Dish sheds 257K pay TV subscribers across satellite, Sling TV

Dish Network continued to lose subscribers across its pay TV business in Q2, reporting 257,000 net losses for traditional satellite video subs and customers of its virtual MVPD Sling TV.

Dish lost 202,000 net satellite subscribers, missing Wall Street expectations for losses of 187,000. In Q1 Dish lost 228,000 net satellite subscribers.  

The satellite TV provider ended the period with 7.79 million Dish TV subscribers.

On the Sling TV side, the vMVPD saw subscribers dip for the third quarter in a row, losing 55,000 in the Q2. It’s better than Sling TV’s first quarter losses of 234,000 net subscribers. Dish’s Sling TV subscriber base now stands at around 2.19 million, down from the 2.25 million last quarter.

The combined net pay TV losses of 257,000 is “more than triple the 67K loss of a year ago and worse than the consensus loss of 210K,” MoffettNathanson analysts pointed out in an August 3 report to investors.

For the satellite business, analysts at MoffettNathanson led by Craig Moffett said that Dish is shrinking rapidly. Dish had managed to stem subscriber losses for a while, the firm noted, thanks to a strategy of putting more focus on its rural core where cable and cord-cutting weren’t options, helping to improve churn as there weren’t many options other than Dish.

“But it has become increasingly clear that that strategy has largely run its course,” wrote Moffett. “Fiber and fixed wireless broadband are expanding rapidly in rural markets, and Dish’s traditional satellite churn rate is now unmistakably rising.”

Satellite TV churn was 1.51% and Dish’s traditional pay TV subscriber base is now diminishing at an 8.9% annual rate, the firm said.

Speaking on Dish’s quarterly earnings call Wednesday Dish President and CEO Erik Carlson said that the company is really trying to acquire and entertain customers that meet the company’s targets for long-term and profitable growth.

“There’s no doubt…there’s a decline in linear video, there’s more competition than ever. Folks that we’ve had a long-term relationship with on the content side are more in a ‘frenemy’ bucket today.”

On the Dish TV side he said the company is doing unique things – like launching streaming apps such as Netflix and Amazon, as well as its Android TV box, which “will help us stem some of that from a retention perspective and help really integrate the customer experience as it relates to additional apps” on the Dish TV platform.

Still, the pay TV market is “obviously in a bit of chaos,” Carlson added. He said it’s up to management ot stem that decline and pointed to Q2 results as evidence of efforts to monetize the existing base as best as possible.

While subscribers were down, combined pay TV average revenue per user was up 5.2% year over year to $101.3 – marking an all-time high and the first time above $100, according to Moffett. Revenue for the pay TV business (satellite and Sling TV) was down 3% from a year ago to $3.2 billion.

Dish’s Charlie Ergen added that the company is “smart enough not to chase customers who aren’t going to be profitable.”

The ARPU increase comes after Dish implemented two steep price increases in 2021, Moffett said. However, while helping ARPU, price increases could mean impacts to subscriber metrics.

“To offset these accelerating subscriber losses, Dish has been raising prices, a strategy that is perhaps necessary, but which carries the obvious risk of exacerbating their subscriber declines (recall the same spiral suffered by DirecTV under the early leadership at AT&T when pursued the same strategy),” wrote Moffett.

For Sling TV, Carlson cited a lot of changes in consumer behavior, with stagnation at some SVOD players. He acknowledged Dish isn’t exactly happy with where Sling growth stands.

“We spent a lot of time and effort in making the customer experience a top customer experience, we now have to prove out that we can have value and we can earn a place in folks homes,” he said. “We’re not the number one subscription there but we can be very complementary with the best of cable and provide customers a great value experience for some content that they may not want to subscribe to from one of the SVOD folks.”

He noted that in the market there’s limited barriers to entry and very easy ways to cancel, acknowledging that Dish needs to do a better job to earn customer business.

Dish also recorded losses in its wireless business, including Boost Mobile where it shed 210,000 net subscribers in Q2. Dish is working to become a fourth facilities-based wireless carrier but has faced some skepticism about its ability to compete, as it builds out a greenfield 5G network.

Consolidated revenue at Dish was down 6.2% to $4.2 billion. Adjusted EBITDA was down 21.2% year over year to $861 million. Net income was $523 million in Q2.