A satellite/cable price war?

Analysts are speculating that if Rupert Murdoch succeeds in acquiring the DirecTV satellite service, he may cut prices of subscription services out of hand, thereby touching off a price war with rival satellite broadcaster EchoStar (DISH Network) and cable broadcasters, Bloomberg News reported Thursday. “Think of this as an arms race,” Josh Bernoff, principal analyst at Forrester Research, told the wire service. “If Rupert Murdoch comes in, he could very well escalate this war.” USA Networks Chairman Barry Diller commented that if Murdoch acquires DirecTV, “I don’t know anybody alive who would be more competitive on every level — and not necessarily prudent — to make it go.” However, Merrill Lynch’s Jessica Reif Cohen expressed doubt that Murdoch would slash prices. Instead, she suggests he would “add more services, TV functionality and more interactive stuff.”