Dish Drops 102,000 Subs In Q4
Satellite Operator Boosts Net Income, Revenue For Period
By Todd Spangler -- Multichannel News, 3/2/2009 6:58:00 AM
Dish Network lost 102,000 net subscribers in the fourth quarter of 2008, and the company warned its customer count may continue to contract now that AT&T has terminated the reseller deal with the satellite TV operator.
Dish reported total revenue of $2.92 billion for the quarter ended Dec. 31, up 1% from the year prior, and net income of $217 million compared with $175 million during the corresponding period in 2007.
Dish had 13.678 million subscribers at year-end, which was a net decline for the full year of also approximately 102,000.
The company blamed the subscriber losses on numerous factors, outlined in its annual 10-K filing Monday, including: "weaker economic conditions, aggressive subscriber acquisition and retention promotions by our competition, heavy marketing by our competition, the growth of fiber-based and Internet-based video providers, signal theft and other forms of fraud, and operational inefficiencies at Dish Network."
AT&T's distribution deal with Dish officially ended Jan. 31, 2009, and the telco now resells DirecTV service in areas of its 22-state footprint where it does not offer U-verse TV.
In its 10-K, Dish said the distribution through AT&T "was a substantial contributor to our gross and net subscriber additions over the past several years," accounting for about 17% of gross subscriber additions for the year ended Dec. 31, 2008, and 19% of gross subscriber additions in the fourth quarter.
About 1 million of Dish's current subscribers were acquired through AT&T. These subs, the company said, have "historically churned at a higher rate than our overall subscriber base."
"Although AT&T is not permitted to target these subscribers for transition to another pay-TV service and we and AT&T are required to maintain bundled billing and cooperative customer service for these subscribers, these subscribers may still churn at higher than historical rates following termination of the AT&T distribution relationship," Dish said.
For the year Dish reported total revenue of $11.62 billion compared with $11.09 billion for the year ended Dec. 31, 2007, an increase of 5%, and net income was $903 million, compared with $756 million the year prior.
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