DISH’s Ergen won’t give in to TiVo: ‘I’m just stubborn’

August 4, 2008

charlieergen1999-2.jpgYou can think what you like about the management of DISH Network Corp, the second largest U.S. satellite TV operator, but they’re nothing if not refreshingly frank about the economy, the state of the market and their competitors’ tactics.

Of course, a lot of that has to do with the disarming candor of founder and Chief Executive Charlie Ergen, whose conference calls tend to avoid the sort of obfuscation and Orwellian double-speak the media and investors have to come expect from C-level executives in corporate America.

Ergen had to be especially blunt today on a day his company announced a loss 0f 25,000 subscribers, which according to Bernstein Research’s Craig Moffett, was its first ever loss of subscribers.

On competition:

 (There are) really competitive offerings in the marketplace, as the biggest being probably the phone companies and FiOS and U-verse, where there are a lot of introductory offers out there that I think they had about close to 350,000 net additions in the second quarter so they’re taking those some from us and some customers from others. Obviously in the Hi-Definition front we haven’t been as competitive as we would have liked in the second quarter, particularly versus DirecTV.

On AT&T ending a joint marketing partnership and calling for the repayment of a $500 million investment:

They contractually were allowed to do that. Our loan from them was at 3 percent interest, probably their (AT&T) CFO looked at that and made a very logical decision to say ‘we can probably do better with that money’. Their operations people probably said that we’re probably in a better position to have flexibility going forward in video, if we want to stay with a satellite partner, it would be better to talk to multiple partners than one and see what the best deal out there is. So we have to be ready as a company.

On on-going litigation between DISH and TiVo which might impact 4 to 6 million DISH subscribers if the satellite company loses:

What we did was we designed around the TiVo patent and patent law encourages people to be innovative and our guys were very innovative and used some very sophisticated algorithms and so fourth to design around the TiVo patent. I believe we’ll prevail but TiVo, we’re going to have conversations with TiVo one way or the other about how we work together, and again, I’m just stubborn. I know this case inside and out. I’ve sat through trials. I’ve sat through the engineering models. I’ve sat and had the best and the brightest explain this to us, and I’m just stubborn. We don’t violate their intellectual property today, and I want to prove that. And so we’re going to go to the September 4th hearing and see who is right and so far, TiVo has been right.

On the management’s role in the subscriber losses:

We really haven’t done as good a job executing for the last year and the second quarter is the first quarter we made progress, and that is kind of the first step, and again it’s all my fault. I really wasn’t on top of this business from an operational point of view as well as I should have been but as I got into it and I traveled around and I saw our operations the first thing was we really had to make sure we had the right people in the right place and that was done pretty much in the end of the first quarter … (In the) third quarter we’ll do a better job and fourth quarter we’ll do a better job.

(Photo: Reuters)

4 comments

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They cancelled Voom without notice. I miss the supermodel channel Ultra on 9478. Also, I going to cancel unless they get the Buffalo Sabres on MSG HD.

Posted by Alex G | Report as abusive

Dish’s customer service is horrible, no wonder 25,000 plus subscribers left them. You will see more leaving in the next few quarters. DirecTV is uping the ante since it has been taken over by John Malone’s Liberty Media which owns Starz and Encore.

Posted by lancerquinn | Report as abusive

Switch from Dish, never! There are things about programming I don’t like, but they have the most diverse programming around. They truly serve the public by offering diverse opinions. Sure you can get the FOX pundits on any number of stations, but DISH offers Free Speech TV as well as several university channels, great sports programming, and a variety of entertainment channels.
Direct TV offers great teaser rates, but watch out when the initial offer ends. The same applies to Cable One.

Customer service is somewhat of a problem, but they’ve always been at least adequate.

Good luck to DISH on the TiVo thing. Lately the court rulings have been designed to stifle competition.

Posted by Robert Brehaut | Report as abusive

[...] Network just reported their most recent financial results, and Reuters’ MediaFile blog has several quotes from DISH CEO Charlie Ergen on a variety of topics. But the one I was most interested in, and likely of most interest to [...]

DISH Network was ordered recently to pay $460,000,000. to TiVo. Ouch! I like DISH Network as a company and am a subscriber myself; but I will admit that lately DISH has been taking a lot of incoming hits. I don’t have any idea what DISH’s financial situation is; but too many more rulings like the TiVo one could really hurt and no doubt they will lose even more customers now over the DVR flap.