DISH Network (NASDAQ:DISH) has no fear. After waging battles in the boardrooms of multiple firms, from telecom giants to national broadcasters, the company has made it clear that there is no fight too daunting. Fresh off a courtroom victory, DISH appears ready to toe the line again, with more of the major networks in disagreements over retransmission fees, in addition to its still-controversial ad-skipping Hopper service. The fierce attitude taken by DISH and its chairman, Charlie Ergen, indicates a very proactive management team, and one that is dedicated to furthering the business. The question is whether the continued rabble rousing will backfire.
This week, DISH won its third federal ruling in favor of its ad-skipping DVR -- the Hopper. The proposed injunction came from ABC, a subsidiary of Disney (NYSE:DIS). Though other broadcasters are in line to sue the company, DISH has so far proven that its Hopper DVR is a legally supported device for consumers who are advertisement-averse. Another company, 21st Century Fox (NASDAQ:FOX), has filed for an injunction against the service, as well, but as long as the court's precedence holds up, it appears DISH has little to worry about.
But DVRs aren't the only problems between DISH and Disney, as there is some speculation that the two companies are struggling to find an agreement over retransmission fees -- a now common battle among broadcasters and service providers. This would be a major, major issue for both players. We all know its football season, and an ESPN blackout would infuriate DISH subscribers. ABC and Disney would be blacked out, as well. DISH needs to work hard to keep its content costs down, but as these issues become more and more common, and the carriers more and more willing to blackout channels for an extended period, there is much concern that the appeal to switch to Internet streaming services and other alternatives will only intensify.
Recently, Time Warner and CBS duked it out for more than a month, limiting coverage of major sporting events such as the U.S. Open. In the end, CBS won the fight, and cable subscribers got one more reason to unplug.
DISH is also in a stalemate with much smaller broadcaster Media General. If a deal isn't reached soon, the satellite TV provider will blackout 17 stations in 13 different markets.
A bad place
DISH Network is in a very difficult position, attempting to satisfy its crucial subscriber base while doing the same with investors. The more arguing that goes on, the more subscribers lost. Furthermore, the government is only increasingly encouraged to intervene to the Pay TV war, and the winner may be neither broadcaster nor carrier, but, instead, the Internet players.
Fool contributor Michael Lewis has no position in any stocks mentioned. The Motley Fool recommends Walt Disney. The Motley Fool owns shares of Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.