a lot has changed since then, locals have bean added to many markets, Distant Nets have gotten much harder to qualify for and spotbeam satellites have made it technically possible to have all locals on satellite without useing up an inappropriate amount of bandwidth for them, the merger should make it economically feasible to have all 210 dma's locals on satellite. So yes why should't Chattanooga TN., dma #85 and others be included in the New DirecTV's line up of locals?

[J Rath]

You keep asking this

Why not give them NY/LA and put HDTV channels on there.

But the cold hard truth of the matter is they can't give the NY/LA distants without waivers. I currently don't get locals and I would gladly take distants, but the NAB and others have seen to it that I (and the rest of us outside those two markets) can't.

Plus HDTV channels take significantly more transponder bandwidth than SDTV channels so how would this help the quality of service (other than you being able to receive an HD channel)? How many subs could and would subscribe to that HDTV channel vs how many subs would subscribe to the locals for the market that could occupy the transponder space in use by that HD channel. Or maybe a better wording of that question would be how profitable would putting up a HDTV channel be vs putting up a local market?

[James_F]

Well then in large cities they will lose millions of customers. Cox cable is already offering more HDTV channels than either DirecTV or Dish. A merged company won't offer any more because they have to have locals in 210 markets. So where does that leave me? Either go back to cable, lose NFL ST or stay and be unhappy. If I didn't have a choice, I might not be as angry, but I do have a choice and Dish wants to screw me so that they can buy their only competition.

You could but up HD locals for the 20 largest markets. The rest can fend for themselves. There would be plenty of bandwith for that.

[pschuckert]

Originally posted by James_F
Well then in large cities they will lose millions of customers. Cox cable is already offering more HDTV channels than either DirecTV or Dish. A merged company won't offer any more because they have to have locals in 210 markets. So where does that leave me? Either go back to cable, lose NFL ST or stay and be unhappy. If I didn't have a choice, I might not be as angry, but I do have a choice and Dish wants to screw me so that they can buy their only competition.

You could but up HD locals for the 20 largest markets. The rest can fend for themselves. There would be plenty of bandwith for that.

Do you know how many HDTV locals are in the 20 largest markets?

Do you realize that even with 8PSK that there can only be 3 HDTV channels per Transponder. HDTV locals for the 20 largest markets would eat up way more bandwidth than providing locals for 210 DMA's.

But with the merger the NEW DIRECTV could put spot beam only birds at the 61.5 and 148 locations. And provide use those spot beam only birds to provide most of the DMA's locals. Then they could use 119 & 110 to provide the core programming, and some additional locals. And use 101 for Full Conus HDTV programming. They could put up 96 HDTV channels at 101 with using all the TP's for Full Conus and using 8PSK.

A merger is the only realistic way any DBS provider could provide a "meaningful" ammount of HDTV content

[James_F]

Originally posted by pschuckert
Do you know how many HDTV locals are in the 20 largest markets?
I know there are 4 here in Phoenix. Thats all I care about.
A merger is the only realistic way any DBS provider could provide a "meaningful" ammount of HDTV content
Or will just kill all hope of anything happening. The debt load will kill the company. The only thing the merger will do is eliminate competition. The company can't afford to switch out 20 million subs (and god know how many receivers) in the first two years. So what will happen. Rates will rise since there is no competition and millions will leave back to cable in the big cities.

[pschuckert]

Originally posted by James_F

I know there are 4 here in Phoenix. Thats all I care about.

Or will just kill all hope of anything happening. The debt load will kill the company. The only thing the merger will do is eliminate competition. The company can't afford to switch out 20 million subs (and god know how many receivers) in the first two years. So what will happen. Rates will rise since there is no competition and millions will leave back to cable in the big cities.

I really don't think rates will rise much. Yes they might rise a bit....but so does inflatation. The NEW DIRECTV will have competition....CABLE! AOL\TW has more subs the DTV or E* currently. Having to keep prices competitive with cable will keep prices from skyrocketing. I just don't get your argument that the NEW DIRECTV will not have competition? You yourself say that "Rates will rise since there is no competition and millions will leave back to cable in the big cities. " Your statment is proof that the NEW DIRECTV will have competition. If they didn't have competition the only option would be NEW DIRECTV or OTA, but that isn't the case. There is and will be a choice....cable.

[JustMe]

If ther e was no DirecTV to compete with Dish Network' prices would be just under cables.

[Mike123abc]

I bet they will carry the top 4 (cbs,nbc,abc,fox) in HDTV in the top 10 markets. They may if they put up another sat go to top 20 markets.

They do not have to worry too much about it now, but in a few years they will have to compete with cable and HDTV. If they do not merge, E* would have a big advantage over D* by putting a spot up on a wing sattellite and do HDTV in top markets. They could also go the Ka way, but that is new technology and they would need new boxes, dishes, lnbs, etc.

[Jacob S]

Lets see where the competition with dbs is: off air, c/ku-band, cable, charter satellite anywhere service (primestar shaped dish with a skew with two lnbf's popping up all over around here now), so there are four things that I can think of right off the bat. This added onto the new providers coming in.

[Chris Freeland]

With cable still currently holding 78% of the Multi-Channel market, common sense will tell you that the New E* will need to hold the line on pricing and offer locals to everyone to stay competitive with cable.

[BrettR]

James_F wrote, "The only thing the merger will do is eliminate competition."

The NE* will have competition, but its less competition with the consolidation of the two satellite providers. The number of providers we can choose from goes down by 1, and one company will control all the CONUS slots plus over 90% of the DBS marketplace. So James_F is correct that this will eliminate competition, not all competition, but will eliminate competition in DBS market place. Cable although in the multichannel market, is not the same sector as DBS.

[James_F]

Originally posted by Chris Freeland
With cable still currently holding 78% of the Multi-Channel market, common sense will tell you that the New E* will need to hold the line on pricing and offer locals to everyone to stay competitive with cable.

DBS is cheaper than cable right now. So what you are saying is that after the merger they will raise rates to be competitive with cable rather than being competitive with DBS. So rates will rise. Sounds great for the consumer. :rolleyes:

In my town I have the choice of Cox or DirecTV or Dish Network. Thats three. My in-laws live in Lake Brownwood, TX. Their choice is DirecTV or Dish Network. I go down to two choices, one of which is a cable company, my in-laws go down to one. How will this keep the prices down? DBS will rise in cost everywhere since they don't have to keep prices down in competition with DirecTV. Lets be honest here, DBS doesn't compete with cable, they compete with each other. Their prices aren't set in relationship to the cable companies, they are set in relationship to each other. Remove one and then there is no price controls. What incentive does the new company have to keep prices where they are when they have to switch about 20 million receivers out to the new service? That money is in addition to the billions in debt the new company will have. The only way to pay for the switch is to raise prices.

[pschuckert]

Both DBS providers are cheaper that cable because the compete with cable. Both DBS providers have about the same pricing structure. Do we see providers cutting prices on main packages or permium? NO....WHY? because they compete with CABLE. Right now DTV and E*'s main competor is CABLE....not each other

[Mike123abc]

Dont kid yourself, they compete against eachother right now. In general the compete against the cable company, but once a potential customer decides that a dish would not look too bad on the house, and that it is time to say goodbye to the cable company, they have to make a choice.

Right now the choice is Dish Network or DirectTV, both companies are very similarly priced. Why are they similarly priced? Because they both watch each others price and move to compete with any new package or price cut. If there was not competition between DBS, a single company could price just under the average price of cable.

DBS companies have low rates right now because they compete with eachother AND the cable company. They will always have to have lower prices than the cable company because it is a pain to put in DBS when you have cable already at your door. Why go with more expensive DBS when you can have cable to every TV in the house?

Right now they both price as low as they can to both attract cable customers and get the cable customer to choose them. If they did not compete with each other prices would go up.

[James_F]

Originally posted by pschuckert
Both DBS providers are cheaper that cable because the compete with cable. Both DBS providers have about the same pricing structure. Do we see providers cutting prices on main packages or permium? NO....WHY? because they compete with CABLE. Right now DTV and E*'s main competor is CABLE....not each other

:rolling::rotfl::rolling::rotfl:

That the most myopic thing I have heard today. Thanks for making my day. :rolleyes:

They compete against each other. :bang:

[Richssat]

It is happening already. I was at a customers house to do a high def install the other day. He had spent somewhere around $1000 for equipment (3lnb dish, high def rx, 2 regular rx and an off air antenna). It would have cost him an additonal $400 or so to get it installed (pole mount, 200ft of cable and conduit, signal amps and backfeeds to two other televisons). I was ready to do the job but I first checked out his digital cable service. Time Warner in San Diego is offering 4 high def channels plus their VOD service. I did a temp install (clamped the dish to my ladder) and did a side by side comparison ( I carry an active rx with me). D* looked pixilated and frankly pretty bad on his Sony bigscreen, TW was clear (even the analog channels). Customer was saying that TW did a massive plant upgrade in his neighborhood a few months previous. Customer made a call to TW asking about Hi Def ready box and was scheduled for an appointment about a week later.

I wound up just installing the off air antenna for his locals in High Def. He saved himself well over $1000 in installation and equipment costs and a satellite installer (myself) learned not to underestimate the cable co. Customer was so impressed with my honesty he paid me for the antenna install and gave me $100 for not installing his satellite system (first time I have ever been paid not to do an install).

If D* and E* (either merged or as individual companies) don't figure out how to carry more HD content and bring down the cost of HD rx then they are going to be left in the dust as HD ready televisions find their way into more and more homes.

Just my impression from the field.

RR

[Mike123abc]

They have a formula that they use to calculate if a DMA will be profitable for LIL. They have filed it with the FCC. But, it is redacted (i.e. whited out for public display) because it is a trade secret.

Essentially it reads like of the # of subs in a market X % will get LIL if it is offered, subscriber growth will go up by X% because of LIL, also X% of cable subscribers will likely switch because of LIL.

Using the formula they can calculate the number of people that will subscribe to LIL and whether or not it is likely to be profitable to do it.

They currently say that it is profitable to do about the top 80 markets. So, if no merger that is about what they will do. With D-7s directtv is supposed to have capacity for 100 markets, but they said they would probably do between 75 and 85. E* said they would do about 80.

They also claim that with LIL to all DMAs could be profitable in 6 years to a merged company (not having to compete with eachother for LIL).

[bryan27]

Originally posted by fv3
And don't forget that there are 2 other DTH companies already operating: SkyAngel on DBS at 61.5 and GlobeCast WorldTV on various Ku band satellites (albeit both with very narrow audiences at the current time)

Speaking of GlobeCast. They have been really busy. Their DTH service (which is on Telstar 5) is now 5 TPs and currently offer 46 video and 12 audio channels. A new channel is being added at the rate of about once a month. This week they added an Info Channel (like D* and E*) and introduced their 2nd Generation receivers. Recently G* (guess that's appropriate) added a Sports PPV Channel. Right now there are 2 full time English Language channels, EuroNews (which has feeds in 10 languages), and Fashon TV. G* took German TV from E* and TV Polonia didn't die it moved from E* to G*. I've been with G* ever since the FCC granted them permission to offer a DTH service and have been very happy with it.

[BrettR]

Originally posted by karl_f
Other than supers, E* doesn't offer D* subs anything they don't already have.

Thats not true. E* has lots of international programming, TV Azteca exclusivity also. Lot of subscribers have chosen E over D for this; supers are a benefit especially in smaller DMAs without UPN and WB. Thats DirecTV loss for not carrying these channels today. One of the best things they did was teaming with Tivo. However, their other business decisions or lack of decisions has always lost so many potential subscribers. I can only do my part, if they cant be profitable and lose market share to Dish, its their fault. When their parent company decided they wanted to cash out, the customers werent at first priority.

If one wants Baltimore locals and RTPi with PVR, they must take DirecTV Total Choice, E* AT 50 (paying twice for many channels)and still not get all their programming integrated on 1 PVR.

Originally posted by Chris Freeland


You snobs in the larger markets will not have to subsidize us "rednecks" in the sticks.

When I first got into DBS, no one had their locals and it was much easier to qualify for distant nets (Prime Time 24 back then), I received East and West feeds and Supers were part of AT40, I was happy with that then. But that was in 1996 and a lot has changed since then, locals have bean added to many markets, Distant Nets have gotten much harder to qualify for and spotbeam satellites have made it technically possible to have all locals on satellite without useing up an inappropriate amount of bandwidth for them, the merger should make it economically feasible to have all 210 dma's locals on satellite. So yes why should't Chattanooga TN., dma #85 and others be included in the New DirecTV's line up of locals?


Blame Congress and NAB. They wanted mustcarry. SHVIA had many of its roots from the Cable Television Consumer Protection and Competition Act of 1992.

However, its a joke to consider this is Consumer Protection now especially with satellite. Many DMAs are not getting carried, because the DBS providers must reserve space so the big markets get all their locals. As for competition, FCC should stop allowing duopolies and allowing Clear Channel and Viacom to own more and more radio and TV in many markets. What happened to anti-trust?

And I can tell you many markets like Lafayette IN will only get 1 channel because its a 1 channel DMA. Again, they will not get Indianapolis locals or any of them, even though cable carries all Indy locals and all are significantly viewed. This is mustcarry protection for us. I do think E* or Charlie Ergen is the lesser of evils atleast to some of the other bigger hypocrites like the NAB.

[Geronimo]

Each provider has some channels the other does not. The differences are not striking----to me at least---- but they do exist.

[Chris Freeland]

Originally posted by Geronimo
Each provider has some channels the other does not. The differences are not striking----to me at least---- but they do exist.

I agree, I could be quite happy with either provider, the Superstation package is the one edge that keeps me loyal to E*. Prices are about the same for D* and E* and each only have about 5 or 6 basic channels that are exclusive to one provider. The only major differences is E* has Superstations , more International and a few more premium channels, D* has more PPV and Professional Sports, the two are about even in college sports. I like the merger because we can eventually have the advantages of D* and E* on one platform and not duplicate so many channels which means additional channels and better pq.

[Win Joy Jr]

Blame Congress and NAB. They wanted mustcarry. SHVIA had many of its roots from the Cable Television Consumer Protection and Competition Act of 1992.


Sorry, blame Charlie...

He opened Pandora's Box...

[Mike123abc]

Well one can understand must carry from the broadcasters point of view. If you plunk down the money to do transmission in a market, you want to be able to force it on cable and satellite since that is how most people watch TV now.

But, what is really the problem is the opposite side where a broadcaster can refuse to let their signal go over cable/satellite. Too many use it as a bargaining chip to try to force satellite companies into deals. The law should be if they do not want to be carried, the DBS company can substitute a national feed instead, or simply say if a DBS company does LIL they have to carry all the stations in the market, the stations have no choice.

[cnsf]

la, la, la.... wasted arguments as no one is in Charlie's conference room with him. The hypotheticals provide no value. Facts are few, far between and generally unsubstantiated.

We'll know when we know, we just all need to sit back watch and call/write/email your Senator/Representative if you feel strongly.

This thread won't have any significant impact on the merger discussions.

Does anyone have a copy of the draft business plan for the merger?

[BrettR]

Originally posted by Mike123abc


But, what is really the problem is the opposite side where a broadcaster can refuse to let their signal go over cable/satellite. Too many use it as a bargaining chip to try to force satellite companies into deals.

A broadcaster cannot refuse to sell their signal if they are approached. They must deal in "Good faith". CBS and FOX are losing money on their NFL contracts with DirecTV carrying NFL Sunday Ticket. However, CBS and FOX cannot withhold their local O&O stations to hurt DirecTV's LIL attempts. They can ask for an absurd price though.

Viacom and FOX can withhold stations like MTV, VH1, FX from either provider. Program access laws prevents a cable channel owned by a cable company from withholding programming to a satellite company. So since E! is owned by Comcast and is delivered by satellite (not terrestrial means), E! has to be made available to Dish and DirecTV at a rate other providers can get it for. However, MTV is owned by Viacom which is not a cable provider. DirecTV could pay for DBS exclusivity of MTV however this would be very expensive. MTV loses potential viewership, so would have to charge DirecTV so much.

Right now, NewsCorp FOX wants DirecTV, and Viacom is making money in other distribution agreements with DirecTV: Blockbuster, CBS March Madness package, all those Viacom owned channels, etc. Both want more exposure for their stations, so wouldnt hold their stations anyways.

http://www.fcc.gov/Bureaus/Cable/News_Releases/2000/nrcb0007.html

However, if say a station like NBC 40/Atlantic City is never approached for carriage, the station does not have to request mustcarry and send signal to Dish.

Originally posted by Mike123abc

The law should be if they do not want to be carried, the DBS company can substitute a national feed instead, or simply say if a DBS company does LIL they have to carry all the stations in the market, the stations have no choice.

The Networks would love this where they dont have an O&O station, but Congress, NAB and FCC would not support this. It wouldnt support local television. Viacom basically wants to own all the CBS stations in the Top 50 markets atleast. FOX wants to own FOX station in the Top markets, preferably VHF. They make lots of money on local ad revenue, so they wouldnt want to replace stations with national feeds.

As for supporting local television, its the NBC ABC CBS and FOX stations that are into local news and are also significantly viewed. WTVE 51 relays Shop AT HOME. Mustcarry allows WTVE and WWAC carriage and other stations with no measureable rating, but Lancaster has to wait until DirecTV launches another spotbeam to get 1 local channel.

[lee635]

What happens to E if the merger doesn't go through? I suspect that Echostar will also be sold to a vertical integator, perhaps Disney? In any event, we'll end up with both D and E owned by program providers. And we may end up with a situation like premium movie channels, where movies are available exclusively on one premium channel.

Today E has superstations and D has NFL sunday Ticket, but we may be faced with many more of these exclusive contracts in the future. My fear is that the future without a horizontal merger will be more limited choices from each provider. And if you happen to want several of these services, you may get stuck having to pay extra to both providers to get what you want.