The longtime main competitor to landline-based cable TV operators -- as well as fiber-based telco services -- is now being usurped by Internet-delivered services of TV networks and on-demand programming.
Then we have 5G technology -- which is set to radically improved Internet delivery of content, especially video.
DirecTV and Dish Network are two big satellite TV competitors hoping to find their way into a big transition.
No surprise here. Both are also highly invested in internet-delivery services of live, linear TV networks -- DirecTV Now and Sling TV, respectively -- as a hedge against declining subscribers on their satellite businesses.
The question is how and when will that play out.
“The [satellite TV] business is almost certainly dying, but could throw off another $5 billion to $10 billion in cash profits before doing so.” says Max Greve, a business analyst writing about Dish. How long? At best, he thinks profitability might continue for another 12 years.
The financial numbers are starting to see some trends -- Dish Network’s satellite service has around 10 million subscribers (amid steady subscriber declines), with Sling at 2.4 million subscribers. That means Sling represents a little more then 20% of all Dish Network services.
DirecTV has a bit more cushion -- 20 million satellite customers and around 1.5 million subscribers for DirecTV Now.
DirecTV has a bigger buffer — being part of the AT&T, which has HBO, Turner, a big phone/broadband communications business with hundreds of millions of consumer interactions, as well as Xander, its new advanced advertising unit.
Dish has also made big gains when it comes to advanced advertising/research via its satellite business.
Dish doesn’t have the marketing leverage of DirecTV when it comes to related businesses at AT&T. But Dish does has $20 billion worth of next-generation 5G wireless spectrum.
True, Dish has yet to do anything with it. But in theory, it can build a next-gen 5G wireless network and give AT&T, Verizon and others a run for their money.
But time is running out for Dish. Next year, it has to show the FCC it has built out a substantial wireless network. Six years ago, it promised to provide signal coverage to 70% of the population in the 176 markets that are part of its FCC license.
But to do that would cost Dish as much as $25 billion. If it can’t, it loses the license. For years, amid some merger talks, it hoped it would sell out to a Sprint or a T-Mobile.
At the same time, Dish now needs to focus on its main pay TV businesses. Satellite TV isn’t going away anytime soon. But the signs are there. New technological innovations will be needed to compete with all things digital.
Media analysts are expecting in the near future that DirecTV and/or Dish might also look to cutback on capital improvements when it comes to new satellite technologies in space.
Until then, things will remain up in the air.
by Wayne Friedman
Courtesy of mediapost