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


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225 replies to this topic

#151 OFFLINE   James Long

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Posted 26 September 2012 - 11:03 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!

Can you name the assets?

DISH has 29 transponders at 110, DirecTV has 3.
DirecTV has 11 transponders at 119, DISH has 21.
Trading 29 transponders for 11 (reducing DISH from 82 transponders to 64 on Western Arc) is not a good deal.

DISH has control of 88 transponders serving the US on Eastern Arc. DirecTV vacated their use of 72.5 last year so that isn't something they could give to DISH. Was 72.5 the Eastern Arc assets you were thinking of?

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#152 OFFLINE   James Long

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Posted 26 September 2012 - 11:28 PM

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

I wonder if they would be better off keeping the brands separate and just sharing satellites and other infrastructure where possible? Keep marketing DirecTV as a premier service worth paying more to have and DISH as a discount service that will save you money. It would not be the first company with competing brands.

Sharing satellite infrastructure would require new dishes and LNBs. DISH makes it easy on their technology to add one more orbital location to their dishes (a complete arc of three orbitals plus one other location). If DirecTV could add a second dish then a single satellite dish aimed at 61.5, 77 or 129 (depending on market) could add HD locals in some markets.

But the real economies may be in the local point of presence. Instead of operating separate receive and backhaul facilities for local channels these sites could be combined. Echostar has an extensive fiber network that could easily deliver received channels to both a DISH and a DirecTV uplink. (Echostar sells capacity on their fiber network to TV stations and others needing a backhaul that reaches every market.)

#153 OFFLINE   Hoosier205

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Posted 26 September 2012 - 11:32 PM

I wonder if they would be better off keeping the brands separate and just sharing satellites and other infrastructure where possible? Keep marketing DirecTV as a premier service worth paying more to have and DISH as a discount service that will save you money. It would not be the first company with competing brands.

Sharing satellite infrastructure would require new dishes and LNBs. DISH makes it easy on their technology to add one more orbital location to their dishes (a complete arc of three orbitals plus one other location). If DirecTV could add a second dish then a single satellite dish aimed at 61.5, 77 or 129 (depending on market) could add HD locals in some markets.

But the real economies may be in the local point of presence. Instead of operating separate receive and backhaul facilities for local channels these sites could be combined. Echostar has an extensive fiber network that could easily deliver received channels to both a DISH and a DirecTV uplink. (Echostar sells capacity on their fiber network to TV stations and others needing a backhaul that reaches every market.)


Associating the DirecTV brand with Dish would only drag DirecTV down. Better to wipe them out, settle the various lawsuits Charlie has invited, and keep what is worth keeping. Chop shop.
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#154 OFFLINE   tonyd79

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Posted 27 September 2012 - 06:33 AM

I wonder if they would be better off keeping the brands separate and just sharing satellites and other infrastructure where possible? Keep marketing DirecTV as a premier service worth paying more to have and DISH as a discount service that will save you money. It would not be the first company with competing brands.


To a large degree, that is what Sirius XM has done. Too many radios out there that are aimed at one company. The shift is coming but it took years and they still brand individually as well as joint. Didn't even clean up the channels on each.

But the real economies may be in the local point of presence. Instead of operating separate receive and backhaul facilities for local channels these sites could be combined. Echostar has an extensive fiber network that could easily deliver received channels to both a DISH and a DirecTV uplink. (Echostar sells capacity on their fiber network to TV stations and others needing a backhaul that reaches every market.)


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#155 OFFLINE   raott

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Posted 27 September 2012 - 06:39 AM

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.


Shades mentioned two things, one of them being SAC (subscriber aquisition cost), which is the one I was addressing. I don't think programming costs are in that bucket.

SAC goes down if you don't need to give the customer the moon to entice that customer to come to your service. That can easily happen in a rural area where there is no longer two sat companies to compete against each other. Shades acted like this was a good thing. Probably is for the investor. For the customer, not so much.
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#156 OFFLINE   MCHuf

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Posted 27 September 2012 - 06:48 AM

Associating the DirecTV brand with Dish would only drag DirecTV down. Better to wipe them out, settle the various lawsuits Charlie has invited, and keep what is worth keeping. Chop shop.


Charlie controls Dish Network. He will still be a big player in any merged company. And where Charlie goes, lawsuits will follow, even if the current ones are settled. Do we really want him to screw over 34 million sat customers instead of 14 million?

#157 OFFLINE   maartena

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Posted 27 September 2012 - 12:17 PM

Associating the DirecTV brand with Dish would only drag DirecTV down. Better to wipe them out, settle the various lawsuits Charlie has invited, and keep what is worth keeping. Chop shop.


FCC will never go for that. Dish is not a failing company in financial struggle that can be bought out and chopped up, it is a company that is doing very well financially, and has 14 million customers. They will do perfectly fine on their own, and besides the FCC not approving such a scenario, I think Dish would rather continue on their own than have it being chopped up.

If they ever merge, it will probably an actual merger with a name change. Just like SiriusXM, they would become something like DirecDish or something similar.

Personally, I don't think a merger will happen any time soon. And if they do, they will probably remain two separate companies for many years, while from the top level down they will slowly - say over 10 years - work towards a compatible standard in technology so they can become one company.

Look at cable acquisitions for instance: In 2008, when Adelphia failed, TWC and Comcast bought up the pieces and started dividing up their markets. TWC got all of Los Angeles, and gained all of Adelphia and Comcast in this market, where they gave up other markets to Comcast. That was 2008.

Four years later, my mother-in-law still has a Adelphia DVR, people still have Comcast equipment, and they essentially are STILL running 3 networks with 3 different setups. They even haven't streamlined the channel lineups yet. TWC in my home town has a vastly different channel lineup and channel location as the town my mother-in-law lives in, only 5 minutes down the road.

Dish may be the smaller party in a potential merger, but they would not be absorbed. It is much more likely that IF a merger would take place, they will stay separate companies for at least 5 years with a corporate merger, and then slowly merge into a one-name company that might not carry either name at all. They would have to come up with a technology merging plan first.
[Disclaimer] The definition of "soon" is based solely on DirecTV's interpretation of the word, and all similarities with dictionary definitions of the word "soon" are purely coincidental and should not be interpreted as a time frame that will come to pass within a reasonable amount of time.

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#158 OFFLINE   Hoosier205

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Posted 27 September 2012 - 12:28 PM

FCC will never go for that. Dish is not a failing company in financial struggle that can be bought out and chopped up, it is a company that is doing very well financially, and has 14 million customers. They will do perfectly fine on their own, and besides the FCC not approving such a scenario, I think Dish would rather continue on their own than have it being chopped up.

If they ever merge, it will probably an actual merger with a name change. Just like SiriusXM, they would become something like DirecDish or something similar.

Personally, I don't think a merger will happen any time soon. And if they do, they will probably remain two separate companies for many years, while from the top level down they will slowly - say over 10 years - work towards a compatible standard in technology so they can become one company.

Look at cable acquisitions for instance: In 2008, when Adelphia failed, TWC and Comcast bought up the pieces and started dividing up their markets. TWC got all of Los Angeles, and gained all of Adelphia and Comcast in this market, where they gave up other markets to Comcast. That was 2008.

Four years later, my mother-in-law still has a Adelphia DVR, people still have Comcast equipment, and they essentially are STILL running 3 networks with 3 different setups. They even haven't streamlined the channel lineups yet. TWC in my home town has a vastly different channel lineup and channel location as the town my mother-in-law lives in, only 5 minutes down the road.

Dish may be the smaller party in a potential merger, but they would not be absorbed. It is much more likely that IF a merger would take place, they will stay separate companies for at least 5 years with a corporate merger, and then slowly merge into a one-name company that might not carry either name at all. They would have to come up with a technology merging plan first.


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#159 OFFLINE   Shades228

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Posted 27 September 2012 - 01:33 PM

Shades mentioned two things, one of them being SAC (subscriber aquisition cost), which is the one I was addressing. I don't think programming costs are in that bucket.

SAC goes down if you don't need to give the customer the moon to entice that customer to come to your service. That can easily happen in a rural area where there is no longer two sat companies to compete against each other. Shades acted like this was a good thing. Probably is for the investor. For the customer, not so much.


If SAC goes down then that money can be reallocated or absorbed into profits. If it's absorbed into profites then that means a smaller increase would take place to keep profit margins the same.

You keep saying rural however DIRECTV and DISH are national. They do not have rural pricing so people in rural areas get the benifits of DIRECTV and DISH having to be competitive in markets with multiple options.

Could the company choose to keep the profits and pass on all increases? Sure but they can do that now if they wanted to. So it wouldn't be doomsday for either situation. They wouldn't lose major markets for the sake of trying to get more out of rural markets that would be counter productive.

The largest "negative" I can think of for consumers will be the simple fact that the current game of swapping back and forth would stop and the retention credit aspect would not have to be as much. This again would free up cash flow into profits which could have the impact of lower increases as well.

What it really comes down to is what they would do with the profits. Would they turn into Apple or would they pass the savings along. I think they would do a mixture of both because it's smart business sense.

#160 OFFLINE   WebTraveler

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Posted 28 September 2012 - 07:29 AM

Just because this is what Mr. White is hoping for does not mean it will happen. While Mr. White may want this, it takes two parties to deal here. Directv stock has been going up, up, and up....and no way a deal will be for Dish to buy or absorb Directv at the current price levels. Companies buy others when they believe the stock price is good deal, not one that is trading at or close to all time highs....

Dish has moved other directions, buying wireless spectrums for future use, absorbing Blockbuster, and other things. It's eggs are not all in one basket. Directv, on the other hand, really doesn't have much other than pay TV in its pocket.

#161 OFFLINE   James Long

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Posted 28 September 2012 - 04:50 PM

Just because this is what Mr. White is hoping for does not mean it will happen.

I'm not sure that Mr White is hoping for a merger or even wants one to happen. I'm just seeing his comments as stating that such a merger may not be a bad idea ... instead of a complete rejection of the concept.

You are right about the complexity of the deal and the differences between the two companies.

DirecTV has remained a satellite TV company with limited movements into other markets. Over the years DirecTV have been owned by companies with other interests.

DISH started as Echostar until that part of the business was separated, but the ownership of the two companies remains primarily the same and the primary ownership of the companies has remained the same since before DISH was born. Over the years DISH has purchased other companies and brought them under the DISH/Echostar umbrellas.

Both companies have purchased other DBS properties ... both "live" companies (eg: DirecTV purchase of USSB) and unbuilt licenses. Both have used such purchases to grow their DBS offerings. The merger of DirecTV and DISH would be the biggest of those deals ever.



One thing to keep in mind ... DirecTV's best quarter so far has been the addition of 1.28 million (gross) customers 3Q 2011. If DirecTV abruptly ended DISH service they would be unable to handle the influx of "new" customers. In addition, with subscriber acquisition costs over $800 per customer it would be cost prohibitive to replace all the equipment. Both company's systems would need to remain in business for several years for a smooth transition.

#162 OFFLINE   Dude111

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Posted 02 October 2012 - 11:08 PM

It's monopolies that maximize profit.

Yup prices would most likely sky rocket!! :(

#163 OFFLINE   Carolina

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Posted 06 October 2012 - 11:10 PM

Oh joy this reminds me too much of the Sirius/XM merger that was a mess. Two companies that were one company, but not really because their technologies were not immediately compatible. Prices did go up and on top of it all Sirius/XM is not as good as either Sirius or XM were when they were separate. Oh please don't let this happen :angel:

#164 OFFLINE   Bambler

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Posted 06 October 2012 - 11:14 PM

Bad idea. Regardless of how you may think DirecTV is "pro-consumer," explain that the next time they blackout and don't roll back rates.

The less choices available is always a bad thing and I think the FCC will agree in regards to Dish and DirecTV.

#165 OFFLINE   Hoosier205

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Posted 06 October 2012 - 11:23 PM

Bad idea. Regardless of how you may think DirecTV is "pro-consumer," explain that the next time they blackout and don't roll back rates.

The less choices available is always a bad thing and I think the FCC will agree in regards to Dish and DirecTV.


Blackout what?
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#166 OFFLINE   Bambler

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Posted 06 October 2012 - 11:27 PM

Blackout what?


I'm speaking in future-tense and my thoughts carry good weight based on what we've seen so far regarding DirecTV's negotiating stance. Re-read.

#167 OFFLINE   Hoosier205

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Posted 06 October 2012 - 11:35 PM

I'm speaking in future-tense and my thoughts carry good weight based on what we've seen so far regarding DirecTV's negotiating stance. Re-read.


They completed 39 retrans deals in 2010, around 80 in 2011, and a ton in 2012 so far. There have been very few "blackouts" however. So based on what exactly?
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#168 OFFLINE   Bambler

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Posted 06 October 2012 - 11:40 PM

They completed 39 retrans deals in 2010, around 80 in 2011, and a ton in 2012 so far. There have been very few "blackouts" however. So based on what exactly?


Viacom? Who is to say the next big one will be easier as DirecTV tries to leverage their declining subscriber numbers against another? I'm just guessing, but you don't know the future, either.

#169 OFFLINE   Hoosier205

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Posted 06 October 2012 - 11:44 PM

Viacom? Who is to say the next big one will be easier as DirecTV tries to leverage their declining subscriber numbers against another? I'm just guessing, but you don't know the future, either.


Viacom? That's one "blackout" compared to 119 successful non-blackout retrans deals from 2010-2011 and a large number of them already in 2012. Still trying to understand why you think it is bad that they are firm in negotiating deals in order to minimize those rate increases.
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#170 OFFLINE   Bambler

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Posted 06 October 2012 - 11:47 PM

Viacom? That's one "blackout" compared to 119 successful non-blackout retrans deals from 2010-2011 and a large number of them already in 2012.


Okay? So maybe those other channels didn't have as much pull and were begging DirecTV to carry. I have no idea? But the line has been drawn in regards to leveraging power. The content providers and content distributors knows where it's at...who blinks first?

#171 OFFLINE   TXD16

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Posted 06 October 2012 - 11:56 PM

Oh joy this reminds me too much of the Sirius/XM merger that was a mess. Two companies that were one company, but not really because their technologies were not immediately compatible. Prices did go up and on top of it all Sirius/XM is not as good as either Sirius or XM were when they were separate. Oh please don't let this happen :angel:


As has been mentioned, that's an apples-to-oranges comparison as both Sirius and XM were bleeding cash and would both be out of business if the merger hadn't been approved. Such is not the case for DIRECTV and Dish.

Personally, I believe that with the existing competition from cable, fiber, and IP, I would love to see what a single merged, leaner satellite offering could offer, both in quality and quantity.

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#172 OFFLINE   Bambler

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Posted 06 October 2012 - 11:59 PM

As has been mentioned, that's an apples-to-oranges comparison as both Sirius and XM were bleeding cash and would both be out of business if the merger hadn't been approved. Such is not the case for DIRECTV and Dish.

Personally, I believe that with the existing competition from cable, fiber, and IP, I would love to see what a single merged, leaner satellite offering could offer, both in quality and quantity.


As enticing as that may sound, I don't agree. Whenever "choices" decline, the consumer loses in the long-run and I think the FCC, no matter how you may think of them, would agree when it comes to something like this.

Satellite radio doesn't count in the eye of the FCC.

#173 OFFLINE   MysteryMan

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Posted 07 October 2012 - 05:24 AM

As has been mentioned, that's an apples-to-oranges comparison as both Sirius and XM were bleeding cash and would both be out of business if the merger hadn't been approved. Such is not the case for DIRECTV and Dish.

Personally, I believe that with the existing competition from cable, fiber, and IP, I would love to see what a single merged, leaner satellite offering could offer, both in quality and quantity.


What that would offer is a monopoly. We're the only satellite service provider. Take what we provide or use a ota antenna or the cable service in your area.

DIRECTV customer since 1995.


#174 OFFLINE   mreposter

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Posted 07 October 2012 - 11:50 AM

It would only be a monopoly in rural areas without cable. A combined Direct-Dish would be a national carrier. It would have to compete with every cable system in the country.

Past regulations have made it clear that the two companies have to offer uniform pricing nationally, so they couldn't get away with charging higher rates or additional fees to rural customers where they have monopoly power. So competition with Time Warner, Comcast and other other biggies in the urban/suburban areas will keep rates within reason.

My own take is that this would be a hugely expensive merger over 3-5 years to combine the technology, the set top boxes and software, etc all while grappling with the increasing impact of the internet and video on demand. If so, it would take a long time for this thing to pay off with higher profits.
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#175 OFFLINE   mrro82

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Posted 07 October 2012 - 12:12 PM

Personally, I view it like this. What if Sprint had been bought by Verizon or AT&T and right now there was only AT&T and Verizon? Imagine those 2 merged. How much better off would you be then?




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