Rivals launch “Don’t Comcast the Internet” to oppose TWC merger

In the current debate over how the U.S. should oversee the internet, the worst case scenario for many is the web reinvented as cable TV: a service where subscribers pay a lot of money for a limited number of channels, and in which the distributor chooses which shows can even appear on the platform.

Rivals of the telco giant [company]Comcast[/company] fear this is exactly what the company is trying cook up through acquiring its next largest competitor, [company]Time Warner Cable[/company]. The proposed merger is already unpopular with consumer groups, and now industry opponents are going into high gear to try a stop it.

On Monday, a consortium of smaller phone and broadband companies launched a campaign called “Don’t Comcast The Internet” to draw attention to a parade of potential horribles that could arise if regulators allow the merger.

At an event in Washington to kick off the campaign, the group presented antitrust authorities who predicted that a combined Comcast-TWC would stifle would-be competitors. One way it could allegedly do so is by using its market power to pressure content partners to keep their content — which is the lifeblood of both TV and broadband — away from new entrants.

The group also warned of danger to another part of the internet, predicting that younger internet and content companies would struggle to obtain permission from Comcast-TWC to appear before subscribers in the first place.

Nick Grossman of venture capital firm Union Square Ventures said he worried that start-ups could find themselves asking “Will Comcast greenlight it?” as a pre-condition to launching their business on the internet.

Others worried that the Comcast would exploit its set-top box to control the user experience and business ecosystem, much as Microsoft exploited its operating system monopoly in the 1990s.

It’s too soon of course to say if all — or any — of these dire predictions might come to pass. The FCC and the Justice Department still appear to be months away from finishing a review of the merger, a process that Comcast VP David Cohen had earlier predicted would be finished by the end of 2014.

In recent months, however, Comcast critics appear to have gained momentum as approval for the merger, which once seemed a near-sure thing, has come under growing doubt.

Comcast, meanwhile, appeared unfazed by the appearance of the coalition, offering the following statement:

“There’s no real news here — just another group of existing opponents making the same arguments they have already made at the FCC for months, many of which weren’t found to be credible in our past transaction reviews, and all of which we’ve refuted directly with evidence in the FCC record.  The real facts remain the same:  consumers don’t lose choice in the broadband or video markets.  Consumers will see real benefits in faster broadband speeds and better video products, and a host of other benefits.  And there are no transaction-specific harms to this merger.”

The “Don’t Comcast the Internet” crowd consists of industry umbrella groups Comptel, ITTA (The Independent Telephone & Telecommunications Alliance) and NTCA–The Rural Broadband Association. It’s not the first anti-Comcast posse to spring up of late: content providers like Netflix and Dish launched an initiative late last year called “Stop Mega Comcast” to point out the alleged downsides of the deal.

This story was updated on Tuesday at 12:30pm ET to include Comcast’s statement.

Dish and Fox end carriage dispute, Fox News returns to Dish

The blackout of Fox News and Fox Business News on Dish is coming to an end: Dish and Fox “have agreed to the major terms of a new long term agreement” that will bring the news network back to Dish, according to a statement released by the satellite TV operator, which noted that there are still a few things up in the air: “We are working with Fox on a few contractual details but we are optimistic that these channels will be restored very quickly.”

Fox confirmed the agreement with a news release, but noted that “terms of the agreement were not disclosed.”

Fox News and Fox Business went dark on Dish in late December after both sides failed to agree on terms to renew their carriage agreement. At the time, Dish complained that Fox was trying to add other channels to the bundle that hadn’t been part of the original agreement.

“It’s like we’re about to close on a house and the realtor is trying to make us buy a new car as well,” said DISH’s senior vice president of programming Warren Schlichting back then. It’s unclear whether the new agreement includes any of those additional channels, or just the two channels that went off the air in December.

Also unclear is whether the impending agreement includes any additional digital rights. Dish officially announced its Sling TV streaming service last week, and has plans to sell consumers an add-on news package for $5 per month on top of a $20 base subscription. At this point, that news package looks fairly slim with Bloomberg being the only actual news network. Adding Fox News to that mix would certainly help Dish to make a better case for Sling TV.

All you need to know about Dish’s new Sling TV service

Dish’s Sling TV online streaming service, which the company plans to launch in the coming weeks, made waves at CES earlier this month, but a few questions were left unanswered. Sling TV CEO Roger Lynch took to Reddit this week to answer some of them in the form of an AMA-style crowdsourced interview.

Here are some of the highlights of the AMA, as well as other previously announced details that potential Sling TV customers may be interested in:

  • Base package content: For $20, Sling TV will get you access to live feeds from ESPN, ESPN2, TNT, TBS, Food Network, HGTV, Travel Channel, Adult Swim, Cartoon Network, Disney Channel, ABC Family and CNN.
  • Kids’ package content: An optional $5 kids’ package gets you access to live feeds from Disney Junior, Disney XD, Boomerang, Baby TV and Duck TV.
  • News package content: Sling TV’s optional $5 news and information package includes access to live feeds from HLN, Cooking Channel, DIY and Bloomberg TV.
  • Sports package content: There will eventually be a sports add-on package as well, but details are still scarce. Said Lynch: “We’re not ready to announce specific channels for the ‘Sports Extra’ add-on pack, but you can expect to see more great channels from ESPN, as well as other popular sports networks.”
  • WatchESPN: Access to WatchESPN is included, said Lynch. But the devil is in the details: Sling TV base package subscribers only have access to ESPN1, ESPN2 and ESPN3 via WatchESPN, according to an ESPN spokesperson.
  • Number of devices: “You can have Sling TV on as many devices as you want, however at launch, Sling TV will be a single-stream service,” said Lynch.
  • Resolution and bandwidth: Sling TV will be available in 720p and 1080p, and users will be able to tweak their streaming settings: “Through settings, we give you tools to limit the bandwidth for your streaming if you’re worried about your data cap,” Lynch said.
  • Speaking of bandwidth caps: Sling TV’s CEO seems to be aware of last-mile issues, especially since he’s competing with ISPs and their TV services. “We do have concerns about net-neutrality and the effect the proposed Comcast/Time Warner Cable merger could have on the broadband market,” he said.
  • Surround sound: Sling TV supports Dolby surround sound where available. “We support DD 5.1 and it will be available on most channels and most VOD content,” Lynch told Reddit readers.
  • 4K: Won’t be available at launch, in part because TV networks aren’t quite ready. “No live channels are offering 4K content yet,” he said.
  • Device availability: Sling TV will be available on Android TV, Fire TV, Roku, Xbox One, iOS, Android and desktops. The iOS app will support Airplay. There won’t be any Chromecast support at launch, but it’s coming: Lynch said, “We plan to launch on many more devices throughout the year, and Chromecast is on our list!” He was notably less enthusiastic about bringing Sling TV to the Playstation, saying: “Not at launch but we’re always open to new device partnerships.” That might be because Sony is about to launch its own TV service on the Playstation.
  • How to get access: Sling TV will officially launch in the coming weeks, but Lynch shared a trick for everyone who wants first dibs: “Just go to Sling.com to get your invite. We’re rolling these out later this month before the general public.”

Dish’s new Sling TV service liberates ESPN from the cable bundle

There are two ways to look at Sling TV, the new internet-based TV service that will be announced by Dish on Monday at CES: It’s either a poor replacement of what cable has to offer, lacking even basic programming. Or it’s finally a way for cord cutters who don’t want to give up on sports to get ESPN live streaming, plus a few extra stations, for just $20 a month.

Dish President and CEO Joseph Clayton announced Sling TV at CES Monday.

Dish President and CEO Joseph Clayton announced Sling TV at CES Monday.

[company]Dish[/company] revealed not only the service’s name but also key details on programming and price: The base package, which will cost consumers $20 a month, includes live access to ESPN and ESPN2, as well as a couple of other cable networks, including Disney Channel, ABC Family, Food Network, HGTV, Travel Channel, TNT, CNN, TBS, Cartoon Network and Adult Swim. Consumers will also be able to add additional packages, including for news programming, family content and sports, for five dollars each. Sling TV will launch before the end of January, and is already in private beta test with select customers.

Sling Guide

Sling TV will be available over the internet, and consumers will be able to watch the service on the web as well as via Roku, Fire TV, Android TV and Xbox One as well as iOS and Android. Chromecast and Apple TV are notably absent from the list, but Sling TV executives told me during a recent interview that they plan to add additional devices in the near future. Most, but not all channels offer DVR-like pause, rewind and fast forward features. And consumers will be able to access some shows up to three days after they air — but there are once again limits dictated by the contracts that Dish has with TV networks.

Sling TV: Not like any other TV service

Dish is not the only company looking to launch an internet-based TV service. Intel tried the same thing with its OnCue service, but eventually gave up on the idea and sold OnCue’s assets to Verizon. Sony announced its own internet-based TV service at CES in Las Vegas a year ago, and began limited tests of the service late last year. But Sony’s approach is very different from Dish’s: The PlayStation maker has been busy signing deals for big bundles, like the one with Viacom that will bring a total of 22 channels to Sony’s TV service, including not only popular networks like Comedy Central but also little-watched properties like VH1 Soul and Palladia.

“That type of deal that Sony signed with them is not a deal that we would do,” said Sling TV CEO Roger Lynch during a recent interview. He added that Comedy Central content is already “widely distributed,” with consumers being able to watch shows like the Daily Show on the show’s website or on Hulu.

[pullquote person=”Roger Lynch” attribution=”Roger Lynch, CEO, Sling TV” id=”903979″]“ESPN is an anchor.”[/pullquote]

Lynch maintained that the same is true for broadcast networks like Fox or CBS, which Sling TV doesn’t carry. Consumers can access their feeds with an antenna, or catch up on shows on Hulu or elsewhere, he argued, adding: “The fact is that they are already watching it.” Lynch said that Sling TV may add a broadcast tier “over time,” offering consumers to stream content from broadcaster for an extra fee. “We don’t want to force everyone to buy them,” he said.

Sling TV bills itself as complementary to Netflix and Hulu.

Sling TV bills itself as complementary to Netflix and Hulu.

Instead, Sling TV is betting that all of its customers want access to ESPN, which is the service’s crown jewel at launch. Or, as Lynch put it: “ESPN is an anchor.”

That’s an interesting bet, because it could actually work: Sports has been the deal-breaker for many would-be cord cutters, who just hold on to their $100-a-month cable bill because they don’t want to miss their team’s games. With Sling TV, they may now get what they want for just 20 bucks a month. Plus, the basic tier also comes with access to some content from WatchESPN, the sportscaster’s online video service. Specifically, Sling TV subscribers will have access to the ESPN1, ESPN2 and ESPN3 through the WatchESPN  app.

DishWorld will be folded into Sling TV

The move towards new online distribution models doesn’t come out of the blue for Dish. The company acquired online video platform provider Move Networks five years ago, and used the Move team to build out its own online team. That team actually launched a first online TV service in early 2013: DishWorld provides expats in the U.S. with access to live TV networks from countries like India, Brazil or Vietnam.

Sling TV may sound a little bit like Sling Media, maker of the Slingbox, but the two companies don't really have anything in common - except the same corporate parent.

Sling TV may sound a little bit like Sling Media, maker of the Slingbox, but the two companies don’t really have anything in common – except the same corporate parent.

Lynch told me that it’s been a success for the company, helping to grow the audience for international channels, which were previously only available as part of Dish’s service, threefold. He didn’t reveal any subscriber numbers, but said that consumers who do pay for international TV stations through Dishworld watch over five hours of programming via the service every day on average.

Dishworld is currently run by a team of 250 people, and Lynch said that the company plans to staff up in the coming months. “It’s in a way our big beta,” he said. It’s worth noting that this beta test is now over: DishWorld is going to be folded into Sling TV and rebranded as Sling International.

Is Dish suddenly a cord cutter’s best friend?

So will Sling TV eat into Dish’s traditional subscriber base? Lynch and the service’s Chief Marketing Officer Glenn Eisen insisted that won’t be the case, with Eisen telling me Sling TV is a separate business unit with the company that goes after a different set of customers. The service targets people who already have cut the cord, and what he called cord-haters: “Psychologically, they have already cut the cord.”

Household numbers are growing, while pay TV subscriptions are on the decline. Dish views this as an opportunity for Sling TV.

Household numbers are growing, while pay TV subscriptions are on the decline. Dish views this as an opportunity for Sling TV.

That’s nice rhetoric, but it doesn’t hide the fact that Dish is in the long run just as vulnerable as cable. The TV industry has seen a small but notable decline of subscribers in recent quarters, but online viewing has grown rapidly at the same time, suggesting that there may be more radical changes of consumption patterns ahead. Quizzed about this, Eisen and Lynch told me that Dish was cognizant of these shifts, but also optimistic that the industry could return to growth by embracing new models. Said Eisen: “If we care about growing the market, then we had to pivot.”

This post was updated throughout at 12:30pm with additional details shared during Dish’s CES press conference. It was updated again at 2:31pm and 4:28pm to clarify how much WatchESPN is part of Sling TV.

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Netflix now on Dish’s Hopper in first big pay-TV partnership

Subscribers to Dish’s satellite TV service can now access Netflix right from their set-top box, the companies announced on Wednesday. The partnership is a major strategic coup for the online video service, and reflects a new level of integration between online and traditional TV.

My colleague Janko Roettgers first reported last week that such deals were on the way.

According to a news release, [company]Netflix[/company] will now appear for all [company]Dish[/company] customers using a second-generation Hopper box, and will feature the same user interface as on other platforms:

“The app is easily accessible from any channel by clicking the blue button on the DISH remote and selecting the Netflix icon, or from the Netflix icon on the Hopper main menu.”

This is significant because, until now, Netflix users have had to switch to another input on their TV, or use another device to access the service. Netflix will now be available to millions of customers who want to access it through the same box where they get their existing TV.

The deal also represents a major marketing opportunity for Netflix. As Janko reported, Netflix has made pay-TV partnerships its major strategic goal for 2015. The Dish hook-up thus comes sooner than expected. AT&T, which is in the process of acquiring Direct TV, appeared to be the most likely initial candidate.

For Netflix, the Dish partnership is another step in its goal to achieve the broad reach of HBO — but at the same time not become too tied to the pay TV industry.

As Janko put it: “Netflix wants to be on your cable box you’ve learned to live with, but not part of the cable bundle you hate so much.”

CBS and Dish reach deal, but don’t include internet TV service

So much for that blackout: CBS and Dish announced a new multiyear distribution deal Saturday that brings the broadcaster’s programming back to the satellite TV operator. The agreement comes just hours after CBS as well as cable networks like Showtime and the CBS Sports Network went dark on Dish in 14 markets, including Los Angeles, San Francisco and New York.

The two companies didn’t reveal how much Dish has to pay CBS going forward, but they did announce a few other details of the deal: Dish customers will have access to Showtime Anytime, the TV Everywhere service that allows them to stream Showtime content to mobile and connected devices. Dish is also putting some significant restrictions on its controversial Hopper DVR, effectively disabling automatic ad skipping for the first week after a show aired on CBS. In return, CBS is dropping its lawsuit against the Hopper.

Notably absent from the agreement are any rights to include CBS in Dish’s upcoming Nutv streaming service, which aims to target cord cutters with a cheaper and smaller programming bundle. Dish previously won the rights to include Disney’s ABC network in the service, but it now looks like Nutv will come without CBS content when it launches in the coming weeks.

However, both parties apparently left the door open to add at least some CBS content to the service down the line. The agreement “includes a path to over-the-top distribution of Showtime Networks,” according to a joint press release.

Leading up to the agreement, Dish tried to blame the long and difficult negotiations on the high costs of the CBS Sports network. But this outcome suggests that internet rights were as much of an issue, and that CBS eventually had the upper hand, forcing Dish to give in before this weekend’s football games.

Why CBS went dark on Dish: it’s all about the internet

After weeks of threats, CBS followed through late Friday afternoon and took its stations off Dish Network. Dish subscribers in 14 markets around the country, including San Francisco, Los Angeles and New York, won’t be able to watch any more CBS programming until the two companies reach an agreement on a new contract.

The blackout not only cuts off popular [company]CBS[/company] shows like NCIS and the Big Bang Theory, but also the network’s sports coverage, including NFL and SEC football games. In some markets, viewers are also losing access to the CW network as well as Showtime.

A CBS spokesperson confirmed the blackout, sending out a statement that reads in part:

“What CBS seeks is appropriate compensation for the most-watched television network with the most popular content in the world, as well as terms that reflect the developing digital marketplace. We hope that we can reach an agreement very soon so we can all get back to the business of providing the best entertainment, news and sports to the Dish customers we both serve.”

Dish responded with a statement of its own:

“We are disappointed that CBS has chosen to black out their local channels, but remain optimistic that the channels will return quickly as both sides are continuing to work tonight to finalize an agreement.”

The move comes after months of contractual back-and-forth that largely mirrors the many retransmission and carriage fee fights we have seen in the past. On the surface, these fights always follow a very simple script: Broadcast and cable networks want more money in exchange for their programming, and pay TV operators aren’t willing to pay up. Both sides often try to enlist the public with on-air and online campaigns. Increasingly, the back-and-forth leads to blackouts, which inevitably result in the TV service operator giving in and agreeing to pay more.

But the dispute between CBS and [company]Dish[/company] is also a good example for why this isn’t just about corporate haggling. At the core, this dispute is all about the internet.

Dish wants more rights, CBS more dough

That’s in part because Dish doesn’t just want CBS to renew its contract for a few more years. The satellite TV operator also wants rights to carry CBS on its Nutv online TV service, which Dish intends to launch before the end of the year. Dish already has announced deals with Disney/ABC, Scripps and A&E networks, and it is likely going to get access to NBC’s programming thanks to the Comcast merger conditions.

Dish has said that it wants to target cord cutters with its online service, and the company is looking to compile an affordable bundle of live and on-demand programming for $30 to $40 per month. Dish was able to strike its Disney deal in part because it used its Hopper DVR as a bargaining chip, promising to curtail ad skipping and monetize recorded shows in exchange for access to online rights.

But it looks like CBS may not be playing ball. The broadcaster recently launched its own online video service called CBS All Access, which combines a live feed of its network with access to on-demand programming. CBS is charging All Access subscribers $5.99 a month. The network was getting just $0.54 per subscriber on average from TV service providers when it signed its last deal with Dish in early 2012, according to Reuters, and has reportedly been looking to bump this to $2 per subscriber in recent contract negotiations.

Advertisers and audiences are moving online

These significant price increases also have something to do with the internet, albeit on a different level. TV networks have been asking for more money for their channels partly because their other major revenue stream is starting to slow down. Advertisers have for some time been wary of TV viewers skipping over their ads with DVRs as well as moving away from traditional TV to new online services. Now, we are starting to see some of them shift their money away from TV and towards the internet as well.

This trend has become especially obvious this year, with companies like Time Warner and Comcast reporting ad revenue for their networks being flat, or in some cases even declining over the most recent quarter, according to a recent Wall Street Journal report. And big advertisers are getting more vocal about shifting priorities. Allstate, for example, plans to move 20 percent of its ad dollars from TV to the internet by 2015, which Journal cited as part of mounting evidence for a “structural slowdown.”

The irony is that advertisers don’t make these decisions in a vacuum; they’re just following their audience.

While internet usage, and even online video viewing, was long seen as complementary to traditional TV consumption, there are now signs that the time spent watching traditional TV is actually declining. Recent numbers from Nielsen show that Americans on average watched seven hours less traditional TV per month during the most recent quarter than a year ago.

So why would networks want more money for programming that is attracting fewer eyeballs, you might ask? One simple answer is: because they can – for now, anyway. Networks aren’t oblivious to the changing world around them, and they are trying to maximize their value while they’re the strongest. That means that we are likely going to see a lot more blackouts like these ones ahead.

For that, you can blame the internet. Or, you know, just go and watch something online.

This post was updated at 4:40pm with a statement from CBS, and at 7:15pm with a statement from Dish.