Dish Sheds 23,000 TV Subscribers in Q1, Warns Viacom Nets May Go Dark

Satcaster says it may not reach agreement with Viacom prior to Wednesday midnight ET deadline

Dish network logo
Courtesy of Dish network

Dish Network posted another quarter of net subscriber declines, as the company’s cheaper Sling TV over-the-top pay-TV service still isn’t offsetting shrinkage in its core satellite TV business.

And Dish would likely see a spate of new customer cancellations if Viacom’s networks drop from the lineup: The satcaster said Nickelodeon, Comedy Central, MTV and other Viacom programming will be pulled from its services Wednesday if the companies can’t reach a renewal.

In the first quarter, Dish’s net pay-TV subscribers — which includes those with Sling TV — declined 23,000 in the first quarter, versus a net gain of 35,000 in Q1 of 2015.

Dish does not break out the number of traditional satellite TV subscribers versus Sling TV customers. Analysts had expected the company to lose 13,000 subs in Q1. The company closed the first quarter with 13.874 million total pay-TV subscribers, down 1% from 14.013 million a year ago.

Overall, Dish posted revenue of $3.79 billion for the quarter ended March 31, 2016, compared with $3.72 billion a year prior. Net income rose 10.8%, to $389 million, or 84 cents per share. Wall Street expected revenue of $3.8 billion and EPS of 62 cents.

The No. 2 satcaster reported the results as talks with Viacom on a renewal for 18 channels come to a head, with a deadline of Wednesday at midnight Eastern. On Tuesday, Viacom warned viewers with a crawl on its channels that the programming may go dark on Dish.

In a regulatory filing, Dish said that on March 17, Viacom “unilaterally elected to send us a termination notice” that would terminate the carriage deal with the programmer prior to midnight ET on April 20.

“While we are willing to continue negotiations with Viacom, in the event that we are unable to negotiate the terms and conditions of a new programming carriage contract prior to midnight of April 20, 2016, Viacom will remove all of its channels, including, among others, Nickelodeon, MTV, VH1, Comedy Central, Spike TV and BET from our programming lineup,” Dish said in the filing. “If that occurs, we currently intend to replace Viacom’s channels with other content.”

Dish is hoping to lure more customers to Sling TV with the launch of a three-stream version of the service anchored by Fox Networks Group, launched last week. The $20 monthly service is the same price as the single-stream product, launched in January 2015. But the multi-stream plan does not include ESPN or Disney networks, and the single-stream version lacks Fox networks.

Dish said average monthly revenue per pay-TV subscriber for Q1 was $87.94, compared with $85.73 a year earlier, with the increase primarily attributable to Dish satellite TV price increases in February 2016 and 2015. Sling TV customers have lower-priced programming packages than Dish branded pay-TV subscribers, which has a “negative impact” on overall ARPU, the company said.