Q. I read that DIRECTV is shutting down its satellites. Does this mean that DIRECTV is going out of business? How about Dish? Will it go out of business, too? I don’t want to watch TV on the Internet! — Marie, Lothian, Maryland.
Marie, DIRECTV is not shutting down its satellites. AT&T, the owner of DIRECTV, recently said it would not order any new satellites in the future to replace ones that fail. That’s quite different from shutting them down at this point.
AT&T doesn’t plan to launch new satellites because it’s seeking to transform its TV business to an all-streaming one, which would be less expensive to operate. However, with roughly 20 million customers now owning satellite dishes, it will take years to convert those people to streaming.
And if AT&T tried to accelerate the switch, it’s likely many of its satellite subscribers would balk and switch to other pay TV providers such as their local cable service. AT&T can’t afford to lose more TV subscribers so it will have to guide the transformation carefully.
But that said, it is clear that AT&T no longer believes in the satellite TV model. Company executives have concluded that the cost of launching, and maintaining, satellites to send TV signals to the home is an antiquated business model.
Consequently, AT&T in 2016 started DIRECTV Now, the live streaming service, and it plans to launch a set-top in 2019 that will stream DIRECTV’s entire lineup to the home.
As for Dish, Charlie Ergen, its irascible but brilliant chairman, has yet to issue a similar blanket statement in regards to future satellite launches. However, the company has also launched a live streaming service, which is called Sling TV, and it would certainly like its satellite customers to switch to streaming over the course of time for the same economic reasons.
But like DIRECTV, Dish can’t change course overnight. So, Marie, satellite TV is not dead. You could argue that its days are numbered, but that number is still relatively large.
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— Phillip Swann