Internet TV eclipsing satellite services, says Ergen

by Steve Blum • , , ,

When one of satellite television’s great visionaries says that over-the-top (OTT) Internet delivery is the future of video, it’s worth taking him at his word. Charlie Ergen is the chairman and CEO of DISH Network, and the founder of EchoStar, a pioneering satellite TV manufacturer and distributor during the big dish days of the 1980s. According to a story by Daniel Frankel in FierceCable, Ergen believes that traditional linear television, the kind that DISH, DirecTv and cable companies sell, needs an overhaul if it’s going to remain a viable product…

Speaking to investment analysts and reporters during Dish’s fourth-quarter earnings call…Ergen said Dish had been “dragged into” this brand positioning by competitors such as AT&T’s DirecTV Now and Sony PlayStation Vue.

“Obviously, the DirecTV Now product is a direct replacement for cable and satellite,” he said. “So is the Sony product. We’ve gotten dragged into that, and maybe that’s not my first preference”…

“The decline of linear TV will be driven by how programmers react,” Ergen said. “If programmers continue to raise prices, if they continue to put 16-18 minutes of advertising into a show, it’s going to continue to decline. … You’ve got to make linear TV look more like an OTT product.”

For the next few years though, cable companies will be more vulnerable than satellite broadcasters like Ergen. Although small dish satellite platforms were never intended to be a purely rural product, they have a large, natural constituency outside of the mostly urban and suburban areas where cable companies offer Internet service that’s usually quite capable of delivering OTT programming.

It’s different in rural areas, where Internet service is a patchwork of expensive and poorly performing fixed wireless systems and generally slow DSL from telcos. And where AT&T intends to rip out copper networks, limit its customers to its own brand of slow wireless Internet service, and force them to rely on DirecTv – which it owns – or Ergen’s DISH for television.