By Chelsey Dulaney
Dish Network Corp. said Monday that it lost 134,000 pay-TV
subscribers in the first quarter of the year as some of its
programming contracts expired, though the company's profit doubled
from a year earlier.
Dish has struggled to boost its subscriber numbers amid what
executives have said is a negative pay-TV industry, pressured by a
weak economy and heavy promotions from competitors.
In part to offset losses, Dish rolled out a new online
video-streaming service called Sling TV in the U.S. earlier this
year. The service features a slimmed down subset of channels,
culminating a three-year effort to create an inexpensive streaming
TV service to reach a younger generation of viewers.
At the end of the first quarter, Dish's pay-TV service had 13.8
million subscribers, down from 14.1 million a year earlier. Gross
pay-TV additions were 554,000, compared with 639,000 a year
earlier. The net loss of 134,000 subscribers compared to an
addition of a net 40,000 subscribers a year earlier.
Dish blamed programming interruptions related to scheduled
expiration of some programming contracts for the declines.
Pay-TV subscriber churn rate, or the rate at which people
terminated service, was 1.65%, compared with 1.42% a year earlier.
Dish said its churn rate continues to be hurt by aggressive
marketing and discounting among competitors, as well as the credit
quality of subscribers.
Average monthly revenue per subscriber grew to $86.01 from
$82.36 a year earlier, helped by price increases.
The company's satellite broadband customer growth slowed to
14,000 net subscriber additions in the quarter, down from 53,000
additions in the previous year's quarter.
Overall, for the quarter ended March 31, Dish posted a profit of
$351.5 million, or 76 cents a share, compared with a year-earlier
profit of $175.9 million, or 38 cents a share. Profit was helped by
$120 million in nonoperating income.
Revenue grew to $3.72 billion.
Analysts polled by Thomson Reuters had projected earnings of 40
cents a share and revenue of $3.74 billion.
The results come as Dish faces increasing pressure for its
tactics in a recent r ecord-setting auction of wireless
airwaves.
At issue is Dish's coordination with a pair of small entities
that together won $13.3 billion worth of bids--second only to
AT&T's $18.2 billion--while qualifying for $3.3 billion in
discounts aimed at small businesses.
Dish has said it complied with the law and followed industry
precedent in the auction, which drew $45 billion in bids. But
rivals Verizon Communications Inc. and AT&T Inc. have
complained that Dish's tactics distorted the auction's outcome.
Dish didn't win any licenses itself.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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