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Here's the Rub:

With most of these contracts with most of the Distributors (a Distributor being Dish or Directv or Comcast), the providers (Cnn, Sci-Fi, espn, etc) give the early-adopters (Directv in this example) Most-favored nation clauses.

So, let's say that Sci-fi negotiates a carriage agreement with Directv and it contains an arrangement that says "If Sci-Fi negotiates an agreement with a competitor of Directv and that competitor gets better terms than Directv, then Directv automatically gets those better terms."

So, let's say Directv get's Sci-Fi for $0.20. Later, Dish gets Sci-Fi for $0.15. Depending on how the contract was written, odds are that Sci-fi just cut Directv's price as well, perhaps even retroactively.

On the matter of "How can Dish Charge $30 for HD Ultimate?" The answer to that there are not that many channels in it. Nothing like the 300+ that are in at250. And I don't think the HD versions of channels cost more per subscriber than their SD counterparts.

Plus, the really expensive channels for Dish are the Sports channels. And except for the ESPN family, they are not in the HD ultimate pack, at least I don't think so. Not to mention that None of the Premium Channels are there, either.

Last I read, most channels were less than $.20 a month per subscriber. HD or SD. The exceptions are sports: ESPN alone is more than $2.00. And ESPN2 is not that far behind. Big Ten Network is about $1. And most of the Fox or Comcast RSNs are about $.75. I think NFL is about $.70.

I thought I read that Discovery was the most expensive non-sports channel and that it was well less than $.50. I could be wrong.

If RSNs were considered a separate Sports HD package, that would give Dish all kinds of room to put all kinds of stuff in the HD ultimate pack.

If Charlie could not make money on the $30 price, he would not have done it. He's a lot of things, but he didn't get to be where he is by not knowing his way around a spreadsheet.

flyingsquirrel said:

Here's the Rub:

With most of these contracts with most of the Distributors (a Distributor being Dish or Directv or Comcast), the providers (Cnn, Sci-Fi, espn, etc) give the early-adopters (Directv in this example) Most-favored nation clauses...

If Charlie could not make money on the $30 price, he would not have done it. He's a lot of things, but he didn't get to be where he is by not knowing his way around a spreadsheet.

Click to expand...

I am aware of that most favored nation clause, however here we are talking about a completely different model, called HD-only, so far even the currently "HD-only" pack is not so, because they carry both the SD and HD versions. That is likely because Charlie had not negotiated a new arrangement on those channels, so the existing ones applied, if you have the SD one, you get the HD one.

And Charlie is making money NOW with this $30 pack as you stated there are very few to begin with, so the fees paid to the producers can justify the price tag.

But if they are to add those other 25 new HD channels, the cost of all the HD's will add up, and if Charlie can not increase the $30 price, he will suffer.

I think he is trying to convince the new HD providers his vision of a true HD-only idea is the way to go, and the content providers should embrace it and agree to charge less so he will just carry the HD version, not the SD version. In such arrangement the most favored nation clause may not apply, or if so the table will be turned.

And all of this pales in utter insignificance in light of the fact that my national HD is once again, gone.

- Captain Jack Sparrow (with creative liberties taken)

jacmyoung said:

I am aware of that most favored nation clause, however here we are talking about a completely different model, called HD-only, so far even the currently "HD-only" pack is not so, because they carry both the SD and HD versions. That is likely because Charlie had not negotiated a new arrangement on those channels, so the existing ones applied, if you have the SD one, you get the HD one.

And Charlie is making money NOW with this $30 pack as you stated there are very few to begin with, so the fees paid to the producers can justify the price tag.

But if they are to add those other 25 new HD channels, the cost of all the HD's will add up, and if Charlie can not increase the $30 price, he will suffer.

I think he is trying to convince the new HD providers his vision of a true HD-only idea is the way to go, and the content providers should embrace it and agree to charge less so he will just carry the HD version, not the SD version. In such arrangement the most favored nation clause may not apply, or if so the table will be turned.

Click to expand...

I agree that's a possibility. But I don't think that Charlie would launch any package without knowing through conversations in principle, if not contracts, what kind of rates he could expect from the providers. I assume Charlie was thinking that he could make money at $30 under a worst-case scenario. I think it's a matter of what he's going to Exclude from the package, not how much he pays for what's in the package. I would bet that he would want to Exclude Speed and possibly Spike, Vs, ESPN-U, Golf, for instance, saying that they are sports channels

IF most of the channels cost less than $.20, as I would bet they do, you can squeeze an awful lot into a $30 bag. Only a few big name channels cost more than that. Think History, A&E, TBS, TNT, Discovery, Disney. After that I be the price per sub drops a bunch for the "common" cable channel like Food or HGTV or Nat Geo, HD Net, Sci-Fi, MSNBC, TWC, etc.

Anyone know what Dish's overall Gross Profit margin on programming is?

It's an ineresting issue: What's included in an HD only pack? A whole nuther area to negotiate.

If what you said is true (I am not saying it is not) then it does not explain the delay and Charlie Chat's reference in "contract talks" as a reason for the delay. There is nothing to talk about, just add the HD versions because no one is charging an extra.