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Why the DISH & Disney contract agreement matters

March 14th, 2014

Disney ESPN ABC Dish network deal Dish and Disney made headlines last week with their agreements that confirmed Dish would carry Disney programming like ABC and ESPN, and that opened the possibility for a potential “over-the-top” service from Dish Network. While the rallying cry against big cable companies has been growing for some time, let’s take a look at the important points from the agreement and why some cable subscribers are so excited about the deal.

1.  “Over-the-top” subscriptions becoming a reality. The main talking point from the agreement is that Dish might actually be able to give users a totally separate service of a few a la carte channels. Why is this important? Well, with the internet, Netflix, and Redbox, people are now used to paying only for the content they want. Traditional cable has always made customers sign up for the entire package. So, it’s expensive, and they get plenty of channels they don’t want. Why have cable companies operated this way? It’s mostly because they could (higher prices), but also because of contracts with individual providers forcing them to do so. (Think about it, if you were selling channels, you would want to sell all of them at once, not just your best content.) This could actually be Dish’s greatest barrier: the fact that many content providers (like CBS, Fox) might legally block the deal Dish has with Disney and ABC.

2. Not a game changer for cable, but it could be. The issue here is that this cheaper over-the-top service would be cheaper, BUT, it also carries significantly less channels. It’s basically built for young professionals dwelling in a lone household. In other words, they don’t want to pay for a family’s worth of channels. Dish’s new agreement with Disney might allow some of this service. It would be a totally separate service, streamed only online.

In other words, it clearly isn’t a catch-all for those fed up with cable, or just looking to switch, but it certainly will keep some cable providers up at night.

3. Comcast. Why does everything come back to Comcast? Dish will likely need separate agreements with the major providers (NBC, ABC, CBS, etc…) to get their over-the-top service. NBC Universal (owned by Comcast, and owner of NBC), has always been the toughest holdout in these regards. Why is this an issue now? Comcast needs to pass the FCC’s look-over of their Time Warner merger, and let’s just say Comcast really needs to publicly look like they can be trusted.

4. What about Net Neutrality? Netflix’s private agreement with Comcast raised eyebrows because it seemed like the ISP was throttling Netflix’s speeds at certain prime times. Of course Comcast has never won any awards for their speed, but slowing one company specifically (Netflix) was seen as a serious break of trust and protocol by almost everyone in the web community. The issue? Comcast would almost certainly do the same if Dish Network had an over-the-top service that not only took up lots of bandwidth, but was also duplicate content to what Comcast was already carrying.

In the end, the Dish and Disney agreement should be seen as a boost for customers and American entertainment consumers everywhere.

is an Entertainment and News Blogger for TV and Dish Network.

Categories: DISH & TV news

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