Pay-TV Subscriber Growth Slows at Dish

Still Adding Subscribers, but Less Quickly and Consistently

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A Dish Network Corp. receiver in Parker, Colo.
A Dish Network Corp. receiver in Parker, Colo. Credit: Matthew Staver/Bloomberg

Dish Network Corp., the second-largest U.S. satellite-TV provider, reported fourth-quarter sales that missed analysts' estimates as new subscriber growth remained sluggish.

Revenue rose 6.6 percent to $3.54 billion from the quarter a year ago, the Englewood, Colorado-based company said today in a regulatory filing. Analysts were projecting $3.59 billion on average, according to data compiled by Bloomberg. Net income was $288 million, up from $209 million in the period a year earlier.

Dish added 8,000 new pay-TV subscribers in the fourth quarter. Analysts estimated 21,000, according to a survey of eight estimates compiled by Bloomberg.

That 8,000 figure is well below the company's pay-TV growth in the fourth quarter of 2012, when the company added 14,000 subscribers, and the fourth quarter of 2011, when it increased subscribers by 22,000.

Dish ended 2013 with approximately 14.057 million pay-TV subscribers, slightly up from 14.056 million at the end of 2012. But the slowdown in growth raises concerns that the company could be heading back toward an annual decline, as happened in 2011.

Satellite companies have generally fared better than cable companies amid competition from services such as iTunes, Hulu, Netflix, Amazon Prime and now Aereo, all of which make it easier to get TV programming without an expensive monthly pay-TV bill. But growth isn't as heady as it once was even for satellite operators. DirecTV, the largest U.S. satellite-TV provider, gained 93,000 U.S. subscribers in the fourth quarter, down from 103,000 in the period a year prior.

Dish has been struggling to transform its business from a slow-growth satellite-TV provider into a more dynamic wireless carrier. Having acquired a large holding of U.S. airwaves, Dish Chairman Charlie Ergen has been able to almost double the company's share price in the past two years even without providing a clear strategy to enter the mobile Internet and video streaming market.

"It's all about their spectrum and their longer-term plans to monetize it somehow," said Chris King, an analyst with Stifel Financial Corp. who recommends holding Dish shares. "That's all that matters for them right now. They are not being valued solely on their operations any longer."

~ Bloomberg News and Ad Age staff ~

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