DISH Network Corp (NASDAQ:DISH) announcing that it is to offer a $20 a month, online TV subscription service, continues to be a point of concern to cable networks. Bloomberg’s, Paul Sweeney, believes media investors should be concerned more than ever as revenues coming out of subscriptions on bundles on cable companies will remain suppressed in the long run.
For only $20 a month, Dish is assuring consumers that they will be able to watch up to 12 cable channels inclusive of ESPN; something that is sure to be of excitement to many viewers. DISH Network Corp (NASDAQ:DISH) is not the only company that is making a push for the internet in terms of content offerings, according to Sweeney.
“We saw HBO a month or so ago deciding to go directly to consumers via the internet; CBS Corporation (NYSE:CBS) the same day made a similar announcement. Now we have got Dish coming out with what they would call a skinny TV package,” said Mr. Sweeney.
Sweeney believes DISH Network Corp (NASDAQ:DISH) new offering is aimed at targeting millennia’s who are not willing to subscribe to Pay TV services and not aimed at cannibalizing the cable and satellite space. Offering ESPN as one of the channels is sure to give the package the much-needed hype that should translate to increased subscriptions.
“I think what DISH Network Corp (NASDAQ:DISH) is doing makes a lot of senses. It is a natural progression for the carriers because they run the risk of losing millennia’s. In the same way, that McDonald’s Corporation (NYSE:MCD)’s has lost millennial to Chipotle Mexican Grill, Inc. (NYSE:CMG),” said Mr. Greg Rayburn, former Hostess Brand CEO.
Most cable companies continue to maintain a competitive advantage in the space having been successful in bundling the video business along with the high-speed internet services and the phone business. Sweeney expects the cable companies to be concerned in the long run should subscribers in the triple band services be swayed away by the likes of DISH Network Corp (NASDAQ:DISH).
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