Wednesday, May 25, 2011

Dish Desires Direct TV

Speculation has arisen yet again that the two major satellite players may look to merge. What once might have been thought of as unthinkable now seems possible, especially with others before them being approved. Look no further than the merger of Sirius Satellite and XM Radio, despite being the only two satellite radio companies. But they were approved because competition still exists via the web and terrestrial radio. Other mergers like Comcast and NBC Universal also demonstrates that even vertically integrated media companies get approved. So it seems that a merger of Dish and Direct TV could also pass because of wire and wireless competition.

"DirecTV has 19 million subscribers, while Dish has 14 million. Together, they would form the biggest pay-TV provider with enough clout to push back against rising programming costs." Currently Comcast has over 22 million subscribers; a satellite merger would make Dish-Direct TV number 1. For cable, the next step is clear to them, continued consolidation of cable operators. With Cablevision recently owning Bresnan and Charter selling its LA systems, MSOs and systems should be ripe for the taking. Logically, Charter, Cox, and Cablevision should be viewed as ripe for the taking.

Is the Direct TV - Dish merger speculation or reality? Today it may be just talk, but as the industry life cycle for cable continues to mature, consolidation and convergence are necessary next steps. It brings better synergies, better efficiencies, and lower costs to compete in an ever changing media landscape.