Satcaster reduces churn, adding net 35,000 TV customers, as earnings top analyst estimates
Dish Network, the third-biggest U.S. pay TV operator, gained a net 35,000 TV subscribers in the third quarter — surprising Wall Street analysts who had been expecting the company to lose about 39,000.
A key difference for Dish in the period: Existing customers were slightly happier. Its pay-TV subscriber churn rate decreased to 1.66%, down from 1.8% percent in the third quarter of 2012. That helped Dish retain more customers, as it actually added fewer gross new subs (734,000) in Q3 2013 than it did in the year-earlier period (739,000). In the third quarter last year, subscribers declined by a net 19,000.
Dish and rival DirecTV — which gained 139,000 subscribers in the third quarter — both also likely benefited from Time Warner Cable’s standoff with CBS over retransmission fees. That resulted in a monthlong blackout of the Eye in major TW Cable markets and the MSO’s subs nationwide lost Showtime and other cablers, which led Time Warner Cable to drop a record 306,000 video customers in the most recent quarter.
The satcaster reported revenue of $3.60 billion for the quarter ended Sept. 30, up 2.2% from $3.52 billion a year ago. Net income was $315 million for the most recent quarter versus a net loss of $158 million in the year-ago quarter (which included a $700 million settlement with Cablevision Systems and AMC Networks, resolving a dispute over the cable company’s Voom HD channels.) Earnings per share of 68 cents beat Wall Street expectations of 43 cents.
The Dish results also show cord-cutting still hasn’t cut to the quick for the pay TV biz, although the industry certainly isn’t in growth mode. Dish ended Q3 with 14.049 million pay-TV subscribers, flat compared with 14.042 million in the year-ago quarter. Pay-TV average revenue per subscriber was $81.05 per month, up 5.3% from $76.99 in Q3 2012.
In addition, Dish added 75,000 net satellite broadband subscribers in the third quarter — versus 17,000 a year ago — bringing its broadband subscriber base to approximately 385,000.
Last week, Dish announced it would close the approximately 300 Blockbuster stores in the U.S., eliminating 2,800 jobs. The final Blockbuster movie (“This Is the End”) was rented from an outlet in Hawaii on Saturday.
Meanwhile, Dish remains in negotiations with Disney on carriage terms for cable networks including ESPN, Disney Channel and ABC Family, as well as retransmission of ABC-owned stations in eight markets: New York, Los Angeles, Chicago, Philadelphia, San Francisco, Houston, Raleigh-Durham, N.C., and Fresno, Calif.