DirecTV CEO Bill Morrow Talks Dish Merger | Bloomberg Talks

Well, thanks Caroline. Actually, we're going to offer them something that the new kind of competition cannot. Think about the volume of direct-to-consumer subscription type services: these are the Netflix, the Amazon Primes, the HBO Maxes that are out there. They have a very narrow scope of the content that they offer, the way in which they can only navigate through their platform forms. Consumers are left with having to pick and choose multiple subscription services and manage this on their own. They're having difficulty navigating across these different platforms. What the new company with Direct TV and Dish will do is number one, it will actually bundle all of those different services together. We'll still have a form of linear or time-of-day type programming, but we're going to let the consumer pick and choose two or three or four if that's what they want of these other direct-to-consumer programs. We'll wrap a user interface around that, we'll make navigation easy, we'll make search and recommendation easy. But equally as important, Caroline, is that the combined entity with just under 20 million subscribers will give us the very needed influence on the industry to work with the programmers to say the days of the past of 250 channels are gone. Consumers don't want to pay for content that they are never going to watch, and the programmers are still kind of tied to those old carriage agreements. This influence is going to change that. It is in the interest of the consumers, we think it's in the interest of the programmers in the long run, and of course to our company as well.

No, well, Caroline, we've really studied the market on what are the pain points of the current environment that consumers feel. Again, having to manage multiple subscriptions, not knowing where your content is. Even the biggest search engines can't keep up when you're looking for a particular season or episode of your favorite series or a movie that you want to watch. We know that the consumers need more than what's available today. By combining these two companies, having the influence to be able to change those carriage agreements, we're going to give them thinner linear bundles of genres that they can pick. We'll let them add in and insert the SVOD or those direct-to-consumer Netflix or Amazon Prime type services, and again with a very different kind of experience that will allow us to get back into a growth situation. Now we need the two companies to come together because we are falling fast. You've heard this from a number of different industry experts. So this buys us some time, gives us the influence to shape the industry that's all about the consumer, and it's going to offer them something that they haven't had.

No, that bundled past is not going to serve us going into the future. That's why we believe with the new kind of carriage agreements, it's going to allow you, the rest of the consumers, the rest of your viewers, to pick and choose the genres of their choice and not pay for all the rest of it. So it's not as big of a bundle as what we've seen in the past. That's what we've been advocating. That was the deal that we struck with Disney. We fought so hard for to be able to let the consumers pick what they want to watch and not force them to pay for stuff that they'll never tune into. And that is our future.

Well, we think the current bond holders of the DBS business under Echostar with Dish are going to have a better deal by converting and exchanging into the debt that we're offering. We think it'll be better leverage ratios than what they see today. There's better confidence in terms of this business model looking forward into the future without the risk that they might perceive today without the DBS business. We also have advocated and explained that while our initial leverage ratio will be in the two to two and a half times, that still is better than any other pay TV provider that is out in the marketplace today. Within a 12 to 24 month window, we're going to be very focused on bringing that leverage ratio down to below two. So that's the reason that we believe they're interested in making this exchange, lowering that debt, making sure that this M&A deal can happen. And then we of course proceed to the SEC and the DOJ for the needed regulatory approvals.