Who needs HBO? Dish Network managed to buck the cord-cutting trend in the third quarter that has afflicted the rest of the pay-TV sector, reeling in 148,000 net TV subscribers in the period.
The gains at Dish come even as the provider’s satellite TV and Sling TV services have been without WarnerMedia’s HBO since October 2018 following a dispute over carriage terms.
Dish in particular surely benefited from AT&T’s disastrous Q3 results for its pay-TV biz, in which the telco’s DirecTV and other video businesses lost a whopping 1.4 million subscribers. One interpretation of Dish’s results is that “the utter meltdown at DirecTV in Q3… inevitably benefited Dish Network. Where else were they going to go?” MoffettNathanson analyst Craig Moffett wrote in a research note.
Dish’s increase in net pay-TV subscribers came from the Sling TV over-the-top side of the house — which added 214,000 net new subscribers during the period. The company lost about 66,000 net Dish TV subscribers in Q3.
The company ended the third quarter with 12.18 million total pay-TV subscribers, comprising 9.49 million Dish TV subscribers and 2.69 million Sling TV internet subscribers. The 148,000 subscribers net gain in the period is in stark contrast to Dish’s net loss of 341,000 subs in the third quarter of 2018 — when Dish suffered from a blackout of Univision networks, which returned under a deal inked this March.
Dish still has carriage spats to deal with: In July 2019, Fox’s regional sports networks also removed certain channels from Dish TV and Sling TV; those RSNs were acquired in August by Sinclair Broadcast Group and haven’t returned to Dish’s lineups at this point.
For the third quarter, Dish topped Wall Street earnings estimates although it posted declines on both the top and bottom lines. Dish reported $3.17 billion in revenue for Q3 (down 7% year over year) and net income of $353 million (an 18% drop) or diluted earnings per share of 66 cents. Analysts expected revenue of $3.15 billion and EPS of 61 cents.
Dish separately announced plan to raise $1 billion through a rights offering to current stockholders, capital it intends to invest in its wireless business. Charlie Ergen, Dish’s co-founder and chairman, owns 51.6% of the outstanding stock and plans to participate in the offering with respect to all the shares he owns (and will purchase all Class A shares that that are not exercised by stockholders in connection with the right offering).
Dish is building out a nationwide 5G network and plans to launch mobile services initially through a deal struck in July with T-Mobile and Sprint, under which Dish will acquire Sprint’s prepaid wireless businesses and obtain rights to use T-Mobile’s network for seven years.
Also Thursday, Dish announced two executive hires for its wireless team, both reporting to Ergen: Marc Rouanne, a veteran of Nokia, will serve as chief network officer overseeing network architecture, strategy, development; and Stephen Bye, a former Connectivity Wireless, C-Spire and Sprint exec, was appointed chief commercial officer to lead network application development and commercialization.