America's Struggling Satellite TV Companies Once Again Propose A Terrible MegaMerger

from the when-in-doubt,-repeat-your-mistakes dept

For decades, like clockwork, somebody at Dish or DirecTV will try and float the idea that the two satellite TV companies should merge. Usually they’ll do this by seeding the idea at trusted news outlets that additional consolidation is just what the U.S. media sector needs. Granted regulators have always balked at the idea of a Dish and DirecTV merger, given that it would only reduce competition in the pay TV space, leading to more layoffs, more price hikes, and even worse customer service (cable TV customer service is among the worst in any industry anywhere thanks to this “growth for growth’s sake” mindset).

Like clockwork, somebody involved in the deal-making has leaked word of yet another attempt to merge the two companies to the New York Post:

“DirecTV and Dish Network are in fresh talks to merge after years of on-again, off-again wrangling and multiple clampdowns from federal antitrust officials, The Post has learned.”

Both companies have been losing TV subscribers hand over fist to streaming competitors, so the argument being seeded in the press is that the merger makes sense now because both companies are flailing, and streaming competitors now exist:

“Now, however, insiders are optimistic a Dish-DirecTV deal could pass regulatory muster as concerns about the market power of the struggling companies have waned, sources said. Some executives likewise argue that a merger could give a surprise boost to the US?s troubled rollout of 5G wireless services.”

The problem, of course, is that every time the telecom and cable industry proposes a deal like this, absolutely none of the promised synergies ever actually arrive, and the end result is almost uniformly more problems, more layoffs, and more price hikes. We just got done watching a megagermer clusterfuck for the ages in the $200 billion AT&T Time Warner and DirecTV mergers, which promised American consumers the sun, Earth, and sky. Instead we saw 50,000 layoffs, record TV defections, higher prices, and absolute chaos, forcing AT&T to recently spin off DirecTV.

Dish and DirecTV policy nerds are going to try and justify the deal this time by claiming it’s the only way to get Dish’s promised 5G network off the ground. That network, if you recall, was a half-baked Trump-era “fix” to the problems already created by the T-Mobile Sprint merger. Based on recent events that network doesn’t appear destined to succeed any way you slice it. But with Dish hemorrhaging both pay TV and wireless subscribers already, it’s short of cash. DirecTV’s fortunes aren’t looking so hot in the TikTok era either.

So instead of letting terrible companies just die at the hands of the market and shifting trends, we turn to regulators to approve terrible deals under the Charlie Brown and Lucy football type promise that this time the deal will solve everybody’s problems. But it won’t. A deal like this will just reduce competition, raise rates, and result in tens of thousands of additional layoffs. As such it’s unlikely the Biden FCC or DOJ approves it, but given this country’s severe allergy to learning from history or experience when it comes to megadeals, you can never quite be sure.

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Companies: directv, dish

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Comments on “America's Struggling Satellite TV Companies Once Again Propose A Terrible MegaMerger”

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9 Comments
Dan (profile) says:

Satellite is so 20th century

Slightly off topic but I was thinking about this the other day and wonder if satellite TV and satellite radio don’t also suffer from another problem. Does it really make efficient sense to get either from a satellite when there is a cell phone tower or cable tap close by? Sure, satellite may make sense for a network TV feed for an affiliate to grab, but not much else. As for music, why should I pay for a feed all the way from space, when Android Auto serves a Pandora feed to my car just fine?

Since AT&T discovered that a land cable gets a phone call around the world more reliably, I suppose they have to do something with the unused satellite transponders. And I don’t think that the broadband from space is going to go far, except for niche situations either.

Anonymous Coward says:

Re: Satellite is so 20th century

Satellite makes sense for those people who live in remote and often mountainous places, and are completely off grid. For those people star link will replace all existing satellite services. In the longer term, all T.V. where people watch on the providers schedule is dead, along with scheduled radio.

And yes, there are places in the US that will not be reached by cable, and which have no road access. 20 miles up river in the mountains with a jet boat, or fly in with a light aircraft, with little hope of a road being built is a formidable obstacle for cable, or even getting a cell tower to serve the an area with maybe half a dozen households.

Ceyarrecks (profile) says:

DirectDish Sign up today!

now with even more Latency, spotty reception with the slightest rise in humidity, and vague, ambiguous Fees to keep you interested,… Sign up today! will even give a $3 voucher on NEW mandatory equipment rental fees. "Directly Dishing Customers into Our Gaping Maw!"
p.s. not sure why markdown is not working on Preview, but here is pic to emphasize point. https://www.austinchronicle.com/binary/5f53/SS.Metropolis.jpg

danderbandit (profile) says:

Satellite is not so 'Niche' as you might think

Dish and DirectTV don’t only compete with each other. There are other providers out there – HughesNet & ViaSat are two of them.
And you don’t have to be 20 miles up river in the mountains to need it. Until recently we lived in San Diego County 1.5 miles off the interstate with grid electric and water service, and AT&T landline service, but no cable. And too many hills to get TV from an antenna. So satellite was the only source for TV & internet until a new company came in with microwave service. They completely blew Dish & ViaSat out of the water. But that was only after they got an antenna to serve our valley. It took at least a year after they had signs out saying they could serve us.

Anonymous Coward says:

So instead of letting terrible companies just die at the hands of the market and shifting trends, we turn to regulators to approve terrible deals under the Charlie Brown and Lucy football type promise that this time the deal will solve everybody’s problems

Mergers are as much a part of the free market as competiting. You have the FTC to blame if you think DiSH or Direct-TV have worn out their welcome. Giving
regulators the right to pick "winners" isn’t a help to capitalism. It’s interference.

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