The aftershocks of the monumental deal struck Tuesday between Dish Network and Disney just keep coming. Today’s player is Dish Network’s largest competitor, DirecTV, which according to Reuters, is now pursuing its own, very similar agreement from Uncle Walt’s media empire.
Dish Network and Disney ended months of turbulent negotiations by inking a deal in which Dish agreed to curtail its besieged AutoHop feature for Disney-owned ABC broadcasts in exchange for the keys to Disney’s content vault – including ABC, ESPN, and Disney programming – for a planned online TV service. Apparently seeing that Disney is in a giving mood, DirecTV is now reportedly in negotiations with Disney to make a similar bargain for its own linear online TV service .
Like Dish’s deal, the agreement will be part of a larger re-negotiation between Disney and DirecTV to replace their current agreement which expires in December. And since DirecTV has a larger following of around 20.3 million subscribers to Dish’s 14.1 million, it is also expected to get a better price for its content terms.
In a media environment that seems to be morphing faster than a cityscape from Inception, Tuesday’s agreement between Dish and Disney is particularly significant. Not only does Dish gain arguably the largest content trophy an online programmer could ask for – namely: the sprawling sports domain under the ESPN banner – but it does so with no subscription-strings attached. Though we remain skeptical of any intent from Dish to offer its new online service independent of its dish-based subscriptions, according to Reuters, the deal it struck made Dish the first pay-TV operator with permission to do so.
That distinction is a big deal.
Most cable and satellite subscribers only want a few of the channels they pay for, but are forced to order bloated packages thanks to the way revenue is collected from service operators and content providers alike. If both Dish and DirecTV could add live sports coverage in an online delivery stream, that would make a lot of so called cord-cutters, and the viewing public at large, very happy.
Up to now, the idea of live TV content without ties to traditional tier-based subscriptions has seemed virtually impossible, thanks to the current paradigm. There is so much money to be made, both for so-called MSOs (multi-system operators) like Comcast and Verizon, and content owners like 21st Century Fox and of course, Disney, that no one was willing to disrupt the billion dollar baby that is the current cable and satellite archetype. And with no word from Dish or DirecTV on concrete plans for their online networks, there’s still far from any proof that will change.
But Disney’s open agreement for its content with Dish could be a sign that the old men in the big front offices have seen the writing on the wall. Once-rogue services like Netflix and Amazon Instant have become powerful mainstream players, and while current rebels like Aereo and FilmOn may still be under siege from the major networks, they are also showing the viewing public what TV in a completely-online format could look like.
There are still a lot of questions to be answered about how DirectTV and Dish Network’s new online services will work. And though Disney is a powerful ally when it comes to content, a lot more partners would need to come on board before an independent online service could compete on anything close to an even playing field with cable and satellite.
Still, there are some encouraging winds blowing through the back rooms of the nation’s largest satellite providers right now. As competition increases, and content providers see new avenues for revenue, a new era of online programming just might be upon us. The real question for the massive conglomerates in charge of big media right now just might be: Can independent online TV services and the current MSO paradigm exist in the same marketplace? If the answer is yes, then an online TV revolution just might be in the works.
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