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Directv CEO Says Possible Merger with Dish "Could Be Pro-Consumer"


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225 replies to this topic

#61 OFFLINE   Carl Spock

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Posted 22 September 2012 - 01:37 PM

DIRECDish® ;)


DirecTV + Dish =

Ditch Divers
Revs Did Itch
Sir Did Vetch

or my favorite

Red Itch Vids
hangin' with the bros at 40 Eridani A

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#62 OFFLINE   NR4P

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Posted 22 September 2012 - 01:39 PM

You can't compare it to Sirius XM because that was done out of necessity.

While less competition would impact rural people from being able to jump back and forth it would allow them to not have rate increases as high as before because of the negotiating power. Both companies use national pricing so therefor the rural markets wouldn't be "singled" out because they could be.


Agree it was necessary, here's why. It was necessity because of stupid business practives because Sirius offered Howard Stern $.5B (yes Billion) and then XM countered with $.7B for Major League Baseball.

And now there is one and may subs will tell you service did suffer with big rate increases after the 2 year moratorium.

I would argue it did work out for the customer. Without the Sirius-XM merger, likely neither company is around right now. If they are both gone, how does that benefit the consumer?

It's more than just dollars and cents, it's the bigger picture.


Sometimes its OK for the government not to bail out the companies as a reward for stupid business decisions mentioned above. The sats would not have fallen from the sky. Once bankruptcy would have been declared, courts and creditors would have had to deal with the company. They would have emerged as a much leaner more efficient company. This way the creditors get to foot the bill, not the subs.


To be somewhat fair Sirius/XM has to negotiate rates with the RIAA and the RIAA raked them over the coals last time. Sirius can't afford to be without music so they had no leverage. They had no choice but to raise rates.

Don't get me wrong I think the merger wasn't that great and I think Sirius/XM quality has suffered because of it.


Yes Quality has suffered. Many more channels with commercials now. They also made their traffic channels less useful. Before the merger, two cities shared a channel with traffic every 3-4 mins back to back. Now 3 cities share a channel with traffic for your city every 10 minutes. At 65mph one covers alot of roadway in 10 mins making the traffic reports useless.


In general, reduced choice usually hurts consumers.

#63 OFFLINE   Satelliteracer

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Posted 22 September 2012 - 02:11 PM

Yea he is pumping some short term profits at the expense of customers to drive stock price. It will all come crashing down. A net 52,000 loss of subscribers last quarter and profits are up....so you spend less on sign up promotions this quarter and get a profit. That strategy can work in the short term, but in the long term you cannot ignore this.

Being king of soda pop does not mean you will be king of tv


The loss of customers is because of a planned pullback of going after certain customers. This had been signaled to the street for more than 2 quarters. If D* wanted to have positive numbers in the last quarter, EASILY could have done it by letting customers on the platform and juicing marketing. The issue is that with subscriber acquisition costs as high as they are, it makes no sense to go after some customers that aren't credit worthy.

There is a reason why Warren Buffet and others have bought so much stock in D* in the last year, because it is a well run company. The days of growing, growing, growing subscribers at any costs are over. Don't let the drop in subs fool you, that was planned...there's a reason why D* hit it's all time high in stock price only two weeks ago. They are playing it smart, trying to reign in costs and keeping the customers that make the most sense in the long run.
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#64 OFFLINE   Satelliteracer

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Posted 22 September 2012 - 02:13 PM

Something D* doesn't do well.

Rich


Directv has already absorbed other technologies over the year, including Prime Star, etc.
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#65 OFFLINE   Satelliteracer

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Posted 22 September 2012 - 02:14 PM

I lived through the Sirius-XM merger mess and would be first to say that the potential writing is on the wall here, but I would suggest that DirecTV look elsewhere beside Dish for merger bait. Think outside the box -- perhaps a Fios/Uverse element? How about going REALLY radical and merging with someone north of the border -- see if Bell or Rogers would spin off their satellite services into a truly North American service?

I'll admit it's pie in the sky, but radical things come from radical ideas....


Canada....meh....way too many regulations up there including what programming you can offer. The other problem is all the cost to go into a market with only 35 million people, most of them entrenched with another provider.

I would be stunned if D* and Dish haven't looked at Canada and both come to the conclusion that you just can't be profitable up there with the current setup.
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#66 OFFLINE   Hoosier205

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Posted 22 September 2012 - 02:19 PM

Directv has already absorbed other technologies over the year, including Prime Star, etc.


Exactly.

I would also note that Dish's technology advances have, at times, come by the way of stolen patents and alongside hefty lawsuits.
DTV = Digital Television

#67 OFFLINE   zimm7778

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Posted 22 September 2012 - 02:49 PM

My biggest fear is a lesson from the XM/Sirius "merger". XM was MANY times bigger than Sirius, but Sirius' management essentially ended XM forever. There's zero XM left now, and it's a real shame.

Therefore, my fear is that Echostar would rule the merged company - we'd lose our sports, our DVRs - all the stuff we like about D*, and it'd be replaced by a no NFLST, cheapened version of D* with crappy DVRs. But at least we'd get the Water Channel :(


And I and many others would be gone and quick.

#68 OFFLINE   James Long

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Posted 22 September 2012 - 02:57 PM

- They allowed the Sirius/XM Merger. This is the most compelling evidence that the FCC and other authorities do not mind a merger that creates a 100% monopoly in 1 service type, in this case satellite radio.

There is competition with SiriusXM outside of satellite. Local terrestrial radios still tend to rule the air ... plus there are streaming options via data networks that give people who want to pay an option.

Satellite radio simply is not as big of a deal as pay television. Sure there are ~21 million subscribers to SiriusXM, but many of them did not choose to subscribe (service came with their new cars) and SiriusXM practically gives away subscriptions to people who have cancelled their service.

- They allowed the SBC/AT&T Merger. Not that this directly compares to a Dish/DirecTV merger, but it is an example of how the FCC and other government bodies are becoming a little more lenient in big companies merging in to a huge company. Additionally, of course, AT&T was split up in the 80ties, and this was seen as a first step to bring back the Big Bell.

With a lot more regulation than they had in the 80s. Back in the day Ma Bell controlled their networks and could tell people what they could or could not connect to a phone line. A series of court victories and the breakup of AT&T opened the door to competition that still exists today (even with the merger of the bells). While the ILEC in a community may be a reconstituted AT&T, the CLECs live and can compete with AT&T by reselling AT&Ts own lines at a government regulated cost.

AT&T T-Mobile fell through ... not all mergers will be approved.

In short: The market has significantly shifted in 10 years. There is a lot more chances of a merger happening in CURRENT market conditions than there was 10 years ago.

As long as DirecTV takes the loss when it falls through I don't see the harm in trying. DISH's attempt to buy DirecTV ended with a huge loss ... but it did mark the beginning of never posting a negative year again.

I am surprised to have people at that level talk of a merger. I don't see it as pro-consumer.

#69 OFFLINE   wilbur_the_goose

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Posted 22 September 2012 - 05:45 PM

What makes people think D* would be the surviving entity? From where I sit, E* would be chief in charge.

Bigger doesn't usually mean the survivor.

I went through this 2 times in the last 8 years at work. In both cases, the smaller entity ended up ruling the roost (and, IMHO, killing the combined company)

#70 OFFLINE   Hoosier205

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Posted 22 September 2012 - 05:48 PM

What makes people think D* would be the surviving entity? From where I sit, E* would be chief in charge.

Bigger doesn't usually mean the survivor.

I went through this 2 times in the last 8 years at work. In both cases, the smaller entity ended up ruling the roost (and, IMHO, killing the combined company)


For me...it's because DirecTV is the only one that deserves to survive. It had better survive.
DTV = Digital Television

#71 OFFLINE   PrinceLH

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Posted 22 September 2012 - 05:56 PM

Agree.

There would have to be a number of significant technology and infrastructure changes to even make that work.

For one, those shared satellite locations, at 119 and 110 would be an increase. Dish also has a Ku band bird at 118.9. So now you've added those transponders. That would be quite a boost and not having to change the LNB to do it!

#72 OFFLINE   john262

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Posted 22 September 2012 - 06:23 PM

Why would Directv want to merge with anybody when they're already making record profits? Is there any end to their greed?

#73 OFFLINE   Satelliteracer

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Posted 22 September 2012 - 06:50 PM

Why would Directv want to merge with anybody when they're already making record profits? Is there any end to their greed?


Directv's profit margin is not that large, very much in line with other companies and industries. 9.84% the last quarter and has been between 7.5% and 10.3% the last three years.

In fact, Directv's profit margin is in the 68th percentile and ranked 1391 out of 4,420 companies. In the CATV systems sector, ranked 11th out of 20.

Apple, is at 25.1%. THOSE GREEDY BASTARDS!! ;)

Yahoo at 18.61%
Google at 22.8%
Oracle 24.86%
AT&T 12.36%
Exxon 12.49%
Disney 16.51%

ETc, etc
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#74 OFFLINE   mnassour

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Posted 22 September 2012 - 08:32 PM

Folks....I think we all know that any time any CEO says that a merger involving his company will be "good for the consumer" you need to seriously watch your wallet.

What makes people think D* would be the surviving entity? From where I sit, E* would be chief in charge.


Then point the dish straight up and use it as a birdbath. That's the only thing that could make me run screaming back to Time Warner.

Charlie in charge? Pay more for less as he drops channel after channel, screaming about how he's saving us money while charging us the same rates for less programming. My God, how stupid does he think we are?

#75 OFFLINE   coolyman

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Posted 22 September 2012 - 09:18 PM

Goldman Sachs is not an example of capitalism at work. Corporatism, folks. And what does that have to do with communications anyhow? The customer is only a revenue stream. What benefits the customer is not necessarily beneficial to the business, especially when government is involved. Centralization equally harmful to the consumer and the citizen. Competition in a free market is most beneficial.

#76 OFFLINE   sdirv

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Posted 22 September 2012 - 09:40 PM

As a guy who subscribed to XM before Sirius even existed, don't remind me. :nono2:

I'd have to go dig out old credit card statements to get the accurate figures but my memory says my satellite radio costs have more than doubled since I originally subscribed. Maybe they have tripled.

And for essentially the same programming although now I get Howard Stern. I've never liked Howard Stern.


You're telling me......I signed up with XM in mid 2005. I was paying about $140 a year. I got my bill last month, it's up to $220 a year. I canceled.

Of course my use has changed too. I was using mine mainly on my motorcycle and I was doing MANY long distance trips which I'm not doing very many now at all. The other impact has been that back in 2005 my cell phone was just a cell phone. Today my cell phone has every record and CD I've ever owned loaded into it....LOL. Why do I need XM....LOL

#77 OFFLINE   y2k02c5

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Posted 22 September 2012 - 11:09 PM

One thing that hasn't been mentioned is how many people are going to lose their jobs because of the redundancy between the two companies? This reminds me of our Auto industry back in 2008 when they were talking of the GM/Chrysler Merger which would have been detrimental to the local economy and the jobs lost.

Of course, this could be different, but i'm sure there would be some job losses.

#78 OFFLINE   Dmitriy

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Posted 22 September 2012 - 11:16 PM

I've been hearing about this merger for years now... is it ever going to happen?

#79 OFFLINE   Shades228

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Posted 22 September 2012 - 11:20 PM

One thing that hasn't been mentioned is how many people are going to lose their jobs because of the redundancy between the two companies? This reminds me of our Auto industry back in 2008 when they were talking of the GM/Chrysler Merger which would have been detrimental to the local economy and the jobs lost.

Of course, this could be different, but i'm sure there would be some job losses.


I don't see huge cuts but I could see a reduction at higher levels. The amount of calls and customers wouldn't change so therefor call centers, installers, and support staffs would probably increase, which make up the bulk of employees of both companies, distribution and warehouses would possibly be impacted depending on redundancy.

However even if it happened today the consumer aspects wouldn't change for at least 2 years just due to the sheer volume of technology aspects. I would bet it would take at least 6 years for existing customers to even start to see technology changes one way or the other. If one company had a stockpile of cash like Apple does it might be faster because they could just eat the loss easier of a more aggressive change but it still wouldn't take more than a year or two off at most.
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#80 OFFLINE   James Long

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Posted 22 September 2012 - 11:41 PM

Neither company has the money to change all of their older receivers over to receivers that would be compatible with the other company. The customers with MPEG4 receivers would be a step ahead but there are millions of older receivers that would need to be replaced to take advantage of the extra satellite space. The two systems would remain separate for years.

Even if DISH MPEG4 customers were migrated over to DirecTV satellites it would mean a new dish. It isn't an impossible task, but it is an expensive one. Such a massive change will either cut into the profits of the combined company or lead to higher rates. As long as cable keeps raising their rates "DirectDISHTV" could raise rates and still be competitive. But it still seems like a formula for higher rates for all. Not "pro-consumer".




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