DISH
#In terms of debt repayment, we set a wire for the $1.5 billion.
We did repay it with cash.
Repaid it with cash and it was cash on hand.
It was US dollars.
We tried to use bitcoin, but they wanted cash.
And just because of the auction we don't want to talk about financing, but obviously we have cash on hand to run our business today.
The market liquidity has tightened up a fair amount the last six months, and certainly we were pretty conservative and I think we were five times levered.
We are more like four times levered now.
That just feels like a more comfortable spot to be based on our existing business.
For Sling on the broadcast network, certainly I think there's an opportunity for both Sling in the broadcast networks, but it's a bit complicated, because there is O and O networks and then there's the affiliates, and they're still fighting through their rights between the O and O's and the affiliates.
And whether we would need to go to the affiliate and have an individual deal, or whether the network itself could speak for the affiliates is unclear to us at this point.
And I think affiliates and O and O's all have different opinions about that.
So they're working through that.
Although we do have a couple of networks from an O and O perspective that we do have the rights to today.
So I think that that's one of the things that's a challenge for OTT writers and Sling and could be a benefit to the networks and to the consumer, right, because they are watching networks, but they are expensive.
So that is the other piece of it.
Viacom renewal.
Look, I think we're taking a long-term view, so any time we talk with the content provider, we want to know what their thoughts are on OTT and whether there is a way ---+ because we think OTT is additive to the content provider.
We would scratch our head if the content provider ---+ excuse me.
I understood three years ago where people were maybe skeptical in the business.
But I think we have shown how it can work today to the benefit of the content provider.
And I think I'd scratch my head if the content provider didn't want to play.
But it has different values, depending on whether it's live TV or VOD or SVOD, or whether it's available on different platforms already.
So it gets a little tricky because some content providers sell some of their programming to one of the OTT providers like Hulu or Amazon or Netflix, and then we want to pay for it again, right.
If you are watching that particular show, consumers shouldn't pay twice for it, and so some of the programming is chopped up a lot and it makes it very difficult.
Again, some people will make great decisions and content and how they handle OTT and they'll will be more successful in growth and some people will make mistakes.
We are not the guys that get to make that decision.
It's hard to know.
CBS sales theirs direct today, so they probably are less inclined.
Other people would like to ---+ the O and O's and the affiliate agreements are complicated not primarily because of OTT, but because of reverse retrans and their own renewals, right.
With the affiliations, because the network has options on where to go and a particular marketplace if they don't get an agreement, so those are very complicated.
We're willing to work with either party, either the affiliate or the owned and operated.
We will work with either or both.
Is that fair, <UNK>.
I don't know.
Yes.
We look at a number of things in working with these content partners or potential content partners.
As <UNK> mentioned, one of the things is that content already available.
Obviously we look at is that content relevant for the target market we are going after, which is not the entire market.
And the final thing is is the programmer going to give us enough flexibility that we could actually package it in our products in the way that we would want to do it.
And so it's a little bit different for us than a traditional Pay-TV operator where they are trying to appeal to the broad segment of the market.
And there are a lot of content partners that have decided they want to go direct, which is fine.
That means from our standpoint it's a little let necessary for us to have them in a bundle, because the devices that we are on they are likely already on, and so our customers can go get that content if they want, or that they've made decisions to distribute their content through other SVOD services, which again are on the same devices that we are on.
So, again, it makes a little less necessary for us to bundle that content into our basic package.
Operator do you want to move to media.
Yes, I don't think I can comment on that one.
I don't think we can comment on that.
Just that the anti-collusion is ---+ we know what the rules are on anti-collusion, but we don't always know that people are going to go by the rules and not change them.
That was a rule yesterday, but the new rule is today and we just better to be safe.
I would say I think Sling is a potentially very powerful platform for all content owners, including broadcasters, and that they can grow their businesses by taking advantage of a new technology and a new generation of people who are not watching their content today.
The second part of it is to do advertising in a model that is not as obtrusive to the consumer in a way that the ad can be interactive and more meaningful to consumer and more powerful for them.
I don't think executives at broadcast networks have their head in the sand.
They are seeing a lot of advertising dollars go to Facebook and Google that used to go to them and that trend is continuing.
And there is a way for them to get a piece of that action and a big piece of that action and Sling has some solutions to that.
So I think the progressive executives are very interested in terms of what <UNK> 's team are doing.
I think it is a positive because they are not down.
So I think it is positive.
Because I think that the approach that we really look at is ---+ the problem you have when you take something down, you take something down and you put it up a month later, a week later or whatever it is, you've already lost to customers that see that as valuable.
So you almost penalize yourself twice.
So I think we've looked at things strategically to say for the most part on what I would term nonessential programming we will have to make a decision one way or the other.
And we will do ---+ my direction to people here is look for every ---+ I don't want to look why we're not going to do a deal.
I want to look why we're going to do a deal, look for every reason to do a deal.
And the benefit of the doubt goes to our programming partner, because they helped us build our business.
So again that's what we are doing, and Viacom is one of those long term, really long-term partners for us.
I mean they helped us build our business, so it would take a lot for us to not move forward.
On the other hand, people have to be realistic that the viewership of their channel relates to the value of the channel.
The availability of their content and other places to our consumers they shouldn't be forced to pay for it twice.
And, oh by the way, we have other ways for you to make money as well, monetize your product.
So when you add all those things together, you put creative people in a room you will probably figure it out.
This is <UNK>.
We are doing some dynamic ad insertion on some of the networks today, not currently as you pointed out on ESPN.
As <UNK> mentioned earlier on the call, the live OTT service is a bit of a science project, in that there is a lot of new technology, a lot of integration with third parties that has to go really, really well, and this is an example of the dynamic ad insertion where we have a number of third parties that all systems have to interact properly.
So we've been doing a lot of work to make sure that we do dynamic ad insertion.
It provides a benefit both to our programmers, but also to our subscribers, doesn't cause service issues on it.
I think we're close to having those issues solved (technical difficulty - audio distorted) come back on, but we are still in development phase for finalizing technology to be confident that we can redeployed without causing service problems.
I agree.
It is very frustrating to see the ESPN commercial break.
I think I would rather see something moving.
Part of ESPN is we have blackouts and things like that for ESPN that we don't have for other networks and that just adds complexity.
I will take the first one about sponsored content.
Where we have experimented is blending what they call traditional Pay-TV content, channels like AMC and ESPN and Food Network with nontraditional content that is available on Sling like content from [Baker] studios.
But really our focus in all of that is figuring out what our consumers in our target demographic really want to watch.
It's not so much on can we get someone to sponsor content in a way that we can make money from the content, that's not our focus.
Our focus is really on providing a service that the customers really want and content that they really want to watch.
So, I think you'll see us do more experimentation with nontraditional TV content.
But again with the singular focus on finding stuff that really works for our consumers and what they want to watch.
I don't have any advice for Sprint and (inaudible), other than I think they have good team in place for now and they are very focused.
When you get a good team and you are focused, good things can happen.
But it is a tougher environment because of liquidity out there, but we got our own.
My job is to worry about DISH.
This is <UNK>.
Obviously we've always expected to have competition in OTT.
I was a little surprised it has taken this long for (inaudible) to come in, but Sony is in today.
That's true.
My expectation really with OTT is its a new segment.
As long as we're performing well, right.
We need to perform well; we need to provide value to our consumers, that other entrants coming in will expand the market and even though we will lose market share, right.
Right now we have probably fairly material market share in it, but we will lose market share, but the market will grow faster and therefore we may grow faster.
So that is sort of ---+ if we look at new entrants and new markets that have developed that's historically what happens is it starts off slow ---+ development.
You get an S-curve adoption.
Others come in.
They grow the market faster, and then at some point you have a shakeup between the larger providers.
So we certainly expect competition.
We certainly expected at some point ESPN will launch with other providers.
I think the interesting dynamic will be the OTT players that come in that are outside that don't have material cost and infrastructure.
So even with Sony we don't have material cost and infrastructure.
They are going to have different motivations about content.
Amazon today makes no secret the fact that they sell ---+ they are trying to sell Amazon Prime and they use content as a way to sell shipping services and product, right.
For content that's a little scary because your product can get devalued because somebody wants to sell something else.
So if somebody wants to sell hardware, they might devalue ---+ and if they're outside the ---+ if they have no infrastructure then it devalues everybody who is invested in infrastructure, which is a slippery slope for our content provider to go.
And so I think that's the part that is most interesting to me to watch, will be who actually entered ---+ not only when and if somebody gets in, but who it is, and do they have infrastructure, or is there motivation to monetize something other than content.
Thanks.
Thanks, everybody.
Thank you, Operator.
