Posted on May 13, 2008
Filed Under Dish Network |
DISH Network came out with their quarterly report after the market close today, and while the numbers look good, the subscriber count doesn’t.
The satellite television provider had 35,000 net subscriber additions for the 1st quarter of 2008. That number was an 89% dive from comparable numbers last year, when DISH Network added 310,000 net subscribers. On the revenue and earnings front, the numbers looked better. Net profit came in at $258.6 million against $157 million a year ago. Per share that translated to 57 cents a share versus last years 35 cents. Revenues increased 7.5% to $2.84 billion, while average revenue per subscriber (ARPU) rose to $67.93 from $64.17 last year.
DISH Network’s total subscriber count now stands at 13.8 million, which is a 3% increase over the total subscriber count at the end of March 2007. But churn continues to be an issue for DISH Network, as it increased to 1.68 percent against 1.46 in the comparable period last year. DISH is now teetering on the edge of subscriber contraction, as it continues to battle DIRECTV as well as new players in the pay TV market including Verizon and AT&T.
Reviewing the company’s 10-Q filing with the SEC, a laundry list of reasons impacting DISH Network’s subscriber growth was presented. Among the reasons given:
- Expansion of Fiber-based pay TV providers
- Effectiveness of some competitors promotional offers
- The number of markets where competitors offer local HD channels
- Their aggressive marketing of these differences
- Satellite launch delays slowing growth of our local HD markets
- Worsening economic conditions, including slower housing starts
- Operational inefficiencies at DISH Network
- Signal piracy and other forms of fraud
According to DISH Network, the reasons listed above have affected both the ability to attract new customers, and have impacted their existing customer base.
DISH Network added 730,000 gross new subscriptions according to the 10-Q report. With that number being reduced all the way down to 35,000 for net additions, the full impact of customer churn is being felt by DISH Network.
Comments
Just 35k increase in customers for the Dish Network in the first quarter of 2008? Ouch! That is really bad news. I wonder what led to such a drastic decrease in subscribers from the first quarter of 2007?