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Dish Network lost about 257,000 net pay TV subscribers in the second quarter, compared with a drop of 67,000 in the year-ago period and a decline of 462,000 in the first quarter of the year.
The company disclosed in a regulatory filing early on Wednesday that it lost around 55,000 Sling TV subscribers in the latest quarter, compared with a year-ago gain of 65,000. It ended June with 2.0 million Sling TV subs. “The decrease in net Sling TV subscribers was primarily related to higher subscriber disconnects following seasonal sports activity,” the company said in a regulatory filing. “We continue to experience increased competition, including competition from other subscription video on-demand and live-linear OTT service providers.”
Dish also recording a net decline of about 202,000 in its traditional Dish satellite TV subscribers, ending June with 7.79 million. It cited a decrease in gross new subscriber activations, “primarily related to the lack of demand and shifting consumer behavior, as well as increased competitive pressures.” The company said gross subscriber activations “continue to be negatively impacted by stricter customer acquisition policies for our Dish TV subscribers, including, but not limited to, an emphasis on acquiring higher-quality subscribers. Furthermore, we continue to assess the impact of COVID-19 and cannot predict with certainty the impact to our gross new Dish TV subscriber activations.”
On a mid-morning analyst call, Dish CEO W. Erik Carlson discussed the video subscriber losses at Dish, including at Sling. “The pay TV market is obviously in a bit of chaos and linear is definitely declining, and it’s up to management to stem that decline and try to monetize the existing customer base as well as we can,” he commented.
Carlson went on to point to increased subscription video-on-demand competition for Sling. “There’s a lot of change in consumer behavior. There’s obviously the effect on Netflix, the spend on content and obviously stagnation in some of the providers,” he added.
Dish chairman Charlie Ergen predicted industry consolidation in the streaming arena, where Sling competed. “We’re profitable, and most people are not. So I think we’re well positioned there for things that might happen. But we’re smart enough not to chase customers who aren’t going to be profitable,” he argued.
While facing continuing subscriber losses, Dish is also building out a costly 5G wireless network, which has put pressure on its capital expenditures. Company execs said the 5G network deployment had taken longer than anticipated owing in part to having to secure and fine-tune its use of VoNR technology.
Dish added it will start receiving 5G wireless phone devices in the third quarter and will begin distributing them to subscribers in the fourth quarter. And the company talked maturing debt as it has around $1.5 billion of debt with a 5 percent coupon coming due in March 2023 and requiring the company to raise fresh capital.
The uncertainty around upcoming debt refinancing as interest rates climb has put a cloud over Dish’s share price. “We believe the markets, while choppy, are available to us today. Obviously more expensive than we’d like today. We’ll continue to monitor that, as we have over the years,” Ergen told analysts about raising capital as he conceded the new debt would be more costly rate-wise to acquire and service.
“I guess people on the call with have confidence one way or the other. But assuming the marketplaces don’t get materially worse than they are today, we’re going to get our network built,” Ergen added.
During the latest quarter, Dish reported net subscriber additions “have been negatively impacted as a result of programming interruptions and threatened programming interruptions in connection with the scheduled expiration of programming carriage contracts with content providers.”
The firm noted that its traditional Dish user churn rate for the three months ended June 30 rose to 1.51 percent, compared to 1.29 percent for the same period in 2021. “Our Dish TV churn rate continues to be adversely impacted by external factors, such as, among other things, cord cutting, shifting consumer behavior and increased competitive pressures.”
Overall, Dish closed the second quarter with a total of 9.99 million pay TV subscribers. The company on Wednesday also reported a decrease of 210,000 retail wireless net subscribers in the second quarter, ending it with 7.87 million.
Dish on Wednesday also reported a decrease of 210,000 retail wireless net subscribers in the second quarter, ending it with 7.87 million. Dish’s second-quarter revenue of $4.21 billion declined 6 percent from $4.49 billion in the corresponding period of 2021. Quarterly earnings attributable to Dish totaled $523 million, compared to $671 million in the year-ago quarter, down 22 percent.
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