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Is OTT the Future of TV?

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Charlie Ergen has never been afraid to gamble. From his youth, when he tried to build a career in playing blackjack and poker, to his founding of Dish Network, his bitter feud with Rupert Murdoch, his frequent tussles with TiVo and the FCC, and his eager embrace of disruptive technologies, he has always been willing to play for high stakes.

On February 22, Dish Network’s CEO demonstrated his buccaneering devil-may-care spirit yet again, predicting imminent doom for the conventional subscription TV model. Over-the-top (OTT) streaming services, he said, will replace them within a few years. Executives for such streaming platforms, including DirecTV Now and Dish Network’s own Sling TV, have repeatedly said that they seek to augment the cable, satellite, and telecom TV model, not to replace it. These executives wanted to avoid alarming programmers, many of whom own their own cable systems. Content providers are likely to resent being told their core business models are doomed.

Ergen apparently is undaunted by such concerns. In a recent call to investors, he said OTT services are “…becoming a direct replacement for cable and satellite”, and that programmers will need to adapt. Noting that the industry has been bleeding subscribers, he said, “If they continue to raise prices… continue to have 16 to 18 minutes of advertising per hour… that deceleration will increase.”

OTT (over-the-top) TV means internet streaming, without need for cable networks, satellite dishes, or antennae. OTT services usually don’t require long term commitments, and most offer small channel bundles for very low monthly fees.

New OTT Platforms Follow Sling TV

Dish Network launched Sling TV early in 2015. It grew quickly, and now has well over a million subscribers. It carries more than ninety channels, though its $20.00 core package has about thirty.

Noting the success Ergen and company saw with Sling TV, AT&T unveiled its own streaming platform, DirecTV Now, last November. (AT&T bought DirecTV early in 2016.) Other TV systems are planning their own versions. Verizon may roll out its own streaming platform as early as this summer, and Comcast is exploring the possibility of carrying a nationwide streaming service. Hulu and YouTube, streaming veterans, are planning to offer live TV.

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