How much would you pay for a standalone streaming service from Dish Network that offers channels like Comedy Central, MTV, and The Food Network? It's worth thinking about since Dish Network is in talks with Viacom to offer a our dream of a standalone streaming television service, sources tell Bloomberg News's Edmund Lee, Alex Sherman and Mark Milian. If these talks end up going anywhere—a big if—Dish would provide some of its channels on the Internet for a fee that is presumably less than what it costs to get all of its channels. For people who don't like paying for a big bundle of channels, most of which they do not watch, this option is ideal. However, from what we've seen with similar propositions, it might cost more than subscribers are willing to pay.
Every month cable companies take all that cable bill money and pay it out to the content owners (like Viacom) for their channels. In the current set-up Viacom, makes around $3 per subscriber per month, according to analyst estimates. That would be nice and cheap for a streaming service. But, that's not where this calculation ends. Dish is also in talks with other non-Viacom channels, Scripps Networks Interactive, which offers the Food Network and HGTV, for this proposition, meaning if this went through, the company would have to give them some fee, too. Now, those numbers represent the current revenue with the current infrastructure. As The Atlantic's Derek Thomspon pointed out when doing a similar calculate for a totally improbable HBO Go service, costs will go way up for either Viacom or Dish if they decide to start a standalone service. "It would have to build its own streaming infrastructure. It would have to take over its own marketing. It would have to build a customer services team and a billing team," he wrote. So, we're looking at some number a lot bigger than $3 per month.
When asked what they would pay for HBO GO, people have said around $12 a month. Are Comedy Central's offerings, some of which are already online for free, like The Daily Show and The Colbert Report, worth as much as HBO's hard-to-find on the Internet stuff? Doubtfully. If you add the Food Network and MTV in does that push it up? By how much? GigaOm has put out a query to its readers. But, to put it in perspective: Right now you can get 120 channels for $25 per month (discounted from $45). At what price point does it make sense to splurge for the extra hundred channels?
This article is from the archive of our partner The Wire.