clock menu more-arrow no yes

Filed under:

Dish CEO says the company needs to transform itself before video declines

New, 20 comments
Dish CES 2013 stock 2 1020
Dish CES 2013 stock 2 1020

American satellite company Dish says it needs to find a new business model before its old one disappears. On an investor call, the company was asked whether it would rather have a merger with rival DirecTV or an acquisition of mobile carrier Sprint — A Dish-DirecTV merger was blocked by the FCC in 2002, and Dish made a surprise bid for Sprint just last month. Unsurprisingly, CEO Joe Clayton picked Sprint. "We would transform DISH and we transform Sprint," he said, according to TV Predictions. "And it becomes a unique company. It's something that nobody else can do inside and outside the home."

More dramatically, Clayton dismissed a DirecTV merger and, to some extent, both companies' core models. "While there'll be a lot of synergy and [a merged company] will be bigger," he said, "it's still the same company and you still would have to ultimately figure out how to transform that company long-term, in my opinion, because the video business has matured and ultimately, will go into decline phase." If it acquired Sprint, by contrast, it would create a unified network of TV, voice, and broadband services.

Dish added 36,000 subscribers in the first quarter of 2013, beating DirecTV but falling short of estimates and slowing down from last year. The company attributed this to a price increase. However, chair Charlie Ergen said that he was actually surprised how well pay TV had held up so far. "Quite frankly, the linear video business big packages has performed better than we thought it would," he said. "We thought the recession would kind of knock its legs up from under, it didn't really happen. The programmers primarily haven't moved to OTT." OTT, or over-the-top service, refers to television services sold over the internet, without the involvement of a cable or satellite provider.