Sling TV 'Softens' Dish Pay-TV Sub Losses9 Nov, 2015 By: Erik Gruenwedel
Media companies’ rollout of over-the-top video platforms represent an attempt to generate new broadband subscribers and stay competitive with OTT competitors Netflix, Amazon Prime Instant Video and Hulu Plus.
For Dish Network, upstart subscription streaming service Sling TV appears to be a double-edged sword. It contributed to the satellite TV operator generating 751,000 gross subscriber additions in the third quarter (ended Sept. 30) — up 8.7% from the previous-year period. Dish said Sling contributed to 14.5%-lower subscriber acquisition cost as well.
At the same time, Dish lost 23,000 net pay subscribers in the period, up almost 92% from 12,000 subs lost during the previous-year period. It ended the period with 13.9 million video subs, compared with 14 million a year ago. With Sling costing $20 monthly for the basic platform, it had a negative impact on average-revenue-per-unit (subscriber), or ARPU.
Sling TV was launched Feb. 9, with additional competitors introduced since including PlayStation Vue, HBO Now, Showtime OTT, Shout TV, Charter Spectrum TV and Verizon Go90, among others.
Dish said the pay-TV churn rate (percentage of subs not renewing) increased to 1.86% from 1.67% a year ago, which it attributed to “competitive pressures,” including “aggressive” marketing, bundled discount offers such as combined broadband, video and/or wireless services and cord cutting.
“We’re bringing our content partners new incremental subscribers that they’re not able to get any other way. I think the future is probably pretty bright for OTT in general and hopefully for Sling," CEO Charlie Ergen said on the fiscal call.
Meanwhile, Dish added 13,000 net broadband subscribers to end the period with 608,000. That was down from 28,000 net additions a year ago. Dish generated 34% higher net income at $196 million on revenue of $3.7 billion, from $146 million net income and revenue of $3.6 billion a year ago.