Sling TV Soars at Dish's Expense

Releasing its Sling TV sub umbers for the first time, Dish Network reports that its OTT service scaled 2 million subscribers while its core satellite TV service continued to shed customers.

Alan Breznick, Cable/Video Practice Leader, Light Reading

February 21, 2018

2 Min Read
Sling TV Soars at Dish's Expense

Maybe Dish Network should just get it over with and shift all of its satellite TV subscribers over to Sling TV already.

Continuing a painful process set in motion three years ago with the launch of its Sling TV OTT video service, Dish Network LLC (Nasdaq: DISH) reported Wednesday that Sling TV scored more subscriber gains at the expense of Dish's core satellite TV service in the fourth quarter. The company also reported another sharp drop in revenue because Sling TV subscribers pay much less for their OTT skinny bundles than legacy Dish subs shell out for their full-sized satellite-TV packages.

Releasing its Sling TV sub numbers for the first time, Dish said its OTT service topped 2 million subscribers at the end of last year, reaching a total of 2.2 million. That represents a gain of about 160,000 subs in the fourth quarter, enabling Dish to report an overall customer gain of 39,000 for the period.

But, at the same time, Dish's satellite TV service closed out 2017 with just over 11 million customers, its lowest total in decades, as more of its legacy subs keep switching over to Sling TV. The satellite service shed 121,000 subscribers in the fourth quarter and that loss would have been even higher if not for the 75,000 subs that Dish reconnected in Puerto Rico and the US Virgin Islands as part of the recovery from last year's hurricanes.

As a result, Sling TV now accounts for about one sixth of Dish's total sub count of 13.2 million, up from zilch just three years ago. While that’s good news for Dish’s prospects in the still-expanding OTT video market, where it joins such other services as HBO Now, CBS All Access and Showtime at the 2 million-plus-sub level, it's bad news for the company's bottom line. That's because skinny bundle subscriptions with their low price points generate much lower revenue than satellite TV subscriptions and are only marginally profitable at best.

This tradeoff is reflected in Dish’s latest earnings report. The company said revenue fell to $3.48 billion, down 7.2% from $3.75 billion in the previous year. While net income shot up to $1.39 billion from $355 million in the prior year, that was almost entirely due to a $1.2 billion tax break from the big recent US corporate tax cut.

For the full year, Dish reported its revenue slid 5.4% to $14.39 billion, compared to $15.21 billion in 2016. Net income rose to $2.1 billion, up from $1.5 billion in 2016, again mainly because of the corporate tax cut.

In trading Wednesday, Dish's stock price fell to $43.18 a share, down about 3.1% on the day.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

About the Author(s)

Alan Breznick

Cable/Video Practice Leader, Light Reading

Alan Breznick is a business editor and research analyst who has tracked the cable, broadband and video markets like an over-bred bloodhound for more than 20 years.

As a senior analyst at Light Reading's research arm, Heavy Reading, for six years, Alan authored numerous reports, columns, white papers and case studies, moderated dozens of webinars, and organized and hosted more than 15 -- count 'em --regional conferences on cable, broadband and IPTV technology topics. And all this while maintaining a summer job as an ostrich wrangler.

Before that, he was the founding editor of Light Reading Cable, transforming a monthly newsletter into a daily website. Prior to joining Light Reading, Alan was a broadband analyst for Kinetic Strategies and a contributing analyst for One Touch Intelligence.

He is based in the Toronto area, though is New York born and bred. Just ask, and he will take you on a power-walking tour of Manhattan, pointing out the tourist hotspots and the places that make up his personal timeline: The bench where he smoked his first pipe; the alley where he won his first fist fight. That kind of thing.

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