Charlie Ergen’s Management Theory: Dumb & Dumber and Seinfeld
Some executives quote philosophers like Plato or legendary coaches such as Vince Lombardi. But not Charlie Ergen; that’s far too high-brow for him. The Dish Network chairman seems to get his theories on management from television and movie comedies.
Just a few quarters after he described Dish’s wireless situation as a “Seinfeld Strategy” (it may not seem clear now but it’ll make sense in the end), the Dish chairman gave a shout out to the Jim Carrey and Jeff Daniels 1994 classic comedy “Dumb and Dumber” on Thursday. When asked by an analyst whether Dish would receive government approval to use its wireless assets, Ergen said:
“I’m hoping. You know that Dumb and Dumber line? I think there is a chance.”
The scene he is referring to is posted above.
Ergen, who has played poker and blackjack professionally, also made some analogies to wagering on Thursday. When asked about the odds of the FCC approving the company’s application for wireless spectrum he said:
“I would go broke betting on Washington. I’m about 0-for-100 in Washington.”
But here’s something for Ergen can count on: the Farrelly Brothers are planning a “Dumb and Dumber” sequel that will reunite Carrey and Daniels in their roles as Lloyd and Harry.
Dish’s kangaroo pitchman doesn’t cooperate
Dish Network went kangaroo-crazy at this year’s CES. Not only did a mascot in a kangaroo suit greet attendees at its press conference, but CEO Joe Clayton took to the stage cradling a wallaby, which resembles a small kangaroo.
Whilst Clayton cuddled the marsupial, someone whispered in the audience: “Does PETA know about this?”
The kangaroo schtick promotes the company’s new set-top box, the Hopper, and its smaller counterpart, the Joey. Together, the devices will let Dish customers record six shows at once that can then be watched in four rooms.
Clayton told me after the show he spent his Sunday at a photo shoot at a farm outside of Las Vegas, posing with kangaroos. He said it was hard to keep the animal still and he had to be careful not to step in kangaroo dung.
Meanwhile, Dish hired trainers and photographers to snap photos of attendees with a live kangaroo and wallaby on Monday. The lines proved longer for the wallaby — the kangaroo was jumpy and looked like he’d rather be anywhere than the Venetian at lunchtime during CES.
Check out this video of the kangaroo “model” to see what we mean by “jumpy”:
What’s Charlie Ergen’s strategy this week?
Satellite TV billionaire Charlie Ergen isn’t a regular on Dish Network’s analyst conference calls these days especially
since he stepped down in May as chief executive (which he still chairs). But when he makes an appearance, nearly as rare these days as one of those biennial dividends it pays, it’s worth a listen.
After losing more subscribers than expected in the third quarter Dish executives pointed to larger rival DirecTV’s hugely successful NFL football Sunday Ticket giveaway as the primary source of competition.
Ergen’s surprise appearance on the call allowed analysts to pivot away from the dreary operational numbers and discuss his vision of the pay-TV space. In May he had described Dish’s hodge podge of investments in wireless broadband and content as the “Seinfeld Strategy”. In other words, it’ll all make sense in the end. We hope for investors’ sake that’s right.
Ergen’s view on competition:
- I think from a macro point of view, clearly DirecTV’s results showed there’s still a big business out there for satellite television on a standalone basis and the rest of the industry absent the phone companies really was negative, so I think there’s still business out there. Satellite is still the most efficient way to deliver video. We’re just not getting our fair share of it yet, but having said that, the other macro trend is we’re continuing to use more consumers are consuming more bits and bites of zeros and wants, could be data, video, it could be voice, so I think that strategically, we believe we have to be in something other than a standalone video business as a Company and we’re in the transition of being able to do that.
That’s going to take some time and it’s unclear whether that’s going to be a smart business decision or not but we think that the way that the zeros and ones come together are going to be beyond just video and you’re going to need to be beyond fixed video to the home, so that’s a path that we’re on strategically and we think that’s going to pay dividends for us long term.
Ergen’s views on rising programming costs:
Tech wrap: YouTube changing the channel?
YouTube is working on a major site overhaul to organize its content around “channels” as it positions itself for the rise of Internet-connected TVs that allow people to watch online video in their living rooms, writes the WSJ’s Jessica Vascellaro and Amir Efrati. Changes to the homepage will highlight sets of channels around topics such as arts and sports and approximately 20 “premium channels” will feature 5 to 10 hours of professionally-produced original programming a week, according to a Vascellaro/Efrati source.
Dish Network won Blockbuster in a bankruptcy auction for $320 million, further broadening its business beyond satellite TV and setting up a possible showdown with Netflix. The deal covers “substantially all” of the rental chain’s business, and likely gives Dish the rights Blockbuster had to stream movies over the Internet, the Blockbuster brand name and customer lists.
A Deutsche Bank estimate that 100,000 Motorola XOOM units were sold over its first two months means the tablet was a flop, writes Business Insider’s Jay Yarow. For comparison, Apple sold 300,000 iPads on the first week weekend it was available. BetaNews’s Joe Wilcox calls the XOOM a surprising success, noting that the tablet came to market with “huge handicaps, all of which make comparisons to iPad 2 unrealistic”. Wilcox says higher pricing has been the main deterrent to buying a XOOM.
Google removed the streaming music app Grooveshark from the Android Market, over concerns it was facilitating music piracy, writes The Next Web’s Matt Brian. Unlike services Spotify and Rhapsody, music is added to Grooveshark by users.
Microsoft and Toyota unveiled a plan to work together on bringing Internet-connected services to Toyota’s cars. Toyota is planning to set up a network based on Microsoft’s Azure “cloud computing” platform by 2015, which would allow customers across the world access to Toyota’s digital services.
Analog chips are back in fashion after Texas Instruments hatched a $6.5 billion deal to buy National Semiconductor Corp as it looks to cement its place in the mobile computing explosion, writes Noel Randewich. Analog chips — which manage power, among other things, in everything from tablets to refrigerators — look set to gain a new investor following as the industry’s growth prospects are reassessed.
With Content at the epicenter and Google TV experience of backlash from major studios – Google will built resouces in addition to negotiation with content owners and studios to counter the content challenge.
Charlie Ergen: Satellite cowboy, TV viewer, pitchman
Charlie Ergen is best known in media business circles as the straight talking homely founder of satellite TV provider Dish Network Corp. He’s often been disarmingly honest on quarterly conference calls with Wall Street analysts by admitting that he had personally taken his eye off the ball when the company was losing customers a few years ago or putting his annual family vacation ahead of being present on the quarterly call.
Well Dish Network’s marketing team is hoping that Ergen’s southern gentleman charm can win over new customers or at least keep old ones in the pay-TV wars versus DirecTV Group and the various US cable operators.
Ergen appears in a new in-house produced campaign below talking about his pride in the company he founded, his “embarrassing” picture from his early days, and its recent success in customer service etc.
Dish Chief Marketing Officer Ira Bahr said that his boss is a “plain-speaking, easy-to-understand American TV viewer” just like the kinds of people the company is trying to win over in a business sector where there is so much “yelling and price competition” between the various players (Dish has been as guilty as anyone in that respect as you can see here and here).
But outside of crisis management does recruiting the boss as your top pitchman really work for a major national brand campaign? The closest most recent example would be mobile phone company Sprint CEO Dan Hesse, who first hit our screens in a black & white stylish campaignsoon after he joined in 2008. Sprint’s fortunes haven’t exactly improved since the end of 2007 the last quarter before he joined the company. Sprint has lost more than 5 million customers, though the rate of those losses appear to have narrowed in recent quarters. Bahr argues that a professional CEO as pitchman doesn’t have quite the same marketing resonance as that of a founder CEO like Ergen and Dish is currently on the up having already added 700,000 customers in the last year or so.
But what does branding professional Allen Adamson think of Dish’s ad spot?
Adamson, who is managing director of branding agency Landor Associates and author of BrandDigital, said: “It’s a fairly tricky thing to do. Personalities of CEOs don’t necessarily always match up with the brand and ultimately may not be persuasive. It really is about how credible and powerful a communicator the CEO is. (Ergen’s) techy personal matches his office with model rocket by the window and lends some credibility but I still feel that he is not the best way to tell the Dish story”
This is the Dish of old. Personable attentive customer service. I have been a loyal customer of dish since it’s inception in 1996 and have experienced the change in customer service to the point of disconnection from it’s consumer. They no longer accept telephone calls at the corporate level and in addition only receive written communication by snail mail and PO box. My advice if you want good customer service look elsewhere.
from DealZone:
DirecTV adds to media merger excitement
With media titans GE and Vivendi still negotiating a deal to bring cable operator Comcast into a mega-media joint venture, a management move at DirecTV is giving dealwatchers a fresh programming alternative.
Yinka Adegoke and Sinead Carew report the appointment of PepsiCo veteran Michael White (pictured below), who has no experience in pay TV, as DirecTV CEO is being read as a sign the company's parent, Liberty Media, just wants a baby-sitter until its sells the operation in the next couple of years.
Telecom leaders Verizon and AT&T approached Liberty earlier this year, they report. Both have cross-marketing deals with DirecTV and would leapfrog the rest of the market with the addition of DirecTV's subscriber base. But fears of insurmountable regulatory resistance put those talks on ice.
Liberty Media shareholders are set to vote this morning on a plan to split DirecTV from Liberty Entertainment -- a move that Wall Street believes could pave the way for a telephone company to put in a bid for DirecTV, leading to a similar bid for smaller rival Dish Network.
If Comcast gets its content pipeline connected to NBC Universal, the pressure on the telcos to boost subscribers could get them to test the regulatory waters again.
Epix nears launch date — more distribution deals coming?
Suddenly, after limited news over the past year, Epix has been very much the talk of the town in recent days. A number of publications, including Reuters, have picked up on some announcements out of the pay TV site jointly owned by Paramount, Lions Gate, and MGM.
The key bit of news, of course, was the announcement that it had reached its first distribution deal, with Verizon. Chief Executive Mark Greenberg suggested to us that other deals should be coming soon — that he is talking to everybody and “some are further along than others.”
This is key, in the eyes of Wall Street. Distribution deals are always a bit tricky, and even tougher in the current economic environment. But analysts want to see Epix sign a deal with one of the big players — one with a ton of subscribers. We’re talking about Cablevision, Comcast, Time Warner Cable, DirecTV. So far the reaction has been a little lukewarm from some of the big boys but that could just be a negotiating tactic.
That aside, there have been some other relatively significant bit of news. In case you missed…
- Epix will be launching in October, though hasn’t announced an official date. Sounds like they could be planning some sort of “event” or “special” to kickstart the channel
- The epixHD.com web site, which we’ve seen, is going to launch earlier. It’s currently in beta, and looks good. Has some of the feel of Hulu.com
- Epix, which will be home to some 15,000 films, including titles like “Iron Man” and “Star Trek” and the James Bond movies, just signed a content deal with independently owned Samuel Goldwyn Films.
Viacom has much riding on “Star Trek”
How big is “Star Trek” for Viacom?
The movie dominated the box office this weekend, taking in an estimated $72.5 million in North American ticket sales. Combined with $4 million grossed from Thursday evening’s preview screenings, “Star Trek” tallied $76.5 million in U.S. and Canadian receipts through Sunday.
Paramount could use a big hit. Last year, as the economy worsened, Paramount scaled by its film releases and cut costs by about $50 million. And this year’s first quarter didn’t offer a lot of cheer: Viacom’s entire filmed entertainment division posted an operating loss of $123 million.
“The weak economy continued to dampen the home entertainment market and Paramount was not immune to the impact,” Chief Executive Philippe Dauman said on the quarterly conference call. That put it mildly.
“Star Trek” will help the bottom line, if last weekend is any indication. But more is at stake than one quarter’s results. It’s about momentum at Paramount. The movie studio is hoping the big weekend sets up the rest of the year, with the “Transformers” sequel and a film based on “G.I. Joe” heading to the theater.
Or as The Wall Street Journal points out…
The debut of “Trek” may also mark the beginning of a new era for Paramount, which both produced and distributed the picture, which cost between $130 million and $150 million to make. In recent years, Paramount has been in reboot mode itself. In 2005, (Paramount Chief Brad Grey) was brought on board to revamp the studio after a long lackluster period, in which it experienced disappointments like “The Stepford Wives” and “Sky Captain and the World of Tomorrow.”
Dish’s Charlie Ergen: Me and Mel don’t have a beef
Ah the media, we love a ruckus. We really do. And when the two pugilists are characters as colorful and savvy as Dish Network’s founder Charlie Ergen (left) and Siriux XM Satellite Radio CEO Mel Karmazin (right) we do really get excited.
If you remember, Ergen was widely reported last month to have made a back door bid to take a stake in Sirius XM by quietly buying up some of the satellite radio company’s outstanding debt. Analysts and experts came up with all kind of theories as to Ergen’s ambitions including taking complete control of Sirius on the cheap, combining various satellite assets, and kicking Mel out.
At the time Ergen ‘s official channels at Dish and EchoStar declined to comment on the matter. So today’s Dish earning call was the first time we heard from the man himself on the matter. Well, it turns out the press was right on most things connected with the Sirius bid, according to Ergen. Except for one thing: he does not have bad blood with Sirius CEO Karmazin.
Here’s Ergen from the conference call:
I would take this opportunity to say one thing that clearly was not true is there wasn’t, at least I can speak for my end, there’s no annimosity toward Mel, Parsons [former XM chair] or anything like that.
I don’t know where they got that. Certainly not from our side.
Really?
Maybe the stories of an old feud were overplayed, but there might have something other than pure cold financial logic that influenced Mel’s final decision on this deal. Liberty Media beat Ergen in the bid for a stake in the beleaguered satellite radio business by offering to pay off Sirius’ due loans. In an interview with Reuters shortly after winning the Sirius bid last month, Liberty Media CEO Greg Maffei implied there may have been some… ahem, personality issues in its favor.
An unclear future for DISH?
Wall Street sell-side analysts seemed to be unsurprised by AT&T’s decision to pick DirecTV as its video marketing partner for its version of the ‘triple play’ package, in regions where it hasn’t built out its U-verse digital service.
The final decision had seemed obvious to analysts after DISH said earlier this month that AT&T would extend its five-year relationship by just one month to Jan 31.
But what does it mean for the independent DISH and its maverick founder/CEO Charlie Ergen (pictured), with the No. 2 U.S. satellite TV provider already struggling with customer losses in a tough economy?
Here’s what a few analysts say:
Craig Moffett, Sanford Bernstein.
The announcement is a clear negative for Dish Network, and a major win for DirecTV. As a result, we now expect Dish Network to post a sizable (400,000) subscriber loss for full year 2009. We had previously expected approximately flat net growth. For DirecTV, we now expect a gain of 800Kwhere previously we had expected approximately half that.
Ingrid Chung, Goldman Sachs:
