Eyeing Ergen's Next Competitive Empire

Publish date:

EchoStar would like the cable industry to focus on its new “Aria” service, a content/technology package for small/medium operators that will debut at Cable Show 2011.

But most of the components in Aria are also the building blocks for a competitive consumer service that Chairman Charlie Ergen has assembled which could provide data and video broadband directly to homes nationwide.

EchoStar’s $2 billion acquisition of Hughes Communications (which closed this week) adds satellite bandwidth power to the arsenal of tools needed to create a service that could rival Netflix Plus and douse Amazon’s nascent video delivery plan, as my perceptive pal Robert Tercek, the consummate Hollywood insider, observes.

Earlier this year, EchoStar acquired Move Networks and its adaptive bit-rate streaming technology that can be used to integrate middleware, content management, subscription packaging, billing, and digital rights management. Added to its earlier purchase of SlingMedia (for Internet video delivery) and access to some Burst.com patents, EchoStar now owns the business components to create a national broadband programming network.

In recent months, Dish Network, EchoStar’s sister company, has bought Blockbuster with its vast video content supply relationships EchoStar acquired ). EchoStar has access to an existing customer base of millions of homes as the equipment provider for Dish Network.

Starting June 20, Dish will have a new CEO/president Joe Clayton, a seasoned executive with experience in consumer electronics sales and marketing at RCA, when that company controlled the TV set and VCR markets. Clayton more recently headed Sirius Satellite Radio (before the XM merger) and before built his telecom chops as president of North American Operations of Global Crossing Ltd., a job he got when Global Crossing acquired Frontier Corp., where he was president/CEO.

EchoStar’s assets - and Ergen’s ambitions - add up to a formidable opportunity in the consumer broadband sector. As the patent battles with TiVO and other confrontational moves have demonstrated, Ergen loves a good fight.

Aria seems like a good Trojan horse approach to get into the cable world (if anyone accepts the offer) while at the same time giving EchoStar time and experience as it assembles its competitive broadband venture.

Gary Arlen is president of Arlen Communications LLC in Bethesda, MD, and a long-time interactive TV enthusiast. Reach him at GArlen@ArlenCom.com