Dish Network Gains Sling TV Subscribers but Retention Is a Problem -- 2nd Update
February 21 2018 - 5:15PM
Dow Jones News
By Shalini Ramachandran and Imani Moise
Dish Network Corp. said its Sling TV streaming-video service has
signed up 2.2 million subscribers in the company's first disclosure
of a figure, but Chairman Charlie Ergen said customer retention is
a significant challenge.
Dish launched the streaming service nearly three years ago in an
attempt to lure younger viewers and people giving up cable TV. The
hope was that it would be an avenue for growth as Dish's
traditional satellite TV business declines.
The subscriber figure disclosed Wednesday came as part of the
company's fourth-quarter earnings report.
The number of Sling TV customers grew 47% compared with the
year-ago period, but it wasn't enough to offset a 9.4% decline in
satellite TV subscribers. The company finished the quarter with
13.2 million subscribers overall, including Sling and satellite
customers, down from 13.7 million subscribers last year. In the
fourth quarter, satellite TV subscribers fell by 121,000.
Sling TV added 711,000 subscribers in 2017, below the 878,000 in
the previous year. Growth slowed partly because of increased
competition with other streaming services.
Streaming TV services such as Sling, Sony PlayStation's Vue,
Alphabet Inc.'s YouTube TV and an offering from Hulu have marketed
themselves as consumer-friendly alternatives to cable TV, without
the headaches of bulky equipment and two-year contracts.
But Mr. Ergen said service cancellations, or churn, are a major
issue for these services, in part because subscription demand can
be seasonal. Some consumers only want to sign up for a month to
watch the "March Madness" college basketball tournament, after
which they disconnect, for example. Moreover, every streaming
service has free-trial offers.
"You buy one month and then turn it off," Mr. Ergen said on a
conference call to discuss the quarterly results. "You can move
from player to player to player. I'm sure there's some college kids
who are going a year and never paying a dime for multichannel
TV."
Mr. Ergen said streaming services "aren't suicidal" and are
likely to rein in promotional offers over time. Dish is also
working with television programmers to address high customer
turnover. "We both have a motivation to reduce the short-term
churn," he said.
As its tries to diversify away from pay TV, Dish is seeking an
entry into the wireless business. The company said Thursday that it
plans to spend up to $1 billion to build out the first phase of a
wireless network to comply with government-mandated deadlines
related to wireless airwaves it has licensed.
Overall for the quarter, Dish reported earnings of $1.39
billion, or $2.64 a share, up from $355 million, or 73 cents a
share, a year earlier. The period was helped by a $1.2 billion
benefit related to the recently enacted tax overhaul.
Revenue fell 7.8% to $3.48 billion, missing the $3.53 billion
forecast by Thomson Reuters.
Write to Shalini Ramachandran at shalini.ramachandran@wsj.com
and Imani Moise at imani.moise@wsj.com
(END) Dow Jones Newswires
February 21, 2018 17:00 ET (22:00 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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