DISH Network (Nasdaq: DISH) may be gaining ground in its legal battle against TiVo (Nasdaq: TIVO), but its fracas with Disney (NYSE: DIS) is turning ugly.
The family-entertainment giant pulled four high-def channels from its programming deal with DISH yesterday. It's been two months since a judge ruled in Disney's favor, but DISH has yet to pay up the $65 million in fees for carrying the four channels
The loss of ESPNews HD, Disney Channel HD, Disney XD, and ABC Family FD won't be fatal for DISH, but it comes at a lousy time. One of the latest televised ads from satellite -elevision rival DirecTV (NYSE: DTV) rips into the high-def content available through DISH and cable giant Comcast (Nasdaq: CMCSA).
When did DISH become the rebel without a pause for couch potatoes? DISH decided to test the gray area of TiVo's DVR patents while DirecTV and Comcast became licensed TiVo partners. Now we find DISH bellyaching about the costs of the channels it's carrying.
It's not easy being in DISH's shoes. The company has positioned itself as the cheaper option to DirecTV when it comes to satellite television, and that occasionally entails cutting corners.
DISH doesn't have the luxury in satellite television that Sirius XM Radio has in satellite radio. Sirius XM has the flexibility to create most of its own content. It's the only game in town, so it's not as if there's a healthier rival showing it up the way DirecTV can humble DISH with its larger high-def collection and its NFL Sunday Ticket juggernaut.
DISH subscribers know they're getting a bargain, but they still expect similar programming to what rival providers are serving up. I predict that most customers won't even notice the absence of these four high-def channels, but eventually this will cost DISH.
When you're spending this amount of time and money defending lawsuits from companies that feel that they're not being compensated correctly, the end result is usually a downward spiral.
How far should DISH go to protect its position as the value-priced satellite television provider? Share your thoughts in the comments box below.
