Sling TV, Dish Network’s live streaming TV service, added 65,000 net subscribers during the second quarter and helped offset declines for the company’s satellite TV business.
Dish ended the quarter with 10.99 million pay TV subscribers—including 8.55 million Dish TV subscribers and 2.44 million Sling TV subscribers—after dropping a net 67,000 customers in Q2. The company lost 96,000 net pay TV subscribers in the same quarter of 2020.
Dish Network’s average revenue per user (ARPU) for its pay TV subscribers climbed up from $92.17 one year ago to $96.32. The company could likely see even further ARPU growth in the third quarter as monthly rates go up for Sling TV customers who had been on a one-year price guarantee since July 2020.
Dish’s pay TV segment revenues rose slightly, up 2.1% to approximately $3.25 billion but segment operating income spiked 18.9% to $827 million thanks in part to a decline in cost of services and other operating expenses.
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Dish Network said that competition for its pay TV services has continued to intensify over the past few years and warned of impacts including potential higher churn—the Dish TV churn rate rose to 1.29% in the second quarter—and higher customer retention costs.
“We and our competitors increasingly must seek to attract a greater proportion of new subscribers from each other’s existing subscriber bases rather than from first-time purchasers of pay TV services,” the company wrote in an SEC filing. “We incur significant costs to retain our existing Dish TV subscribers, mostly as a result of upgrading their equipment to next generation receivers, primarily including our Hopper receivers, and by providing retention credits. Many of our competitors have been especially aggressive by offering discounted programming and services for both new and existing subscribers, including bundled offers combining broadband, video and/or wireless services and other promotional offers. Certain competitors have been able to subsidize the price of video services with the price of broadband and/or wireless services.”