Satellite TV fading as streaming displaces cable
Not long ago, satellite TV was the future. Now, one of its biggest players is being sold for $1, as streaming continues to erode traditional cable, over-the-air TV and DVDs.
DirecTV announced today that it is buying Dish and Sling TV for $1 and a complicated debt exchange deal, an ignominious end for Colorado-based Dish, once the leading satellite provider.
We think this is the right deal for consumers, DirecTV Chief Executive Bill Morrow said in a Los Angeles Times report. We think [satellite TV] has a greater life and a greater value than most people realize.
An earlier deal, back in 2002, was squashed when the Federal Communications Commission vetoed it, saying it would reduce competition and raise prices for consumers.
At that time, satellite TV was a leading option for rural residents who lacked cable. Those consumers are still underserved but do have access to newer satellite services that more closely mimic ground-based streaming.
"Better one than none"
Dish and DirecTV have lost more than 60% of their customer base since 2016 as subscribers flee. Given those numbers, analysts say it's unlikely regulators will block the merger this time.
Better to have one than none, analyst Craig Noffett told the Times.
DirecTV operates in a highly competitive video distribution industry, said Bill Morrow, Chief Executive Officer, DirecTV.
With greater scale, we expect a combined DirecTV and Dish will be better able to work with programmers to realize our vision for the future of TV, which is to aggregate, curate, and distribute content tailored to customers interests," he said.
A high-flying business
Satellite transmission of television signals began in the late1960s but was mostly limited to in-house transfers between producers and broadcasters.
In the 1970s, some rural customers began erecting large receiving dishes to pluck those in-house transfers and view them at home. Though technically illegal, the practice was mostly ignored by broadcasters.
PrimeStar, the first direct-to-home service launched in 1990 and was followed in 1994 by DirecTV using smaller Ku-band dishes. Dish Network launched in 1996, making direct-to-home a hotly competitive, fast-growing market segment.
But the 21st Century has not been kindto direct-to-home satellite services. The transition to digital technology and the growth of the internet is fueling new delivery technologies that enable greater variety and, in some cases, lower prices and fewer long-term contracts.
Satellite's biggest contribution, most analysts agree, is the development of niche programming that appeals to targeted audiences that may not have been well served by the one-size-fits-all broadcast philosophy.
Photo Credit: Consumer Affairs News Department Images
Posted: 2024-09-30 13:25:41
