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16 Nov

Ergen Says OTT Can Be Bigger Than Pay TV But Includes Risk For Contents

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Dish Network CEO, Charlie Ergen, recently said that Over-The-Top services have the potential to make big changes in the economics of pay-TV business. While speaking to analysts after releasing the third quarter results of the company, he said that OTT could bring services to users without any need for installers or investments in equipment from the side of the users.

Ergen added that OTT could deliver much flexible user experience that can be easily changes, and could offer personalized experience including targeted advertising. However, experts believe that by decreasing the barriers to enter the OTT business, it could lead to a situation where the current subscriptions can become less important to the users and this could have a harmful effect on the visual content business.

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The ability of the OTT users to sign up for the service and drop it whenever needed can lead to a situation where the “content creators are going to end up in a place that maybe will not be so good for them.” Nonetheless, Ergen said that Dish Network has not seen much of cord cutting in favor of their own low cost OTT service, Sling TV. Yet, it is to be noted that the Sling OTT service appealed to a different demographic than the subscribers of the main Dish Network channel service.

Ergen further said that cord cutting in general is starting to become a big issue, and he expects that it will accelerate with the popularity of over the top services, which includes live TV services like Hulu, and the yet to be released DirecTV Now streaming service. Replying to a question on the planned merger of AT&T and Time Warner Inc, Ergen said that Dish Network would have “some concerns,” but would weigh up the possibilities when more details on the deal are released. He, however, said that Dish has some concerns on DirecTV Now being a “zero-rated” service on the network of AT&T.

In the third quarter this year, Dish Network saw a decline in subscriber base by 116,000, which is a sharp decline than the 23,000 subscriber loss last year. The current subscriber base of Dish is 13.643 million, including the subscribers of Sling TV. Nevertheless, Dish posted revenues of 3.75 billion US dollars in Q3 earnings, which is up from the 3.73 billion in the previous quarter.

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