Dish Network lost another 233,000 customers to its core satellite TV platform in the third quarter, estimated one analyst, who pegged the linear service’s rate of decline at 8.4% a year. The company’s revenue is shrinking by 4.3% annually, and EBITDA is declining at a yearly rate of 9.7%.
Still, Dish Chairman and CEO Charlie Ergen told analysts and reporters yesterday that the satellite TV operator doesn’t “get as much credit for our video business as we should.
“It’s not dead—it’s still a very, very profitable business,” he added.
Discounting 145,000 subscribers lost in Puerto Rico and the Virgin Islands in the aftermath of Hurricane Maria, Dish reported a gain of 16,000 customers in the third quarter—the result of better-than-expected erosion of the satellite platform and continued growth of the Sling TV OTT service, which is now approaching 2 million users.
Base priced at $19.99 a month, investment analysts haven’t been excited by Sling TV.
“The wheels are officially coming off the satellite business,” said MoffettNathanson analyst Craig Moffett, who pegged Dish’s satellite TV losses at 233,000 in Q3, even though the operator doesn’t parse out satellite losses and Sling TV gains. “And we’ve now seen Sling TV contribute to the top and bottom lines long enough to make clear (as if anyone had any doubts anyway) that Sling TV is economically irrelevant. It is doing nothing to arrest Dish Network’s slide.”
For his part, Ergen dismissed assertions that Sling is cannibalizing Dish’s core satellite platform and making the erosion worse.
“Our goal was … to get that generation that we've lost in pay TV,” Ergen said. “There wasn't much overlap in between Sling and Dish at all initially.”
However, Ergen conceded that the virtual MVPD market in which Sling TV now operates is merging into the traditional pay TV market.
AT&T’s DirecTV Now, he said, “is really a replacement for cable—really, it’s almost exactly cable, just in an OTT format.”