Dish Network, Viacom Discuss Internet TV Deal

by Christopher Freeburn | September 28, 2012 12:02 pm

Dish Network (NASDAQ:DISH[1]) is working on a plan that could lead to the biggest shakeup[2] in the way Americans watch TV since subscription cable debuted decades ago.

The satellite TV provider is reportedly in discussions with Viacom (NASDAQ:VIA[3]), Univision and Scripps Network Interactive (NYSE:SNI[4]) over the possibility to delivering cable TV channels over the Internet, sources told Bloomberg.

TV programming would be transmitted as an over-the-top service and would be priced at a discount. The programming could be viewed on tablet computers, like Apple‘s (NASDAQ:AAPL[5]) iPad.

The move would give consumers greater control over the channels they pay for, eliminating the bundling that it typical in traditional subscription TV services. Currently, consumers pay for plans that include a wide range of channels, regardless of how many they actually watch.

However, networks have traditionally balked at eliminating bundling, which gives them more advertising revenue.

If successful, the new service would also allow Dish to eliminate its sports programming charges, which are high. The satellite TV service pays Disney (NYSE:DIS[6]) $5.13 per subscriber every month just to receive ESPN.

Whether subscribers are willing to forgo sports programming to reduce subscription costs remains an open question. Some cable TV providers offer non-sports packages, but they don’t get many subscribers.

Shares of Dish were mostly flat in Friday mid-day trading.

  1. DISH:
  2. working on a plan that could lead to the biggest shakeup:
  3. VIA:
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  5. AAPL:
  6. DIS:

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