Both Linear and Over the Top Video Entertainment Markets are About to Change

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Both Dish Network and AT&T appear to be preparing different streamed video entertainment offerings. AT&T appears to be looking at creating an on-demand, non-linear service. Dish Network, on the other hand, seems to be looking at a real time streamed TV service akin to linear services, but accessed using the Internet.

At least so far, the Dish Network offer would be priced much lower than standard linear packages, perhaps as low as $20 to $30 a month. That also suggests the channel lineups will be more restricted than is available with a standard linear video package.

The AT&T venture starts off with a $500 million investment and a partnership with media development veteran Peter Chernin's Chernin Group and seems to be a video-on-demand service.

On the other hand, any AT&T bid to acquire DirecTV could play a role in AT&T’s overall thinking.

Gaining DirecTV would make AT&T the second-biggest video entertainment provider in the U.S. market, second only to Comcast, presumably after adding Time Warner Cable subscribers.

Gaining that market heft as a buyer could make it easier for AT&T to negotiate for content rights underpinning any new streaming service.

Disney content, presumably, would anchor any Dish Network offer. The big issue is whether ESPN content, owned by Disney, would be part of the package. And since Dish Network has gotten such streaming rights, one has to assume DirecTV also could acquire such rights.

To be sure, AT&T also could make a bid to acquire Dish Network, instead of DirecTV. That deal would have the advantage of Dish Network’s mobile spectrum. The disadvantage is that regulators would eye such a spectrum increase for AT&T skeptically.

In that sense, the DirecTV deal carries lower regulatory approval risk.

For its part, Dish Network could bid for T-Mobile US, should the Sprint acquisition bid not be launched, or if the deal does not gain regulatory approval. And Dish Network recently has admitted it cannot outbid Sprint for T-Mobile U.S., or AT&T for DirecTV.

That means it is highly likely there will be significant alteration of U.S. communication markets, which now include video entertainment services as a lead application, one way or the other. The more likely changes will occur in the linear video subscription business, if Comcast gains Time Warner Cable and AT&T wins DirecTV. 




Edited by Maurice Nagle
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