A third of the people who read this column don’t live in the USA so maybe this prediction isn’t interesting to them, but I think Apple will buy Dish Network, the American direct satellite TV broadcaster. It’s the only acquisition that will give Apple the kind of entry point they want into the TV business, allowing Cupertino to create overnight an over-the-top (OTT) Internet streaming video service — effectively an Internet cable system.
Buying Dish would be a bold move for Apple because all the benefits Cupertino seeks aren’t obviously available. True, Dish has 14 million U.S. subscribers (I am one of those) who get 100+ channels of TV from the sky. True, Dish has an existing OTT streaming service called Sling that already offers a subset of the company’s cable channels. But it doesn’t necessarily follow that Dish could simply transfer its satellite content to the Internet, at least beyond what it does already with Sling.
There is, however, a long tradition of brash TV operators being rewarded for their brashness. The heart of Ted Turner’s first fortune was WTBS, the UHF TV station in Atlanta that grew out of his family’s billboard business. Turner threw WTBS up on a satellite giving his episodes of All in the Family a national reach that to many didn’t seem to be supported by Ted’s syndication contracts. Still, WTBS is a success today, so it worked. And don’t forget how Netflix paid only $25 million per year to Starz back in 2008 for access to 2,500 Disney and Sony movies that would cost hundreds of millions today. Starz was Netflix’s streaming killer app. And Dish will be Apple’s because gaining access to all that content will be worth to Cupertino whatever it costs. Even if it destroys Dish in the process, Apple will succeed, which is exactly why they will succeed.
Dish is for sale. Every company is for sale but Dish is especially so following AT&T’s acquisition of Dish’s main competitor, DirecTV, last year for $48 billion. Apple won’t have to pay that much for Dish but they could. Each Dish employee represents only $800,000 in sales so many of those 19,000 workers will have to go. But if Apple outsources just satellite dish installation and customer support they’ll easily pull the revenue numbers up toward the target $2 million per employee.
One Dish employee Tim Cook will be sure to keep is CEO Charlie Ergen — a tough-yet-charismatic operator who built Dish from scratch and knows his industry. Apple won’t succeed without a Charlie Ergen at the TV controls. Ergen’s already a billionaire but he’ll stick around for a chance to turn TV on its head.
But acquiring Dish would do more than just turn TV and maybe movies on their heads, it would have an impact on mobile phone and data service, too. Dish is one of the largest owners of unused wireless spectrum that can be used as a bargaining chip in those content negotiations or possibly put Apple into the wireless data business. Dish also sells the Slingbox, which allows watching your cable or satellite content over the Internet, so there’s a patent-protected addition to the Apple TV available, too.
Apple wants in the content business but buying Time Warner (not Time Warner Cable) won’t do it. Apple needs hundreds of networks, not just 14 channels of HBO. In order to succeed Apple needs to acquire a company that has legacy rights to that content — rights that Apple can through sheer force of will ride for a year or two until the market transitions and cable TV starts to die.
Yes, Apple wants to kill cable TV. So do AT&T and Verizon. So do Microsoft and Sony. So did Intel until it gave up. The difference is that Apple’s deep pockets and Dish’s moxy can actually make it happen.
Why not SKY in the UK? They already have NowTV with rebadged Roku boxes.
Cringely, one year from today — Well, Tim Cook ate lunch off of a dish today, so I’m calling this prediction “close enough”. Another year of 80% prediction accuracy.
woww wonderfull
Name a previous major Apple acquisition that’s as provincial as Dish Network.
.
Here’s even the list: https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Apple
.
Not seeing it. Especially when China is poised to soon overtake the U.S. as Apple’s largest market.
TV is by nature provincial. Apple has to start somewhere, and what better place than its home market. Plus where else on the world could it get its foot in the TV door like this? Not China. While China may soon be Apple’s biggest market, it’s built on the “me too” sale of iPhones – it’s a market that follows, not leads, because nothing happens there without the Party’s approval.
Cell phone service is also provincial. So which carrier did Apple buy to get itself into its current position of capturing 90% of worldwide handset profits?
.
Strangely enough, people have (mostly) stopped calling for Apple to create their own MVNO, or buy T-Mobile USA or Sprint.
.
As for China not being a leader in anything, it’s dangerous and myopic to simply discount them like that. Wasn’t Japan discounted in the same way, in regards to cars and electronics, before they became a powerhouse and started leading in many areas? We can’t simply count on something like the various random factors that slowed Japan down around the mid-’90’s to do the same to China.
Dish? No way. Having a network is nothing…having content is everything. That’s why Netflix and Amazon are cooking up original content left and right. Dish may have content rights, but not for anything other than what they’re doing today…and they all expire. And the so-called “network” is pretty dismal. They should do the Time-Warner deal today.
Dish has the content that’s what Bob is saying. Dish has contracts for content already negotiated. So its an instant in for Apple to the content they need for their TV ambitions.
Michael – Dish doesn’t “own” content. They only have a TEMPORARY license to transmit it via one specific methodology.
Dear Mr. Cringe: looks like you need twice what Dish is worth …
https://www.nbcnews.com/business/business-news/satellite-tv-provider-dish-could-face-24b-fines-sales-calls-n502326
which, in case the article disappears, says “DISH Network Corp., on trial for violating national Do-Not-Call registry laws, could face up to $24 billion in fines — or about $1.5 billion more than the U.S. satellite TV provider is worth.”
yeah, that Charlie Ergen is too slick for anybody’s own good.
If that’s the case, the company should be free.
actually, Dish should pay for somebody to take them. there are lots more lawsuits where that is coming from. there’s a long history of bait-and-switch, funny charges, inability to cancel, and other nonsense in their past. now if Apple had gone after DirectTV, the whole theme changes… a better company, the first direct-to-subscriber satellite outfit, better sky position, and of course contracts with all the content guys you would ever want.
but if phone companies can lock the content up as well, it can’t be that hard to get a contract signed. Apple has the advantage of a LOT of customers to show it to. more than anybody, world wide.
Any deal that provides better competition to Charter, Time Warner Cable, etc is a plus in my book.
I just read an article on ars technica (http://arstechnica.com/tech-policy/2016/01/doj-and-4-states-want-24-billion-in-fines-from-dish-network-for-telemarketing/) saying Dish may be on the hook for $24 Billion in fines for telemarking to people on the do not call list. How would that play into this?
If they haven’t already, Apple should subtract the expected fine from whatever they valued the company at before the fine. It’s the same with any future liability, but this is high-stakes.
I’m not too sure of this one…
However, I suspect that Dish and T-Mobile will merge right after the next FCC spectrum auction. T-Mobile has a ton of midband spectrum which isn’t so good at mobile. It’s great for bandwidth and fast speeds, but has a heck of a time with wall penetration. Dish also has a ton of midband spectrum. Again no good for mobile, but has lots of bandwidth for high speed Internet.
So, let’s look at what we have. T-Mobile is waiting for the 600Mhz spectrum which will put it on par with AT&T and Verizon. Because T-Mobile is a small company, they have a bid advantage. Sprint, the other carrier who could possibly compete against T-Mobile has announced they’re sitting out the auction due to monetary concerns. Even Verizon and AT&T have threatened to sit out because of their bidding disadvantage. I assume that if the auction takes place, T-Mobile will get the mobile spectrum they need to compete.
However, that midband spectrum that T-Mobile and Dish have is interesting. Again, it’s great for bandwidth, but it has limited range and has a hard time penetrating walls. It’s bad for mobile because it’s likely you’ll end up with an area outside the range. But, what if you are talking about something that doesn’t move — like a house?
Midspectrum bandwidth would be great for home Internet. If you are in range (and 90% of the U.S. population is), you have access. The other issue is wall penetration. What if you could put some sort of antenna on your roof? You could then feed the signal into your home’s WiFi and stream — much like an AppleTV can. Now, all you need is someone who has experience on installing antennas on roofs — like Dish.
With all the midband spectrum between T-Mobile and Dish, I see a way of competing toe-to-toe with cable companies for Internet service. Dish’s satellites can’t offer triple play. Internet over satellite is slow. In areas where Dish offers Internet service, it’s through a DSL provider. T-Mobile has the towers that cover 90% of the U.S. population, and Dish and T-Mobile have the bandwidth to provide high speed Internet. A new nationwide Internet service that could be rolled out in a year. And, because it’s wireless, and the towers are already there, the cost would be very reasonable.
So far, FIOS and UVerse have been disasters for Verizon and AT&T. They’re still money pits. Verizon and AT&T have to build up their networks with no guarantee they’ll have customers. And, the cable providers can easily trim prices because they have much lower costs. This is why AT&T and Verizon have stopped expanding their networks. Wireless Internet have no such disadvantage.
If Apple was to buy Dish, it would be after T-Mobile and Dish merge. Then, Apple’s true cable service could be implemented with Dish’s contracts that allow Dish to offer all of the cable channels on a nationwide basis. That’s very important. Apple could have bought a tiny cable provider, but it’s likely the contract that cable provider has to offer content would have been geographically limited.
There are several questions. Would Apple spinoff T-Mobile’s mobile cell phone operations? It might make sense because it would prevent Apple from competing against Verizon and AT&T with iPhones. Then again, maybe it’s time to screw those two after all. People want an iPhone, they can go to Apple and get one stop service. No more buying an iPhone from Apple, and then trying to get a contract from a third party.
And, this would be U.S. only. Would this be a blueprint for other markets? Would Apple be able to penetrate Europe or China with the same idea: Buy up a provider to offer services if they had to do this for every single country. And, what would Apple’s cell phone service provider “Partners” around the world feel if they suddenly thought Apple may compete against them directly? They could start pushing Android over the iPhone.
I have one problem with this prediction – it is too logical, too much common sense. As I’ve observed Apple for the last 15 years or so they have a knack at not doing what is logical or makes common sense.
I just don’t see this. Content is a southern California obsession. Gadgets are the Bay Area obsession. I just think Apple is too much a Bay Area company, I don’t see them jumping into this kidney-shaped SoCal pool.
Do you think Apple would offer a la carte channel selection? Our family only watches 4 or 5 of the available hundreds of channels.
DISH is a horrible company. The technology is poor & their customer service service reps are rude and dishonest.
Apple would disgrace itself by being associated with them.
Anybody remember Leona Helmsley? She owned a chain of hotels and half the apts. in Manhattan. She’s been dead 8 years; if you type in Queen of Mean her name still pops up.
.
I imagine Apple would sooner buy Helmsley Hotels featuring Leona, were that possible, than a satellite TV company headed by another CEO who is equally reviled.
Imagine the possibilities if Apple bought the Dish Network! Apple could disrupt and revolutionize the kitchen industry. Apple branded serving products including bowls, dishes, finger bowls, mixing bowls, plates, platters, punch bowls, ramekins, salvers, saucers, side dishes, sugar bowls, tureens, and rose gold plated vessels designed by Jonathan Ive would raise the bar to a whole new level. The sleek and elegant design of the dishes along with dishOS 1.0 will make over eating the most satisfying experience ever conceived. Wow, I can’t wait to have my next Hot Pocket on an Apple designed dish!
.
The next logical leap is for Apple is to take over the cutlery market so they could be on the cutting edge.
I think Apple could get sliced and diced in that merger…
Not a merger, a straight up acquisition.
Let me simplify the terminology being used here. I would describe it as using the sous-vide method to cook pancakes. Num-num, eat up!
There is no way on gods green earth that Apple would sully their name and brand by attaching it to a current television provider. Not going to happen. They will work to disrupt the TV segment by working their own contracts and deals, not by taking over a business that is losing subscribers to cord cutters. Sorry Bob, I wouldn’t put any money on this one.
How does Apple profit from destroying cable TV? I could see them going to an on-demand model, but can’t the cable companies just do the same thing? And with streaming devices turning into sticks and being built into TVs, I don’t see much profit in Apple TV.
Apple profits from anything by selling for more than the cost of manufacturing/acquisition/programming/advertising. duh department, but yeah.
Apple’s modus de operandi is to create the market by either inventing something you didn’t know you needed/wanted, or turning the tables on a moribund industry by putting its wares on something you didn’t know you needed/wanted. faster, easier, better, smoother, distortion of reality, etc.
the trouble with getting into video programming has been “eh, youse-a got no sense coming onta my turf, capiche?” it took Stan Hubbard 15 years to get DirectTV into the air, and he was like this with RCA and scion of a pioneer broadcaster who knew all the industry. risked it all. ended up with $4.5 billion when he sold the rest of his stake to Hughes, who took over RCA’s satellite business and liked the satellite TV idea so much they financed the rest by taking ownership of the satellites and 3/4 of the transponders.
Ted Turner beat the odds by putting his little sky-high channel Atlanta TV station on a Satcom and letting cable TV outfits carry it for a nominal fee. one of the leaders in taking content up high in the first place.
it takes a cast-iron gut, determination, and changing the way everything is done to get this sort of disruption. something Apple has done almost every time they’ve gone up to bat.
they don’t need Dish. they just need what has probably been 10 years of schmoozing to come ripe. don’t forget, Apple and Disney are like this…
Re: “modus de operandi” should be “modus operandi”. Also, sentences should start with a capital letter.
You predicted Blockbuster would be using IPods in their stores for video distribution, and Blockbuster also had a deal with Sling…
I think it’s ridiculous to value a company for acquisition based on sales per employee. Most employees have nothing to do with generating sales. Far better to value companies based on likely future growth and profitability, dominant business model that would be difficult to duplicate, trade secrets, favorable relationships, and other factors. Actually, all the factors used by Warren Buffett would be a far better way to value possible acquisitions.
sales-per-employee is a shortcut to calculating overhead. it’s meaningful.
it is a complex calculation… you have both efficiency and margin represented by one number. so it’s sorta suspect, but no more so than EBITDBA.
Thanks for your reply, swschrad.
.
However, I don’t believe that sales per employee necessarily imply low overhead, high efficiency, or exceptional gross or net margin. To me it seems to appeal to an elitist corporate official to show how “superior” a particular company might be. However, since it cannot be related in any specific manner to current net profit or future growth possibilities, I still maintain that it is a meaningless number.
.
Let’s say I own a factory with 15 employees, and hundreds of robots that do all the work. My sales per employee are out of sight. What exactly does that number indicate?
.
Okay, my example is foolish, Thanks again for your reply.
Your example is excellent since the cost of the robots is out of sight, no doubt bankrupting the profit-less company, with huge sales per employee.
What about a prediction on when you’ll update on Mineserver? Bad news is better than no news! People on Kickstarter back projects to hear updates on progress, even if it’s bad. There are projects that may take over the time to deliver, but they deliver! Other projects go silent and steal the money and run.
No one wants to see this project fail. Many people backed the project because they believe in Robert Cringely. People are EXCITED but weeks and weeks of silence are killing it for people. We know you are busy. We know you are frustrated, but we the backers have NO IDEA what is going on. Let us encourage you! Let us let you know we understand but are waiting. DON’T just IGNORE the 388 backers you have on Kickstarter!
Could you commit to an update schedule? Say, every Friday, good or bad. News or no news, you publish an update. Or Sunday or whatever day is convenient. We’re not asking for product specifics. Just an IDEA of WHAT is going on!!!!
However, I think that the Mineserver is going the way of his moon project and foil based hard disks. A lot of initial hype and then no updates. At least his sons have learned how to “fake it until you make it”.
Thank you for updating the Mineserver project.
I don’t see this because Apple wants physical devices they can monetize as premium goods.
I know you’re thinking about Beats, but Apple needed its own streaming service and the headphones made it a great consumer product purchase.
Scott, Apple has this thing called the Itunes Store where they sell content such as TV shows.
Maybe Apple will buy Dish, keep the Dish Anywhere app and throw out the rest, or rather sell it to some telco.
Apple TV is sold to us Aussies as something that will give access to Netflix, plus they mention the other local equivalents. Apparently access to ITunes video isn’t desirable enough on its own, it is listed fourth. Is it similar in the USA? Cos if buying Dish will get Apple content to the beginning of the list, rather than the end, they might buy it.
I don’t get streaming as a service. it all goes away first month you don’t pay your bill. us old grey phartes, we like assets, not liabilities. and those headphones have nothing against a good set, like a Sennheiser or Grado or Koss.
Dishy getting fine 24 bill…. fat chance! Calling Rose at chow time doesn’t add up to that fig…..
Sir Sour Lloyd flings people out of there cribs and gets a f u bill for 9 bill… 4 bill for Dishy
This is my attempt at understanding:
Dish is unlikely to be fined for 24 billion dollars!
Making spam calls in the evening doesn’t warrant a 24 billion dollar fine.
Sir Sour Lloyd wakes people from sleep and gets fined 9 billion dollars, so 4 billion for Dish’s fine, is more in line.
Still don’t get the reference to “Sir Sour Lloyd”.
yes it does warrant $24.5 billion in fines. they are wantonly breaking federal law, and that of many states!
about time somebody big gets liquidated for this.
To be clear, I’m neither trying to agree or disagree with what Tony Pies said, just trying to figure out what he meant. The “Sir Sour Lloyd” reference still has me baffled.
More likely that T-Mobile will by Dish than Apple. It makes better sense, and Apples knows better than to try to get into that market. It’s better for them to lease or create something like Google Fi – which contracts TMobile and Sprint – than to get into it directly.
I think it’s more likely Apple would purchase Netflix. Dish is dying. It’s crap service on old technology from a crap company. It would be like buying the Pinto to get into the car making business.
Content is king. The method of getting it to consumers is becoming more and more ubiquitous.
We had a surge of M&A in 2015 which means it will most likely be a down market and less M&A activity in 2016. Perfect time for the smart people at Apple to scoop up Netflix.
http://fortune.com/2015/04/21/why-apple-should-buy-netflix/
I love your analogy. I owned a Pinto when I was in college. Mine had an “engineering upgrade” to the rear bumper. A few years later it took a 35 MPH hit to the rear and didn’t explode. In fact, the gas tank wasn’t touched.
my dour old-fart take on M&A is: evil crap dreamed up by M&A bankers to get commission and bonus money, and if the terms take out the clients, hey, I got mine. there are legitimate reasons to grow a company by adding another. there is no good reason for Bigcorp to buy Biggercorp for a one-time tax deal of $70 million. the M&A fees could be $250 million. yet a lot of that nonsense continues.
Bigcorp and Biggercorp wouldn’t pay the M&A fee if they didn’t expect to recoup it as a result of the deal. The high fee indicates that the deal must be worth much more to cover it.
Mineserver, mineserver, when will the promised mineserver be released. A billionaire strolls in amiss an hour late, but a Cringely more than a month? I begin to show concern that a law suit will become of this, as others have won such for late projects. You have our money, and thus this is becoming a robery rather than a crowdfunding.
Please deliver my dear Cringely.
Consequenses you face may not even shake the great Bill Gates, but you, you just don’t have the money to silence lawyers.
The prob with all this is the presence of huge platforms, with, on the other hand, all the potential, more now that ever, for, at the very least, many small providers. Why, after all is said, should a handful or one company control so much, ala Disney, Apple, Netflix, etc? Why so much under a small handful of Aegis’s? Mega-mergers themselves are so penultimately corporate they are antithetical to all the web stands for, if it EVER did in the first place.
While Netflix, Amazon, and others are developing their own content, control of so much, implied here by a Apple-Dish merger, would not only lead to more consolidation, but stiffle content and innovation. The issue is really supplying content itself, per who is creating it, and where it is going. Take away a small handful of corporate megahits(New Orange, GOT, HOC’s, and such), which amount to at most 25-30 “hits”, and sports(itself so corporate now that it has lost all meaning), and you really don’t have much, considering that 300 hours of YouTube video is uploaded in the world each minute. Now THAT is the real future of video, and that is in Google’s play, along with search. While that is corporate as well, for the time being anyway, it far more resonates with DIY video, trends such as mobile video “social media” apps such as Snapchat, and peer to peer communications. A mega merger of Dish/Apple still smacks of Marshall Mcluhan’s cold one-way media. Content created one-way push to consumers, no matter how popular the sport or show, is old school and soon to be dead. Only advertisers and wealthy stockholders should be worried, and rightly so, if consumers realize they are already creating their own content, infinitely more interesting than what is “created” by corporations, and can hack easily whatever IS created to share with each other. Music has just been through the ringer last 10-15 years with that, and is not the same after. The same will happen with video. Only saving grace is so few people can code, even now. If and once they do, and control content AND distribution(which they largely do already, at a precursor level), mergers of anything corporate will be meaningless. There is simply no way that can be held back, unless the masses never learn to code, and lose the ability to creat, which I hardly see, in an era when corporate content has devolved to “super-hero” pap and soulless sports, branded to the gills.
For every form of human activity, there are both professionals and amateurs, the difference being the professionals make money while the amateurs spend money on the activity. Democratizing exposure provides a greater opportunity for success, but not the guarantee.
Ronc, interesting, your mention of “success” here….
That’s really a basic question behind all this – Who benefits in consolidations? I can’t see how amateurs ever benefit at all from them in tech, especially information tech. There are only so many sluice-gates to open up.
I believe the goal is to be as kind and open to amateurs as possible, in any conception of “winning” at all. Much of that winning would include amateur “creative content”, and access to the same, at the very least.At the most, and ideally, “winning” would include open access/source to hardward and software that portals the system, along with free use of the bandwidth, itself still ultimately a publicly shared commons that is strangely enough allowed to be controlled by a few at the top(monied interests), like any public resource that gets metered and siloed.
The current mentality is to keep dig entertainment of all kinds top-down and metered, and keep the masses simple end-unit consumers only, with sluice-gate access controlled and metered, one way only if possible.
The Apple-Dish NW merger in question is still largely about increasing control to those sluice-gates, content and hardward/software both. There are indeed professionals, not all necessarily paid(the line can get blurred with open-course and such), in all endeavors, Ronc, as you mention, but the paid versions usually are the winners as well, not to mention the ones that ultimately control those activities(and sometimes, like FIFA recently, or Microsoft in the 90’s, they rightly implode, and control devolved back down to the amateurs again(to the web in Microsofts case).
I still hold out that the largest enemies of the mentalities behind mergers like this are the free control and access of amateurs to content, per creating it, sharing it, and even hacking the old-school kind(which comes in waves on the web, per Napster and such). What we are really speaking of is what is behind this merger, and others like it, which is the control of access to all sluice-gates, as tech invades and controls so many aspects of our lives, from Smartphones to Cars, to the I of Things. In that case, all mergers writ large will never stop the devolvement of control to the bottom-dwellers, as long as they learn to code, and realize their power to take back what is rightly theirs, and keep that access to themselves.
Wow, people connenting in here really need to read up on these companies your talking about. Most have no idea what their talking about, t mobile and dish. Yes perhaps. Apple no. Dish antiquated and dead.. No. They are in the best position with spectrum and the best technology also with the new smart home services and getting into home automation.. Dish needs a merger for triple play with existing provider, then comes the value
very nice
[…] plans to buy Dish (although I doubt it). In January, pundit Robert X. Cringely predicted in an I, Cringely column that Apple will buy Dish Network, the American direct satellite TV […]
[…] this year, Robert X. Cringely predicted that Apple would buy Dish, […]
[…] this year, Robert X. Cringely predicted that Apple would buy Dish, […]