But DirecTV has so far signed up only 380,000 new subscribers, half its 2005 rate. Malone needs a killer app to get them back: broadband. He’s likely to strike a deal with an outfit like Craig McCaw’s wireless broadband company Clearwire, says Jimmy Schaeffler, CEO of the Carmel Group digital consultancy. Malone didn’t respond to e-mail requests for comment, and Maffei wouldn’t comment.

The so-called violation of the federal government’s so-called “distant network signal” could cost Echostar as much as $50 million a year, figures Jimmy Schaeffler, chairman of digital media consultants The Carmel Group, but more importantly could send as many as 20% of Dish’s “distant network” subscribers over to DirecTV. “That’s another $100 million or more a year and those subscribers won’t come back,” says Schaeffler. Ergen has been trying to negotiate a settlement with the broadcasters for months.

Little wonder that Murdoch and Ergen want to take control of their own futures. Neither is afraid to slash prices to win subscribers, and they may have to. “It’s not like they have an option any longer,” says Jimmy Schaeffler, president of digital consultant Carmel Group. “This isn’t a game about crisp pictures any longer.” No one knows that better than Murdoch

After going public in 1995, EchoStar took on industry leader GM Hughes by cutting the price of a dish and set-top receiver to $199 from $499. Soon he was giving them away to customers who signed up for a year’s worth of service. By 1997, he had 1 million subscribers, according to the industry newsletter DBS Investor. “He turned the economics of the business on its ear,” says Jimmy Schaeffler, president of the digital-media research company Carmel Group.