Satellite pay-TV continues to be a tough business for Dish Network in the United States, as the operator continues to see its subscribers migrate to a number of Over-the-Top (OTT) competitors in a much more fragmented video landscape than what we have seen in previous years. In its latest results, Dish Network confirmed that now has less than 13 million pay-TV subscribers in the United States.
At the end of it 2018 fiscal second quarter, The operator had 10.653 million Dish TV subscribers and 2.344 million Sling TV subscribers, totalling 12.997 million customers – a drop from the 13.332 million Pay-TV subscribers the company had at the end of second quarter last year. Dish’s slow customer bleed continued at a steady pace year-over-year. Its net pay-TV subscribers declined approximately 151,000 subscribers in the second quarter, compared to a decline of approximately 196,000 in the second quarter 2017.
“For the fourth straight quarter, subscriber losses in the core satellite TV segment weren’t quite as bad as feared, but they were declines nonetheless,” Craig Moffett, a satellite equity analyst at Moffett Nathanson said in a research note. “In a business with high fixed costs – and no serious analyst of the satellite TV business would argue that the satellite TV business isn’t a business with high fixed costs – a falling subscriber base means falling margins as those fixed costs are spread across a smaller and smaller base. DISH lost another 192K satellite TV subscribers in Q2, somewhat better than the consensus loss of 235K. And the loss was gentler than that a year ago, when the company lost 316K traditional subscribers.”
Moffett also took a long look at the Sling results, and said there were worrying signs for that business, as well. “Sling’s growth continues to slow sharply. Subscriber additions of 41K were well short of consensus of 68K, and below the 120K gain from a year ago. While this deceleration will likely get a fair amount of attention – Sling was once hailed as Dish’s Pay TV future – it simply isn’t terribly important for the longer term. These subscribers have never been profitable, so whether Dish adds a lot or just a few, or begins to lose the ones it already has, just doesn’t matter very much,” said Moffett.
Overall, the company had revenues of $3.46 billion for three months to the end of June this year, compared to $3.64 billion for the same quarter last year. Subscriber-related revenue for the quarter totalled $3.42 billion, compared to $3.61 billion for the quarter at the same stage last year.
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