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Why Did Dish Network Launch Flex Pack?


Sep. 2 2016, Updated 2:05 p.m. ET

Dish Network’s Flex Pack

The Wall Street Journal reported that Dish Network (DISH) launched a new skinny bundle called Flex Pack. According to the report, Flex Pack will offer consumers a basic channel bundle of 50 channels and one additional pack of channels for $39.99 each month. The basic bundle of channels would exclude broadcast networks like The Walt Disney Company’s (DIS) ABC, CBS (CBS), and Comcast’s (CMCSA) NBC. The broadcast networks will be available separately in add-on tiers with prices ranging from $4 to $10 each month.

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This move by Dish could be an attempt by the company to reduce the price of skinny bundles further and attract new subscribers to pay-TV. This is because broadcast channels like Disney’s ESPN are expensive to carry for a pay-TV operator like Dish. The inclusion of broadcast networks like Disney’s ESPN in a basic bundle would result in raising the cost of the basic bundle.

Factors affecting Dish’s pay-TV subscriber base

Dish Network’s pay-TV subscriber base has been steadily declining over the last five quarters. As the pay-TV provider faces increasing competition from OTT (over-the-top) operators like Netflix (NFLX), it’s struggling to gain new subscribers. As indicated by the chart above, Dish had subscriber losses of 281,000 in fiscal 2Q16. At the end of fiscal 2Q16, Dish had 13.6 million pay-TV subscribers.

According to Dish, the rising competition from OTT services has been a major factor for the declining subscriber base of the pay-TV industry. Dish Network listed other factors at the company’s fiscal 2Q16 earnings call contributing to its decrease in pay-TV subscribers. These included AT&T’s (T) acquisition of DIRECTV and its ongoing dispute with Tribune Broadcasting.


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