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Dish Loses 134,000 Video Subscribers, Sling TV to Blame?

11 May, 2015 By: Erik Gruenwedel

Satellite operator doesn’t disclose OTT video service’s numbers since February launch. But company resources toward Sling are increasing.

Dish Network May 11 reported it lost 134,000 pay-TV subscribers in the first quarter (ended March 31) to end the period with 13.8 million subs.

Dish, which launched over-the-top video service Sling TV in February, said the subscriber tally did not include Sling TV data. The OTT service, which features 20 basic channels, including ESPN, is aimed at a growing broadband-only market estimated at 10-15 million households.

Principle concern among pay-TV operators is the impact OTT video could have on the TV channel subscription bundle. In addition to ESPN2, AMC, A&E, TNT, History Channel, H2, TBS, Food Network, HGTV, Travel Channel, IFC, El Rey, Adult Swim, Cartoon Network, ABC Family, Disney Channel, Bloomberg Television, CNN, Lifetime and Galavision, Sling offers subs HBO Now for $15 per month or the optional “Sports Extra,” “Hollywood Extra,” “Kids Extra,” “Lifestyle Extra” and “World News Extra” add-ons, each priced at $5 per month.

Dish CEO Charlie Ergen in March told CNBC there was “no question” Sling TV could siphon off his own satellite TV subscribers going forward.

“It’s the innovator’s dilemma,” Ergen said.

Indeed, Dish said it added about14,000 net broadband subscribers in the quarter, bringing its broadband subscriber base to approximately 591,000.

On the May 11 fiscal call, Ergen believed much of the Q1 sub losses were a result of the carriage agreement dispute with Fox TV. He said that next to ESPN, Fox News is a channel no pay-TV operator can live without. At the same time, Ergen said Dish finds itself where Netflix, as a by-mail disc rental service, was when it launched subscription streaming in 2008.

“[Netflix] started focusing on that side of business because they knew long-term that was going to capture more of the market,” he said, adding that the scenario wouldn’t necessarily happen with Dish. “Things like Sling TV are going to become more and more prevalent, and the way you deploy will be different as a result of that.”

Meanwhile, Dish quarterly revenue increased 3% to $3.7 billion with net income doubling to $351 million.

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