The satellite company had high hopes that its new Hopper with Sling DVR would win CNET’s widely watched “Best of CES” award after the tech news and review site named it a finalist and gave it an enthusiastic review, but CNET changed its mind before the awards were announced today. CNET says it removed the new Hopper from consideration “due to active litigation involving our parent company CBS Corp.” which says the DVR’s ability to automatically skip over ads in recorded shows violates the network’s copyrights. What’s more, CNET says “We will no longer be reviewing products manufactured by companies with which we are in litigation with respect to such product.” Dish Network CEO Joe Clayton considers this is a free speech issue. READ MORE »
Dish‘s unsolicited and non-binding offer values Clearwire at $3.30 a share totaling $5.15 billion for all of Clearwire. The per-share price tops a previous bid by Clearwire’s majority shareholder Sprint Nextel by around 11%, according …
“While unsettling, this is sometimes necessary,” Dish Network‘s Joe Clayton said at an International CES presentation to unveil his company’s new DVR and mobile viewing technology. With his company’s programming costs growing at double-digit rates, “we as …
The No. 2 satellite company hasn’t raised consumer prices since February 2011 following CEO Joseph Clayton‘s commitment that year to freeze consumer prices to January 2013. So rates probably would be rising now no matter what. But the steep jump in programming costs no doubt factored in to the increases that will hit most of Dish‘s 14M customers beginning January 17. The top-of-the-line America’s Everything Pak (which includes HBO, Showtime, and Starz) will rise $15 to $119.99 a month. Subscribers with the lowest-priced service, Smart Pack, will pay $29.99, up $5. Those with other packages also will pay an additional $5 a month. Dish is holding the line on the $10 service fee for its Slingloaded VIP 922 as well as the Hopper DVR and the $7 charge for the remote boxes it serves. Service prices will increase by $1 to $7 a month for the other VIP DVRs.
Fox went back to federal court this week seeking an injunction against Dish Network and its AutoHop DVR. Fox Broadcasting and 20th Century Fox argued in a filing with the 9th Circuit Court of Appeals that because the lower District Court …
Listen to Episode 10 of our audio podcast Deadline Big Media With David Lieberman. This week, Deadline Executive Editor Lieberman and host David Bloom discuss how Quarter 3 earnings season turned out; whether DirecTV and Dish Network should merge; Cinemark’s smartphone app Cinemode to encourage people not to use their smartphone during movies; and growing uncertainty over Google plans to renew funding deals with more than 100 original-content channels on YouTube.
Google and Dish Network have explored partnering on a new wireless service to compete with major providers such as AT&T and Verizon, the Wall Street Journal reports. Talks are preliminary and may go nowhere according to sources cited by the Journal. Dish has also held exploratory talks with other potential partners who were not identified. Dish has acquired wireless spectrum over the past few years and has said it wants a partner to build a network to provide mobile phone and Internet services. Dish Chairman Charlie Ergen said today some of the potential partners include companies that don’t currently have a wireless business but would like to enter the space. Ergen said it would be easier for Dish to go with a company that already has towers and network infrastructure for transmitting data.
Google has already taken steps to expand into Internet delivery to personal computers and mobile devices. It has begun installing fiber-optic cable to homes in Kansas City, Kan, for an ultra-high-speed Internet and video delivery service that will compete with Time Warner Cable and Dish. Google believes that faster Internet speeds at home and on mobile devices will boost its search, Gmail and YouTube business and revenue. Although Google doesn’t currently have wireless infrastructure or own spectrum, the company has about $45 billion in cash which could be used to help build a new network.
That long-debated question on Wall Street took on new urgency today after Bernstein Research’s Craig Moffett bet that the companies will make a deal, and that it will be approved by the FCC and antitrust officials. This morning he raised his target stock price for each company by $9 (to $72 for DirecTV and $37 for Dish) “to reflect the increased probability of a merger.” Why now? Dish seems to have leverage over the FCC, which wants to promote competition in broadband and telephony more than it wants to block media mergers. Charlie Ergen’s company has been amassing wireless spectrum that “offers the prospect of either a fixed wireless broadband network to compete with cable, or, alternatively, a new competitor for mobile wireless to compete with Verizon and AT&T,” Moffett says. “Either would be a tremendous regulatory (and political) win” for the government. By year-end regulators likely will help their cause, and Ergen’s, by giving Dish permission to use its spectrum for terrestrial services. But the approval will include a timetable requiring Dish to deploy its services quickly. That gives Ergen the opportunity to tell regulators that he’ll proceed — but only if they enable Dish to combine with DirecTV, Cost savings and other benefits could amount to $3.5B a year, which Moffett says is “a staggering sum.”
The broadcaster filed an appeal today (read it here) against the denial of its request for a preliminary injunction against Dish Network‘s ad-skipping AutoHop and Primetime Anywhere features. Fox’s heavily redacted filing now moves the matter from U.S. District Court to the U.S. Court of Appeals for the Ninth District. On Tuesday in a sealed ruling, Judge Dolly Gee refused Fox’s attempt to shut the ad-skipping features down as the two sides head to trial later this year. In another side to the Autohop legal battle, Judge Gee yesterday refused Dish’s attempt to have NBC’s contract claims against them dismissed. As well as Fox, CBS and NBC also filed copyright infringement suits against Dish. The satcaster was hoping Gee would let them have the court venue moved to New York. Dish filed in federal court there in May seeking a judgment on whether its ad-skipping feature is legal.
The Q3 message for AMC Networks comes from William Shakespeare: All’s well that ends well. Although earnings were down, everyone knows the main reason — the court fight with Dish Network that led it in June to drop the company’s channels. And as AMC chief Josh Sapan reminds this morning, that’s past and his company is “delighted to partner with them again.” Meanwhile, AMC topped the Street’s expectations. It generated net income of $36.6M, -8.4% vs the period last year, on revenues of $332.1M, +17%. That revenue figure is well ahead of the $288.5M that analysts anticipated. And earnings at 51 cents a share beat expectations for 37 cents. The company’s National Networks (AMC, WEtv, IFC and Sundance Channel) generated $306.2M in revenues (+18.5%). Affiliate fees rose 24.3%, to $199M, as digital and licensing deals offset the lost revenue from Dish. Ad revenues increased 9.1% to $107M. But operating income dropped 2% to $98.5M in part due to litigation and other costs for the Dish dispute. The company’s grab-bag category for international networks and other operations — including IFC Films — recorded revenues of $29.3M (-4.6%) with an operating loss of $12.9M, an increase from last year’s $4M loss.
UPDATE, 3:35 PM: DISH Network released the following statement today in regards to the court ruling denying Fox’s request for a preliminary injunction against DISH’s ad-skipping Autohop and Primetime Anywhere features:
Today’s ruling is a victory for common sense and customer choice. DISH is gratified that the Court has sided with consumer choice and control by rejecting Fox’s efforts to deny our customers access to PrimeTime Anytime and AutoHop — key features of the Hopper Whole-Home DVR. The ruling underscores the U.S. Supreme Court’s ‘Betamax’ decision, with the court confirming a consumer’s right to enjoy television as they want, when they want, including the reasonable right to skip commercials, if they so choose. We look forward to vigorously defending AutoHop and Primetime Anytime, and the choice and control those features deliver our subscribers. – DISH Executive Vice President and General Counsel, R. Stanton Dodge
PREVIOUSLY, 1:59 PM: A U.S. District Court judge yesterday denied Fox’s request for a preliminary injunction that would shut down Dish Network’s ad-skipping AutoHop and Primetime Anytime features, Deadline has confirmed. However, Judge Dolly Gee did agree with Fox that Dish has likely committed copyright infringement and broken the contract between the two companies in making copies of Fox programming for alleged quality assurance. The ruling was sealed so both sides could redact confidential trade information. Notice of the ruling appeared on the court docket today. Fox had the following statement on the ruling:
The court denied Fox’s request for a preliminary injunction. But we are gratified the court found the copies DISH makes for its AutoHop service constitute copyright infringement and breach the parties’ contract. We are disappointed the court erred in finding that Fox’s damages were not suitable for a preliminary injunction. We intend to appeal that portion of the court’s decision, as well as the court’s separate findings concerning the PrimeTime Anytime service. DISH is marketing and benefitting from an unauthorized VOD service that illegally copies FOX’s valuable programming.
The decision on the broadcaster’s petition comes after the parties argued their respective points of view in front of Gee on September 21. Introduced in May by Dish, AutoHop allows subscribers to leap past commercials in programs that have been recorded off network TV the day before. CBS, NBC and Fox have all filed copyright infringement suits against Dish to get the service stopped.
Dish Network Chairman Charlie Ergen can change his tune on an issue more elegantly than just about anyone in the media business. Consider how easily he just reversed himself in an analyst call where he explained his company’s agreement to resume carrying AMC Networks’ channels, which he dropped in June. He brought them back as part of the $700M deal to settle AMC’s breach of contract suit against Dish after it ended a 15-year agreement to carry the now defunct VOOM HD networks. Ergen noted that AMC’s hit The Walking Dead is “off the charts.” If the channel has more shows like that “then it will be a fair deal for us.” And he likes the AMC folks. “Absent the litigation we probably wouldn’t have gotten to that point” of dropping the channels. That’s a head-spinning shift from three months ago when he said it was a question of cost, not courts. AMC’s networks were too expensive, he said then, especially since “our customers are not looking at zombies in New York City… They live on farms and ranches.” What’s more, he preferred doing business with Mark Cuban, whose HDNet channels took the slots formerly held by AMC’s services.
Chairman Charlie Ergen is probably glad to put the quarter that ended in September behind him. His $700M settlement with AMC Networks and Cablevision in the breach of contract trial over the VOOM HD channels, and marketing costs for his controversial Hopper DVR, put a big dent into earnings. Dish reported a net loss of $163.3M, down from a net profit of $319.0M in the period last year, on revenues of $3.52B, -2.2%. The revenue figure was short of the $3.65B that analysts expected. And the 35 cent net loss per share contrasts with the consensus forecast for a 55 cent profit. The biggest hit for Dish was its $730.5M hit for litigation expenses, including $676M for the VOOM case. The company also recorded a $54M programming expense tied to its agreement, as part of the court settlement, to resume carrying AMC Networks’ channels including AMC, IFC, We, and Sundance Channel. The decision in June to dump the channels “contributed, in part, to our higher subscriber churn rate” in the quarter, Dish says. The company ended the quarter with 14.04M subscribers, down 19,000. That’s less of a loss than the company recorded in the quarter last year, and pretty much what analysts expected considering the company’s increased advertising around the Hopper.
Sure looks that way — for the company, not Dish Network subscribers. AMC Networks shares are +3.9% in early trading following yesterday’s $700M agreement with Dish Network to settle the $2.4B breach of contract case involving the defunct VOOM suite of HD channels. But the surprise is that Dish is up 2.2%. Consider that a sigh of relief from shareholders who feared the worst from the lousy hand chairman Charlie Ergen had to play in court. A series of rulings by New York Supreme Court Judge Richard Lowe III found that Dish destroyed or covered up important evidence that probably would have hurt its case — and made Dish a likely loser against the charge that in 2008 it wrongly terminated its 15-year deal deal to carry VOOM. Yet Ergen’s decision in June to drop the AMC channels appears to have paid off. The $700M settlement was “well below Street expectations” of at least $1B says Wells Fargo Securities’ Marci Ryvicker. Barclays Equity Research’s James Ratcliffe calls the amount “quite reasonable” in light of the court setbacks.
Listen to Episode 6 of our weekly podcast Deadline Big Media With David Lieberman. This week, Lieberman and host David Bloom discuss whether the big entertainment companies, with their reliance on ever-increasing cable-TV fees, are driving off a fiscal cliff; what happened to Google in its awful quarterly earnings report; what to expect from the rest of earnings season; and whether a possible settlement of the $2.5 billion VOOM lawsuit will finally bring AMC Networks TV shows back to the Dish Network.
It started today with a note on the New York State Supreme Court’s website that says there’s a “possible settlement” in the case when the trial resumes on Monday. That was enough to drive up stocks for AMC Networks (+3.9%) and Cablevision (+4.3%) — the companies that filed a $2.4B breach of contract suit against Dish Network following its 2008 decision to drop the now-defunct VOOM suite of HD channels. The settlement hopes also contributed to a 4.8% jump in Dish shares. Investors are eager to see AMC’s channels return to Dish, which dropped them in June, and for the satellite company to be free of the threat of a courtroom loss that is starting to look inevitable following a string of embarrassing revelations that suggest it tried to hide evidence that it feared might hurt its case. “In the context of the $2.4 billion in damages originally sought, we believe a cash settlement could be worth between $200 million and $1 billion…equating to $1-$4 per share in aftertax cash consideration” for AMC,” Barclays Equity Research’s Anthony DiClemente says. He adds, though, that “the amount of a potential cash consideration is less important than the value of a new carriage deal.” Without Dish’s 14.1M subscribers, AMC could lose much as $100M per year in cash flow. “Assuming a 7 year deal, we estimate carriage would be worth $7 per share” for AMC, DiClemente says.