Marc,
This news is probably better than you think. As you probably know, DSS had a monopoly for years before DISH entered the market. The pricing wars that ensued dropped the price from around $1000 professionally installed to around $250 - $300 (I consider Primestar, at least in its current "big dish" form a rural network, shouldn't compete well in the much bigger urban and suburban markets).
The problem was that DISH, while needing to be the low cost option to break into the market, had to undercut DSS prices to compete. But DirectTV has Hughes' deep pockets and DISH has huge debt. This is the DISH strategy as I take it:
1. Undercut initially to gain large enough base to compete, using E I and EII.
2. They have backed off the price cuts. They will now try to differentiate their service offering with local channel capacity (EIII and E IV), something DirecTV and USSB cannot offer with current sat spots.
This means that the FCC approval is key to DISH's long term strategy. Also, DISH has announced price increases for its channel packages (Top 60 now $29 instead of Top 50 $27, but... superstations $5 more and multichannel packages $11 each) As a DISH subscriber, I'm not thrilled, but it should really help the bottom line.
say $10+ a month more per sub x 12 months x 1.1m subs = 130m revenue!!
Happy investing,
John Thrall |
