Dish Network's Hopper is turning a year old next month and is starting to show the first signs of changing the satellite giant's subscriber trajectory. But the DVR hasn't propelled the level of growth the market expected.
The company added 14,000 pay-TV subscribers in its most recent quarter, up sequentially from the prior two periods. Still, this is less than the 22,000 subscribers added in the same quarter a year earlier and significantly less than the 44,000 Wall Street analysts predicted.
In comparison, rival DirecTV added 103,000 subscribers during the quarter, which is also a slowdown from the 125,000 it added a year ago.
Dish ended 2012 with 14.1 million subscribers, adding 89,000 customers during the year. In 2011 it lost 166,000 subscribers. DirecTV boasts 20 million subscribers.
Dish CEO Joseph Clayton attributed most of this growth to the Hopper on a call with analysts.
"At Dish, we know that customers want their video content to be affordable, easy to use, and available anywhere," he said. "Americans are not making a gradual shift to mobile entertainment; it's a full blown sprint. And as a result of actually hearing consumers, we've developed a host of new features to meet this ever growing demand for mobility."
The Hopper has been a point of contention within the marketplace after Dish rolled out its AutoHop technology last spring, which allows users to automatically skip commercials on broadcast networks. As a result, the big four broadcasters filed suit against Dish, alleging AutoHop infringes on copyright.
Dish released the second-generation of the device, Hopper with Sling, earlier in the month. The new version allows users to watch live or recorded TV on web-connected devices and move recorded programs to an iPad, where they can watch without an Internet connection.
The Hopper is allowing Dish to continue adding subscribers over cable operators, who have been losing out to satellite and telecom competitors for years. While churn at cable companies is slowing, Time Warner Cable still lost 129,000 video subscribers in its most recent quarter and Comcast lost 7,000.
As cable operators have latched on to broadband to grow business, Dish is also looking to wireless to expand the company beyond its' maturing video service. Chairman Charlie Ergen said on the call that he expects to have a wireless license by the end of March and hopes for wireless tests by late this year.