Dish 1Q16 Earnings Call Notes

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Charlie Ergen

Obviously there’s a whole generation that isn’t paying for TV

“There is obviously a whole generation that, they’re either not paying for TV or if they’re paying for TV it’s more likely to be a Netflix or Prime or Hulu or some combination of those.”

We’re continuing to make a transition to be a connectivity company

“The other parts of the world, the world is becoming more and more in need of being connected and we’re continuing to make the transition to a company that is a connectivity company. And we connect you through satellite and we’re going to connect you through wireless.”

Certainly cars are going to be connected

“Certainly cars are going to be connected. I’m pretty sure you’re not going to connect a car to a cable or wire so the only way that I know you are going to connect a car is wirelessly. If it is going to be wirelessly, you’re going to have to have some spectrum to do that. There is a lot of difference parts of that. Some is collision avoidance, some is the connection, what you’re doing while you’re in the car, particularly as you go to autonomous cars when you are not actually driving.”

We would overpay modestly for content just to avoid disruption, but we wont overpay astronomically

“by the way, we would always overpay a little bit for content because of the disruption. But we wouldn’t overpay astronomically to avoid the disruption because long term we would be in a stronger position than our competitors because we wouldn’t have to raise prices to our consumers long term. Anything you do as a takedown is short term in nature if it is not the right deal.”

Have the courage to get the right customers, not just any customer

“one of the first things that I looked last year when I came back into the CEO role was really working with Steve and team to have the courage to go out there and get the right customers where I think there might have been a mentality here and maybe perhaps in other companies, where you’re trying to show some number to Wall Street, but at the end of the day it hurts you long term financially. One of our rules is to think long term.”

We’re aware of the power of Netflix

“we’re pretty aware of the power of Netflix and the content that is there., As an example, they have an awful lot of children and family programming that’s pretty easy to access. In fact, if you’re about two and a half you can pretty much navigate through the product. We’ve done some promotions and stuff with them in the past. It’s interesting to see that Amazon has gone to a monthly fee now which fits more into our consumer’s model. I think there are a lot of alternatives there for consumers.”

It’s starting to be a fairer fight for distribution

“The world is changing a little bit to where distribution — it’s starting to be a fairer fight. But the industry hasn’t worked through the balance between cost of content and viewership. There’s going to be some food fights between any number of companies and content providers in the future, probably, would be my guess. You’ve seen it with YES, you’re seeing it with the Dodgers, you see it with — I think Comcast just rolled Spike up to a very high tier, low penetration. I think they rolled country music television up. You’ve seen Skinny Bundles by Verizon, that’s where it’s going.”

Roger Lynch

We always assumed that OTT would be a competitive business

“We’ve always expected that the OTT business is going to be a competitive business and ultimately we may have competitors that aren’t traditional pay-TV companies in the market. In many ways they’ll be lower carriers to entry. You don’t have to go build a cable system, you don’t have to launch satellites and therefore we’ll probably end up with more competitors. The nature of this industry is that there is not a lot of exclusive content. The channels business, the vast majority of the channels in the U.S. are licensed on a non-exclusive basis. So, I don’t think it’s going to be exclusive content that’s going to drive the differentiation.”

Advertising is better in OTT than in linear

“We’ve always expected that the OTT business is going to be a competitive business and ultimately we may have competitors that aren’t traditional pay-TV companies in the market. In many ways they’ll be lower carriers to entry. You don’t have to go build a cable system, you don’t have to launch satellites and therefore we’ll probably end up with more competitors. The nature of this industry is that there is not a lot of exclusive content. The channels business, the vast majority of the channels in the U.S. are licensed on a non-exclusive basis. So, I don’t think it’s going to be exclusive content that’s going to drive the differentiation.”