Dish Sheds 134K Q1 Subs

Programming Disputes Drive Greater Customer Losses
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A high profile carriage dispute with Fox News Channel helped drive net subscriber losses skyward at Dish Network in the first quarter.

Dish lost 134,000 net subscribers in the quarter, the same quarter it endured a nearly one month blackout of Fox News and Fox Business Network. At the time, Fox estimated that Dish had lost about 90,000 customers as a result of the standoff.  It appears as if their estimates, like their networks, were conservative.

Fox and Dish resolved the carriage dispute on Jan. 15.

Dish added approximately 14,000 net broadband subscribers in the first quarter (compared to 53,000 net broadband subscriber additions in the same period in 2014), bringing its broadband subscriber base to approximately 591,000.

Revenue increased  3.6% to $3.7 billion and cash flow, bolstered by lower subscriber acquisition costs, increased 22% to $848.6 million.

The video losses were in contrast to gains of 60,000 net new customers at DirecTV during the period.

According to MoffettNathanson principal and senior analyst Craig Moffett, the quarter was Dish’s worst first quarter ever and highlights the decline of the video business.

“Dish’s video business is dying a slow death,” Moffett wrote in a note to clients, adding that the notion that its wireless spectrum will save it is becoming increasingly unclear.

Moffett added that Dish has never articulated its wireless plan, whether it will build out its own fixed wireless network to offer a bundle of data and video; a mobility network competing directly with the likes of Verizon, AT&T, Sprint and T-Mobile, or simply sell the licenses and reap the one-time gains.

The market seems to think the last of these is the most likely, but today’s results illustrate why that would simply be leaving the mothership to sink,” Moffett wrote. That’s not likely Dish’s end game. But what is?”

Dish is scheduled to hold a conference call with analysts today at noon.

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