Weighing A Potential EchoStar-DirecTV Merger
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I would just note that Murdoch and his companies have a lot more friends in Washington today (and yesterday) than Ergen has today (or had 3 years ago). Government regulators take note of what the President and Congress what.
I'm not saying this merger will happen but I think there is less chance of government killing a deal than when Ergen tried to buy Directv.
I'm not saying this merger will happen but I think there is less chance of government killing a deal than when Ergen tried to buy Directv.
I favored the E* buyout of D* and have favorable inclinations towards this buyout/merger too, for most of the reasons that Scott listed earlier.
The total amount of bandwidth available from a merged company would be immense. You would not have two competing companies trying to deliver HD LiLs to 200+ markerts, eating up all of those transponders.
I think it likely that nearly all of the programming would go to the "central" locations at 101, 110, and 119, eliminating the problems with conus coverage from 61.5, 129, and 148. The combined company would own a lot of transponders at the 101, 110 & 119 locations. And if they wanted to use it, the 118.7 location is available.
As to HD-lite, we could hope that with all of these transponders that a good quality HD would be delivered, in order to compete with what will be available from cable/FIOS. There could be less reason to squeeze HD with the additional transponders, and if MPEG4 continues to improve.
Of course they would have the option of continuing to use 61.5 and/or 148 to provide locals or mirroring or special channels, to offload/complement the "central" birds.
The total amount of bandwidth available from a merged company would be immense. You would not have two competing companies trying to deliver HD LiLs to 200+ markerts, eating up all of those transponders.
I think it likely that nearly all of the programming would go to the "central" locations at 101, 110, and 119, eliminating the problems with conus coverage from 61.5, 129, and 148. The combined company would own a lot of transponders at the 101, 110 & 119 locations. And if they wanted to use it, the 118.7 location is available.
As to HD-lite, we could hope that with all of these transponders that a good quality HD would be delivered, in order to compete with what will be available from cable/FIOS. There could be less reason to squeeze HD with the additional transponders, and if MPEG4 continues to improve.
Of course they would have the option of continuing to use 61.5 and/or 148 to provide locals or mirroring or special channels, to offload/complement the "central" birds.
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If Charlie does decide to sell to Rupert then it will go through, Ruperts got friends in dark places ( read goverment ) and all he will do is call in some more favours and grease a few more palms and next thing you know there will be a company called DirectDish.
Let's look at what is known:
1. DBS profits have been minimal due to the high costs of operating and maintaining a fleet of satellites, along with new subscriber acquisition costs (hardware, installation, advertising, etc.). Hell, VOOM DBS had a great product, but they weren't even close to making it profitable.
2. Competition in the video market is going to heat up now that Telcos are getting involved. Additionally, the average price of video services where there are at least two cable providers is, on average, 15% less. D* and E* need to be mindful of this when pricing their programming packs.
3. Telcos and Cable have a distinct advantage over DBS by their being able to provide the infamous Triple Play (voice, broadband, video) and other bundled discounts (wireless?).
4. The DBS market will no longer see double-digit growth and, by all indications, may very well contract. Conversely, quarterly churn rates are on the rise.
5. The competitive marketplace has changed in the past three years: DBS acquisition rates are increasing due to new technology; churn will continue to increase due to additional consumer choice; DBS will need to price their programming according to market conditions (won't be able to raise rates).
If DBS is to complete against Digital Cable and the Telcos then they had better find a way to reduce operating costs. Merger, buyout, partnership? Your guess is as good as mine, but I see something happening...and I don't see the government getting in the way of this one.
1. DBS profits have been minimal due to the high costs of operating and maintaining a fleet of satellites, along with new subscriber acquisition costs (hardware, installation, advertising, etc.). Hell, VOOM DBS had a great product, but they weren't even close to making it profitable.
2. Competition in the video market is going to heat up now that Telcos are getting involved. Additionally, the average price of video services where there are at least two cable providers is, on average, 15% less. D* and E* need to be mindful of this when pricing their programming packs.
3. Telcos and Cable have a distinct advantage over DBS by their being able to provide the infamous Triple Play (voice, broadband, video) and other bundled discounts (wireless?).
4. The DBS market will no longer see double-digit growth and, by all indications, may very well contract. Conversely, quarterly churn rates are on the rise.
5. The competitive marketplace has changed in the past three years: DBS acquisition rates are increasing due to new technology; churn will continue to increase due to additional consumer choice; DBS will need to price their programming according to market conditions (won't be able to raise rates).
If DBS is to complete against Digital Cable and the Telcos then they had better find a way to reduce operating costs. Merger, buyout, partnership? Your guess is as good as mine, but I see something happening...and I don't see the government getting in the way of this one.
I, for one, hope the merger DOESN'T happen, as the competition between the two has been and will continue to be good for US, the customers. If they join, prices will soar and service will go downhill, fast. Just my opinion.
DaveyBoy26 said:I, for one, hope the merger DOESN'T happen, as the competition between the two has been and will continue to be good for US, the customers. If they join, prices will soar and service will go downhill, fast. Just my opinion.
Why would prices soar? Do you really think they'd risk losing millions of urban customers in highly competitive markets just to assert their monopoly power on the small percentage of ultra rural customers?
In my opinion prices would go DOWN and Quality would go UP.
Instead of two companies each trying to duplicate everything they can do it all only once and would be able to offer more HD and more programming and because of their buying power they could get better pricing on programming.
I still say a merger is a good idea.
Instead of two companies each trying to duplicate everything they can do it all only once and would be able to offer more HD and more programming and because of their buying power they could get better pricing on programming.
I still say a merger is a good idea.
Ergen is going to make a major fortune considering he is the majority stock owner. Echostar is a very top heavy corp and could use a good pruning or takeover.Tom Bombadil said:
Scott Greczkowski said:
I do too, which is ironic since I'm one of the rural Americans mentioned whose only "legal" choice of TV provider would become either DirecTV, FTA, or an antenna.
~Alan
If a merged company jacked up their prices, it would be sealing their own doom.
Why go to all the trouble to merge and then drive off 10+ million customers?
Why go to all the trouble to merge and then drive off 10+ million customers?
At $40 a share, Jim DeFranco, of Charlie Chat fame, would probably walk away with three to five billion dollars.
Maybe this will be Echostar's chance to get its $600 million back from DIRECTV...
ATT would probably do better buying E*. With E* they can immediately get nationwide service and they could then upgrade the service in dense population areas to IPTV. And slowly move IPTV out farther and farther. It will be a long time before rural America gets IPTV. Satellite's roll will be good for covering these areas. Satellite really has an exclusive with rural areas...
ATT would probably do better buying E*. With E* they can immediately get nationwide service and they could then upgrade the service in dense population areas to IPTV. And slowly move IPTV out farther and farther. It will be a long time before rural America gets IPTV. Satellite's roll will be good for covering these areas. Satellite really has an exclusive with rural areas...
Scott Greczkowski said:
A quote from the Rocky Mountain News article posted earlier:
The paper also said that EchoStar CEO Charlie Ergen told guests at the conference that a merger could save $3 billion each year in expenses.
Scott Greczkowski said:
:haha
Funniest thing I've heard all day!
If they raise prices NOW, when they have MORE competitive pressure, you think they would LOWER prices when that pressure is REDUCED?
Yup--just like the oil companies did when mergers reduced the number of competitors!
Not gonna happen. Same problems that prevented it before would do so again. Satellite is still, and will continue to be, the sole competition to cable in the vast majority of the country and in rural areas a merger would eliminate any choice.
Funny how this always crops up during the slow time of year.
NightRyder
Funny how this always crops up during the slow time of year.
NightRyder
I think your fooling yourself to think that the rural issue is even in play anymore. The times they are a changin'...
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