Sub Losses Plague Dish


Dish Network added fuel to the debate that protracted retrans battles lead to heavy subscriber losses, dropping 156,000 customers in the fourth quarter, a deficit that many analysts blame on its nearly month-long dispute with Fox Sports last year.National Geographic Channel, FX and 19 regional Fox Sports networks went dark on Dish on Oct. 1 and did not return until Oct. 29. While Dish has struggled with subscriber losses in the past - it has now shed customers in three of the last four quarters - analysts had hoped the satellite giant was turning a corner. Although Dish finished the year in the black - it added a total of 33,000 customers for the full year - it was the worst quarterly subscriber performance in the company's history. And Dish's results were a stark contrast to No. 1 satellite TV service provider DirecTV, which added 289,000 customers in the fourth quarter and 663,000 for the full year.
Dish shares were down as much as 5.3% ($1.21 each) in early trading today. The stock was priced at $22.58 each (down 35 cents per share or 1.5%) at 10:46 a.m.
While Dish did not give a reason for its most recent declines, most analysts blamed it on the Fox dispute and an ongoing battle with MSG Network, which was also pulled from Dish subscribers on Oct. 1. The losses mirror those of Cablevision Systems, which shed 35,000 basic customers in the fourth quarter, almost entirely because of its own Fox dispute.
The satellite giant also reported lower than expected gross subscriber additions - 653,000 vs. consensus of 764,000 - which some analysts said was a result of more stringent credit policies.
The subscriber losses overshadowed what some analysts believed were solid financial results - revenue was up 8% in the quarter and pre-marketing cash flow rose 12% in the period.
Dish is expected to hold a conference call with analysts to discuss quarterly results today at noon.