DISH targets OTT service to younger demographic
Michelle Clancy | 20-09-2012
The second-largest satellite TV operator in the U.S., DISH Network, intends to launch a, over-the-top (OTT) streaming service to deliver live TV shows to its subscribers, leveraging the Blockbuster acquisition. According to Zacks Equity Research, the goal is to target a younger group of customers - mainly belonging to high schools and colleges.
DISH will offer the younger demo a handful of popular channels at lower price than a full TV subscription, available via tablets, smartphones or PCs, the Wall Street analysis firm said.
"Higher penetration of smartphones/tablets, coupled with increased rollouts of 3G/4GLTE technology, have completely changed the TV viewing options for customers," Zacks said. "Viewers are now demanding multiple viewing options with anytime and anywhere TV service facility. In particular, the younger generations, who are extremely tech savvy, are hugely influenced by such changes."
In a saturated market, sluggish economic growth coupled with continuous increase in pay-TV pricing is slowing subscriber uptake. Zacks says that DISH's move is a calculated one to counter competition from cheaper online video services. "DISH Network is trying to explore new markets with its innovative over-the-top product," Zacks said.
However, there are certain caveats. Zacks said that DISH is running the risk of cannibalising its pay-TV service, despite the demographic segmentation. And secondly, "it will be difficult for Dish Network to gain transmission rights of popular channels, as the media companies will always offer bundled channels (as per the existing business model), which in turn will drive up DISH Network's programming expenses."
However, Blockbuster's ingrained relationships with media studios could be a boon there.
DISH Network is already offering online TV services outside the U.S. via a service known as DISH World.