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Dish's overall pay-TV sub base shrunk to 10.99 million (8.55 million satellite TV and 2.44 million Sling TV subs). Analyst notes that Dish's aging satellite fleet portends 'the long, slow goodbye of satellite tv.'
August 9, 2021
Overall pay-TV subscriber losses at Dish Networks improved to -67,000 in Q2 2021, versus a year-ago loss of 96,000, as Dish added Sling TV customers in the period and kept satellite TV losses in check, thanks to an ongoing focus on the rural US market.
Dish shed 133,000 satellite TV customers in the quarter, ending the period with 8.55 million. Analysts were expecting Dish to lose 126,000 satellite TV subs.
Figure 1: Click here for a larger version of this image.
Sling TV, Dish's Internet-delivered pay-TV streaming service, gained 65,000 subs (analysts were expecting a loss of about 11,000), ending Q2 with 2.44 million.
Although Sling TV has gained subscribers in three of the last four quarters and remains the cheapest "full service live-streaming option" despite recent price increases, Sling TV's total subscriber base is roughly the same as it was at the end of 2018, MoffettNathanson analyst Craig Moffett pointed out in a research note.
Figure 2: Click here for a larger version of this image.
Dish ended Q2 with a combined pay-TV subscriber base of 10.99 million. Its traditional pay-TV base is now eroding organically at a rate of 5.4%, while its blended business of satellite TV and Sling TV declined 2.7% year-over-year, according to MoffettNathanson.
The silver lining is that average revenue per user rose 4.5% to $96.32, from a year ago. That helped Dish's pay-TV unit revenues rise 2.1%, to $3.2 billion.
Satellite TV's rural advantage could be fleeting
Moffett noted that Dish's focus on the "sticky core of rural customers" with satellite TV continues to work well, but reiterated that this strategy faces risks as new fiber builds in rural US markets gain steam in the coming years. Those new fiber networks are poised to provide adequate connections for the market's wide array of OTT-delivered video services and obviate satellite TV's key advantage in those rural areas, he argued.
There are other concerns ahead of those fiber buildouts, as Moffett also points out that gross additions for Dish's satellite TV business have plummeted by a "staggering" 70% over a period spanning nearly a decade. Dish posted 201,000 gross adds in Q2 2021, a new all-time low – 25% lower than a year ago and 69.8% lower than nine years ago, he noted.
Figure 3: Click here for a larger version of this image.
Signs of satellite TV's 'long, slow goodbye'
Moffett also made note of Dish's aging satellite fleet, pointing out that of its 11 operating satellites, only two are less than a decade old. In another five and a half years, only one of their 11 satellites will still be inside an estimated useful lifespan of about 15 years.
"To be sure, some of these satellites may continue to operate well beyond their fifteen-year life," Moffett explained, noting that Dish has no new satellites under construction. "But Dish appears to have concluded that the end of the line for satellite TV is coming within the decade ... We are witnessing the long, slow goodbye of satellite TV."
Light Reading will have more detail about Dish's wireless results and plans following Monday's earnings call.
— Jeff Baumgartner, Senior Editor, Light Reading
Senior Editor, Light Reading
Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.
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