Dish Network looks to reinvent itself
Dish Network is giving itself a makeover.
Over the last several months, Dish has been on a spending spree, gobbling up billions of dollars worth of wireless spectrum and acquiring bankrupt video store chain Blockbuster in a deal valued at $320 million.
On the surface, the moves seem unrelated, but Dish says it has a grand plan that includes launching a subscription streaming service to compete with Netflix and getting into the wireless communications business.
"We are putting together the building blocks to be able to provide a whole suite of services to the customer," Dish President and Chief Executive Joe Clayton said. "Wireless voice, broadband, video, mobile ... we're going to have the capability to do all of the above."
"What Dish has basically done is bought itself a lot of options to keep itself more relevant," Wells Fargo securities analyst Marci Ryvicker said.
Primarily a satellite broadcaster with 14.2 million subscribers (which makes it the third-largest multichannel video program distributor behind Comcast and DirecTV), its co-founder and chairman, Charlie Ergen, has expressed doubts about the long-term prospects for that business.
"My kids think I'm crazy for being in the pay-TV business because they don't pay for TV," Ergen told analysts in November. Noting the competition from not only cable and DirecTV but Netflix and the Internet, Ergen said, "The world is changing" and Dish has to "figure out how we can do things differently and how we can compete."
Still, some Wall Street analysts worry that the company may be biting off more than it can chew with its recent spending spree.
"It sounds ambitious, innovative and expensive," said Sanford Bernstein analyst Craig Moffett, who last month issued a report on Dish calling the stock a "leap of faith."
-- Joe Flint
Photo: Dish CEO Joe Clayton. Credit: Joshua Duplechian / Rich Clarkson and Associates