Can Dish bridge television and smartphones?
$22.5 billion in cash and stock. 32 percent ownership of a combined company versus 30 percent ownership of a single, smaller business. That's what Dish has offered to Sprint shareholders in its latest attempt to offer consumers broadband, wireless data, and television service in one comprehensive package, thereby bridging the gap between television sets and smartphones.
Video is, as Dish pointed out numerous times on a conference call this morning, an increasingly vital aspect of mobile computing. Verizon CEO Lowell McAdam claims that streaming video accounts for 50 percent of the wireless data used on Verizon's network. YouTube recently announced that it has more than 1 billion monthly users, many of which access the service via their smartphones; the service claims that 18 to 34-year-olds -- "Gen C" -- now watch YouTube-hosted videos on their smartphones as often as they do on traditional computers.
Dish wants to act as the bridgekeeper to all of that video-related goodness, and this morning's bid for Sprint is simply Dish's latest attempt to seize control of a wireless network provider. The company previously bid on Clearwire -- which, fittingly, was acquired by Sprint instead -- and is said to be shopping around for "every second- and third-tier US mobile carrier" in its attempt to buy someone, anyone, that will allow it to break into mobile.
The company argued this morning that a combination of its, Sprint's, and Clearwire's spectrum and technologies would make for a better video distribution platform than any offered by an existing company. Sprint (and, by extension, Clearwire) are able to freely distribute data amongst consumers in densely-populated urban environments, while Dish is better able to reach consumers out in the boonies.
But perhaps the most interesting aspect of Dish's plans for a combined Dish-Sprint is its utilization of its broadcast network, which it says could help improve video streaming on mobile devices by offering access to television programming and by replacing the smartphone's one-to-one data connection with a cellular tower with a broader, one-to-many connection between a broadcaster and all of its viewers.
Dish claims that this would not only ease congestion on a combined network, but would also allow customers to bundle their television service with their cellular service and watch videos without worrying about data caps and higher monthly fees. This would, in effect, break the content barriers between television sets and mobile devices, allowing Dish-Sprint customers to stream their videos and watch them too. (Or however that particular metaphor would work.)
Whether or not that would work would depend on a variety of factors: Sprint would need to nix its $20 billion deal with SoftBank and accept Dish's offer; the merger would need to receive regulatory approval; and broadcasters would have to support Dish and allow their content to be viewed on multiple platforms without requiring that customers jump through hoops.
Given the fact that CBS forced CNET to change its pick for best-in-show at CES 2013 from Dish's Hopper, which allows Dish customers to automatically skip commercials, and CBS CEO Leslie Moonves reportedly saying that "Hopper cannot exist... if Hopper exists, we will not be in business with (Dish)," and the continued opposition against Aereo, which makes broadcast television available on PCs and mobile devices, that support seems unlikely.
Dish makes a compelling case for a combined Dish-Sprint, and its plan to make it easier for consumers to watch videos on all of their devices, no matter where they are, sounds like a dream come true. But it's likely just that -- a dream, one prevented from becoming reality by the current state of both the wireless and media industries. As much as both Dish and consumers would like the walls between television and mobile to come down, acquiring Sprint in an effort to make that happen seems like a long-shot at best.
[Image Credit: Spinoff]