Dish paid $320 million for Blockbuster, which is quite a lot of cash for something that was ultimately worth less than zero. Why is that "chump change"?
Claude's portrayal of Charlie's vision for Blockbuster is accurate. Ergen dreamt of competing with Netflix and it all came to naught very quickly.
Sling TV is flawed because a $20 per month streaming service won't ever be profitable. Look who they are competing against. At&T DirecTV, Google, Hulu (which is owned by Disney, Comcast, Fox, TimeWarner), Sony, even Comcast. Apple is waiting in the wings to enter along with Amazon, if they think there is any profit.
I really detect you have some kind of Death Wish for Dish. Charlie must have cut you off in traffic to engender such irrational hostility.
Well, everyone thought that Dish was stupid to compete
(and buy out the the resources, abondoned partially built satellites, and licenses of the BIG companies who were throwing in the towel on the DBS biz because nobody had a hope against far ahead and very BIG DirecTV, then owned by massive General Motors through its acusition of Hughes) with cable and, especially, DirecTV, and YES, EVERYONE thought
(especially those BIG compaines who gladly got OUT of the DBS train before it would derail and "conned" Dish into buying out all thier DBS biz because those BIG companies knew better just because they are big) that Dish would be out of business so fast no-one would notice Dish even existed. Quite the opposite has occured, and Charlie has led the industry in making bets that were correct and paid off: first to realize DBS needed LIL's; first to offer DVR's; first to do something about high programming costs; first to bet on and build and offer an OTT pay-TV service (SlingTV) when content providers did NOT want to go there. Chuck persuaded them and blazed the trail for those to follow who are MUCH bigger than Dish. Where was the BIG competition's vision with an OTT service? NOWHERE! Well, not until Dish was working on one. So, I don't buy the "look at what he [Charlie] is up against the much bigger competitors. He has the track record of either beating out his much bigger rivals, or at least surviving as a real competitor.
Look at much bigger Verizon and their hapless attempts to create a NEW TV service. Verizon hasn't a CLUE what they are doing in the TV realm after having sold their FiOS TV service and holdings. They had a vision of the future and it is a NIGHTMARE for them, a much BIGGER company. The corporate graveyard is littered with some of the BIGGEST companies in the history of business in every industry. Never make the mistake that just because a company is BIG today, that they ALWAYS make the right and best business decisions: Buh-bye Pan American, Braniff, Virgin US. Buh-bye RIM (Blackberry--THERE WERE THE KING OF BEASTS; much smaller Apple didn't have a chance, not even against MUCH BIGGER Microsoft and its Windows Mobile and susequent Windows phones?), while Microsoft is sliding into its grave, and even the vaunted Apple (once a tiny company compared to its competitors of the day) has its days numberd, and they know it. Apple could survive as a boutique company in the coming years, but if Apple does not get into another business, Apple will be interred next to RIM with an epitapth reading: "
We were consistantly the BIGGEST of the BIG companies with the most CASH and an innovator. Then Steve Jobs died, and now, therefore, so do we, only because we just couldn't figure out and make the gamble into what NEW business we should go into to assure our survival, but phones it aint no more. We seriously considered the OTT TV biz, then got scared because it is expensive and a mysterious biz we don't understand and we did not know what we were doing once the phone biz matured and kept coming LATE to the whole IOT and other innovative realms etc. Really, we bet on Animojies to erode Android's dominance of 2/3 of the market. So, we lay in eternal peace--along with Steve Jobs."
Of course, Google/Alphabet will be around for a while simply because they have a lot of differnt tech businesses, (and the far, far more popular mobile OS of Android worldwide), although the same BIG company Google/Alphabet managed to ruin Nest very well, and Amazon will outlive Apple for similar diversification of its business, and some new, small company will become the next big company.
Last I had checked, Sling TV still had the most subscribers of ANY of the OTT services. While that lead may not last, none of these services is going to stay pat with the prices they offer today. They will ALL go up, and even YouTube TV announced a few days ago that it would be RAISING its rates (they gotta pay for the new channels some way). And it is probably likely that the current lowest tier of $20 per month IS profitable because Ergen, having been first to secure rights, is most likely paying the LOWEST rates for those rights with the media companies seeing the rapid growth of SlingTV knew they could (and most likely did) bargained for higher rates from subsequent SlingTV competitors. It is one reason why all subsequent OTT services have higher prices for consumers. BTW, DirecTVNow is working on its own $20 per month package to directly compete with SlingTV. So, using your argument, DirecTVNow will go out of business along with SlingTV. According to your logic, all DirecTV has to do is stand back watch SlingTV go out of business offering a bottom tier of $20 per month instead of following Sling's lead with offering a bottom tier for $20. .You had better tell DirecTVNow that their plans for a $20 per month offering will lead to the end. Tell them before it's too late. And BTW, most of Sling Subcribers don't take the lowest $20 tier, but it is a nice option for those who want the least, and if it were not profitable, we all know CHEAP Charlie would NOT be offering it.
However, when the time comes, SlingTV will most likely have to pay more for the content, too. And that craetes the same ugly mess we have today with never ending increasing prices for traditional pay-TV. And all the companies will pay it for some time, but the OTT services is the SAME GAME: Tiered pricing for channels and/or add-ons with prices (including DVR fees) to soon match the prices of traditional cable and sat, AND we know that the media companies have indeed required the OTT's to take channels they don't want in order to get the ones they want and subscribes want, just like the traditonal MVPD business today.
I'd say Charlie had a passing thought of creating a competitor to Netflix: that idea was nixed pretty quickly and even Joe's press conference was all about the BRAND. Blockbuster did already have a streaming service like Netflix, so it was not really "Charlie's Dream" because it already existed at BlockBuster when Dish bought it, but it was a turd service compared to Netflix. But it became clear "hours later"--a bit of hyperbole--that competing with Netflix, even with the already up and operational Blockbuster streaming service that was part of the purchase by Dish was just NOT gong to be a wise move. Ergen publicaly stated that he believed Netflix had too much of a lead and that it would be folly for Dish to try and catch up to that. Truly, I don't think anyone at Dish really had a clear idea of WHAT they were going to do with the purchase of BlockBuster. They just felt they couldn't pass up buying a well known BRAND for VERY LITTLE money for a company even the relative small size of Dish.
"Cump Change" or your use of "Quite a lot of cash," among others, are RELATIVE terms. $320 million for Dish in 1996 was a massive amount of money, but $320 million dollars for Dish at the time of the BlockBuster bankruptcy really could be phrased as "chump change." And, keep in mind that they don't have to pay that all in one lump sum, over time at periods not having great fiscal impact on the much larger Dish since 1996. Dish's loss of over $200 million dollars with its investment/partnership in Starband (everyone has to remember Starband, right?) at a time when Dish was even smaller than when Dish would later buy Blockbuster, didn't even come close to ruining Dish company in those long ago days. $200 million hurt like a pinch in those Starband days, but hardly a heart attack, and many years later spending over $300 million for BlockBuster was like someone buying Magic Beans at an auction for $50: a lamentable purchase; money that could have been better spent, but it is not going to make a difference on your personal finances. And if one can't absob a one-time $50 hit (over two or three payments), then one is on the verge of personal bankruptcy and best change their address and phone number now because that person has got massive personal economic problems
.
Yeah, lots of ideas bandied about AFTER the purchase of Blockbuster of WHAT they were going to do with it, even considering using the retail locations for Dish showrooms, and maybe even still renting content on media and hardware to play them on that BlockBuster had established, even kooky ideas none of us know about, and, of course, keeping alive and expanding the BlockBuster OTT streaming service competing with Neflix, et al. The truth is the purchase of BlockBuster for Dish was like finding an item at a garage sale: a small, cheap, eye catching thing that you would like to have and think you have a use for only to find out that you have utterly no need or use for the curio you bought
(a cool back scratcher or a vintage Series 1 TiVo that you're sure you can convert to some use). So, you either give it away to someone else or just BIN IT! I agree that it probably wasn't worth it for Dish to buy BlockBuster. Could the money have been spent on other things that would have really mattered in the long run? Quite likely. On that we can agree. Dish bought a BRAND and they knew they were buying a BRAND, but did NOT know what to do with it. The Typical "one trick pony" that is Dish, and Ergen has publicall admitted to that, and Dish does not want to spend on a $34 million annual salary for a top tier CEO who probably really can turn around things at Dish. However, we'll have to see how Charlie does with 5G. If done well, it could make the company even bigger, since this is something of a businesses closer to the one Charlie has now (RF tech, hardware, software, operating RF and fiber networks), it could be another sucess for Mr. Ergen.