It's one very-well-informed person's "big picture" view of what Dish is doing which begins with Charlies response to a question in DISH’s Q3 2010 conference call. It's a long post but worth reading as it offers a comprehensive explanation for the various pieces of the puzzle we've been discussing in various threads (spectrum acquisition, Blockbuster acquisition, dropping sports channels, giving away premium movie channels, staying away from sub growth just to grow subs).
Thursday's The Morning Bridge from MediaBiz offered up this summary:
Near the end of the analysis, Greenfield comments:
What, oh what, is Charlie Ergen thinking? BTIG's Richard Greenfield (who came up with today's too-good-not-to-steal headline) says the DISH-EchoStar-Blockbuster etc. etc. honcho is "clearly worried about his core distribution business and has begun to take aggressive measures in 2011 to build a next-generation DISH Network."
Notes Greenfield, Ergen has been dropping sports programming (bye bye Fox RSNs, MSG, SNY); buying wireless spectrum, giving away free year deals to various premium nets, and apparently challenging Netflix via the purchase of Blockbuster, which, by the way, closed Tuesday. So what's he gonna do with all that? Who knows? says Greenfield. But a hybrid model is one good bet ... as is a challenge to Netflix. To get the full post, go here (and don't forget to register.)
He doesn't discuss the Sling acquisition which was on the Echostar side, but it also fits into a broader picture.
Ergen’s Goal Not Clear Yet: Hybrid Model in the Works? We’re not sure and to be honest, we’re not even sure Ergen has an exact plan at the moment, albeit, we increasingly believe he knows he needs to reorient DISH’s business model, especially while cash flow from his core business is robust enabling him to redeploy capital to build/re-engineer DISH. Ergen is reducing expensive sports programming and staying away from sub growth just to grow subs (focusing on profitable sub additions), while at the same time redeploying capital into new strategies such as online/mobile programming and helping to enable high speed wireless broadband.
...We wonder whether Ergen’s goal is to focus on a small group of linear networks that are must have destinations for consumers and supplement it with a robust on-demand offering that allows anytime/anywhere access to a wide array of programming (albeit without sports).
With regard to sports, IMHO Charlie isn't dropping sports but rather only contracting for sports programming that is purchased separately.
I'm going to be curious what he will do with the Disney folks at contract renewal time when Disney will be pressing for a 100% price increase for the ESPN stuff charged to every customer which is already too expensive for the cash-strapped portion of the population.
Of course, Disney will try to leverage the Disney Channel if they notice that Charlie isn't big on making all his customers pay exorbitant fees for ESPN. It's hard to imagine a model without the Disney channel, but then again my 8-year-old granddaughter quit watching TV - she watches streaming video on a computer and other devices. Apparently this is not unusual, according to the Nielsen folks who report that not only do they watch on computer but tell us younger consumers ages 12-17 are the heaviest mobile video viewers.
Certainly Comcast (you remember them, the folks that bought a 51% interest in NBCU) is focusing their efforts on streaming and on-demand and "Comcast on the Go" (yeah, I know I should be using "Xfinity", but to me they're Comcast). Comcast, of course, is "the cable company" much like there used to be "the phone company." So to a degree, they can charge families more without too much subscriber loss.
Anyway, it's interesting to see an analysis of what's going on inside Charlie's brain with regard to the future of Dish.