Average Revenue per User Rises for Dish Network in 2Q15


Aug. 21 2015, Updated 3:09 a.m. ET

Pay-TV subscribers

In 2Q15, Dish Network (DISH) ended with 13.93 million pay-TV subscribers—compared to 14.05 million subscribers at the end of 2Q14.

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Average revenue per user

The ARPU (average revenue per user) was $87.91 in 2Q15—compared to $84.15 in 2Q14. The $3.76, or 4.50%, rise in pay-TV ARPU has been primarily driven by programming package price increase in February 2015 and 2014 as well as higher hardware-related revenue related pay-per-view event.

These rises were partially offset by a shift in the programming package mix and a rise in Sling TV subscribers and retention credits. In comparison to Dish’s branded pay-TV subscribers, Sling TV subscribers have lower priced programming packages. For 2Q15, TV subscribers had a negative impact on pay-TV ARPU.

The ARPU for DIRECTV (DTV) and Comcast (CMCSA) rose 5.50% and 6.20%, respectively, in 2Q15.

Pay-TV subscriber acquisition cost

During 2Q15, the pay-TV SAC (subscriber acquisition cost) was $767—compared to an SAC of $846 in 2Q14. This was a fall of 9.30% or $79 on a YoY (year-over-year) basis. This fall in SAC was attributed to a rise in Sling TV subscriber activations with lower pay-TV SAC and a fall in hardware costs per activation, partially offset by a rise in advertising costs per activation. The fall in hardware costs per activation was driven by a high percentage of remanufactured receivers being activated on new subscriber accounts.

Broadband net and gross additions

Dish added ~4,000 net broadband subscribers in 2Q15—compared to 36,000 net subscribers in 2Q14. This fall was due to lower gross new Broadband subscriber activations and a higher number of customer disconnects. During 2Q15 and 2Q14, Dish activated ~51,000 and 76,000 gross new Broadband subscribers, respectively. The fall was attributed to stricter customer acquisition policies, lower gross new pay-TV subscribers, and satellite capacity constraints in certain geographic areas. Customer disconnects were higher due to a larger Broadband subscriber base during 2Q15—compared to 2Q14.

You can get diversified exposure to Dish by investing in the PowerShares QQQ Trust, Series 1 (QQQ) and the Vanguard Consumer Discretionary ETF (VCR). QQQ and VCR had 0.28% and 0.48% exposure to the company, respectively, as of August 7, 2015.


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