Dish Network lost 25,000 subscribers in the last quarter. It is the first time that a satellite pay-television operator has reported a net subscriber loss, in the United States at least. In fact, Dish added 752,000 subscribers, but customer churn left it with a net loss, down to 13.8 million customers. There is once again the prospect that Dish and DIRECTV could merge their satellite television operations.
Dish did better financially, reporting revenues for the last quarter of $2.9 billion, up 5.6% on the same period last year. Net profit was $336 million, compared to $224 million last year.
The loss of subscribers is attributed to promotions by competitors and general economic conditions.
“It’s not a good number and obviously we’re disappointed,” said Charlie Ergen, the chief executive of Dish Network in his disarmingly frank manner. “It’s all my fault. I really wasn’t on top of this business from an operational point of view as well as I should have been.”
He said that the next two quarters would be better. “The lesson learned is we’ll stay on top of our operations, certainly at my level, well enough to make sure that our operations ultimately are better than they have ever been.”
Telephone companies Verizon and AT&T have between them added around 300,000 subscribers to their FiOS and U-verse television services over the last quarter. Notably, AT&T has also given notice that it may end its joint marketing partnership with Dish, which has accounted for around 15% of its new sales.
Following the approved merger of satellite radio operators Sirius and XM Satellite Radio there is once again talk of a merger of Dish and DIRECTV. The two companies have considered this in the past but faced regulatory opposition which ruled it out in 2002 on competitive grounds.
There is a view that regulators may now be more receptive to such a deal, although some analysts appear doubtful. While there is now increased choice and competition in the provision of pay-television services as a result of new offerings from telecommunications providers, the choice in rural regions is generally limited to satellite.
However, the duplication of services involved in the competition between Dish and DIRECTV is not ultimately in the interests of consumers. One solution would be to separate the wholesale satellite delivery from the retail packaging. The recent separation of the EchoStar and Dish Network operations could provide a step towards this.