Dish's Charlie Ergen Talks Ads, Cord-Cutting and Netflix
CNBC Media and Entertainment Reporter
Dish Chairman and co-founder Charles Ergen insists: "I don't want to kill ads, I think advertising is great." This support for Madison Avenue comes despite the fact that his company just launched a campaign for its controversial ad-skipping "Hopper."
Instead, he says he wants fewer, more effective and more expensive ads, to yield a better experience for consumers, and prevent cord-cutting and piracy. "I don't want to put my head in the sand," Ergen said at AllThingsD's "Dive Into Media" conference in an on stage interview with reporter Peter Kafka.
"The world is changing.... I don't, as a consumer, want advertising that's not relevant. If we're going to take a side let's take the side of the consumer," he said.
Ergen rarely conducts interviews, so it was a rare treat to hear him speak candidly on a wide range of issues, including some very controversial ones.
Ergen says "cord-cutting" is happening, but what he's really talking about is the fact that there's a whole generation of college kids that never have, and never will pay for cable.
"There's a reason tobacco companies give away free cigarettes on college campuses. I think we need to hook people on Pay TV when they're young and we're not doing that. If we don't we're going to get run out of town," Ergen said.
Competing with inexpensive services like Netflix and free services like Hulu and YouTube, not to mention piracy, makes Ergen eager to innovate: "I believe it's less risky long-term to embrace change. Then when you deal with change you have a couple choices; you can lead it and make the rules, or you can be a fast follower, or you can be a slow follower."
Ergen may not be advocating the elimination of ads, but he wants to overhaul the way broadcasters use advertising, arguing that just a few good, well-targeted, even Interactive ads, like those Hulu offers, would eliminate a huge amount of wasted, skipped ad time, and would prevent cord-cutting.
Cautious about predicting much innovation, Ergen said the leading contenders to undercut the $100-plus monthly cable bills are Google, Amazon, Netflix, Apple, Hulu, and Microsoft.
"My kids have one subscription to Netflix and they share the password. They get a lot of TV for that. They can go to Hulu if they want, they go to YouTube, and if the Broncos are playing - see them Sunday afternoon [to watch the live game on pay TV] and then they have an extra $100 bucks."
He praised Netflix, saying both it and Amazon can be successful, and he called Netflix's investment in "House of Cards" brilliant, adding: "I think they can change the paradigm, I'm a fan."
Where Ergen was optimistic, was the potential of wireless, and delivering video to mobile devices: "Your phone knows where you are, it knows what you spend money on, it knows when you go to the airport."
Combined with Dish's "hopper" technology, Ergen says the company has a winning combination.
He'd like to buy Clearwire for his proposed $5.15 billion bid, saying ideally Dish would be able to compete against AT&T and Verizon.
But Ergen says if the Clearwire acquisition doesn't go through, he has a plan B and many other backup plans after that.
He acknowledged that the company's wireless plans "haven't exactly gone as planned."
Apparently Dish bought Blockbuster in order to use its stores to sell its wireless products. Clearly that didn't work out, but Ergen says such things are part of its DNA: "We're a little like an Indiana Jones movie. We're always in trouble and we're always getting out of it. We're going from alligators to arrows, to snakes."