Dish: We'll Keep ESPN, Disney
By Swanni
Washington, D.C. (February 21, 2013) -[FONT=Arial, Helvetica, sans-serif]- Dish executives yesterday said they expect to be able to negotiate a new carriage deal with Disney, including ESPN, despite the fact the two companies are battling each other in two separate lawsuits.
The current carriage deal expires in September and some observers have wondered if Dish and Disney can peacefully negotiate a new one considering the acrimony expressed in the courtroom. Dish is suing Disney over an alleged violation of the current agreement regarding fees while Disney has sued Dish over the satcaster's ad-zapping Hopper HD DVR.
In addition, Disney won a lawsuit last year against Dish for dropping four high-def channels and then refusing to pay for them in violation of their carriage agreement.
But Dish CEO Joe Clayton and company chairman Charlie Ergen yesterday both offered relatively conciliatory statements towards Disney in an analyst call following the release of Dish's fourth quarter report.
Ergen said he expected "that both companies will find a workable solution," referring to a new carriage deal. Clayton added: "We are a big customer of Disney's. I would not expect them to take it down with the AutoHop (Hopper HD DVR) as the reason...That being said, anything can happen. But, normally, greed prevails and there'll be a discussion and it'll be a win-win for both companies."
Disney owns the ESPN suite of channels as well as some ABC affiliates and Disney theme channels such as The Disney Channel. Ergen noted that Disney needs Dish to carry ESPN to help offset the costs of programming purchased from the college and pro leagues.
"C[/FONT]ontent going down is a lose-lose for both us and the content provider. Particularly in Disney's case," Ergen said.
In other issues discussed yesterday, Ergen said he believed that cord-cutting -- the dropping of cable and satellite TV services -- will increase in the coming years if monthly pay TV bills increase as well.
"I think cord cutting is going to -- is here to stay and will accelerate over time as monthly fees -- as people pay $1,000, $1,200, $1,500 a year for TV and they have other alternatives," Ergen said. "And one of the problems is that the video is available on the Internet. It may be a day later, it may be -- right? It may have less commercials or no commercials. And it comes in more of an a la carte form where you can kind of pick and choose."
Ergen is a rare executive at a pay TV service who publicly acknowledges that cord-cutting is for real; most of his colleagues say it's overrated and does not reflect the facts.
Clayton chimed in that the industry may be overlooking the 18-28 age category.
"We believe there's a market, mostly 18- to 28-year-olds that we're missing today in the pay-TV industry," Clayton said. "They're not going to pay $100 per month for content, and they're not going to watch 250 channels. And most likely, they're not going to watch it on a 60-inch flat panel display. But they may pay let's say, $20 -- about $10 to $20. They may watch 20 channels, and they most certainly will watch it on their mobile phone, on their tablets and on their PCs. So it's a market that I believe, down the road, has a compelling interest not only for us, but for the programmers, especially as the pay-TV market matures going forward."
Clayton also said he expects that 4K TV, which purports to offer a resolution four times greater than current 1080p HDTVs, will face a "slow rollout" due to costs and other factors such as lack of programming.
