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Why TV Giant DISH Took a Chance on Bitcoin Payments

(@pete_rizzo_) | Published on June 18, 2014 at 22:10 BST

US-based subscription satellite TV provider DISH became the world’s largest company to accept bitcoin late last month, boasting 14 million subscribers, nearly $14bn in annual revenue and a $27bn market capitalization.

Overnight, DISH reaped the rewards of its forward-thinking initiative in the media, scoring high-profile promotions in financial publications such as Reuters and The Wall Street Journal along with more general-interest national news outlets like NBC and ABC.

However, while the press response to the news was strong, DISH executive vice president and chief operating officer Bernie Han told CoinDesk in a new interview that the decision to take bitcoin was not the product of its marketing department.

Rather, bitcoin payments were an employee-led initiative, Han said:

“We had some employees at DISH who are bitcoin enthusiasts, and they brought this idea up. We’re one of the best companies for customer service already today, and we know one of the reasons for that is we like to offer choice and convenience for our customers when it comes to programming, technology and how they pay for their bills.”

Formerly the CFO of US Airways, Han told CoinDesk that DISH’s confidence in the merchant processing service offered by Coinbase – which allows it to receive fiat currency for bitcoin payments – was integral to its announcement.

Han added: “Having that [partnership] was an enormous benefit. If we didn’t have that, we’d be unlikely to be in the space today”.

DISH also indicated that its decision to delay bitcoin payments until its third-quarter launch was not a reflection of any issues or complications with the integration process, as suggested by commentators.

“At a big company like ours,” Han said, “everything touches our billing system, and there’s literally hundreds of projects happening every quarter.”

Listening to its employees

The news that employees played a role in this process is notable, given that the Colorado-based company was voted the worst company to work for in America for two years in a row and, most recently, in 2013.

Still, Han’s comments suggest that DISH is putting increased emphasis on speaking with its employees, adding that the initiative “came from the ranks” and was eventually assessed by upper management.

Han further suggested that acting on recommendations from employees was simply a practical course of action, explaining:

“We’re always trying to balance the attractiveness of ideas against the degree of difficulty of implementation and the constrained resources we have to implement literally hundreds of projects every quarter. When we did that assessment [...] we saw the implementation risk as very manageable and the resources as something we were willing to consume.”

Bitcoin vs recurring billing

Much has also been made of DISH’s decision to accept bitcoin given that it is a subscription service that would seemingly prefer recurring billing options. Bitcoin payments are pushed by the consumer to the company, rather than pulled automatically as in recurring credit card billing options.

However, Han stated that recurring billing isn’t as easy and advantageous as observers may assume. He noted that accepting payment via this method brings its own kind of added responsibilities and costs.

For example, Han said that recurring billing does impart a rather large cost on DISH in the form of the security steps it must take to safeguard consumer data:

“You have to collect account numbers and store account numbers. Suddenly, you’re holding customer information and security becomes a much bigger issue when that’s the case.”

Han hinted that DISH may seek out more advanced bitcoin auto-payment services, should they become available, but that they aren’t actively looking at such options at this time.

For now, bitcoin customers will be prompted monthly via email to make their payments, a service that Han said is used widely even by those who favor traditional payment options.

Why Coinbase was key

As a purely US-focused company, DISH wasn’t equipped to handle any currencies outside of the dollar. According to Han, this made Coinbase’s bitcoin-to-fiat conversion service a key incentive for starting to accept the digital currency.

Should DISH have needed to handle its own currency conversion, Han said, any other advantages of bitcoin payments would have likely dissipated:

“While it might make sense down the road, it would’ve opened up a lot of questions and uncertainties which we weren’t willing at that time to address.”

Current state of the project

Once DISH decided to investigate bitcoin payments, it still needed to perform a cost assessment of the initiative. This included documenting any requirements, assessing the difficulty of those requirements and revising and refining this list of necessities until a final decision could be made.

DISH assessed the internal systems bitcoin payments will interact with, and now approved, the initiative will head to the company’s development team.

Han said:

“Ultimately, they write the code that’s needed to develop those things. The integration between us and Coinbase is development work.”

Until the time this work is completed, however, US bitcoin enthusiasts will need to wait patiently to take advantage of DISH pay-TV service, and further demonstrate the benefits that bitcoin businesses in the ecosystem can gain.

Image via DISH

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