Is there such a thing as division through addition? In a pair of announcements that may seem contradictory at first, satellite television star EchoStar
Can you slim down as you pack on more weight? You can, but let's tackle the Sling Media buy first. The $380 million deal is a good one, giving the parent company of the DISH Network sole ownership of an existing technology partner with one of the coolest convergence gadgets around.
Connect a Slingbox to both a television outlet source and the Internet, and you can do some pretty amazing things when you're away from home. By tapping into your Slingbox (through your laptop or certain wireless devices), you can check out your hometown news -- or any of the channels you normally watch back home -- while you're at the other end of the planet. Yes couch potatoes, your living room now spans the breadth of the Web-enabled globe.
Order in the court
The buy gives EchoStar a hot gadget just as it's going to war against another one. Oral arguments in its appeal against TiVo
The court ordered EchoStar to pay roughly $74 million in damages to TiVo, asking it to stop selling recorders that infringe on TiVo's Time Warp patent, which allows viewers to pause live television and simultaneously store and play back programs.
EchoStar may lose the appeal. It may prevail. What it does know is that it's showing up to court with a trophy wife in Sling at its side. The applications for the Slingbox are mind-boggling, giving EchoStar a little patent-rich muscle of its own no matter how things go in the courtroom.
Divide and conquer
With EchoStar's buy of Sling, it fortifies a company that is becoming more than just the parent of DirecTV's
The side being spun off would include everything else, like the company's set-top box design and manufacturing business, uplink centers and spectrum licenses that aren't core to servicing the company's DISH users, and Sling.
Spinning off subsidiaries argues that a company is worth more in pieces than how the market values the sum of those parts. It can also lead to intriguing scenarios. When Viacom
The push to innovate
I like what EchoStar is doing here. These are some pretty crazy times in television. Major networks are pushing content online, whether it's through Apple's
Cable and satellite providers don't need to fear extinction, but video consumption trends are changing. The more video that we watch on our computers, cell phones, and PSPs, the less time we have to justify costly living room programming packages. This is clearly not a trend that will play itself out overnight, but you have to be aggressive like EchoStar in banking on new technologies that add value to content subscriptions.
It's not addition through division. It's about avoiding subtraction by multiplying.
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Longtime Fool contributor Rick Munarriz is a happy cable television subscriber, with his Slingbox playing a major part in that happiness. He does own shares in TiVo. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.