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Dish Posts First Quarterly TV Subscriber Gain in Nearly Three Years

Dish Network tallied a net gain of 28,000 pay-TV subscribers in the fourth quarter of 2016 — its first move into positive territory after 10 straight quarters of sub losses.

The gain in the last three months of 2016 wasn’t enough to offset Dish’s steep losses earlier in the year, including its worst-ever quarterly loss in Q2. For full-year 2016, Dish lost 226,000 subscribers, ending the year with 13.671 million pay-TV customers.

The last time Dish posted a net quarterly gain in TV subscribers was for the first quarter of 2014, when it added 40,000 subs. The satcaster’s Q4 gain was a surprise: Wall Street analysts on average expected Dish to report a net loss of 87,000 subs for the quarter, according to FactSet StreetAccount.

However, it’s unclear if the subscriber results for Q4 2016 reflect an improvement in Dish’s core satellite TV business or a strong surge in its Sling TV internet-delivered streaming service. Starting in the second quarter of 2015, the company has reported aggregated metrics for both satellite and internet TV customers — which show that Sling TV has not been able to offset significant satellite subscriber losses, until the most recent quarter.

Analysts believe Dish’s high-value satellite TV business continues to suffer dramatic declines. Dish shed 245,000 satellite TV subs in the fourth quarter, far worse than the loss of 114,000 in the year-earlier period, according to estimates by MoffettNathanson analyst Craig Moffett. Dish’s traditional video base is down 7.8% year over year, he estimated.

In its 10-K filing with the SEC, Dish said subscriber activations “continue to be negatively impacted” by its focus on signing up higher-quality subscribers (i.e., consumers with better credit histories) — as well as increased competitive pressures from rivals, including “skinny bundles” like AT&T’s DirecTV Now, which added more than 200,000 subs in Q4.

To try to shore up its satellite TV business, Dish earlier this month launched a new ad campaign geared around a character called the “Spokeslistener,” carrying a message that the company is actively responding to consumer concerns and complaints.

Overall, Dish posted $3.72 billion in revenue for the quarter ended Dec. 31, 2016, down 1.6% from the year-earlier period and slightly below analyst expectations. Net income was $343 million for Q4 2016 (or 70 cents per share), topping Wall Street’s forecast of 66 cents, compared with a net loss of $125 million in the year-ago quarter.

Pay-TV average revenue per customer was $88.66 per month during full-year 2016 (across both Dish satellite and Sling TV services), versus $86.79 in 2015. Dish said average monthly subscriber churn for 2016 was 1.83% compared with 1.71% the year prior.

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