A possible merger between the USA’s two satellite pay-TV giants DirecTV and Dish Network is a topic that we have already covered earlier this year. Now, however, we have the fresh knowledge that newly appointed Dish Network CEO Joe Clayton also agrees it is a possibility. This is not to say it will happen, of course, but there’s little doubting the metrics for a possible ‘merger of near-equals’ are now lining up.
Five years ago it would have been near-impossible for the two broadcasters to get together. The FCC and other anti-monopoly bodies would have screamed loudly had such a proposition been mooted. Now the picture is very different. There’s the experience of an FCC/DoJ agreement to the ‘merger’ between XM Satellite Radio and Sirius Satellite Radio, and Mr Clayton played a very active part in seeing that marriage come together, and helping steer the process through the long and complex regulatory and legal challenges.
The picture is also very different as far as the usual satellite vs cable battle is concerned. There are now many, many players in the pay-video market. Satellite and cable dominate, but the telcos have a fat finger in the DSL pie, as do any number of Over The Top suppliers of content onto the broadband, cable and telco circuits, not least the likes of NetFlix, Google/YouTube and dozens of other players.
In other words a merging DirecTV and Dish could almost certainly argue that far from dominating a sector they are now the minority players in the wide new world of content supply to the home.
However, there’s also the personal views of those two Denver-based giants of the industry: Dr John ‘the cable guy’ Malone, and Charlie ‘the satellite guy’ Ergen. Both Malone and Ergen have considerable influence over their respective businesses. Indeed, Charlie Ergen remains a majority stockholder of Dish voting shares, while Malone’s strategy has always been to maximise shareholder value for a longer-term play.
Will a merger happen? Today’s Crystal Ball remains cloudy, but a coming together would result in breathtaking cost-savings for both parties, programming would be bought more efficiently allowing – possibly – for even more exclusive material being acquired, and thus making DTH satellite an even more appealing prospect. There’s also Clayton’s strategy as far as acquisitions like Blockbuster is concerned to be added into the mix. The Crystal Ball may be cloudy, but don’t be surprised if it clears later this year.