[HobbyTalk]

In a Form 8-K, DISH Network (Nasdaq: DISH) and AT&T Inc. (NYSE: T) yesterday announced that they have agreed to a one month extension of the Commercial Agreement between AT&T and DISH Network. As a result of the extension, the Commercial Agreement will terminate on January 31, 2009.

http://www.streetinsider.com/Corpor...+Commercial+Agreement+by+1-Month/4012825.html

 

[BattleZone]

Dumping AT&T will be a GOOD thing for Dish. Bundled services are a pain anyway, but when you have two different companies involved, it's a nightmare. Plus, AT&T likes to cannibalize their Dish referrals and move them to Uverse anyway. It's a mess.

 

[Richard King]

Plus, AT&T likes to cannibalize their Dish referrals and move them to Uverse anyway. It's a mess.

That's an interesting thought. Not many people still remember the early days of Directv when they used several distributors of big dish equipment to sell Directv equipment to the big dish dealers. Their biggest distributor when they started was Echosphere Corp. Echosphere was owned by two fellows who had been in the big dish market from day one, Charlie Ergen and Jim Defranko. I have no idea how much of a head start this gave the boys when Echosphere became Echostar, but I suspect it helped quite a bit. Of course, the deal made sense for both since Echosphere had a national sales "footprint" and Directv needed to get a foot in with the big dish dealers.

It's Deja Vu all over again, again.

 

[harsh]

I find it curious that the extension was only one month. Perhaps AT&T is waiting to see what happens with the EA and Ciel 2 before committing?

 

[Spoonser]

That's an interesting thought. Not many people still remember the early days of Directv when they used several distributors of big dish equipment to sell Directv equipment to the big dish dealers. Their biggest distributor when they started was Echosphere Corp. Echosphere was owned by two fellows who had been in the big dish market from day one, Charlie Ergen and Jim Defranko. I have no idea how much of a head start this gave the boys when Echosphere became Echostar, but I suspect it helped quite a bit. Of course, the deal made sense for both since Echosphere had a national sales "footprint" and Directv needed to get a foot in with the big dish dealers.

It's Deja Vu all over again, again.

That's interesting. I think it was Winn Dixie that had Sam Walton (founder of Walmart/Sam's club) on their board of directors. At some point someone woke up to the fact that he was learning the grocery business from then and one day was going to be competing against them directly with Walmart. So they got him kicked off the board, but of course that was probably just a speed bump at most as far as Walmart getting into the grocery business.

I suppose this is a little off-topic, but oh well.

 

[CHDinCT]

Neither AT&T or Verizon will ever build out their "landline" video service to their total footprint, so sat TV will remain complimentary for a long time. Still think there could be a merger there somewhere. That said, AT&T and Verizon would rather sell their own video service over Sat if it's available to a given customer.

 

[grog]

From front page.

AT&T and DIRECTV, Inc. Reach Agreement to Offer Satellite TV Service to AT&T Customers

http://www.dbstalk.com/showthread.php?t=140799

 

[Richard King]

Charlie is screwing up again. He has NOTHING to set Dish apart and this is the result. It's a real shame. :nono:

 

[grog]

Don't worry....
James will find a positive spin on this one I am sure.

Charlie is screwing up again. He has NOTHING to set Dish apart and this is the result. It's a real shame. :nono:

 

[peak_reception]

Dumping AT&T will be a GOOD thing for Dish. Bundled services are a pain anyway, but when you have two different companies involved, it's a nightmare.

You are exactly right! I'm an AT&T/DISH bundle customer and it took about a year to get everything set right, including promised rebates granted, billing SNAFUs, etc. The absolute worst thing though is being bounced between the two when questions and problems arise which need to be resolved. It's always the 'other guys' area to take care of. I'll say one thing in DISH's favor though; AT&T, at least in this region, has the WORST customer DIS-service imaginable. Most of them just. don't. care. period.

Plus, AT&T likes to cannibalize their Dish referrals and move them to Uverse anyway. It's a mess.

They haven't even flirted with me yet It would have to be one helluva deal though for me to make a jump to them, given the customer service they've shown me so far. :nono2:

 

[peak_reception]

Oh, and one more thing as long as I'm *****ing about AT&T. They try to sell you more services EVERY SINGLE CONTACT. Without exception. I'm not blaming the CSRs for that one, it's a management decision. Milk as much moolah out of the customers as you can! Nag them about upgrading or adding services EVERY SINGLE CONTACT. What a damn nuisance. :sure:

 

[James Long]

Don't worry....
James will find a positive spin on this one I am sure.

What?

DISH is the market leader! They just seem to be leading in the wrong direction at the moment.

I don't know how much the deal with AT&T helped DISH in the past, beyond 15% of gross additions for the first six months of the year. I've never really liked reselling agreement (beyond local retailers selling a national product for a commission). The rebranding/repackaging often waters down of the main product. One is often better off dealing direct with the company with the product and not the repackager.

There are some areas where a reseller can get you a deal ... but it is only a good deal in my mind when the main product stays intact.

BTW: No spin required - from the DirecTV thread:

After reading posts from folks with AT&T/Dish packages saying what a PITA it is when trying to get 'discounted/free' upgrades or making changes. If AT&T/DirecTV have the same limitations I'll just stay with my non-bundled service.

Quarterly Report Information:
"In addition, for the six months ended June 30, 2008, approximately 15 percent of our gross subscriber additions were generated through our distribution relationship with AT&T."
"Monthly average revenue per subscriber was $69.38 during the three months ended June 30, 2008 versus $66.06 during the same period in 2007. ... This increase was partially offset by a decrease in revenues from installation and other services related to our original agreement with AT&T."

Looks like having the relationship brought in new customers (no guarantee that some of them would not have come to DISH anyways) but it was a costly arrangement. Perhaps AT&T wanted a better deal, one with a higher profit margin? Every customer sold through AT&T is a loss of profits for DISH ... there is a balancing point where the number of customers added balances the extra cost. Only DISH would know just how much losing AT&T hurts. (If one wants worst case scenario gloom and doom read the quarterly report.)

DISH does need to find a way to sell their service ... get it in front of potential customers, get the orders, get the installs, get the monthly income. Losing any sales path isn't good.

 

[phrelin]

So someone tell me I'm wrong about a curious coincidence.

I got the "DISH Network(R) Launches Next-Gen Digital-To-Analog Converter Box: DTVPal(TM) Plus" news release on 9/24. I got the "DISH Network and Sony Pictures Television Reach Agreement to Offer Video On Demand" and the "DISH Network Teams With NBC Universal on Record Number of Viewers for Enhanced Interactive Coverage Of 2008 Beijing Olympic Games" news releases on 9/25.

The "AT&T and DIRECTV, Inc. Reach Agreement to Offer Satellite TV Service to AT&T Customers" news release is dated 9/26.

Three positive interesting corporate news releases which are released just ahead of the one meaningful story, all four buried in the economic disaster news. They're getting better at pr.

 

[HobbyTalk]

Another way to look at is that while the actual "profit" from the bundled ATT/Directv subscribers may be lower, in the end it could make the profit from all subscribers higher.

This could be because of lower "per subscriber" programming costs when Directv can get a better programming price because they now offer 16 million customers instead 14 million due to the extra 2 mil. subscribers gained thru ATT.

Fixed overhead costs are now spread between more subscribers lowering the per subscriber overhead expense.

Lower equipment costs as the per unit price of equipment falls as higher quanities are ordered/manufactured.

 

[BattleZone]

DISH does need to find a way to sell their service ... get it in front of potential customers, get the orders, get the installs, get the monthly income. Losing any sales path isn't good.

Two things here:

1. IMO, Dish's marketing has always been terrible. It still is. Their commercials, instead of trying to be funny, need to dole out some real info about their service. And it would help if they worked to get their name associated with other people/shows/brands/products that help make them look like more of an advanced, premium product. DirecTV has done a much better job in this area, and are reaping the rewards. Dish's product is slightly different but also very good, but their marketing has always been perceived as fighting over the low end of the market. That's a losing strategy, especially with the continued growth of the Telecoms in the TV arena.

2. Dish built much of their subscriber base by working closely with their local retailers, but they have really undermined them over the last couple of years, in favor of a more corporate-centric plan. I really believe that they have hurt their growth because of that policy; while the retailers were well supported, growth was never higher.

Dish's performance this year has been HORRIBLE, and they need to start waking up and figuring out that their current direction is not helping. They need a complete retooling of their marketing strategy, one that takes into account the growing need for HD (TV2 outputs in SD are becoming passe') and the fact that many people want TV in 6-8 rooms of their house, something that Dish doesn't deliver well. What worked in 2000 does not work for 2008, much less 2010 and beyond.

They are handing a lot of their potential customers to their competitors with these outdated models, and it's only going to get worse. The time to change this is NOW, before this "temporary downturn" becomes a death spiral. I know they CAN do this; let's hope they CHOOSE to do it. As a Dish subcontractor, I certainly hope Charlie & Co is paying attention.

 

[Stewart Vernon]

Both Bellsouth and the AT&T that re-absorbed it recently have gone through multiple cycles of even offering bundles and unbundling with their own products. From this, I've learned there is no stability to the bundling. Similarly, Bellsouth and AT&T have had a recent history of reducing prices on services BUT not unless you call in to ask for the reduced rate... so if you don't read online message boards you never know of the price reduction you should be getting.

Now... consider that Bellsouth had bundled with DirecTV... AT&T was bundled with Dish... the merger happened, and the combined "new" AT&T dropped DirecTV when that contract ended... and now announces they are dropping Dish when that contract ends. So all I've learned is that AT&T is likely to change their bundle with 3rd party services on a whim... which doesn't give me a high-confidence that bundling is in my best interest as a customer.

All-in-all, I can't speak to how much new business Dish or DirecTV gets from these types of relationships... but as a customer, it isn't as friendly to bundle as they make it out to be... so I see this as a non-news item ultimately.

 

[Phil T]

I have the DirecTV/Qwest bundle. All my dealings have been directly with DirecTV, including upgrades (free HR21, Slimline install etc). All Qwest does is send me the bill and I get a $10.00 monthly savings having TV, Phone and Internet with them.

If AT&T handles it the same way, I don't see why people would be unhappy.

 

[BattleZone]

Right now, if an AT&T bundle customer calls Dish, they get transferred to AT&T. Even techs get transferred to AT&T for things like Work Order changes. And the AT&T CSRs can be even more clueless than Dish CSRs. It can be a real pain.

 

[HobbyTalk]

I'm bundled with ATT. I have had nothing but good experiences with them. At least the CSRs are located in the US.

 

[phrelin]

Hmmm. Well, I guess Dish can't deflect bad news by sending out positive news. The Google News screen scrolled down to business a few minutes ago:

I must admit I was a bit startled to see that the important economic news today in order of importance is (1) the economic bailout, (2) the WaMu Failure, and (3) AT&T switches satellite partners.