Punctuated by the loss of 281,000 customers in the second quarter, Dish Network's (NASDAQ: DISH) steady stream of retrans battles and carriage wars has resulted in the loss of 7.5 percent of its subscriber base in just one year.
"Leaving aside the merits of either side's arguments about right and wrong, what is clear is that Dish's steady stream of programming disputes are having an increasingly obvious impact on the subscriber metrics of the core satellite business," MoffettNathanson analyst Craig Moffett said in an investor memo Thursday, shortly after Dish reported its Q2 earnings.
"Granted, the second quarter is always the year's worst," he added. "But the loss is much worse than last year's 151,000, and it leaves their satellite TV subscriber base a shocking 7.5 percent smaller than it was a year ago. In a business that is ostensibly all about the operating leverage of the fixed-cost satellite TV platform whose costs are spread across a growing base of users, that's an awkward place to start a conversation."
Amid Dish's latest retrans-related battle, 33 Tribune Media stations in 42 markets are blacked out on the satellite service. Dish Chairman and CEO Charlie Ergen said the two sides are "tens of millions of dollars apart" in a dispute that purely centers on licensing fees.
Dish is also involved in a carriage battle with the NFL Network, with Ergen describing the negotiations as being more "positive" and focused on resolving "long-term strategic issues."
But these are only the latest in a series of programming impasses Dish has faced in recent years.
Since losing 81,000 subscribers in the second quarter of 2015, Dish hasn't had a positive quarter in the last year, losing 339,000 subscribers. In terms of the core satellite service, however, this loss has been masked by the gains of IP-based service Sling TV. Moffett estimates that the satellite TV portion of Dish's operation lost 330,000 customers in the second quarter, for example.
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Ergen: Dish and Tribune 'tens of millions of dollars apart'
Dish loses 281K subs in Q2 as Sling TV growth 'hits a wall'