Dish TV Subscriber Base Shrinks in 2015

CEO Charlie Ergen says satcaster evaluating Viacom renewal in light of programmer's other OTT distribution deals

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Courtesy of Dish network

Dish Network dropped a net 12,000 pay-TV customers in the fourth quarter of 2015, as the skinnied-down Sling TV over-the-top service failed to offset losses in the company’s core satellite business.

The satcaster ended 2015 with 13.897 million pay-TV subscribers (including Sling TV), a year-over-year decline of 81,000. In 2014, Dish lost about 79,000 net TV subscribers.

Dish’s pay-TV figures combine satellite and Sling TV, launched in February 2015 — the company doesn’t break out subscriber counts for the different services. Still, the aggregate numbers indicate a steep drop in Dish’s satellite base.

Dish lost 121,000 traditional satellite TV subs in Q4 — typically a seasonally strong period for the pay-TV sector — while netting 109,000 Sling TV customers in the quarter, according to estimates by analyst Craig Moffett. That came after Dish shed 178,000 satellite TV subscribers in Q3, its worst quarterly loss ever. The company ended the year with an estimated 503,000 subscribers for the lower-priced Sling TV bundle, per Moffett.

[UPDATE, 12:30 ET: On Dish’s earnings call Thursday, chairman and CEO Charlie Ergen said the company expects to break out Sling TV vs. satellite results in the future but offered no timeline. He said Dish expects the traditional pay-TV biz to continue to decline: “There’s not that many new household formations where satellite or cable are the right option – they’re just going to go to people like Netflix and Hulu, and hopefully Sling TV.” Asked about ongoing carriage talks with Viacom, Ergen said, “It would take a lot for us to not move forward” on a renewal but he added that Dish is evaluating the value of Viacom’s programming given its distribution deals with Netflix, Hulu and Amazon. “Some of the programming is chopped up a lot… and they want us to pay for it again,” he said.]

By comparison, rival DirecTV — now owned by AT&T — netted 214,000 U.S. subs in Q4 (up from 99,000 adds the year prior). Cable giant Comcast gained 89,000 video customers during the period, its best quarterly results for the segment in eight years.

Overall, Dish reported 2015 total revenue of $15.1 billion, up 3.4% compared to $14.6 billion a year earlier. Net income for the year was $747 million, down 21% from $945 million in 2014. Dish said operating income in 2015 was hurt by an FCC spectrum auction expense of $516 million and an impairment of long-lived assets expense of $123 million.

Dish’s monthly revenue per customer for pay-TV (including Sling TV) was $86.79 during 2015 versus $83.77 in 2014. Pay-TV average monthly subscriber churn for 2015 was 1.71%, an increase over 1.59% in the prior year.

For full-year 2015, Dish added approximately 46,000 net satellite-broadband subscribers. That brought its total broadband customer base to about 623,000 compared with 577,000 at the end of 2014.