Dish Said to Be in Talks With Viacom About Internet TV
Dish Network Corp. (DISH) is talking to networks such as Viacom (VIAB) Inc.'s MTV about offering their channels over the Internet, a service that could shift the economics of the pay-TV industry, five people familiar with the plan said.
Context & Ripple Effects
This is the second time Dish has been reported circling internet TV — the Wall Street Journal flagged talks for an internet TV service back in November 2011 — but naming Viacom and MTV gives the rumor its first concrete programmer. The pickup was broad: Engadget, CNET, GigaOM, AllThingsD, The Verge and others all ran the Bloomberg story on the day.
The timing matters on Viacom's side too. In July 2012 the network group reportedly extracted a seven-year deal worth over $600 million a year from DirecTV after a public carriage fight, so any internet distribution would be a second revenue line negotiated from strength, not a retreat from the bundle.
First-order effects
- If the talks produce a deal, MTV and other Viacom channels would reach viewers who buy no satellite or cable package — Dish gets differentiated content for an over-the-top service, and Viacom gets paid outside the traditional carriage system.
- Viacom's leverage in these talks rests on its fresh DirecTV renewal, which set a high price floor for its channels just two months before this report.
Second-order effects
- Other large programmers would face pressure to answer with their own internet licensing deals rather than let Viacom define the OTT terms alone, while cable and telco distributors would see a top programmer legitimizing distribution that bypasses them.
- A successful Dish-Viacom package would put a market price on small bundles of youth-oriented channels, giving advertisers and investors a benchmark against the all-in bundle rates like the DirecTV deal.
Third-order effects
- If programmers keep licensing marquee channels to internet distributors, the pay-TV bundle starts to unbundle at the network level — carriage fees negotiated per distributor type rather than per household subscription.
- Satellite and cable operators would then be pushed toward owning exclusive content or services themselves to defend subscribers, a structural shift from pure distribution toward content ownership — a path Dish has already tested through Blockbuster, which explored a stake in a Viacom-led channel as far back as 2008.
The trend: Pay-TV programmers are beginning to license channels directly to internet distributors, testing whether over-the-top packages can grow alongside — or eventually undercut — the traditional cable and satellite bundle.