Dish Goes Toe-to-Toe Over Content

[Commentary] Television networks are trying to pass on the mounting costs of securing major sports rights and broadcasters faced with weak ad revenue are attempting to wring more high-margin retransmission fees from pay-TV companies. The resulting cost inflation trajectory for distributors like Dish looks increasingly untenable. This is particularly true in an industry where cord-cutting is slowly eating away at subscriber rolls as the options for online video expand. So far, contract disputes have all ended with a resolution.

The current one may well follow suit. But it seems inevitable there will come a point at which a media company’s asking price is simply too high to merit avoiding the resulting subscriber loss. This is especially true for Dish, which lacks a broadband offering to offset video margin pressure. Despite live sports’ role in cost inflation, the networks most at risk of being seen as dispensable are those without that content. So, too, may be those that sell content to online providers like Netflix and Amazon. Unless content providers blink, such a showdown may prove the pay-TV bundle’s last stand.