Dish Network is planning to launch a Netflix-like video service by year-end, a lower-cost offering geared toward young adults who aren’t willing to spend $100 a month for pay-TV.
The new service — which would be delivered over a broadband connection — will allow the company and its programming partners to serve targeted advertisements based on a viewer’s interests, physical location and other data.
Dish chairman Charlie Ergen said Thursday that the company has enough contracts with content owners such as the Walt Disney Co. to launch the service now, but still needs to develop ad and data monitoring technology.
“There’s a few things that we have to invent that’s going to take us some time, so we’re looking at something by the end of the year,” Ergen said during a conference call with analysts and media.
He didn’t provide details on other content streaming deals.
The company’s agreement with Disney, announced in March, allows Dish to deliver Disney programs through its traditional pay-TV model as well as via an interactive, “over-the-top” service that primarily targets people who prefer to watch shows and movies on demand on tablets, smartphones and Internet-connected TVs.
“We wouldn’t launch with Disney channels alone,” Ergen said. “We would want to have enough critical mass between general entertainment and sports and children’s (programming) to launch, and we think we have that.”
Dish CEO Joe Clayton said the service will target a key customer segment — young adults between 18 and 35 years old — that the entire pay-TV industry is missing out on.
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“We do know that they’re young, they’re well educated, they’re mostly urban dwellers and they are not going to spend $100 per month for their video content,” Clayton said. “Maybe they’ll spend the $20 to $30” that has been reported.
Dish, based in Douglas County, is widely viewed by analysts to be a potential merger partner for satellite-TV rival DirecTV or a major wireless company such as ATT. Ergen has said in recent years that Dish needs to broaden its business as growth in pay-TV slows, backing up those comments by spending billions of dollars on wireless spectrum with an eye toward offering mobile broadband service.
His remarks Thursday addressing MA activity indicated that he may believe Dish is being undervalued by potential suitors.
“Our board, I don’t think would be inclined to do something with the valuation of Dish that didn’t include the true value of our technology, our spectrum, our management and everything else,” Ergen said.
Analysts had speculated that news of a potential ATT-DirecTV hookup was recently leaked as part of a negotiating ploy with Dish.
Ergen said Thursday that Dish doesn’t have the financial firepower to compete with Sprint for T-Mobile, or with ATT or Verizon for DirecTV.
Andy Vuong : 303-954-1209, [email protected] or twitter.com/andyvuong