Dish boss Charlie Ergen clearly isn't comfortable with his company's role as a simple satellite TV provider, so he's spending significant cash to get into the wireless and video streaming businesses. As Internet video evolves, traditional broadband ISPs have responded with Internet video services of their own -- and some have jacked up rates by imposing caps and overages to counter revenue losses. Dish obviously is hunting for a similar evolutionary path.
While we're seeing a lot of talk about Dish competing with Netflix and traditional ISPs, there's not a lot to suggest these are bets that will pan out for Dish.
When it comes to video services, the company's recent supposed "Netflix killer" received yawns from the press, and their attempt to acquire Hulu has been shelved by Hulu's owners, who've put the deal on ice. While Dish has a leg up in this field due to licensing expertise, the fact they're stocked with "old TV" folks means they won't be willing to disrupt. If they don't disrupt, they won't innovate -- and they won't succeed at "dethroning" Netflix.
As for jumping into the wireless business, there's a long and winding road littered with failed efforts by satellite providers to expand into other broadband delivery territories. Dish is eager to build an LTE network, but that will require an FCC waiver and a lot of good fortune. Rumors suggest Dish could acquire Clearwire after Sprint's recently announced network transition plan wound up leaving Clearwire a little high and dry. Still, gobbling up a struggling carrier and jumping into a market dominated by AT&T and Verizon doesn't exactly scream success.
Many of these companies tend to stumble badly when they wander outside of their core competency, and Dish investors are justifiably nervous about all of Dish's recent moves, even if many of Ergen's recent spectrum acquisitions were discount fare. Keep in mind DirecTV is also
testing a fixed residential LTE service with Verizon -- something that may or may not ever materialize as an actual product.