Dish Networks' pay-TV business took it on the chin in Q1 2022, as both its legacy satellite TV service and Sling TV, its OTT-TV service, lost a bunch more customers than analysts were expecting.
Dish shed 462,000 total pay-TV subs in the quarter. Dish satellite TV lost 228,000, lowering its total to 7.99 million. Sling TV dropped 234,000 subs, lowering its total to 2.25 million. Dish ended the quarter with 10.24 million total pay-TV customers.
The pay-TV customer losses were more than double the losses posted by Dish in the year-ago quarter. They were also more than double the 189,000 losses expected by analysts, according to MoffettNathanson analyst Craig Moffett.
Dish's pay-TV base declined by 7.4% year-over-year, a "significant worsening for the third straight quarter," the analyst pointed out. "Dish lost more satellite TV subscribers than expected, and Sling utterly collapsed."
Moffett noted that Sling TV's base is now smaller than it was at the end of 2017, while Dish's satellite TV sub total is now dwarfed by the 14.3 million it had in its 2010 peak. "There was a time when Sling was to become the lifeboat for satellite TV. That lifeboat is taking on water," the analyst observed.
Speaking on Friday's earnings call, Dish CEO Erik Carlson partly blamed the drop on customer attrition following the football season. "But the bottom line is we simply didn't execute to the level we expected," he said.
Dish also attributed some of the video losses to recent price hikes and a carriage dispute with Tegna, which was resolved in February.
Though 5G and wireless is the road Dish is taking to the future, the poor performance at Dish's legacy pay-TV business caused shares to drop $5.26 (-9.14%) to $22.22 each on Friday.
'Uncarrier'-like approach needed for pay-TV
Dish Chairman Charlie Ergen suggested that Dish and programmers do a better job working together to improve the pay-TV proposition.
"We've never had better content in the United States than we do now," he said, noting that the heavy ad load for TV is the biggest source of frustration among video subs.
"We need a little more T-Mobile Uncarrier approach to consumers in the video business," Ergen said in a nod to T-Mobile's strategy to develop streamlined and friendly plans and pricing packages for consumers for mobile and, just this week, for its fixed wireless access service for home broadband.
- New Sling TV boss hails from Charter, Cablevision
- Sling TV connects to Vizio's SmartCast platform
- Sling TV extends price hike to existing subs
- Dish loses 462K pay-TV subs and loses 343K retail wireless subs in Q1
— Jeff Baumgartner, Senior Editor, Light Reading