DISH Network Corp. (DISH) – the second largest satellite TV operator in the U.S. – is set to offer live streaming of Walt Disney Co.’s (DIS) popular channels to its subscribers. The deal primarily targets young price sensitive customers.
This deal will allow DISH Network customers to directly watch live shows on devices like PCs, smartphones and tablets, thereby bypassing the need for a set-top box. The company has dropped its ad skipping features from all Disney channels to make the latter withdraw its litigations against the satellite TV operator.
The successful execution of the deal will allow DISH Network to approach media companies with similar proposals. Moreover, the rollout of such value-added services will not only help the company boost subscriber growth but will also allow it to safeguard its position against low-cost video streaming companies like Netflix, Inc. (NFLX) and Hulu.
Higher proliferation of smartphones and tablets has compelled most pay-TV operators to deliver online content to its subscribers. So, the deal with Walt Disney will certainly help DISH Network to keep up with the popular demand of TV viewing on multiple platforms.
The U.S. pay-TV market has already reached saturation level. Unlike other U.S. cable and telecom operators like AT&T Inc. (T) and Verizon, DISH Network lacks triple-play services (voice, video and Internet).
Hence, to diversify its business portfolio as well as to deliver online videos, the company acquired a significant amount of wireless spectrums to either set up its own mobile network or to align with an established operator It already holds 40 MHz spectrum and has recently bought 10 MHz of airwaves for nearly $1.56 billion.
The company is yet to take any firm decision regarding its wireless venture. At this phase, the deal with Walt Disney will not only counter subscriber churn for DISH Network but may also add a separate revenue stream for the company to drive its ARPU.
Moreover, Verizon is planning to deploy nationwide online video services after acquiring video streaming technology of Intel. Thus, DISH Network needs to keep abreast technologically to counter competition.
Currently, DISH Network carries a Zacks Rank #3 (Hold).
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