5 Big-Picture Issues Behind the AT&T, Dish Network and HBO/Cinemax Feud

Just in time for the first GOT spoilers, HBO goes dark on Dish Network and SlingTV.
Just in time for the first GOT spoilers, HBO goes dark on Dish Network and SlingTV. HBO
Last week, right around the time substantive news about the final season of Game of Thrones was hitting the web, Dish Network customers found that HBO and Cinemax had gone dark on their platforms. The reason? Well, as they sometimes say in relationships, it's complicated.

In short, AT&T, which owns DirecTV, wants Dish to have guaranteed minimum subscriber numbers for HBO after AT&T merged with Time Warner — TW wants to ramp up engagement in their new properties. The problem is that Dish is the one service catering to rural subscribers, most of whom don't have as much to spend on programming as those in cities. As a result, the percentage of subscribers on Dish for premium channels is lower than other providers.

Also, because Dish ONLY provides programming (unlike AT&T or Comcast, which offer broadband services and the like, and are deepening the push for new customers for those services), it has far less margin for financial error.

There is no word on when the dispute will be resolved (or if, gulp), but it brings up a few more critical, big-picture concerns with modern digital services, the thing people used to call "television."

Content and service providers are merging.

Netflix doesn't just give you a place to watch movies and TV shows, it makes movies and TV shows. Ditto Amazon. As huge service providers like Time Warner swallow up more and more content creators like HBO, it means bigger and more powerful companies will control not only the shows we watch but the methods of distribution. That's never a good thing for consumers, at least from a cost standpoint, and it makes it even tougher on content providers to compete.

But, for a company like Dish, which doesn't produce content or provide any service other than displaying that content, it leaves them at a huge disadvantage, even if their new parent companies may offer those services.

Wireless networks are getting faster.

And if that weren't enough, add into the equation the speed and reliability of wireless networks. It is now not only feasible but realistic to stream high quality audio and video on the connect we use for phone service. With now 5G networks beginning to roll out across the country, it's no wonder the vast majority of traffic on the internet is via a mobile device.

It's why we now see live sports, movies and even live streaming events like concerts available on cellular networks. If Dish didn't already have to compete for subscribers, the field is now getting even more competitive.

Companies are trying to roll out their own services.

Disney is preparing to launch its own streaming service exclusively for content from its vast collection of film and TV shows. And before you scoff because you don't have small children, consider that Disney owns the Star Wars collection, Marvel films and the Pirates of the Caribbean series. If they are able to negotiate their own deals, it's not a reach to think they could keep some of the most popular films of the last 20 years off networks and services that don't pay their prices. If it works for HBO...

We consume content differently now.

Of course, besides money, the way we consume information is driving much of the disputes over content. Fewer than 15 years ago, no one thought streaming music would be how we all listen to our jams. Now, few can remember why we downloaded songs, let along bought CDs (or records!). Now, in under a decade, we've gone from wired boxes on top of televisions to wireless devices we carry in our hands.

And before we all start talking about millennials and their part in this, look around at a grocery store on a Sunday or a mall on a Saturday and tell us you don't see a few guys in their 40s watching game live streams on their phones. That change is happening faster than we think and it is affecting traditional services built around the television, like Dish.

The digital divide isn't growing so much as it's changing.

For years, the digital divide was a hot topic among those who saw poor people in urban areas struggling to get access to broadband networks. The infrastructure didn't exist to get them what most wealthier neighborhoods had already. But, a funny thing happened. Wireless broadband became readily available for lower prices and you rarely hear about kids in the inner city without access to the internet.

What you DO hear about, however, is rural access. People who live outside the city don't have nearly the options for internet, let along streaming content from Netflix, Amazon and others. Many folks in poor rural areas still rely on DVD rentals for watching movies. Dish caters directly to those types of customers and that market is shrinking, not growing.
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Jeff Balke is a writer, editor, photographer, tech expert and native Houstonian. He has written for a wide range of publications and co-authored the official 50th anniversary book for the Houston Rockets.
Contact: Jeff Balke