Dish coy about Sling TV uptake amid what appears to be cannibalization of core satellite services

How many subscribers to Dish Network's (NASDAQ: DISH) core satellite service were lost in the second quarter? And how many customers does Dish's new Sling TV streaming service have nearly six months after launch?

These were the questions of curious media investment analysts that remained unanswered after Dish's Wednesday afternoon second-quarter earnings conference call, during which coy Dish executives would only release hints at the real answers. One thing that does appear certain: At least some of Dish's core subscriber base has migrated to the company's $20-a-month Sling TV service, which has aggressively sold itself to millennial-age consumers as an alternative to pay-TV.

Dish said that it lost 81,000 subscribers during the second quarter -- but the company lumped in its Sling TV subscriber metrics into its standard satellite TV subscriber base, so it's unclear how the two services are affecting each other.

Dish did say it counted 169,000 Sling TV customers at the end of the first quarter, all of which were new additions to its domestic streaming service. This led one analyst, MoffettNathanson's Craig Moffett, to conclude that Sling TV currently has an impressive collection of around 300,000 subs, and that the satellite company's core services lost up to 187,000 customers in the second quarter. 

For his part, Dish Chairman and CEO Charlie Ergen did his best to convince analysts that a Dish subscriber is a Dish subscriber, whichever delivery mechanism they choose. 

"You really don't care where you get a video customer," Ergen said, according to a Seeking Alpha transcript of his remarks. "We're paying the programmer the same, and we get a Sling customer or we get a Dish customer, and they both have ESPN. We just write the check to ESPN."

Ergen also re-iterated his believe that traditional satellite TV distribution is a mature business for Dish. And in that process, he did concede the number of core losses was bigger than 81,000.

"The linear TV business I think is mature to the -- and I think it's now declining," he said. "I think it has been declining since about 2012. But it's not declining in free fall, it's not crazy. But it is kind of going along. OTT is growing. So, I think you have a point when you say there's certainly more losses on the linear side than 80,000 or whatever it was. But we haven't broken out because that's not how we look at it."

Separately, Sling TV CEO Roger Lynch did reveal that most of the customers that drop the streaming service do so because it only allows an individual account one stream at a time.

"So, they may want to watch ESPN and their wife may want to watch another channel. And on Sling TV today, it's a single-stream service, that's probably the single biggest factor that I see cited as a reason that it doesn't meet their needs," Lynch said.

For more:
- read this Seeking Alpha transcript
- read this Bloomberg story

Related articles:
First Sling TV ads paint pay-TV companies as school-yard bullies
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Dish reports 81K sub losses in Q2, but analyst says Sling TV gains are hiding much bigger attrition

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