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DirecTV CEO: “Never Say Never” To A Merger Deal With Dish Network

Discussion in 'DIRECTV General Discussion' started by Athlon646464, Aug 3, 2013.

  1. Aug 5, 2013 #61 of 217
    slice1900

    slice1900 Well-Known Member

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    I doubt that, simply because it is unlikely that the all current Dish satellites have a useful life of a whole decade. There's no way they'd want to launch any new satellites for Dish services after they bought them. I would assume if they merged that soon all new installs would be Directv installs, and any changes that a Dish customer wanted to make that would require a new dish (HD upgrade) or adding receivers above a certain threshold would switch them to Directv. They would offer Dish subscribers the same type of Genie upgrade, free Sunday Ticket (or free movie channels for those not interested in sports) to get them to upgrade that they do with Directv customers, part of the deal would be that they had to switch to Directv receivers and packages. They'd have all the former Dish contractors to help with this process, and could step up production of HR44, C41 and SL3S dishes.

    Directv could sort of slowly push the Dish upgrades in various other ways as well, by limiting access to new channels and technologies like 4K to the Directv side, and via price changes on the packages for customers they want to migrate. i.e., include something with the bill saying "in 3 months the price for your service increases by this much, if you switch to Directv dish/receivers the equivalent package is x and if you commit for 24 months we'll lock that price in for the entire time" They could encourage migration by whatever segment of customers they want by doing price increases differently for the different packages and equipment. One year maybe they target people with high end packages but using SD only, the next they target HD customers who have no DVRs, and so on. They would probably reserve the very best offers for long time Dish only subscribers because they are likely to be the most resistant to switching to Directv.
     
  2. Aug 5, 2013 #62 of 217
    RAD

    RAD Well-Known Member

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    I've lost track how many subs Dish has now, but lets just say 14M. If you say $800/sub to convert them between hardware and truck rolls that's $11,200,000,000, they'd have to make a ton of money renting out transponder space and they wouldn't be able to do that until all the subs on at least one of the arc's had been converted. Yes I could see new subs being forced on one or the other system but not a wholesale conversion ASAP.
     
  3. Aug 5, 2013 #63 of 217
    cypherx

    cypherx Hall Of Fame

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    Sharing IP would be nice. Getting the Dish engineers to make DirecTV receivers fast, and getting the DirecTV graphic designers to make Dish receivers look aesthetically pleasing.

    But I don't think its a good idea. That would become a monopoly in some area's where dbs is your only choice. Or what if you can only get DirecTV obstructions to Dish Eastern Arc.. or vice versa (only can get Dish because obstructions in DirecTV's skyline).

    IPTV providers via BYOA won't work great either. Not with all the excessive caps ISP's are using. Especially those in the sticks stuck with 4G LTE... or even if they have capless DSL, its DSL... what's that in the sticks... 3 mbps? Not enough for HD video on multiple TV's.
     
  4. Aug 5, 2013 #64 of 217
    Diana C

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    RAD put the numbers to what I said.


    The age of the satellites is irrelevant - the merged company would never surrender licenses that can serve the Western Hemisphere. While, in the extreme long run, Dish's eastern arc slots might be reallocated to latin America, they will still need functioning satellites there. Therefore, old satellites WILL be replaced, merger or no.

    As I said, they would probably deprecate one receiver architecture or the other, but it would take a VERY long time before the number of "legacy" customers reached a number small enough to make the wholesale conversion feasible. When aquired Primestar had only about 2 million subscribers. Dish has 14 million, and the cost of current hardware and labor is much higher than when those 2 million Primestar subscribers were migrated (there were no DVRs back then, for example).

    Another factor is that if they were going to do such a migration, it would probably involve, at a minimum, an LNB like the Slimline 5 (supporting Ku at 101/110/119 and Ka at 99/103) which has not even been the DirecTV standard for a couple of years. It would make sense to also include the Dish Ku and Ka capacity at 121 in a new ODU. Dish leases the capacity on Ciel-2 at 129, so that is a non-issue. In the end, this means an ODU capable of receiving Ka from 99/103/121, RDBS from 99/103/121 and Ku from 101/110/119/121. This would require a new switching architecture as well, supporting at least 9 or 10 bands (depending on whether RDBS is available at 121) and maybe triple stacked from dish to switch across 3 or 4 cables. This would not be not cheap to design and build.

    Someday they would have a single platform, just like someday XM and Sirius will be a merged service, but it would take a very long time.
     
  5. Aug 5, 2013 #65 of 217
    Mike Bertelson

    Mike Bertelson 6EQUJ5 WOW! Staff Member Super Moderator DBSTalk Club

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    What would it cost to replace all the Dish hardware with HR44s? Probably billions of dollars in hardware and manhours.

    It just doesn’t seem economically feasible to completely eliminate Dish or DIRECTV.

    Mike
     
  6. Aug 5, 2013 #66 of 217
    inkahauts

    inkahauts Well-Known Member

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    A merger would be about everything that happens before the signal gets to the satelites. It would have little to do with what happens with the satelites and in customers homes for a very very long time.

    I can see them saying all new customers will get one platform and not a choice of both, after many years and getting both companies to have the exact same costs of and packages for programming. That would take many many years by itself. Probably close to seven years I'm guessing if that fast. One must take in to consideration current contracts lifespans.

    I still say a merger with Netflix and or sprint or other similar companies if a horizontal nature makes far More sense than with dish for directv or dish. Vertical integration for then would not offer as many benefits as horizontal expansion.
     
  7. Aug 5, 2013 #67 of 217
    damondlt

    damondlt New Member

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    I'm all for what ever makes these increases STOP!. Period!
     
  8. Aug 5, 2013 #68 of 217
    slice1900

    slice1900 Well-Known Member

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    Why would they try to combine the two? With two new satellites going up already, what could Directv possibly use all the combined capacity for? I'd think they'd keep the two systems separate, and try to eventually retire one. Even if that takes a decade it still results in some significant long term savings. If they design a new ODU that uses both then they see no future savings in satellite build/launch costs, and have more bandwidth than they could ever use except in the unlikely event that 4K upgrades are as popular as HD upgrades (I think its popularity will be much closer to 3D, because the visible improvement between HD and 4K is very difficult to see, whereas it was massive going from SD to HD)
     
  9. Aug 5, 2013 #69 of 217
    James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Club

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    Primestar was 2.3 million customers (April 1999). DirecTV managed to get 600k to convert by the end of the year and operated the Primestar network well in to 2000 (completing the conversion in the third quarter). It was a very expensive conversion.

    DISH lost $690 million in 2002 in merger termination costs. It seems that it is also expensive to try a merger - even if it does not complete.
     
  10. Aug 6, 2013 #70 of 217
    Diana C

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    I think that in the coming decade (which is how long a hypothetical phase out of one platform would take) you'll see not only 4K, but 8K video take hold. Not to mention "glasses-less" 3D. Many people questioned the adoption of HD with the same "it is not THAT much better" argument because they were thinking in terms of the 36" CRT TVs of the period. While I can't imagine devoting a 10 foot wall to just a TV, I suspect that once the prices get into 4 significant digits you'll see lots of 10, 12 and even 14 foot screens getting installed. Technologies like OLED will even make such large screens easy to install.

    For these and many other reasons I can't imagine a hypothetical merged company giving up ANY satellite capacity. If they don't need it, they can always lease it out. But they WILL replace the current satellites, no matter what else happens.
     
  11. Aug 6, 2013 #71 of 217
    Laxguy

    Laxguy Honi Soit Qui Mal Y Pense.

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    Is that another way of saying they wrote down Good Will? (The amount paid for the purchase less net asset value).
     
  12. Aug 6, 2013 #72 of 217
    pdxBeav

    pdxBeav Godfather

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    Unless as a condition of merger they are required to give up some amount of capacity by a certain date in the future.
     
  13. Aug 6, 2013 #73 of 217
    Diana C

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    True, but there would be little in the way of benefit to the public interest in doing so. A new DBS operator appearing is unlikely. In all probability I think the FCC would take the position that since the merged entity would already have all the infrastructure in place to use these assets, it would be in the public interest to allow them to keep them, and find new applications for the capacity. At a minimum, an argument could be made that the extreme eastern and western assets could be used to enhance service to US territories in the Pacific and Caribbean, as well as Alaska and Hawaii (although the eastern assets would make more sense to be used for Latin American service). IMHO it is more likely that these sorts of service enhancements would be made a condition of the merger, rather than a divestiture.
     
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  14. Aug 6, 2013 #74 of 217
    Laxguy

    Laxguy Honi Soit Qui Mal Y Pense.

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    Winters,...
    I just did a quick google (using Google) on Chinese TV, and see Dish prominently mentioned. Do their feeds into China come from their sat. or is it linked by other means. And if by sat, is it "direct" (no pun intended) or bounced to another sat.?
     
  15. Aug 6, 2013 #75 of 217
    Diana C

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    Are you sure that was delivery of programming INTO China? Dish distributes lots of Chinese channels here in the US - both by satellite and via IPTV (DishWorld).
     
  16. Aug 6, 2013 #76 of 217
    Laxguy

    Laxguy Honi Soit Qui Mal Y Pense.

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    No, not sure, but I asked to see what sat. services there were in China, and the Dish logo showed up.
     
  17. Aug 6, 2013 #77 of 217
    Diana C

    Diana C Hall Of Fame DBSTalk Club

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    I'm afraid the only way to make the price increases stop is to cancel service.
     
  18. Aug 6, 2013 #78 of 217
    Diana C

    Diana C Hall Of Fame DBSTalk Club

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    I just googled "satellite service in china" and sure enough, Dish Network does come up, but the links are to the US service that provides 20 Chinese channels to US customers.
     
  19. Aug 6, 2013 #79 of 217
    Laxguy

    Laxguy Honi Soit Qui Mal Y Pense.

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    Gosh, what a surprise, something misleading on the 'Net!

    Thanks for the followup.
     
  20. Aug 7, 2013 #80 of 217
    damondlt

    damondlt New Member

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    Well that may be the case, I don't think customers will put up with this for ever.
     

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