In the pay-TV biz, it's tough all over. While traditional service providers continue to struggle to retain customers, even some of the streaming video players are feeling the pinch.
Sling TV, the Dish-owned video streaming service that just turned five, posted its first-ever subscriber loss in Q4 2019. Sling TV shed 94,000 subs in Q4, compared to a gain 47,000 subs in the year-ago period. Sling TV ended 2019 with 2.59 million customers; it added 175,000 subs for the full year, down from a gain of 205,000 in 2018.
On today's call, Dish CFO Paul Orban attributed Sling TV's struggles on general video competition and service disconnects that followed the end of the National Football League season. Other culprits were price increases and changes to the channel lineup.
But the company is still confident of its strategy, viewing itself as a complement to subscription VoD services that continue to rake in subs. "We like our position and our skinny bundle," Warren Schlichting, EVP and group president at Sling TV, said. "We might not be everything to everybody, but we like where we are."
Meanwhile, Dish's satellite TV business continued to show signs of stabilization. Dish lost about 100,000 satellite TV subs in Q4, better than the loss of 122,000 expected by analysts, and well below the 381,000 subs it lost a year earlier.
Dish lost 511,000 satellite TV subs for all of 2019, ending the year with 9.34 million, improved from a loss of 1.12 million for full 2018. With Sling TV included, Dish ended 2019 with 11.98 million pay-TV subs.
"But, given the utter implosion at AT&T's DirecTV unit, it is almost certainly the case that Dish's rate of decline is being softened by the migration of AT&T subscribers… There is clearly a case to be made that the worst is over," Craig Moffett, an analyst with MoffettNathanson, pointed out in a research note issued today. Moffett noted that Dish's sub base peaked at 14.3 million in Q1 2010, and has contracted by 5 million subs (or 34.7%) since then.
The logic of a potential merger of Dish and DirecTV and Dish surfaced again on Wednesday's call, despite regulatory headwinds such a deal would likely face. Charlie Ergen, Dish's chairman, noted that times have changed since Dish and DirecTV failed to merge almost two decades ago, and that such a combination feels "inevitable" in today's video marketplace – this despite the fact that AT&T has made it clear it does not intend to sell off the DirecTV business.
"The growth in TV is not coming from linear TV providers, but from huge programmers," Ergen said, a reference to new streaming services from media giants such as Disney, WarnerMedia and NBCUniversal. "You just can't swim upstream against a real tide of big players."
- Dish video losses narrow to 194K in Q4 2019 versus a loss of 334K a year earlier
- US pay-TV losses widen to 864K in Q4
- Sling TV turns 5
- CES 2020: TiVo enters the streaming fray, teams with Sling TV
- YouTube TV surpasses 2M subscribers
- Disney+ Bolts to 28.6M Subscribers
- Apollo Proposes DirecTV Spinout, Combo With Dish – Report
- AT&T's Stankey: No Plans to Sell DirecTV
— Jeff Baumgartner, Senior Editor, Light Reading