US digital TV provider DISH network has announced that it has over six million subscribers.
DISH network, owned by EchoStar Communications Corporation, added nearly half a million subscribers in Q1 2001 and continues to grow faster than its larger rival, DirecTV. It already has a 37% share of the US direct-to-home (DTH) broadcast market. DISH offers far more than just many digital channels and fledgling interactive services – customers also get free personal video recording and high-speed Internet access.
Despite this achievement, DISH has been perceived as lagging behind DirecTV, which now has over 10 million DTH subscribers, making it the third largest multi-channel TV provider. DirecTV has also launched personal video recording services and Internet access. The two operators pose a serious challenge to cable in the American pay-TV market, particularly as cable operators have been slow to roll out interactive services.
The rapid growth and sustained success of these US DTH broadcasters has revived News Corporation’s interest in bidding for DirecTV, which is currently owned by General Motor’s (GM) subsidiary Hughes Electronics. Talks over a $70 billion deal earlier in the year broke down following disagreements to do with price and control.
If News Corporation cannot agree a deal with GM then it may well turn its attentions to EchoStar. Either operation would complete News Corporation’s global coverage through Sky Global Networks, complementing its satellite operations in Europe, Asia and Latin America.
News Corporation must close a deal soon. EchoStar and GM will soon enter negotiations to merge DISH and DirecTV, which would seriously damage Sky’s ambitions to gain truly global coverage and a foothold in the most lucrative digital TV market. However, such a merger could run into regulatory difficulties. A combined DTH service provider would almost totally dominate the provision of digital TV to rural areas.
When the relationship between Sky, DISH network and DirecTV is resolved the global competitive positioning in satellite digital interactive TV markets will be much clearer. If News Corporation fails to gain a foothold in the US, a new interactive DTH powerhouse is likely to emerge.
