Echostar vs. DISH Network
As a longtime DISH Network® subscriber you might have noticed something strange about your equipment: It has the name “Echostar” on it. Since seeing that you’ve likely been curious what the connection between Echostar® and DISH Network is. You’ve likely asked questions like “Why have I always received Echostar satellite dishes instead of a DISH Network TV satellite dishes?”
Well, now that you’ve stumbled across this InternetLion.com page, you can finally find answers to such questions. The following sections will fully describe the historical relationship between Echostar and DISH Network for you and put to rest any confusion you might have over whether Echostar Communications Corporation founded DISH Network in Englewood, CO., or vice versa.
A Man Named Charlie
Everything we know as satellite television originally began with a man named Charles Ergen. The son nuclear physicist William Ergen and business manager Viola Ergen, Charlie grew up in Oak Ridge, Tenn., with a serious bent equal to that of his professional parents. Upon graduating from the University of Tennessee at Knoxville (BA) and Wake Forrest University (MBA) he initially tried his hand at card counting with friend Jim DeFranco. But after the pair got so proficient at sharping they were ejected from a Las Vegas Casino, Ergen quickly straightened up and turned his energies toward working as a financial analyst for Frito Lay.
And yet, ever the incorrigible risk takers, Ergen and DeFranco couldn’t help but team up again, along with Ergen’s wife, “Candy,” to found their own company. At the time, the U.S. government had recently deregulated the cable-TV industry, handing cable companies a stranglehold on many communities’ TV watching. Ergen, Candy and DeFranco realized that if they could viably compete nationwide with the period’s hundreds of mini-monopolies, consumers would jump at the chance to save on their subscription TV programming. And so, in 1980 the three founded Echostar.
Echostar’s original mission was to manufacture and sell C-band television systems to the scads of satellite TV hobbyist that were springing up across Europe and North America. Sick of paying cable’s exorbitant fees, these hobbyists would purchase and install their own dish antennae and run coaxial cable to tuner/receivers in their homes. They would then tap into the signals national networks like NBC and subscription-channel services like HBO would transmit to cable providers via C-band satellite.
Technically this was “stealing TV,” but satellite TV technology was so far ahead of its time in 1980 that no law yet existed to combat the theft. As a result, there was a high demand for cost-effective satellite TV equipment, and Echostar meant to fill that gap.
Of course, this liberalized system couldn’t last forever. Eventually, too many would-be cable customers were getting premium TV for no more than the cost of their Echostar systems and every cable TV provider in the country began crying foul. Seeing that soon the market they were servicing would legally close forever, then, the Echostar Communications Corporation decided to found DISH Network in Englewood, CO., as a satellite subscription service that provided an alternative to cable service.
Because Echostar satellite dishes were basically the original TV satellite dishes, the company already had the infrastructure in place to create its own subscription TV equipment. But before the company could go through with its new plan, it needed a license from the U.S. government to do so, and it needed to get its own physical satellite into orbit over North America.
The first of these requirements came before everything else, of course, because without government approval all fledgling satellite communications companies could count themselves out of the entire industry. Echostar played the game logically, then, and applied for its license, and in 1992 the Federal Communications Commission granted the company access to its first orbital slot at 119 degrees west longitude.
Now came the hard part for the Echostar Communications Corporation and its infant offshoot, DISH Network, in Englewood, CO. You see, Echostar’s DISH Network needed its own satellite if it was going to become the granddaddy of all satellite communications companies, and launching a geosynchronous satellite isn’t cheap.
Subsequently, Echostar Communications Corporation and DISH Network, both based in Englewood, CO., began hunting for investors. Considering Echostar’s licensing for its DISH Network project, this process snowballed, eventually drawing nearly $200 million in outside investments. Ergen himself had already raised $335 million in junk bonds for the project, but this extra infusion of cash drove Echostar/DISH Network’s total war chest into the $500 million range—more than enough to give the new subscription service a proper beginning.
The end result of all Ergen’s moving and shaking was the December 1995 launch of the first Echostar satellite, and with that its DISH Network project was underway; safely floating far above Los Angeles, EchoStar I was a massive success, and subscription TV would never be the same again.
Echostar/DISH Network: The Founding of an Industry
In March 1996 DISH Network made its first TV transmissions to subscribers, and the service soon became so popular it was pulling customers wholesale from traditional cable companies. And why not? With packages starting at just $19.99 per month DISH Network service was hard to beat.
But a delay in EchoStar I’s launch had also prevented DISH Network from being the “first to the moon” as it were. DISH Network’s competitor for years to come, DIRECTV®, had managed to get its service working two years earlier in its original incarnation, United States Satellite Broadcasting, or “USSB.”
As a result, the two satellite communications companies would duke it out over market share for nearly two decades. Sometimes DIRECTV would have an edge. But more often than not, DISH Network would come out the winner because USSB didn’t produce its own TV satellite dishes. It was therefore next-to-impossible for USSB to compete when DISH Network could sell its Echostar satellite dishes for far less—not having to purchase them as it were.
It seemed, then, that DISH Network was poised to become the final word in satellite television. In fact, in 2003 DIRECTV was so weak Ergen entered into negotiations with its owner to buy the company. The problem was that media mogul Rupert Murdoch also wanted in on the satellite TV game, and he aimed to get in by purchasing DIRECTV out from under Ergen.
There was a real problem with Murdoch buying DIRECTV—as he eventually did. You see, DISH Network’s edge of having easy access to Echostar satellite dishes would be challenged because Murdoch’s News Corp. could jack up rates DISH Network would have to pay to provide its viewers FOX brand programming. Ergen knew this and fought valiantly to bring DIRECTV into the EchoStar fold. But eventually Murdoch’s deeper pockets won out.
Still, old Charlie was able to use the confusion surrounding his and Murdoch’s bidding war to scare off DIRECTV investors and therefore lay DISH Network’s main competitor low. Without investors, after all, DIRECTV has less liquid capital, and as a result DISH Network could out-compete it in terms of pricing and advertising. Despite eventually losing the battle to Murdoch, Ergen’s savvy maneuvering allowed DISH Network to gobble up much of DIRECTV’s market share and forced Murdoch to have to pay more for an increasingly hobbled company.
Murdoch, however, has never been a man to trifle with, and after pulling his stunt Ergin found he’d made himself a lifelong enemy. What’s more, with a fresh infusion of Murdoch’s billions, DIRECTV came roaring back with a vengeance.
With this new, serious competition underway, EchoStar decided to spinoff DISH Network so it could hedge its bets and provide hardware to other subscription TV providers. Still, Murdoch was looking to settle the score with Ergen and as recently as 2010 used a minor advertising foul-up as grounds to raise the programming rates FOX brand channels were charging DISH Network.
This has put DISH Network between a rock of customer demand for FOX channels and a hard place of wanting to remain the cheapest satellite TV provider. But, even so, DISH Network is hardly down for the count. DISH Network remains the cheapest alternative to cable, and its exclusive relationship with EchoStar has ensured that it has all the cutting-edge hardware before DIRECTV.
EchoStar’s ViP922 Slingloaded DVR
EchoStar’s SlingBox, for instance, like the ViP922 Slingloaded DVR which is offered exclusively to DISH Network subscribers, was the first technology to allow TV viewers to watch and set recordings for satellite programming on their smart phones and laptops. With revolutionary technology like this and with DISH Network packages starting at a mere $24.99 per month ($5 less per month than DIRECTV’s cheapest package), Ergen has made sure that DISH Network is the better choice with better value. That’s one of the reasons why DISH Network is the fastest growing company in the pay-TV industry*.
Click here to learn more about the great benefits of switching to DISH Network today!
* Claim based on 2009 3rd and 4th quarter net subscriber additions comparing DISH Network, DIRECTV and major cable companies. DISH Network is a registered trademark of DISH Network L.L.C.
Disclaimer: Please note that this article was written when the satellite TV provider DISH was branded as DISH Network. As of 2/1/2012 DISH Network has changed their branding name to DISH. Article post date: 11/29/2010.