Dish’s Hopper Threatens To Shake Up Pay-TV Industry
News Corp’s (NASDAQ:NWS) Fox and other broadcasters have filed a lawsuit against Dish Network (NASDAQ:DISH) over the satellite company’s Hopper DVR and Primetime Anytime service. Fox has stated that Dish Network is wrongfully making copies of primetime shows from broadcasters to make them available to its customers on-demand on their Hopper DVR that allows for automatic ad skipping. This not only violates the copyrights but also negatively impacts the ecosystem of broadcasters which are heavily reliant on advertisements.
From broadcasters’ point of view this makes sense. Primetime viewership and ad pricing are much higher than those for the rest of the day. Even though this move might impact revenues from a small proportion of viewers, it is definitely not the signal that the broadcasters would want someone like Dish Network to send to the pay-TV industry.
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However let’s take a look at this issue from Dish Network’s point of view. The features provided by Hopper DVR are not default features and a viewer has to engage with the system in order to record primetime shows and watch them ad-free. Although this DVR makes it easier for the viewers, they can perform similar functions with any normal DVR. Dish has not done anything new, it has rather made it easier and more explicit.
The whole point is about enhancing overall user experience and Hopper DVR represents an experiment in that direction. Dish’s other steps with a similar aim include offering Blockbuster streaming service, bundling satellite broadband in partnership with ViaSat and allowing remote access via sling DVRs.
We feel that this lawsuit is not a very significant issue for the company. What’s important to note here is that Dish is trying different ways to enhance viewing experience of its subscribers and such efforts will go a long way in strengthening its position in the U.S. pay-TV industry.
Our price estimate for Dish Network stands at $34.31, implying a premium of more than 20% to the market price.
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