Lots of people are quietly excited about the Web TV pact Disney and Dish announced yesterday — the one that gives Dish the ability to show some of Disney’s key networks on an “over the top” broadband TV service, if it actually launches one.
But let’s be very clear: If Dish does launch a Web TV service, a lot of people are also going to be disappointed.
Because it’s not going to be the Web TV service of their dreams, where they can cherry-pick a handful of TV channels they want, ignore the rest and save a ton of money.
If Dish — or any other big player, for the foreseeable future — is going to sell TV on the Web, it’s going to look a whole lot like the pay-TV services that exist today: You’re going to have to buy a bunch of channels, whether or not you watch them. And you’re not going to save much money.
I hit on this last night — like I do whenever I write about the prospects of Web TV — and my hunch is that I’m going to end up repeating myself many times, because lots of people believe/fantasize that moving pay TV over to the Web will mean things change in a fundamental way — like when newspapers went online, or when Napster and iTunes overhauled the music business.
Maybe, one day. But not for a long time: No big network programmer is going to sell their stuff on the Web in a way that threatens their existing business — not when that business remains so freaking huge.
Based on the deal points announced yesterday, the main difference between a Dish Web TV service and a regular pay service is that the broadband one would be slimmed down a bit — you wouldn’t have to pay for, say, ESPN Classic or ESPNews, if you got the package.
But the bundle — the thing that keeps the TV Industrial Complex intact — isn’t going anywhere. Which means that if you wanted to get the Disney channel, you would still have to pay for ESPN, and vice versa.
So for now, I’ll just highlight some of a new note from Bernstein Research’s Todd Juenger, who also thinks the Disney/Dish Web stuff is a big deal — and who also thinks it means things stay put for a while:
“Dish has the right to offer Disney networks in a hypothetical “Virtual” (“OTT”) pay-tv service. We are shocked the press (so far) has not focused more on this groundbreaking aspect.
- The release doesn’t say whether Dish will actually launch such a service – but if Dish decides to launch one, they have the right to include (some) Disney networks. Under certain conditions…
- This is NOT a la carte in any way, shape, or form. This is an OTT manifestation of a linear, bundled service. Potentially offered by an incumbent distributor (Dish), as opposed to a new third-party interloper.
- It is, to some degree, an unbundling. A strict reading of the press release suggests the included networks would be: ABC, ESPN, ESPN2, ABC Family, and Disney Channel. There are several networks missing, including pieces of both the ESPN and kids’ network families.
…We believe Disney insisted on language that the (hypothetical) Dish service must meet minimum conditions in order to launch. In other words, Dish probably has to carry a certain number of (other companies’) networks (i.e. networks comprising a certain audience share) in order to launch.
- Disney won’t allow Dish to create a “Disney-only” service. In fact, we suspect Disney’s requirements make it such that the offering would be closer to a full bundle than a skinnied-down package.
Disney doesn’t want to encourage other network groups to begin offering their own specific OTT services, which could lead to unbundling. If an OTT service launches, all the network groups want it to include networks from all the other network groups.”
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