Dish talks with content owners could launch Internet TV service by late summer

By Jim O'Neill on Apr 23 2014 at 9:00 AM

More details on Dish Network’s plans to roll out an Internet TV service targeted at younger cord nevers and cord cutters are rolling out today.

Bloomberg, quoting unnamed sources, said the operator is letting programmers know that an online service could deploy by late summer.

Dish hopes that offering an easy-to-access and easy-to-navigate online service could woo cord nevers to become first-time subscribers and that it also would be effective at bringing back cord cutters. The service is expected to cost $20-$30 per month.

Dish is the second-largest satellite operator and fourth-largest pay-TV operator in the U.S.

Last month Dish and Disney signed a broad deal that allows Dish to stream some content from ABC, Disney and ESPN online. Bloomberg said the operator also is seeking online rights from Comcast’s NBCUniversal, A&E Television Networks, Turner Broadcasting and CBS, and has held preliminary talks. Dish reportedly is hoping to offer a service that includes a bundle of 20 to 30 channels.

Bloomberg said content owners have demanded that at least two of the Big 4 TV networks – ABC, CBS, NBC and Fox – and 10 top cable networks be onboard before content owners will allow Dish to stream their content.

As reported last month, Dish’s deal with Disney could force NBCUniversal to be that second major network.

Comcast, when it acquired NBCUniversal, agreed to regulator demands that it be willing to offer programming “on terms that are economically equivalent” to deals rivals make. That equivalency, however, so far has been a sticking point in negotiations between Dish and NBCU, Bloomberg reported.

Dish is only one of several companies trying to launch an online TV service.

Sony has been talking about one for months, Verizon has made numerous recent acquisitions – including Intel’s OnCue and CDN EdgeCast -- that position it to play in that space, and AT&T yesterday announced a joint venture with the Chernin Group that it says will allow it to eventually introduce an online TV service, possibly by the end of this year.

The concern, of course, is the continued erosion of subscribers to traditional pay-TV services, a trend that has been accelerating.

A report from Experian earlier this month said about 7.6 million (6.5%) of U.S. households counted themselves as cord cutters in 2013, compared to 5.1 million households (4.5%) in 2010. It also found that the percentage of younger consumers aged 18-34 not subscribing to traditional pay-TV sources had grown to 12.4% from 7.9%, a 57% increase.

While Experian’s study didn’t differentiate between cord nevers and cord cutters other research has shown the potential for younger consumers to access content without subscribing to traditional pay-TV services was enormous.

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