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News Analysis
Can HDTV Save EchoStar?
Two recent court rulings could cost the satcaster hundreds of thousands of customers.
By Phillip Swann

Washington, D.C. (August 23, 2006) -- EchoStar's Dish Network now has 30 national High-Definition TV channels, more than any other TV provider.

And it might need every one of them to keep its subscription base from falling like a rock.

Why?

EchoStar suffered another legal setback yesterday when the Supreme Court rejected its request for an emergency stay on a court ruling ordering it to stop providing 'distant' network signals to subscribers outside of their home market.

The decision will likely force the satcaster to turn the signals off as early as today. Hundreds of thousands of EchoStar's subscribers stand to lose their network feeds. (The company has approximately 12 million subs.)

While the company hopes to overturn the decision when the Supreme Court hears a separate appeal in the case, the order to pull the plug (even temporarily) could drive some subscribers to drop EchoStar and sign up with DIRECTV or a local cable operator.


Could HDTV keep EchoStar's customers from running?

EchoStar's legal woes actually began last week when, in a separate case, a Texas district court judge ruled it  must discontinue DVR (Digital Video Recording) service to millions of customers in 30 days because it infringed on patents held by the DVR company TiVo.

The satcaster won a temporary stay of that order shortly after the Texas decision was announced. However, it could still lose the case in appeal. If so, EchoStar would have to quickly sign a costly licensing agreement with TiVo or risk losing a large percentage of its DVR customers.

Even if EchoStar ultimately prevails in both cases, the  succession of bad news will likely hurt its subscription efforts for the rest of the year. Many consumers will hesitate to sign up for EchoStar until it's abundantly clear that the satcaster can offer both DVR service and, in some cases, local signals.

Which brings us to HDTV.

EchoStar's high-def lineup is very impressive, especially compared to rival DIRECTV, which offers fewer than 10 national HD channels. The satcaster may be able to keep current HDTV subscribers -- and attract some new ones -- by emphasizing its position as the industry's HDTV leader.

Consequently, look for EchoStar to add even more high-def channels in the coming weeks and months.

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Phillip Swann is president and publisher of TVPredictions.com. He has been quoted in dozens of publications and broadcast outlets, including CNN, Fox News, Inside Edition, The New York Times, The Washington Post, The Chicago Tribune, The Financial Times, The Associated Press and The Hollywood Reporter. He can be reached at swann@tvpredictions.com or at 703-505-3064.

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