Dish Network will in some ways be the most interesting company to watch over the next several years in the crowd that includes AT&T, Verizon, DirecTV, Dish Network, Comcast (News - Alert), Time Warner, Cox Communications, Qwest and possibly a few others.

 

Dish Network will not be interesting because it can move the market, creating a whole new battleground on which the others must compete. Dish Network will be interesting because it no longer can move the market, even if it wanted to. That is the result of the AT&T (News - Alert) decision to switch its marketing affiliation to DirecTV on Jan. 31, 2009. That means the entire top tier of U.S. telecom providers now are aligned with rival DirecTV (News - Alert).

 

After years of being first or second in its satellite niche, and then among the top video providers nationally, Dish Network now faces a business environment where, with each passing year, it must now expect to slide further into the second tier of video or communications providers, as the major telcos move up to displace it.

 

The reason is that the mass market now is a confirmed “bundle” battleground, and Dish Network is ill-equipped to compete on that terrain. So is DirecTV, but there now is a strategic difference.

 

Telcos will need virtually permanent help in low-density areas as far as a robust linear video offering is needed to fill out the bundle. DirecTV now fulfills that role for all the largest firms in the telecom industry. So telcos, while a channel for DirecTV, also help DirecTV flesh out its own ability to be part of the key “triple play” bundle. The path to relevance in the basic voice-video-data bundle is clear, and the argument doesn’t change as quadruple-play bundles adding wireless become the next evolution in the mass market.

 

The reason Dish Network will be interesting is that it now must seriously consider one of two strategic futures. In the first, it ends life as an independent entity, if the government will allow it. That is the easier path. The second future requires abandoning the effort to position against DirecTV and seeking some future as a distinctively niche provider of services to a distinctive niche of buyers.

 

That will be very tough in the scale game that triple-play services now have become. Ultimately, the antitrust objection to a DirecTV-Dish Network merger is a reduction in competition. That won’t be a compelling argument if Dish Network winds up being a much-smaller player in a much-bigger market.

 

That suggests Dish Network ultimately will find the consolidation path an easier business strategy than the alternative: essentially becoming something it is not. That’s always tough and rarely succeeds. But it would provide a fascinating case study, should the latter path be chosen.

 

The large cable companies already have an answer: they are becoming communication companies. So do the large telcos: Tthey are becoming content and application providers. It isn’t yet clear what Dish Network’s answer would be.