DirecTV, Dish sub counts see little Q3 impact
Blackouts didn’t leave much of a black eye for pay-TV distributors, if the third-quarter numbers for video subscribers are any indication.
Both DirecTV and Dish saw minimal impact to the sub counts they revealed Tuesday in their third-quarter earnings reports despite the overhang of carriage-fee disputes with Viacom and AMC Networks, respectively, that left consumers without key channels for extended periods leading into the quarter.
By defying the notion that these blackouts would prompt consumers to cancel their subscriptions in meaningful numbers, top MSOs will only be emboldened to dig in their heels on carriage disputes in the future: Blackouts could become even more common and maybe even last longer. A record 80 such incidents have occurred to date in 2012.
DirecTV reported an increase of 67,000 video subs for the quarter. While a number that small is nothing to brag about, it’s telling that the satcaster didn’t register a decrease despite the nine-day absence of Viacom-owned channels in July.
On the company’s conference call Tuesday, DirecTV CEO Mike White made it clear he’ll look to continue to hold the line against higher programming costs. “All of us at DirecTV are going to continue to stand up” for keeping consumer costs lower, White said.
The impact of the Viacom nets’ absence was likely blunted somewhat by the NFL Sunday Ticket package, subscriptions to which always tick up heading into football season. While far below the increase of 327,000 notched in the year-ago quarter, the sub total is still better than the unprecedented decrease DirecTV registered last quarter.
Dish did get dinged in the third quarter, dropping 19,000 subs — nearly double the loss of the previous quarter. But that’s still a small number considering the four-month standoff that knocked out top AMC Networks programming like “Breaking Bad,” and a decrease far smaller than the 111,000 subs that Dish shed in the year-ago quarter.
“We suspect that without the AMC fight, Dish might have shown positive net adds,” Stefan Anninger at Credit Suisse wrote in a research note.
It’s entirely possible that whatever losses DirecTV and Dish sustained for the quarter spurred modest gains for rival cable and telco providers, which are far less vulnerable than the satcasters because of their more diversified product offerings. Major cable operators overall saw a smaller year-over-year decrease in the quarter: 499,000 subs compared to 544,000, according to Bernstein Research. The slower rate of losses was driven by a strong performance from Comcast, while the telcos actually saw their gains tick up year-over-year to 324,000, from 303,000 in third-quarter 2011.
While the bruising battles between programmers and distributors probably left both sides weaker, plenty of ink was spilled suggesting that distribs took the bigger hit. But the numbers are going to have to show a far greater toll from the blackouts if the adversarial nature of these negotiations is going to soften anytime soon.
DirecTV reported a profit of $565 million for the quarter, up from $516 million in the year-ago quarter. Dish reported a loss of $158 million from the net income of $319 million in the year-ago quarter, a reflection in part of its settlement with Cablevision in the Voom lawsuit.