The Englewood, Colo.-based company said net pay-TV subscribers declined 81,000 in the second quarter, compared with a loss of 44,000 in Q2 of 2014.
For the first time, Dish included Sling TV subscribers in reporting overall pay-TV metrics for the second quarter. It had 13.932 million total TV subs as of June 30. According to Dish, Sling TV had 169,000 subscribers at the end of the first quarter. It didn’t disclose how many Sling customers it gained or how many satellite TV subs it dropped in Q2, but analyst Craig Moffett estimated that Dish added 70,000 for Sling TV and lost 151,000 on the satellite side.
Nevertheless, the No. 2 satcaster posted financial results that topped Wall Street forecasts, thanks to higher average subscriber fees. The company reported Q2 revenue of $3.83 billion, up 3.8%, and net income of $324 million (up 52%) or 70 cents per share. Analysts had expected EPS of 45 cents on revenue of $3.79 billion.
Pay-TV average revenue per subscriber for the second quarter of 2015 was $87.91, up 4.5% compared with $84.15 in the year-ago period. However, the growth of customers for the Sling TV bundle, which starts at $20 per month, “had a negative impact on pay-TV ARPU,” Dish acknowledged in its 10-Q filing Wednesday.
It’s not clear the extent to which Sling TV is cannibalizing Dish’s legacy satellite TV biz; that is, how many customers are switching from Dish to the lower-cost Internet TV service. In May, company execs claimed the vast majority of Sling TV signups were people who were not former pay-TV subscribers.
Meanwhile, Dish added a net 4,000 broadband subscribers, compared with 36,000 net adds in the year-prior quarter, bringing its broadband subscriber base to approximately 595,000.