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Source: DISH Network.

Regardless of what side of the cord you're on -- cut or intact -- DISH Network's (NASDAQ:DISH) new contract with Time Warner (NYSE:TWX) has interesting implications for both types of consumers. DISH customers don't have to worry that NCAA Final Four games will go dark, as 21st Century Fox's Fox News did last year for DISH subscribers amid a content-cost dispute.

However, the most interesting development is that DISH secured the rights of Time Warner's streaming HBO Now through its streaming-only Sling TV service. According to The Wall Street Journal, DISH is unlikely to offer the service at the time of launch, but it has the rights as part of the deal. For cord-cutters, is appears that DISH is offering a high-quality competing option to conventional pay-TV.

Lots of streaming buy-in now, except from providers
Simply put, DISH's bundle with the premium HBO is the next step in the evolution of cord-cutting solutions. After Hulu started as the first streaming-content provider, Netflix entered the market, with streaming quickly overtaking its DVD-by-mail business. Networks outside Hulu (NBCUniversal/Disney/Fox) have recently provided, or are in the process of providing, streaming offerings, with CBS offering CBS All Access and Time Warner offering the aforementioned HBO Now.

That's not to say all pay-TV parties are happy about streaming-based services. There's been one stakeholder decidedly against the format: pay-TV providers and operators. In most interviews, they are decidedly against, with Charter Cable's Tom Rutledge summing up most operators' feelings about over-the-top, streaming content:

Anybody who sells their content over the top and also expects to continue to exist inside a bundle of services sold to cable or satellite providers I think is really deluding themselves. ... Because if the product is available over the top or elsewhere, there's no reason to pay for it ... from an operator's perspective.

DISH is the only operator embracing cord-cutting and now offers a package with a premium channel
Of course, operators are forced into a Catch-22 here. On one hand, any move to streaming-based services legitimizes a format that could eventually kill the golden goose -- in this case, large, expensive conventional pay-TV packages. On the other hand, by refraining from offering any solutions, you pass up the opportunity to add incremental revenue and profit from streaming-based subscribers, ignore a growing contingent of consumers and the ability to poach cord-cutters from other providers, and miss out on the opportunity to shape the format to your benefit.

For DISH, it appears these concerns are simply too much to ignore. Recently, the company added its Sling TV option with 20 channels, including the all-important ESPN, for $20 per month. But the service appears to be aggressively courting new content providers, given its deal with the aforementioned HBO Go and with the recent addition of A&E's network channels.

Essentially, the company is offering a streaming-only package with premium HBO content. While the price of the premium channel hasn't been disclosed, it's a low-risk proposition for Time Warner, as the company receives incremental revenue from current Sling TV customers, while DISH will probably handle the billing and customer-service issues.

While there are rumors that DISH has a "soft limit" of the number of subscribers at 5 million,, popular services have a way of ensuring they continue. In addition, DISH benefits from existing streaming-content deals and a working familiarity with content providers, while other operators resist the format. It appears that DISH is shaping how cord-cutting is consumed and could quickly become the leader simply because other operators refuse to offer competing solutions.

 

Jamal Carnette has no position in any stocks mentioned. The Motley Fool recommends Netflix and Walt Disney. The Motley Fool owns shares of Netflix and 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.