Post by dkennedy on May 11, 2009 7:29:47 GMT -5
Dish Drops 94,000 Subs, Boosts Income
Satellite Operator Blames Drop on 'Issues Specific to Dish'
May 11, 2009
By Todd Spangler, Multichannel News
Dish Network lost another 94,000 subscribers in the first three months of 2009 -- as rival DirecTV posted its best customer gains in four years -- but at the same time the DBS distributor boosted its bottom line, growing net income nearly 21%.
The No. 2 satellite TV provider posted total revenue of $2.91 billion for the quarter, up 2.1% compared with $2.84 billion the year prior. Net income climbed to $313 million, a 20.8% increase from $259 million in the year-ago quarter.
Dish's net subscriber losses for the quarter come after it shed 102,000 subs in the fourth quarter of 2008. The company attributed the decline partly to its loss of a reseller deal with AT&T, which ended Jan. 31 as DirecTV is now AT&T's exclusive satellite partner, but even so the telco contributed 5% of gross subscriber additions, or 32,000, for the first quarter of 2009.
"While economic factors have impacted the entire pay-TV industry, our relative performance has been mostly driven by issues specific to Dish Network," the company said in its 10-Q Monday.
Dish was the odd man out in the pay-TV sector for the first quarter of 2009, as other major operators fared far better. DirecTV added 460,000 net subscribers, and Comcast and Time Warner Cable posted stronger-than-expected first-quarter results. On the telco side, Verizon gained 299,000 FiOS TV subs and AT&T netted 284,000 U-verse TV customers.
Dish last month reorganized its senior management team, hiring former AT&T executive Robert Olson as its new chief financial officer and reassigning CFO Bernard Han and executive vice president Thomas Cullen to new roles.
The decline of 94,000 net subs in the quarter left Dish with 13.584 million as of March 31.
"In recent years, Dish Network's position as the low cost provider in the pay-TV industry has been eroded by increasingly aggressive promotional pricing used by our competitors to attract new subscribers and similarly aggressive promotions and tactics used to retain existing subscribers," the company said in the 10-Q filing.
Other issues cited by Dish for the net loss of subscribers were that it has not always met standards for "performing high quality installations, effectively resolving customer issues when they arise, answering customer calls in an acceptable timeframe, effectively communicating with our customer base, reducing calls driven by the complexity of our business, improving the reliability of certain systems and customer equipment, and aligning the interests of certain third-party retailers and installers to provide high quality service."
The company's boost in net income was helped by lower subscriber-acquisition costs in the quarter. Dish's total subscriber acquisition costs were $292.2 million for the first three months of 2009, down 22% versus $375.0 million in the first quarter 2008.
Satellite Operator Blames Drop on 'Issues Specific to Dish'
May 11, 2009
By Todd Spangler, Multichannel News
Dish Network lost another 94,000 subscribers in the first three months of 2009 -- as rival DirecTV posted its best customer gains in four years -- but at the same time the DBS distributor boosted its bottom line, growing net income nearly 21%.
The No. 2 satellite TV provider posted total revenue of $2.91 billion for the quarter, up 2.1% compared with $2.84 billion the year prior. Net income climbed to $313 million, a 20.8% increase from $259 million in the year-ago quarter.
Dish's net subscriber losses for the quarter come after it shed 102,000 subs in the fourth quarter of 2008. The company attributed the decline partly to its loss of a reseller deal with AT&T, which ended Jan. 31 as DirecTV is now AT&T's exclusive satellite partner, but even so the telco contributed 5% of gross subscriber additions, or 32,000, for the first quarter of 2009.
"While economic factors have impacted the entire pay-TV industry, our relative performance has been mostly driven by issues specific to Dish Network," the company said in its 10-Q Monday.
Dish was the odd man out in the pay-TV sector for the first quarter of 2009, as other major operators fared far better. DirecTV added 460,000 net subscribers, and Comcast and Time Warner Cable posted stronger-than-expected first-quarter results. On the telco side, Verizon gained 299,000 FiOS TV subs and AT&T netted 284,000 U-verse TV customers.
Dish last month reorganized its senior management team, hiring former AT&T executive Robert Olson as its new chief financial officer and reassigning CFO Bernard Han and executive vice president Thomas Cullen to new roles.
The decline of 94,000 net subs in the quarter left Dish with 13.584 million as of March 31.
"In recent years, Dish Network's position as the low cost provider in the pay-TV industry has been eroded by increasingly aggressive promotional pricing used by our competitors to attract new subscribers and similarly aggressive promotions and tactics used to retain existing subscribers," the company said in the 10-Q filing.
Other issues cited by Dish for the net loss of subscribers were that it has not always met standards for "performing high quality installations, effectively resolving customer issues when they arise, answering customer calls in an acceptable timeframe, effectively communicating with our customer base, reducing calls driven by the complexity of our business, improving the reliability of certain systems and customer equipment, and aligning the interests of certain third-party retailers and installers to provide high quality service."
The company's boost in net income was helped by lower subscriber-acquisition costs in the quarter. Dish's total subscriber acquisition costs were $292.2 million for the first three months of 2009, down 22% versus $375.0 million in the first quarter 2008.