DISH Network (DISH) Signs Landmark Deal with Disney

By: , dated March 4th, 2014

Shares of DISH Network Corp. (DISH) closed up +0.04 or +0.07 percent to $58. 88 per share on Monday. After the market close, the company announced a groundbreaking long-term agreement with The Walt Disney Company (DIS) that will allow DISH customers the option of streaming television programming over the Internet, versus receiving programs through a satellite dish.

Englewood, Colorado based DISH Network is a major provider of direct-broadcast satellite service, offering television, satellite internet and audio programming to over 14 million subscribers. The company employs roughly 34,000 people worldwide and earned $807 million on revenue of $13.9 billion in 2013.

The wide-ranging distribution agreement with Disney will give DISH customers access to Disney’s ESPN, ESPN2, Disney Channel, ABC Family as well as content from all ABC-owned broadcast stations, as part of an IP based, Internet delivered multichannel offering.

Disney content will be available to DISH customers on a variety of different platforms including televisions, computers, tablets, gaming consoles smartphones and other connected devices. DISH customers will also have access to Disney’s live and video on demand products such as Watch ESPN, WATCH Disney and WATCH ABC using both stationary and mobile Internet devices.

Joseph P. Clayton, DISH Chief Executive Officer and President said “The creation of this agreement has really been about predicting the future of television with a visionary and forward-leaning partner,” he continued, “Not only will the exceptional Disney, ABC, ESPN entertainment portfolio continue to delight our customers today, but we have a model from which to deliver exciting new services tomorrow.”

The agreement includes the dismissal of all pending litigation between the two companies, which include disputes over PrimeTime Anytime and AutoHop. As part of the deal, DISH agreed to disable AutoHop functionality for ABC content in the C3ratings window. AutoHop allows viewers to automatically skip commercials on recorded DVR content.

The landmark deal is the first time a content owner has granted satellite or cable operator the digital rights to offer their programming without a paid TV subscription. Details of the cost of DISH’s TV subscription over the Internet have yet to be announced, but will probably be in line with other over-the-top providers such as Netflix. According to some analysts, North American consumers will spend as much as $6 billion for this type of service in 2014, more than double the amount spent in 2010.

DISH Network recently reported fourth quarter 2013 earnings of $0.63 per share, versus $0.46 per share in the same period one year ago, an increase of +37 percent. Revenue grew by six percent to $3.54 billion, with the company adding 8,000 additional pay-TV subscriptions.

DISH stock closed a little over a dollar below its yearly high on Monday. The stock showed no pre-market activity this morning, with investors probably evaluating the news of the deal. Nevertheless, some analysts are already upgrading their forecasts and rating on the stock. Once the implications of the deal become clear, DISH stock should react in kind.

Other News About DISH Network
Dish Network wins all wireless Internet licenses in FCC auction
DISH wins bids for wireless broadband frequencies in all 176
DISH Network Corp Upgraded to “Buy” by Ned Davis Research (DISH)
Analyst upgrades rating to “buy” from “neutral”.

Other Stocks in the News
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Lowe’s outperforms Home Depot in stormy quarter
Company shows strong growth in quarterly sales.

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Jay Hawk Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

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