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


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225 replies to this topic

#126 OFFLINE   wilbur_the_goose

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Posted 25 September 2012 - 10:51 AM

I still firmly believe that Echostar would be the company in charge. Just think of why you didn't go with E* and you'll see what I'm fearing.

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#127 OFFLINE   Hoosier205

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Posted 25 September 2012 - 10:58 AM

I still firmly believe that Echostar would be the company in charge. Just think of why you didn't go with E* and you'll see what I'm fearing.


Echostar and Dish Network split into two separate companies nearly five years ago.

#128 OFFLINE   hdtvfan0001

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Posted 25 September 2012 - 10:59 AM

Perhaps you could cite an example of an entertainment media/medium merger/acquisition that wasn't ultimately a downer for consumers.

Gee...

With you being a Dish customer, I would have thought you'd be able to cite Echostar's purchases of DISH Network, Hughes networks, Move Networks, and other stellar examples. :rolleyes:
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#129 OFFLINE   archer75

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Posted 25 September 2012 - 11:58 AM

Having had both, and now with direct tv I can say that without a doubt I prefer Dish. The regular out of contract price I was paying with Dish was lower than my 1st year promo price with direct. I also like aspects of Dish's receivers better. Though Direct's receivers do have some nice features.

I'm not sure i'd be a fan of a merger. I could only see prices going up and for many people cable is not an option and the new combined sat company wouldn't have to work as hard to retain you as you'd have no where else to go. At least with the both of them I can threaten to go to the other and usually get the deal I want.

#130 OFFLINE   n3ntj

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Posted 25 September 2012 - 03:08 PM

I believe that we need separate competing satellite and cable cos. to be more consumer friendly and lower prices.

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#131 OFFLINE   mnassour

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Posted 25 September 2012 - 03:39 PM

That appears to be a pessimistic and unfounded perspective.

A wide revenue stream and lowered operating costs (combined support and technologies just to name 2 elements) through merged operations actually would probably reduce the probability of raised rates, or at minimum stabilize them.

In addition, the potential 35 million subscriber total pales in comparison to the cable subscriber total numbers - so plenty of competition would keep an incentive to be competitive.


Really?

That's right, after the Sirius/XM merger choice on the XM side went up and rates went down.

Oh....wait a minit........

Please, look at merger after merger after merger.....that "wide revenue stream" flows right from our pockets into those of the investors.

I lived through Sirius' destruction of XM. No offense, but I'm tired of those (not you) who would piss on my shoes and tell me it's raining.

#132 OFFLINE   oldcrooner

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Posted 25 September 2012 - 04:58 PM

The trouble is that these multi-billion dollar profitable companies play the "buddy" card. Every time they put out a press release that says a decision was made "to save their customers money" they are trying to make us feel like they really care about our money.

Have you ever seen the press release that said "we are dropping this channel or not adding this other channel in order to raise our profits and make more money"? Have you seen a press release that said "we need our annual rate increase will allow us to maintain our 10% profit margin ... or increase our profits beyond 10%"? No ... the "bad news" for consumers is always wrapped in excuses ("just passing on the rate increases we are seeing" or "just keeping your rates down") or "PR" (also spelt BS) that is intended to give their customers a warm fuzzy feeling about the bad news.

And the PR works. There are people who will defend to the death a company that they do not work for and hold no stock in. A company who will gladly continue to raise rates to keep their profits up. A company who will raise rates on retirees on a fixed income and when they can't pay they will let them go and find younger, more affluent customers. Congrats to the PR team for making customers happy about it.

Seeing a company remain reasonably profitable is good for all the reasons mentioned. But I don't mind that people disagree on what level is "reasonable". If a merger such as DirecTV and DISH would bring down costs for the consumer it might be a good thing. But somehow the expectation that consumer prices will continue to rise while costs are reduced for the new company seems to be more likely. Higher prices, more profit. :(


The preceding statement is my own and does not represent the opinion of the site or any company.


Very well and accurately put. Of course, the usuals will pretend that this does not describe the benevolent Directv and Dish companies. :rolleyes:
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#133 OFFLINE   VLaslow

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Posted 25 September 2012 - 07:14 PM

I'd like to think that, sooner or later, price increases can't continue as the customers will simply fade away. Even though we haven't seen it yet on a broad scale, there is a limit to what people can, and will, pay.

The Sirius/XM deal took two failing ccmpanies and made one failing company. That's not the situation with Dish and DirecTV. But, never underestimate the capabilities of a good lobbyist.

#134 OFFLINE   harsh

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Posted 26 September 2012 - 08:10 AM

Gee...

With you being a Dish customer, I would have thought you'd be able to cite Echostar's purchases of DISH Network, Hughes networks, Move Networks, and other stellar examples. :rolleyes:

So you don't have any examples of mergers (as opposed to acquisitions of satellite bandwidth) to support your claim? I was kinda suspicious that you didn't believe what you posted.

BTW, as Hoosier205 accurately pointed out, Echostar didn't purchase DISH. Spinning off Echostar put Echostar in a better position to do STB business with DISH competitors.

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#135 OFFLINE   Richierich

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Posted 26 September 2012 - 08:29 AM

Gee...

With you being a Dish customer, I would have thought you'd be able to cite Echostar's purchases of DISH Network, Hughes networks, Move Networks, and other stellar examples. :rolleyes:


But if the Merger between Dish and Directv goes thru then Harsh would be justified with his Posting on the Directv side of DBSTALK because he then would be a Directv/Dish Customer so Directv Posters could no longer poke fun at him for posting on the Directv side of DBSTALK!!! :lol:
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#136 OFFLINE   Hoosier205

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Posted 26 September 2012 - 08:57 AM

But if the Merger between Dish and Directv goes thru then Harsh would be justified with his Posting on the Directv side of DBSTALK because he then would be a Directv/Dish Customer so Directv Posters could no longer poke fun at him for posting on the Directv side of DBSTALK!!! :lol:


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#137 ONLINE   Diana C

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Posted 26 September 2012 - 10:34 AM

Mr White can think whatever he wants, but he's dreaming if he thinks this deal is any more likely to be approved than it was last time. Unlike the Sirius/XM deal (and the Sprint/Nextel deal) both DirecTV and Dish Network are financially healthy and vibrant companies. There is no consumer benefit to be gained from a merger of the companies, other than a reduction in operating costs.

The problem with even that benefit is that it is unlikely to have much, if any, effect on customer's bills. The majority of our monthly bill is driven by programming costs, not operating costs. Anyone who thinks that a combined Dish/DirecTV would have more leverage with content providers is dreaming. Even if they kept every current subscriber (and assuming there are not many subscribers to both) they'd have about 34 million subs, making them about 50% larger than the current #1 Comcast (which, at 22 million is about 50% larger than #3 Dish Network separately). But has Comcast's larger size made them able to hold the line on costs any better than Dish? Not for one minute.

In terms of subscriber savings, even if ALL the cost savings were passed on, a merger might mean an annual increase of $1.95 per month instead of $2.00. Hardly enough to overcome antitrust and bandwidth monopoly concerns.

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#138 OFFLINE   tonyd79

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Posted 26 September 2012 - 11:13 AM

Mr White can think whatever he wants, but he's dreaming if he thinks this deal is any more likely to be approved than it was last time. Unlike the Sirius/XM deal (and the Sprint/Nextel deal) both DirecTV and Dish Network are financially healthy and vibrant companies. There is no consumer benefit to be gained from a merger of the companies, other than a reduction in operating costs.

The problem with even that benefit is that it is unlikely to have much, if any, effect on customer's bills. The majority of our monthly bill is driven by programming costs, not operating costs. Anyone who thinks that a combined Dish/DirecTV would have more leverage with content providers is dreaming. Even if they kept every current subscriber (and assuming there are not many subscribers to both) they'd have about 34 million subs, making them about 50% larger than the current #1 Comcast (which, at 22 million is about 50% larger than #3 Dish Network separately). But has Comcast's larger size made them able to hold the line on costs any better than Dish? Not for one minute.

In terms of subscriber savings, even if ALL the cost savings were passed on, a merger might mean an annual increase of $1.95 per month instead of $2.00. Hardly enough to overcome antitrust and bandwidth monopoly concerns.


Not to mention the cost of merging technologies. They can't even afford to shut down mpeg2 SD today, who says they'd have any gain in merging two companies using completely different technologies. The cost savings comes down to things like Human resources and some other functions that would save money.

The cost savings is a mirage.
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#139 OFFLINE   Christopher Gould

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Posted 26 September 2012 - 03:14 PM

Mr White can think whatever he wants, but he's dreaming if he thinks this deal is any more likely to be approved than it was last time. Unlike the Sirius/XM deal (and the Sprint/Nextel deal) both DirecTV and Dish Network are financially healthy and vibrant companies. There is no consumer benefit to be gained from a merger of the companies, other than a reduction in operating costs.

The problem with even that benefit is that it is unlikely to have much, if any, effect on customer's bills. The majority of our monthly bill is driven by programming costs, not operating costs. Anyone who thinks that a combined Dish/DirecTV would have more leverage with content providers is dreaming. Even if they kept every current subscriber (and assuming there are not many subscribers to both) they'd have about 34 million subs, making them about 50% larger than the current #1 Comcast (which, at 22 million is about 50% larger than #3 Dish Network separately). But has Comcast's larger size made them able to hold the line on costs any better than Dish? Not for one minute.

In terms of subscriber savings, even if ALL the cost savings were passed on, a merger might mean an annual increase of $1.95 per month instead of $2.00. Hardly enough to overcome antitrust and bandwidth monopoly concerns.


But does comcast negotiate as 22 million customers or does it do it by area since all channels aren't available in all areas?

#140 ONLINE   Shades228

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Posted 26 September 2012 - 03:46 PM

The cost savings would be more in the future of contract negotiations and reduced SAC costs. Would the bills go down? No but they may not rise at a steady 3-4% a year either.

If either company had regional pricing then there would be a lot more of concern with price fixing but both companies have national pricing. The people with 6 options have the same cost as the people with 2. Now some loss would be the people with 2 options right now being able to "threaten" to leave to get discounts but eventually this "business model" will evolve and the discounts won't be as they are today.

#141 OFFLINE   raott

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Posted 26 September 2012 - 04:18 PM

The cost savings would be more in the future of contract negotiations and reduced SAC costs.


In other words, no more up front deals to come to Directv because we no longer have to compete with Dish in the rural areas.
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#142 OFFLINE   Carl Spock

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Posted 26 September 2012 - 04:35 PM

There are two kinds of costs here, raott. You're talking about the cost of the service to the consumer. I think Shades228 was talking about costs of procuring programing for DirecTV. Those are two completely different things.

We really should call the first one price and the second one costs but we often don't. Your remark about lower prices when there is competition is very valid, as is Shades' one about possibly lower costs with a merged company.
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#143 OFFLINE   tonyd79

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Posted 26 September 2012 - 05:09 PM

The cost savings would be more in the future of contract negotiations and reduced SAC costs. Would the bills go down? No but they may not rise at a steady 3-4% a year either.


Not sure I really imagine much cost per unit to go down in contract negotiations. Why would they? It is not like we are going an order of magnitude. DirecTV would go from 20 mil to 35 mil. That is a big jump but not enough to force a big change in pricing, especially as it is assumed that Dish is getting good deals now because they are 15 mil-ish.

What could happen is that DishrecTV thinks they are big enough to push things and there are more disputes.

I am not seeing economies of scale elsewhere either. This is not a paper company where they can just mingle the stock.
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#144 OFFLINE   James Long

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Posted 26 September 2012 - 05:33 PM

Not sure I really imagine much cost per unit to go down in contract negotiations. Why would they?

I would expect a "bulk discount" for a wider distribution ... a channel accepting 20c per subscriber because they are in Entertainment or AT120 and wanting 25c per subscriber if they are placed in Choice or AT200. Knowing that they will make more money off of the additional subscribers in the lower tiers (regardless of actual channel viewership).

Perhaps a combined DirecTV-DISH could offer a channel 25 million viewers at the Choice/AT200 level and expect a better price than when they were only offering 10 or 15 million. The channel provider would only getting 25 million subscribers - even if their payment comes from one company instead of two. So I doubt if there would be a better price.

It may even backfire to the point where channel providers look at the profit the combined company is making and want a bigger cut. If one company can afford to buy the other they certainly can pay higher rates per channel. Right? The channels will always want a bigger piece of the profits.

#145 OFFLINE   Eksynyt

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Posted 26 September 2012 - 06:08 PM

Coincast and the cable companies will pay off whoever they have to in order to prevent this from happening.

#146 OFFLINE   tonyd79

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Posted 26 September 2012 - 06:17 PM

I would expect a "bulk discount" for a wider distribution ... a channel accepting 20c per subscriber because they are in Entertainment or AT120 and wanting 25c per subscriber if they are placed in Choice or AT200. Knowing that they will make more money off of the additional subscribers in the lower tiers (regardless of actual channel viewership).

Perhaps a combined DirecTV-DISH could offer a channel 25 million viewers at the Choice/AT200 level and expect a better price than when they were only offering 10 or 15 million. The channel provider would only getting 25 million subscribers - even if their payment comes from one company instead of two. So I doubt if there would be a better price.

It may even backfire to the point where channel providers look at the profit the combined company is making and want a bigger cut. If one company can afford to buy the other they certainly can pay higher rates per channel. Right? The channels will always want a bigger piece of the profits.


The problem I have is that most of the channels are already in directv and dish households. At levels both companies are happy with. Why would they give a discount just because they are now dealing with one company. That would be asking them to foot the bill of the merger. They won't like that. If the new company sticks to its guns, more disputes.
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#147 OFFLINE   Davenlr

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Posted 26 September 2012 - 06:59 PM

Only consumer benefit I see to a merger would be that the combined company would be able to repurpose satellites to exclusively offer 4K or 8K programming. The cable companies will never have the bandwidth for it. Neither Dish or DirecTv alone, really have the bandwidth for it either.

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#148 ONLINE   Shades228

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Posted 26 September 2012 - 08:19 PM

Not sure I really imagine much cost per unit to go down in contract negotiations. Why would they? It is not like we are going an order of magnitude. DirecTV would go from 20 mil to 35 mil. That is a big jump but not enough to force a big change in pricing, especially as it is assumed that Dish is getting good deals now because they are 15 mil-ish.

What could happen is that DishrecTV thinks they are big enough to push things and there are more disputes.

I am not seeing economies of scale elsewhere either. This is not a paper company where they can just mingle the stock.


35 million households is over 1/3rd of the population who pay for pay TV. You also have to think of market penetration as well. In some place a dispute may only impact 150k subs in a market because they have a share of that. With the two companies it could impact 300k subscribers.

The problem I have is that most of the channels are already in directv and dish households. At levels both companies are happy with. Why would they give a discount just because they are now dealing with one company. That would be asking them to foot the bill of the merger. They won't like that. If the new company sticks to its guns, more disputes.



It's the increase in rates that is driving the bills. No one is saying that there will be a discount in any sense. What is being said is that it would be much more costly to blackout a channel because it impacts that many people. It also allows a smaller increase because they'll get it from more people. So instead of a larger increase it could be smaller due to the more consistent amount of customers.

There would be other savings as well but they would be offset by other costs so who knows how that would pan out. Advertising would be less than both companies spend but licenses for software users would increase. Then there's the whole getting everyone on the same platform but that's already been discussed.

#149 OFFLINE   tonyd79

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Posted 26 September 2012 - 09:14 PM

35 million households is over 1/3rd of the population who pay for pay TV. You also have to think of market penetration as well. In some place a dispute may only impact 150k subs in a market because they have a share of that. With the two companies it could impact 300k subscribers.

It's the increase in rates that is driving the bills. No one is saying that there will be a discount in any sense. What is being said is that it would be much more costly to blackout a channel because it impacts that many people. It also allows a smaller increase because they'll get it from more people. So instead of a larger increase it could be smaller due to the more consistent amount of customers.

There would be other savings as well but they would be offset by other costs so who knows how that would pan out. Advertising would be less than both companies spend but licenses for software users would increase. Then there's the whole getting everyone on the same platform but that's already been discussed.


You are proving part of my point. More disputes. Because that will become the big weapon. It is the only weapon. There is no discount because you are not growing the market. You are consolidating the market. And the big company will expect bigger discounts.

As programming is the big cost, that is where they would expect to gain in a merger so it will become more contentious.

Otherwise there is no real economy of scale. You still need the same customer support. The same amount if engineering (maybe more if you plan to merge systems some day). The same installation contracts as you have different systems.

Just the rebranding alone is costly. There will not be fewer ads. There will be more during rebranding.

Mergers like this make no sense. Mergers between commodity companies do. Mergers like Comcast/NBC do from their perspective. No one wins in a dish/directv merger except maybe someone who gets a golden parachute if revenues go up.

When Allied Signal and Honeywell merged, both CEOs got bonuses because they hit numbers in the merger year. They both used the combined numbers.

Beware when a man who is paid by revenues proposes a merger.
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#150 OFFLINE   PrinceLH

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Posted 26 September 2012 - 09:27 PM

I wish that they'd just do a transponder swap and leave it as two companies. Directv gains 110w and Dish gets 119w and any assets in the eastern arc and then call it a day!




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