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Dish Network continued to dispose of its satellite television customers in the third quarter, as a result of the cable shutdown, magnified by the power outage that kept Univision programming on end. And the unprecedented loss of HBO by Dish last week threatens to worsen the situation.
For the third quarter of 2018, the company recorded its worst net subscriber losses to date, dropping 367,000 direct-to-home satellite service customers and earning only 26,000 Sling TV subtitles. It closed the period with 10.29 million Dish TV subscribers and 2.37 million subscribers to Sling TV; In total, its television customers are down 19% year-on-year.
Dish's headline was down 3.2% in pre-market trading on Wednesday because of worse-than-expected satellite television losses. Its financial results exceeded Wall Street's expectations, with a business turnover of $ 3.40 billion in the third quarter (down 5% from the previous year) and a profit of 82 cents per share (up from 57 cents a year earlier).
After the contractual talks between Dish and Univision met an obstacle this summer, Univision channels were removed from Satcaster and Sling TV on June 30. the loss of channels resulted in higher churn, higher net losses of pay-TV subscribers, and a decrease in the number of gross subscriber activations from the third quarter of 2018 to the fourth quarter quarter.
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Dish seems ready to embark on a long battle against Univision and will never bring back the contents of the Hispanic programmer to his services.
"[O]In the long-term, we expect to be able to offer our subscribers more compelling offerings, particularly with respect to Latin-language programming, due to, among other things, our ability to provide more flexible programming at a lower cost. " the company in the release. 10-Q. In addition, some Univision broadcasts are also available via other methods, including microwave antennas, and directly from Univision on the Internet.
In another programming battle that could depress Dish's pay-TV numbers, HBO pulled out its HBO and Cinemax channels from Dish and Sling TV on October 31, the first time the premium cable company went black.
"What is a surprise is that Dish continues to lead these battles. It looks like they have one almost every quarter, "said Craig Moffett, an analyst at MoffettNathanson, in a note on Wednesday. While the reason for each outage may have an individual meaning as Dish tries to control costs, "taken collectively, they send a disturbing message. What Dish seems to point out with all these power cuts is … they do not really want to be in the video business anymore. "
Dish has improved its operating profit for the third quarter of 2018 by 25% over the previous fiscal year, mainly due to a 41% reduction in subscriber acquisition costs . The company said the decline in SAC was primarily related to the decline in the gross number of Dish TV subscriber activations and a $ 41 million positive impact related to an accounting change made on Jan. 1 2018, which capitalizes payments made under certain sales incentive programs previously expensed as "subscriber acquisition costs" (and are now initially recorded in the balance sheet under "Other current assets"). and "Other non-current assets, net").
While Dish's stalemate with Univision and HBO may exacerbate its customers' losses, it's not the only pay-TV provider to suffer from the ongoing cutting and shaving of the cord. AT & T has announced a net decrease of 346,000 traditional DirecTV satellite TV and Uverse video customers in the third quarter, gaining 49,000 DirecTV Now submarines.
In its 10-Q document, Dish also noted that higher programming costs have pushed rates up for subscribers, which continues to put pressure on its pay-TV market. The company also said that even if subscribers do not cancel the TV service, they could buy OTT content (like pay-per-view movies) from other platforms, resulting in lost revenue.
Dish's average monthly subscriber churn rate of 2.11% in the third quarter was well above 1.82% in the third quarter of 2017.
Since its inception in 1996, Dish is essentially a one-off pony, completely dependent on the subscription television product. But he could become a next generation wireless data player.
Over the past decade, Dish has spent more than $ 11 billion to acquire wireless spectrum licenses and has invested billions more in other wireless assets. Dish plans to deploy a 5G network capable of supporting Internet applications of narrowband objects. The first phase is expected to be completed by March 2020. The company plans to spend between $ 500 and $ 1 billion by 2020 on wireless projects. The second phase of network deployment will cost more than $ 10 billion. of dollars.
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