The DIRECTV-Dish Sale: Is It Too Late to Save DIRECTV?

By Phillip Swann
The TV Answer Man –Follow me on X.
Former editor of Satellite DIRECT magazine. Reported on DIRECTV for 30 years.

TV Answer Man, I agree that it’s necessary for DIRECTV and Dish to merge because the industry is falling apart. But I am wondering whether it’s too late. Can DIRECTV survive even with a merger now? This should have happened several years ago, don’t you think? — Mark, Baton Rouge, Louisiana.

Mark, DIRECTV announced this week that it was paying $1 to buy Dish, including its satellite service and its live streaming service, Sling TV. The deal also includes DIRECTV taking on Dish’s debt which is around $10 billion.

The sale, if approved by federal regulators, will give DIRECTV nearly 20 million subscribers with the two services combined (minus likely sub losses between now and the second half of 2025 when the feds are expected to rule on the deal.) That will make DIRECTV the largest multi-channel pay TV service in the nation, a weapon that can be used as leverage in future carriage negotiations with programmers.

DIRECTV CEO William Morrow says the Dish purchase will help DIRECTV reinvent itself by offering slimmer packages at reduced prices. But did it come too late for DIRECTV to survive indefinitely as a TV provider? The two companies have engaged in merger flirting for years as subscriber totals declined, but it took Dish nearing bankruptcy to actually make it happen. Did Dish acquiesce too late for the satellite TV industry as a whole?

It says here that the Dish sale should enable DIRECTV to be more competitive in the next several years. However, the satellite TV industry is in sharp decline thanks to the explosion of streaming services such as Netflix, Max, Hulu and Disney Plus. Consumers now prefer the convenience of watching a sub-$20 a month streamer over installing a dish on the roof and paying $100 a month. (Fancy that.) There’s still an audience for satellite in rural areas where Internet access is more limited, but even that will start to decline as government funded programs help eliminate the rural Internet gap. For the next handful of years, DIRECTV will be able to maintain a satellite audience, but it will also have to accelerate efforts to convert existing subs to streaming (DIRECTV Stream, DIRECTV Via Streaming) and attract new streaming subscribers.

By eliminating Dish as competition, and taking its subscribers to boost its negotiating power, DIRECTV will have a slightly bigger window to carve out a new niche in the industry. But with satellite TV soon to become a footnote in TV history, the time is short, perhaps just three to five years, before DIRECTV will have to make the transition to a largely all-streaming company. Prior to the Dish sale, I would have said DIRECTV had half that time to do it so that should tell you the importance of the deal.

Mark, hope that helps. Happy viewing and stay safe!

The TV Answer Man will answer more questions about the DIRECTV-Dish deal. If you have a question, send it to The TV Answer Man at swann@tvanswerman.com Please include your first name and hometown in your message.

The TV Answer Man is veteran journalist Phillip Swann who has covered the TV technology scene for more than three decades. He will report on the latest news and answer your questions regarding new devices and services that are changing the way you watch television. See the bio for Phillip Swann here.