DIRECTV and Dish Network reported their second consecutive quarterly declines in subscriber numbers in the United States. This can be partly attributed to the competitive and economic environment, causing subscribers to switch providers to take advantage of special offers. Speaking to analysts, executives from the two satellite television services appear unperturbed by the customer losses and unthreatened by online video services. If anything, they see online television and video as an opportunity to increase their subscriber base and grow incremental revenues.

Dish Network plans to launch an online video package, primarily aimed at younger men who are interested in sport but do not currently pay for a television service.

DIRECTV is looking to launch an online video package aimed at the Hispanic market before the end of 2014, possibly to test the water for other services. Meanwhile the company, which is anticipating a pending acquisition by AT&T, is cautiously looking towards 4K ultra-high-definition services.

In the six months to September the two satellite television providers shed 118,000 subscribers between them, with DIRECTV losing slightly more than Dish Network. That may sound like a large number, but in percentage terms it is relatively small.

Charlie Ergan, the co-founder and chairman of Dish Network, downplayed the decline in subscribers. Speaking to analysts he said the core multichannel business remained a mature business.

“It continues to, in a way, surprise us that it has held up as well it has and continues to be a solid business for DISH and continues to hold up pretty well,” he said, with characteristic candour.

However, he certainly sees the opportunities of online video. “We think there’s a pretty clear path to actually grow the business. So instead of a mature business or maybe even a slightly declining business, we think we can actually be in a growth mode.”

“It will enable us to go after customers who aren’t paying for TV today,” he suggested. “So working with our programming partners, we go after people who aren’t in the pay-TV universe today, and we know that that’s growing by 4 or 5 million a year and probably will continue to grow and probably accelerate.”

Dish plans to launch an over the top online video service by the end of 2014.

“We continue to have several major programmers signed up and a lot of interest with some others. We won’t sign up everybody because it’s kind of a skinnied-down package. So we’re going to make sure that we can meet the price point of consumers.”

He was also sanguine about a current contract dispute with Turner, which has resulted in channels like CNN being temporarily taken off the satellite service. “Fortunately or unfortunately, things like CNN are not quite the product that they used to be.” He implied that some operators might be prepared to do without some networks if they could not reach a reasonable agreement on the value of particular channels.

The planned online offering is aiming at the 18-35 year-old who is not currently paying for television. They are more likely to be male, urban and living in an apartment rather than a house, with an interest in sport.

It will be available online, without the need for an engineer installation or dedicated hardware. So while the average revenue per user may be lower, the subscriber acquisition costs will be materially lower.

“So you’ve got a kind of a different financial model, where your ARPU margins are a little bit less but your SAC is materially less,” he said. “When you run all the numbers, to the extent that you’re getting incremental subs, it makes sense.” He also described the long-term opportunity to target advertising as “immense”.

Late in 2010, EchoStar paid $45 million for the assets of Move Networks, a pioneer of the adaptive bitrate streaming that was rapidly adopted by others, including Microsoft, Adobe and Apple.

Joseph Clayton, the chief executive of Dish Network suggested that this offered it the “secret sauce” with “patents and intellectual property”.

“That will help us have a first-mover advantage from a technological standpoint when we launch our new service here shortly,” he said.

The reality is that many of these ideas are now commonplace. Creating an online video service is not so much a technical challenge as a commercial issue.

However, Dish appears to believe that programming providers are now more open to unlocking the bundle of channels to try something new. Certainly, recent activity in the market suggests that many are prepared to start experimenting.

As far as price is concerned, Dish has yet to announce the package, but Charlie Ergan suggested that a dollar a day, or $30 a month, “sounds in the ballpark”.

For its part, DIRECTV acknowledged that customer churn was higher than it would have wished, but this needs to be seen in the context of its overall subscriber numbers.

Including its wholly and majority owned Latin America operations, DIRECTV added 965,000 subscribers in the quarter, giving it a total of 32.56 million.

DIRECTV is the subject an acquisition by AT&T, pending regulatory approval. AT&T U-verse gained 214,000 video customers in the quarter. Together, DIRECTV and AT&T would have 38.60 million television customers in the Americas, so a loss of 28,000 is almost a rounding error in the big picture.

Speaking to analysts, Michael White, the chairman, chief executive and president of DIRECTV, attributed its recent subscriber loss to a tough competitive and economic environment.

Discounted deals from competitors appeal to price sensitive customers shopping around. He suggested that DIRECTV is concentrating on attracting and retaining higher lifetime value subscribers and tightening credit checks on lower-income renters that tend to churn regularly.

He accepted that “there’s a huge segment of customers that are looking for something certainly less than $100 a month,” but is uncertain whether it is $70, $50 or $30.

He suggested there is a new generation that may not want the full pay-television package but offering the right mix of channels is difficult because of the way many of them are bundled together by distributors. “I mean, I could pick out the top 15 channels that’ll appeal to millennials, but I don’t think I could get them.”

“There’s no question that all of us would like to have a product, and the content providers, I understand, would certainly like to get their content to be seen by probably 10 million homes, if you will, of millennial renters that don’t take pay TV today.”

“We don’t have to go to à la carte, I don’t think that’s in the industry’s best interest,” but suggested a need to allow more flexibility in allowing customers to choose channels they want to watch.

He implied that might mean an offer without the four main broadcast networks but admitted it was unclear how much demand there would be for that.

DIRECTV is looking to “a significant segment of consumers out there that are broadband only.” It is expected to launch an online service aimed at the Hispanic population in the fourth quarter. Learning from this could be used for other services in the future.

Given the pending acquisition of DIRECTV by AT&T, subject to regulatory approval, that could create an interesting proposition.

Meanwhile, DIRECTV is cautiously exploring the potential of 4K ultra-high-definition services. Initially it will launch a limited video offering for customers with its new Genie HD digital video recorder and a Samsung 4K ready display. A number of movies will be preloaded on the hard drive, with additional titles that those customers can select to download overnight.

The DIRECTV 14 satellite is also scheduled to launch in December, which could allow the introduction of additional 4K channels in 2015. “We need to see who’s interested in a channel,” he said. “I’m guessing, at least initially, it’s more likely to be event driven or VOD driven, but we’ll be prepared to do live streaming next year.”