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News Corp. withdraws Hughes bid, will E* get DirectTVby default?
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Posted by: MighTiVo

http://www.msnbc.com/news/648800.asp?0na=2103220-

DETROIT, Oct. 27 — News Corp. on Saturday withdrew its long-standing offer for General Motors Corp. subsidiary Hughes Electronics after the automaker’s board of directors failed to make a decision on the deal.

And what would E* buying DirectTV do to TiVo?

Posted by: samo

If (and it is a big IF) E* buys DTV, according to Charlie Ergen all DTV receivers will be phased out in 4 years. They will be replaced by E* or compatible receivers that will utilize Nagravision encryption to combat piracy. There is nothing for TiVo owners to worry about because estimated life of TiVo units is about 5 years.

Posted by: DBCooper

And if you believe anything that Samo says, go get your head examined.

Posted by: samo

I'm not going to reduce myself to an argument with ignorant fool, but for people who may question a source of my statement in this thread, here is the link http://media.corporate-ir.net/media...0806/sld015.htm

Posted by: rasheed

I just don't see a merger like this getting approved, even in this current administration.

Regardless of how good/poor a merger would be for TiVo DTV users, I felt a News Corp. merger could go through.

Rasheed

Posted by: ehopper

quote:
Originally posted by DBCooper:
And if you believe anything that Samo says, go get your head examined.

Samo's information has been quoted various places.

I do believe that "Madman Charlie" will find migrating the DTV customer base will not be that easy. If I feel disrespected or manipulated, I will explore other options. I have two different digital cable providers calling me regularly.

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Tivo since 11/99!!
Ultimate TV: From the same people who make the Code Red worm possible

Posted by: samo

Just an update http://dailynews.yahoo.com/h/nm/200...ughes_dc_7.html
Looks like Charlie going to get what he wants.

Posted by: DCIFRTHS

I'm confused...has there been any announcement that the Direct TV TiVos will go away after the merger?

quote:
Originally posted by samo:
Just an update http://dailynews.yahoo.com/h/nm/200...ughes_dc_7.html
Looks like Charlie going to get what he wants.

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DCIFRTHS -- if you can.

Posted by: samo

NO! Not for at least 4 years AFTER the merger is approved (if it gets approved). All that was proposed is a hardware swap over 4 years at estimated cost to E* of $2.5B.

Posted by: DCIFRTHS

A hardware swap is quite ambiguous. I think it could go either way...

Form many reasons, I hope the deal doesn't doesn't get approved.

quote:
Originally posted by samo:
NO! Not for at least 4 years AFTER the merger is approved (if it gets approved). All that was proposed is a hardware swap over 4 years at estimated cost to E* of $2.5B.

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DCIFRTHS -- if you can.

Posted by: Bsteenson

Here's what AP says:

GM Agrees to Sell Hughes to EchoStar

By ED GARSTEN
AP Auto Writer

DETROIT (AP) -- General Motors Corp. on Sunday agreed to sell its Hughes Electronics subsidiary and its DirecTV home satellite network to EchoStar Communications for $25.8 billion, the automaker said.

GM's board of directors decided to sell to EchoStar after News Corp. dropped out of the bidding Saturday. If approved by regulators, EchoStar's purchase would make the home satellite business in the United States a near monopoly.

Under terms of the deal announced in a news release, GM would technically spin off Hughes and merge it with EchoStar in a tax-free transaction.

An EchoStar representatives was not immediately available for comment.

The new company would be called EchoStar but would market its service under the DirecTV name. GM shareholders still have to approve the deal, which GM said it expects to close in late 2002.

EchoStar, of Littleton, Colo., is offering 0.73 EchoStar shares for each share of Hughes. Based on EchoStar's closing stock price Friday of $25.26, the deal values each share of Hughes at $18.44 -- a 20 percent premium to Hughes's closing share price of $15.35.

News Corp. chairman Rupert Murdoch withdrew his company's long-standing offer Saturday after GM's board failed to reach a decision on the sale.

The two companies had been in negotiations for more than 18 months, and Murdoch sorely wanted to make Hughes Electronics, and especially its DirecTV home satellite unit, part of his international media empire.

``Hughes would have been an excellent strategic fit for our global platforms, and we are disappointed with the board's inaction in the face of an as-yet unfinanced counter proposal,'' Murdoch said in a statement.

EchoStar entered the picture this summer with a proposed stock swap and assumption of almost $2 billion in debt for Hughes and its DirecTV division, which has 10 million subscribers. EchoStar also had guaranteed GM a $500 million breakup consideration if regulators reject the deal.

EchoStar operates Dish Network, a distant number two among satellite television providers with 6.7 million subscribers. A merger of the two services would give the company a stronghold on the home satellite television business in the United States.

While it was still in the hunt for Hughes, News Corp. noted that regulators are sure to scrutinize any deal with EchoStar to ensure competition remains in the satellite television market.

Last week, the president of the National Consumers League wrote a letter the Federal Trade Commission and the U.S. Justice Department asking both agencies to look into the possible implications of an EchoStar takeover of DirecTV.

``This would almost certainly lead to reduced competition, higher prices and poorer service for millions of consumers,'' wrote National Consumers League president Linda Golodner.

A GM spokeswoman had said the automaker's board would consider regulatory issues in making its decision.

GM was anxious to sell off Hughes in order to focus more fully on its core automotive business.

Despite its market-leading position with DirecTV, Hughes lost $227.2 million in the third quarter and $481.6 million through the first nine months of the year. The company announced plans in August to lay off 10 percent of its 7,900 workers.

Last May, Hughes chairman Michael Smith abruptly resigned and was replaced by GM vice chairman Harry Pearce. The move was seen by industry analysts as a move to bring negotiations with News Corp. to fruition after months of fits and starts.

BS

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TiVo is no BS

Currently enjoying:
103-Hr 2.5.1
30-Hr 2.0.1

Posted by: DJRobX

We have a lot of reasons to be concerned over this. Sure, DTV hardware may be phased out over "4 years", but phasing out usually entails not phasing old stuff in.

No DTiVo could be bad for TiVo, Inc, and we really want TiVo, Inc to survive to keep our beloved boxes happy and fed.

-- Rob

Posted by: Xaa

There is no reason to believe they won't keep Tivo around. DirecTV has a big stock interest in Tivo. As we believe that Tivo is the best of the three satellite combo boxes, I think they are in good shape.

Additionally, Dish does not charge for PVR service with the 501, and Tivo, UTV along with DirecTv have proven that customers will pay for it. I think there is a better than even chance that if they decide on just one in the future that it will be Tivo.

Anyway, It'll be more than a year before the deal is even done and there is also a good chance it won't go through. I don't see it as a monopoly, because the true industry is television service and I see plenty of competition from cable. If the FCC sees it only as Sat TV, then there might be issues.

Xaa

Posted by: Xaa

quote:
Originally posted by DBCooper:
And if you believe anything that Samo says, go get your head examined.

Where's a good shrink. I belioeve most of what Samo says as he rarely (if ever) speaks without the facts. I for one have appreciated Samo's insight and posts for more than two years now.

Maybe I'm nuts??!!

Posted by: mbklein

quote:
Originally posted by Xaa:
I don't see it as a monopoly, because the true industry is television service and I see plenty of competition from cable.

What competition is there in rural areas not served by cable? Even in those places that do have cable, the choice is between a single cable provider, DTV, and E*. 3 choices makes for much healthier competition than 2 choices.

Michael

Posted by: BrettStah

Assuming this deal does finally go through, do you guys think it will mean that the combined company will be able to offer local channels to more markets? It would seem so, but I don't know if there are any technical reasons the existing satellites couldn't be used for this...

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Brett

Even though I was their captive, the Indians allowed me quite a bit of freedom. I could walk freely, make my own meals, and even hurl large rocks at their heads. It was only later that I discovered that they were not Indians at all but only dirty-clothes hampers.

Posted by: interactiveTV

quote:
Originally posted by Xaa:
There is no reason to believe they won't keep Tivo around. DirecTV has a big stock interest in Tivo. As we believe that Tivo is the best of the three satellite combo boxes, I think they are in good shape.

Sorry but any ownership in a $230 million company doesn't even register in a $25 billion transaction. I will guarantee that the word "Tivo" has not come up in these negotiations. Also, the Dish PVR has been a pet Charlie project.

quote:
Originally posted by Xaa:
Additionally, Dish does not charge for PVR service with the 501, and Tivo, UTV along with DirecTv have proven that customers will pay for it. I think there is a better than even chance that if they decide on just one in the future that it will be Tivo.

They might have proven that SOME customers will pay for it, but not a whole hell of a lot. I look at the current state of the PVR industry and I see what looks like a dud. Don't get huffy about that. I'm a big believer in PVR and my employment in life is somewhat connected to the industry. However, that said, take rates are pretty damn lousy. No one has proved that a monthly PVR fee is the future. And, fee or no fee, it doesn't speak to Tivo which is capable of moving to a no fee system itself if it so chose.

quote:
Originally posted by Xaa:
Anyway, It'll be more than a year before the deal is even done and there is also a good chance it won't go through. I don't see it as a monopoly, because the true industry is television service and I see plenty of competition from cable. If the FCC sees it only as Sat TV, then there might be issues.
Xaa

The FCC may have something to say but the FTC will most likely lead the charge. Personally, I do see it as a monopoly and something that will end up costing DBS customers money. I have cable and no DBS choice where I live (no southern exposure) so I won't feel it but I would wager that like all unregulated monolopolies, the fees creep ever higher. Such is life.

This deal is so far from done it isn't even funny. We've got a long way to go and a short time to get there http://www.avsforum.com/ubb/smile.gif

One thing though: theorize about Tivo's place in this uncertain future but Hughes and Dish aren't even considering Tivo. There are bigger, more important issues that are critical to this even happening.

Tivo needs a good lobby firm and fast. Best way to ensure "choice" in DBS PVR is through some rattling down in DC. Big issue will be access billing. Direct connection to customer and unified bill is a biggie. Will cost some money, but will be well spent. And of this, I know of what I speak.

_ITV

Posted by: Otto

Even assuming the deal goes through there's no reason to think that they'll try to replace DirecTV systems with DishNetwork systems. They're technically very different, and changing over the backend is such a massive job that I'd be amazed if it could be done in 8 years, much less 4.

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All comments made in this post are my opinion and my opinion alone. Deal with it.
Otto, Zen TiVo Master - Moderator - AVS Tivo Forums - Tivo Underground, Tivo Coffee House
"The way of the portable computer user is as a stony path strewn with plugs and sockets, all the wrong size..." -- Terry Pratchett

Posted by: mwarner

quote:
Originally posted by Otto:
Even assuming the deal goes through there's no reason to think that they'll try to replace DirecTV systems with DishNetwork systems. They're technically very different, and changing over the backend is such a massive job that I'd be amazed if it could be done in 8 years, much less 4.

But don't you think they would? Dish makes all its own hardware. Why support two very different platforms when you can support one that you make yourself? I do agree that it is a massive undertaking to swap out millions of boxes. I don't want to be involved in that. http://www.avsforum.com/ubb/smile.gif

-Matt

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Standalone Tivo V2.5.1
Dish Network Model 4900

Posted by: andyf

Oh God, I can see it now. Echostar offers to replace all DirecTivo's with PVR501 or PVR721s. Bugs an'all.

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Andy

Posted by: dslunceford

I'm up in the air on this. I've been a loyal Dish subscriber since the beginning, but would hate to see the variety of hardware that DirecTV provides go by the wayside.

The argument to Justice will center around the sat industry's ability to compete effectively against the cable industry -- E* and Hughes will argue that a strong national competitor with national pricing is the only way to make a dent against the cable monopolies in various markets. I really don't think we'll see too much pushback from the FCC; Justice is where things will get sticky -- the DOJ typically hates to reduce competition, as it's seen as a minus to consumers; it's taking away an option they previously had. But if the combined entity could promise some sort of national price guarantees and convince that the economies of scale from combining operations would allow reduction in pricing, better programming/service compared to a cable industry that has been jacking up prices fairly indiscriminately, they have a shot.

On the hardware issue, I simply don't know where E*'s head is. Are they making a profit on producing hardware? Or is it like the game console industry, where hardware is a loss leader to get people back for the MRC (monthly recurring charge) and lifetime value/income stream? If (as I suspect) it's a loss leader, E* could abruptly shift strategy to take advantage of the partnership deals and third-party hardware contracts that DTV already has in place, opting instead for a small licensing slice for each unit sold and focusing profits on subscriber growth and package/content level upsells.

If things go that route, then we could see the end of the Dish PVR series and greater growth for integrated TiVo and UTV devices. Or, you could see TiVo and UTV go by the wayside as E* promotes their own boxes. Who knows? Too early to tell, and I'll bet that vary little brainpower at E* will be devoted to this except at a very macro level and in relation to getting the deal done.

From this day forward, their energies will be focused on one thing alone -- GET THE DEAL DONE.

As someone who worked on one of the biggest rejected mergers of late (Sprint/WCOM), I know first-hand how you can have a great argument that makes sense to everyone in the industry, yet the government will still be dead against it. This one will be a test to see how much, if at all, attitudes have shifted within the DOJ under the new administration.

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--Steve
BrainStorm PR

My DVD Collection

Another thought, maybe now TiVo will get crackin' to have 4-digit channel changes working!! http://www.avsforum.com/ubb/biggrin.gif http://www.avsforum.com/ubb/biggrin.gif

[This message has been edited by dslunceford (edited 10-29-2001).]

Posted by: MighTiVo

quote:
Originally posted by Otto:
Even assuming the deal goes through there's no reason to think that they'll try to replace DirecTV systems with DishNetwork systems. They're technically very different, and changing over the backend is such a massive job that I'd be amazed if it could be done in 8 years, much less 4.

Charlie is on record saying he would do just that. He thinks the DirectTV system is flawed and too easily compromised by pirates.

Posted by: arjay

Of course this is all speculation and the deal may never get consumated. It it goes through it won't be completed for years.

Undoubtedly there'd be a fairly long interim period during which both satellite providers would continue to operate separately. Then CS and billing would merge while the technical sides would remain separate.

Actually I'd love to see a perfected 721 receiver/recorder with dual tuners, simple features, no phoneline requirement, no (aggregate) data sampling, and no fee go up against a DBSTivo with its sophisticated features, fee and phoneline requirements.

Betcha' there's room in this market for both recorder's business models.

[This message has been edited by arjay (edited 10-29-2001).]

Posted by: Michael R

Currently there is a huge amount of local into local duplication as well as obviously a huge amount of cable channel type duplication on the DirecTV/DISH satellites. With a combined company Charlie will easily be able to add large amounts of local shop at home and religious channels <G>. The DISH system is DVB MPEG-2, a world standard satellite broadcast system. DirecTV uses what I call a MPEG-1.5 system, which we all know has been hacked to death. On balance, from a satellite bandwidth point of view, this merger makes great sense. I just pray that Charlie keeps the DirecTV music channels. They are a lot better than the DISH music channels IMHO. Meanwhile enjoy your DirecTiVo's before they, someday, become doorstops.

quote:
Originally posted by BrettStah:
Assuming this deal does finally go through, do you guys think it will mean that the combined company will be able to offer local channels to more markets? It would seem so, but I don't know if there are any technical reasons the existing satellites couldn't be used for this...

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HDR31204 original w cable/DTV & 2.5.1
The fittest shall survive yet the unfit may live. 

[This message has been edited by Michael R (edited 10-29-2001).]

Posted by: arjay

quote:
Originally posted by Michael R:
Meanwhile enjoy your DirecTiVo's before they, someday, become doorstops.

But don't hold your breath waiting and worrying.

At least Charlie Ergen is a homegrown zillionaire who's politics revolve around technical issues and making money. Rupert Murdoch is from overseas and while he's also good at making money he appears to have more overt political motives for many of his enterprises.

I don't like this proposed deal but there's not much we can do about it. I suppose you can write your congressperson and see who's on the committee which will review this.

Posted by: arjay

Depending how it all works out the new DBSTivo's may actually still be called DirecTiVo's.
http://www.hughes.com/ir/pr/01_10_28_talks.xml

"EchoStar and Hughes have pledged that the merger would not cause disruption of service or additional expense to existing customers of either DIRECTV or DISH Network service."

[This message has been edited by arjay (edited 10-29-2001).]

Posted by: BadAstronaut

So, are we all relatively confident that this won't ruin or (further) delay the launch of the spot-beam satellite this month?

Posted by: mwarner

quote:
Originally posted by BadAstronaut:
So, are we all relatively confident that this won't ruin or (further) delay the launch of the spot-beam satellite this month?

I would think that they would launch it on schedule. Doesn't DirecTV have a spot beam in the works as well? They'll be able to use those for locals no matter what. In the event that they do merge the systems, they could use the extra transponders for HDTV and other niche services. I don't think you'll hear Charlie say, "Nah.. we've got enough bandwidth in space already."

-Matt (my $0.02 worth)

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Standalone Tivo V2.5.1
Dish Network Model 4900

Posted by: alexcue

quote:
Originally posted by BadAstronaut:
So, are we all relatively confident that this won't ruin or (further) delay the launch of the spot-beam satellite this month?

Great question, i've been wondering this myself. I want my local UPN so i can finally get rid of cable. The funny thing is, if E* makes me get rid of my Dtivo's I'll probably go back to cable.

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Most toys wins!!!
30hr Philips SA Tivo
14hr Philips SA Tivo
35 hr Philips DTivo
96 hr Philips DTivo
126hr Philips DTivo

Posted by: arjay

The timeframe for changes on this merger deal is years. Nothing's gonna' change next week, next month, and probably next year.

This may be a win win deal for everyone.

Posted by: interactiveTV

quote:
Originally posted by arjay:
The timeframe for changes on this merger deal is years. Nothing's gonna' change next week, next month, and probably next year.

This may be a win win deal for everyone.

Well, the close of the transaction is slated for year-end 2002, but actually, the two companies could start to integrate well before then.

Certainly, I would expect -- if Dish so wishes -- that new hardware introductions on the Direct side start to taper off real soon...a clearing of inventory and a sales shift to Dish product versus Direct. You could see that starting in the retail lull known as February.

In terms of everyone winning, I'm not so sure consumers will win here. I see higher prices in the future. Certainly, those first subscription deals (like Dish is running now) would go by the wayside. increased bandwidth sure is nice and those in AK might now get local stations, but choice and competition will be limited.

We'll have to see what pans out, but personally (and the professional opinion is different! http://www.avsforum.com/ubb/wink.gif ) I think this ends up costing consumers money.

_ITV

Posted by: arjay

quote:
Originally posted by interactiveTV:
I would expect -- if Dish so wishes -- that new hardware introductions on the Direct side start to taper off real soon...a clearing of inventory and a sales shift to Dish product versus Direct

You bring up valid concerns.

Certainly I'd expect a version of DirecTiVo in the future; otherwise there'll no doubt be revolting developments!

(I'd hate to see the more radical fundimentalist elements within the TiVo Army begin the development of a rocketry division to blow 'em out of the sky!)

[This message has been edited by arjay (edited 10-29-2001).]

Posted by: BrettStah

About the possibility (or probability) that prices would increase due to lack of competition:

Since they will still have to compete with the cable companies in the majority of the country, wouldn't a simple restriction that forces them to have the same fee regardless of the location of the customer counteract their ability to jack up the price on rural customers not served by a cable company?

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Brett

Even though I was their captive, the Indians allowed me quite a bit of freedom. I could walk freely, make my own meals, and even hurl large rocks at their heads. It was only later that I discovered that they were not Indians at all but only dirty-clothes hampers.

Posted by: MighTiVo

quote:
Originally posted by interactiveTV:
In terms of everyone winning, I'm not so sure consumers will win here. I see higher prices in the future. Certainly, those first subscription deals (like Dish is running now) would go by the wayside. increased bandwidth sure is nice and those in AK might now get local stations, but choice and competition will be limited.
_ITV

Why are you certain? Dish sees cable as its biggest competitor. Note the commercials they run have never been geared to people converting from the other provider, they are geared twords those with cable service.
I did indeed just get a great Switch to Dish(from DirecTV) deal, but it was a deal offered by a reseller and was not available directly from Dish or from any other reseller.

Posted by: jhstn58

Four years is a lifetime in this business. How many of us owned a DTV receiver four years ago? I know none of us owned a PVR. Assuming the merger goes through, four years from now, EchoStar will be offering as standard fare new hardware we we could only imagine today. My guess is, PVRs will be a part of just about every type of receiver available in four years, or at least an optional feature. Being the owner of two lifetime subscriptions to Tivo proves my judgment is not always the best, but if I get four more years out of my current hardware I will be pleasantly surprised that I got my money's worth.

As for the competition, the cable companies will certainly make a run at the business and don't count out Bill Gates. If there is a opening, someone will jump in. Nature abhors a vacuum.

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Rough business this movie business. I may have to go back to loan sharking for a rest.

Check out my DVD list: Jim's DVDs

Posted by: arjay

quote:
Originally posted by BrettStah:

Since they will still have to compete with the cable companies in the majority of the country, wouldn't a simple restriction that forces them to have the same fee regardless of the location of the customer counteract their ability to jack up the price on rural customers not served by a cable company?

Charlie Ergen mentioned uniform nationwide fees as part of the merger's regulatory strategy in an interview today.

Still cable fees are usually higher than satellite fees. Over time there might be a levelling out between cable and satellite pricing.

Prices are gonna' rise over time; the question is how much?

Maybe there'll be good promo deals on those brand new MPEG-2 system DirecTiVos for awhile.

In fact why doesn't Echostar just pick up the TiVo Company with the change left over from the DirecTV deal? They'd like TiVo if they owned it. TiVo comes with an accomplished fully professional software team which apparently gets the stuff working right the first time.

Posted by: HTH

quote:
Originally posted by arjay:
In fact why doesn't Echostar just pick up the TiVo Company with the change left over from the DirecTV deal? They'd like TiVo if they owned it. TiVo comes with an accomplished fully professional software team which apparently gets the stuff working right the first time.

They already argue that DirecTV's system isn't secure from piracy. Do you really want them to buy up TiVo with how much we've hacked TiVos? DirecTV's hold on the security of the DirecTiVo will be nothing.

And would those of us with standalones really want TiVo taken over by a company with only satellite interests?

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http://www.war-of-the-worlds.org/tivo/HTHb.gif

There is no spool.

Posted by: samo

Besides, if E* ever wanted Tivo technology, they could always get the license much cheaper than a whole company. Problem is that E* doesn't want any part of TiVo technology.
They use different philosophy, and so far it works very well for them. They are leader in a number of units placed and as far as E* is concerned they already have basic PVR functionality and trivial things like search or automated recordings they can always add later at fraction of the cost.

Posted by: arjay

quote:
Originally posted by HTH:

And would those of us with standalones really want TiVo taken over by a company with only satellite interests?

Good point!

So who else gotta' lotta' dough?

AOL stuff appears to work very well but they're so pushy with their never ending promos. Another big company you love to hate!

Posted by: MighTiVo

Long road ahead for EchoStar merger http://news.cnet.com/news/0-1004-20...eed..ne_7707895
The proposed $25.8 billion deal between DirecTV parent Hughes Electronics and EchoStar Communications, which would create a satellite TV company bigger than any cable TV rival, is already fanning the flames of consumer discontent.