Dish’s Ergen warns of ‘pressure on all the content providers’ from OTT churn

Sony is currently in a licensing dispute with Viacom for its PlayStation Vue service.

During Dish Network’s quarterly conference call with investors, chief executive Charlie Ergen offered a lengthy and caustic assessment of the overall content industry, specifically calling for better content and fewer and more targeted ads.

Ergen also pointed to the ongoing dispute between Sony and Viacom, explaining that such altercations could eventually put pressure on the content industry as a whole.

“That's a lower cost for Sony Vue,” Ergen said, explaining that Sony can reduce its expenses by no longer paying for Viacom content. “And if you want Viacom channels, then maybe you're going to be able to go to DirecTV Now or Sling or somebody else. But if you don't want Viacom channels, you're going to have a choice now. You're not going to have to buy them. So that's a change and that's good for consumers but it's going to put pressure on all the content providers.”

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Added Ergen: “And I can switch between vendors and so it's going to put pressure on the other sides of the linear television business,” he said, according to a Seeking Alpha transcript of Dish’s earnings conference call with investors.

Indeed, Sony this week announced that its virtual pay-TV service, PlayStation Vue, will no longer carry Viacom channels effective Nov. 12. “As part of our ongoing evaluation of the PlayStation Vue offering, we have determined that removing the bundle of channels from Viacom is the best way for us to continue to offer the most compelling value to our fans,” said Dwayne Benefield, VP and head of PlayStation Vue, in a blog post

In his comments, Ergen urged content companies to think about how to become more flexible in their business models, and to not become complacent inside of long-term content-licensing contracts.

“There's things we could do about it to make that content better and the environment richer for our customers but it involves things like changing the 16 minutes of commercials. It means we got to change things so we need to be able to do binge viewing for customers with the lower advertising load,” Ergen said. “We need to have dynamic ads for customers that are more meaningful to the people. We have to make it a better product for people so they're willing to pay more for it. We have to make it more convenient product for them so they'll do it and not all linear content companies move that fast.”

(Perhaps not surprisingly, Dish Network announced pay-TV's first programmatic ad exchange for linear television in 2015.)

Of course, Ergen has long had a long and contentious relationship with content companies. Indeed, in 2013 The Hollywood Reporter labeled Ergen as “the Most Hated Man in Hollywood.” In recent months Ergen has engaged with Tribune and Viacom in heated content-licensing negotiations.

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