Chief of EchoStar unfazed by rivals - 'We'll have to differentiate ourselves,' the satellite-TV company's Charlie Ergen says, in light of deals by cable and telecom firms
Copyright 2005 The Denver Post All Rights Reserved The Denver Post November 14, 2005 Monday FINAL EDITION Kimberly S. Johnson, Denver Post Staff Writer From LexisNexis
EchoStar chief executive Charlie Ergen is confident about the future of his satellite-TV company despite recent strategic deals announced by cable, satellite and telephone competitors.
"We'll have to differentiate ourselves from what the telephone and cable companies are doing," Ergen said last week in a conference call. "We'll make calculated decisions and see what makes sense."
DirecTV last week announced an on-demand agreement with NBC Universal to offer top programs from the NBC, USA, SciFi and Bravo networks for 99 cents each, hours after they air. Comcast also inked a similar deal to provide same-day, on-demand content from CBS. In October, ABC teamed up with Apple, offering $1.99 iPod downloads of some of its top shows.
The nation's four major cable providers - Comcast, Cox, Time Warner and Advance Newhouse Communications - joined forces Nov. 2 with Sprint Nextel to offer a "quadruple play" of services. The move allows cable companies to offer TV, Internet, Internet phone and cellphone services in a bundled package, on a single monthly bill.
Matthew Harrigan of Janco Partners said Douglas County-based EchoStar is at a disadvantage, with no content deals or additional partnerships on the horizon. EchoStar has a deal with SBC Communications to bundle Dish Network with SBC's phone and Internet service in its 13-state market.
EchoStar is "kind of a one-trick pony," Harrigan said. "They've done a good job of maximizing the value of the asset they have, but other companies have managed to fill gaps in their product offering."
Ergen downplayed the recently announced content deals, saying it remains to be seen whether customers will pay for shows they can get for free by using their digital video recorders.
"Generally anything anybody else can do on video on demand we can do," he said. "We have a bigger base than anyone else that's capable of those on-demand deals."
EchoStar, which operates Dish Network, is the nation's second-largest satellite-TV company, with 11.71 million subscribers. It reported strong third-
quarter earnings and subscriber growth.
Recent moves by EchoStar include the introduction of a portable media player, the PocketDish, and a new compression standard that will allow for high-definition TV services.
Dish Network is positioned for price-sensitive customers, with DirecTV being a premium service and cable in the middle, said Kaufman Bros. analyst Todd Mitchell.
As long as Dish continues to deliver a good multichannel service, the subscriber base will be satisfied with what's being offered, he said.