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Rivals react to the explosive Dish-Disney pact

By
Claire Atkinson
Published March 5, 2014, 4:56 a.m. ET

The future of TV viewing is coming into view — and it’s all about streaming.

Less than 24 hours after Charlie Ergen’s Dish Network signed a groundbreaking deal with Disney that gave the satellite TV service the building blocks of an Internet TV operation, a second company waded into the sector.

Verizon is looking to sign deals with content partners to bring a mobile Internet TV service to its FiOS customers, CEO Lowell McAdams said at a conference on Tuesday.

The firm acquired Intel’s wireless video service OnCue earlier this year.

CBS, while happy with the current cable ecosystem, is also eyeing new and appropriate ways to add revenue, CEO Leslie Moonves said Tuesday.

“Everybody’s talking about over the top,” he said. “We’re talking about it with many of the [pay TV distributors] we’re in business with.”

The race to own the entertainment space on the Web is being waged by a host of other players as well, including Sony, Microsoft and Amazon.

While others are talking about it, Ergen’s Disney deal had the media world buzzing on Tuesday. It promises to take a Netflix-like service to current sports, entertainment and movies.

While Ergen needs more than just Disney to entice consumers to sign up for a streaming service, sources said, Disney’s new agreement by itself would already allow consumers more variety than Netflix has on offer, with ESPN, the Fusion news service, kids channels, local broadcast TV stations and a ton of movies and TV shows on demand.

“Would it be better than what you get for $8 with Netflix?” wondered one industry observer.

Dish is considering a price point at between $20 and $30 per month, and it is likely to pursue other deals before launch, Bloomberg reported.

“We think there is a group of individuals, 18 to 34 years old, who would love to have a lower-cost product with some of the top content out there,” Dish Chief Commercial Officer David Shull told Bloomberg. “That’s who we’ll be targeting.”

Dish signed a broad-ranging deal with Disney that delivers choice content for a new so-called over-the-top service dubbed “PSS,” or personal subscription service.

One significant aspect of the deal is Dish agreeing to disable its ad-skipping technology for three days after a show’s initial broadcast — commercial ratings are paid for as ratings increase during a three-day replay window — though the industry is moving toward adoption of a seven-day window.

The service may be a way to get other content giants on board. For example, CBS’ deal with Dish expires on Dec. 31.

Some speculated that NBC¬Universal’s consent decree might require it to provide its content online if other industry parties are doing so. NBCUniversal declined to comment on whether that was true.

Fox doesn’t have any carriage discussions with Dish in the pipeline.