Dish Exploring Over-The-Top TV Service: CEO

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Dish Network is looking at the possibility of introducing some kind of Internet-delivered video service, CEO Joe Clayton said in an interview with Bloomberg.

"There's not a lot of infrastructure you have to put in place for this," Clayton said, according to Bloomberg. "The expense is the programming."

Last week, Verizon Communications president and CEO Lowell McAdam confirmed that the telco is interested in delivering an over-the-top offering, after reports surfaced that the telco was putting together a streaming-video service to challenge Netflix outside its FiOS footprint. "I think the jury is out, but I do think there is a place for over-the-top here, and it will be part of our strategy," McAdam said at the UBS Media & Entertainment conference.

In the Bloomberg interview, Clayton said, "If Verizon can do it, why can't we? Both of our companies buy a lot of content. That gives us some leverage."

This fall, Dish introduced Blockbuster Movie Pass, a hybrid DVD-by-mail and streaming service starting at $10 extra per month initially available only to satellite-TV customers. Non-Dish subs will be able to sign up for Blockbuster service soon, according to the company.

The Blockbuster Movie Pass service includes: more than 100,000 movies, TV shows and video games available by mail; 3,000 movies available on the TV; and more than 4,000 movies streamed to PCs. The service includes linear networks and online content from Starz, Epix and Sony Movie Channel.

Dish bought Blockbuster's assets for $234 million in a bankruptcy auction in April 2011.

As broadband speeds accelerate -- particularly from cable operators -- the stage is set for a major player to launch a "virtual MSO" service that will challenge incumbent pay TV providers with a lower-priced offering, BTIG Research analyst Rich Greenfield wrote in a blog last week.

However, Greenfield cautioned, a virtual MSO service would be unable to provide video quality on par with traditional pay TV. Furthermore, some programmers would refuse to license current content to an over-the-top service "out of fear of what the virtual MSO means to the established multichannel ecosystem."

Regarding the likelihood of Dish becoming a "virtual MSO," Greenfield wrote, "Charlie Ergen has already said his current business is in trouble longer-term. In turn, we view Dish (along with its recently acquired Blockbuster brand) to have a keen interest in a virtual MSO strategy."