FRED: It's good to see that there's lots of interest in DISH. If you read today's WSJ article, you found one of Charlie's greatest assets: frugality. That's why his cash flow requirements are so suprisingly low. To go further, these lower costs will allow him to reach a break-even sooner than any of his competitors. For this reason, he can prepare a convertible debenture issue and obtain enough capital to reach profitability, albeit at a slower pace than he would have with SKY.
As a shareholder, I prefer a company with linoleum instead of carpeting (news corp) or marble (Directv) on the floor at the uplink. A better programming lineup and a better box (full mpeg2 - unlike DSS) at a lower price is all that Charlie needs. And, at the end of the day, Charlie has all the transponder space he needs to remain competitive.
Unlike Apple, the software (cable programming) is the same for every competitor. And, unlike Apple, the hardware is just a means to an end - subscribers. If in a couple of years, Charlie still only has 20% market share, so what. If the DBS market is 20m homes, that leaves DISH with 4m homes and monthly revenues of $120-150m. And, with subscriber aquisition costs at that point as a much smaller piece of the puzzle, DISH is extremely profitable.
Apple's problem was that, once it sold the hardware, that was it. So when Microsoft programs gained popularity using a different hardware standard, the market moved away from Apple hardware. But HBO from USSB is no different than the HBO you buy from DISH, so the Apple analogy doesn't apply. If you talk to a retailer, DISH outsells DSS every time. If you talk to customers, DISH has a higher satisfaction rating (and one bill for all the programming - unlike Directv and USSB).
I suspect that if you talk to Charlie in a couple Q's, he'll sound a lot like Mark Twain when he says "the reports of my death have been greatly exaggerated..."
Regards
NPD |
