Dish Network’s declining customers
Like all satellite TV providers, Dish Network (DISH) has been seeing a fall in its overall subscriber base for the past four years, mainly due to declining pay-TV subscriber numbers and falling demand for subscription-TV packages. In the fourth quarter, Dish Network posted net losses of 334,000 Dish TV customers, much worse than analysts’ expectation of 264,000 subscriber losses.
Cord cutting, the growing shift from traditional cable services to low-cost video streaming services, has taken a toll on pay-TV providers. Netflix (NFLX) and Amazon (AMZN) are dominating players in the online streaming space, and they’ve been offering premium video content at reasonable prices to gain more customers. Therefore, telecommunications and satellite operators such as AT&T (T) and Dish have also started offering streaming services through DIRECTV NOW and Sling TV to offset their subscriber losses.
Dish’s increasing Sling TV customers
Amid a falling pay-TV subscriber base, Dish Network has been focusing on its streaming substitute, Sling TV, which it launched in 2015. The company ended 2018 with 2.42 million Sling TV subscribers, higher than its 2.2 million subscribers in 2017 and its 1.5 million subscribers in 2016.
Sling subscribers generally buy lower-priced programming services than satellite TV subscribers, which hurts the company’s net pay-TV ARPU (average revenue per user). In the fourth quarter, the company’s net pay-TV ARPU was down due to a higher number of Sling TV subscribers in the mix.
The company’s Sling revenue per subscriber also increased in the quarter as more customers purchased higher-priced packages. Its revenue also increased due to add-on revenue from extras, cloud DVR, and ad sales. The price of the Sling Orange package rose $5 in the quarter, which also added to Sling’s revenue per subscriber.