Orby TV peaked with less than 25K subscribers, court documents reveal

Orby TV
Court documents reviewed by FierceVideo revealed Orby TV was never close to its break-even point. (Orby TV)

Shuttered pay television upstart Orby TV reached its peak with less than 25,000 paying subscribers before the low-cost satellite service started running out of cash, according to recently-published court documents reviewed by FierceVideo.

The number was affirmed by an Orby TV executive in an affidavit that supported a motion to dismiss the company's Chapter 11 bankruptcy, a request that was approved by a federal judge overseeing the case earlier this week.

Orby TV launched in March 2019, offering prepaid satellite television service in three markets — Houston, Charlotte and St. Louis — before expanding nationwide with a promise to deliver general entertainment, news and sports channels at a substantial discount compared to DirecTV and Dish Network.

RELATED: Orby TV shuts down, redirects customers to Dish

To keep costs low, Orby TV was selective about its programming deals, making agreements with companies like ViacomCBS, AT&T's WarnerMedia, AMC Networks, Discovery Networks and Newsmax for a mixture of general entertainment and news channels. It also required customers to purchase satellite equipment and installation up front, though Orby TV included a free, over-the-air antenna that worked with its receivers so customers could get their local ABC, NBC, CBS and Fox stations for free.

In a 2019 interview, Orby TV CEO Michael Thornton said the company would need to attract around 100,000 paying subscribers in order for the service to turn a profit. The following year, Thornton revised that figure to between 70,000 and 75,000 subscribers, and said the service was projected to reach its break even point by the end of 2020 or the start of 2021.

Not even close to break-even

But court documents reviewed by Fierce Video revealed Orby TV was never close to its break-even point. In an affidavit filed by Orby TV COO Alexander Izzard, the service "grew and eventually peaked at roughly 23,000" paying subscribers before the company "ran out of money due to operating expenses and operating losses."

Thornton did not return two messages seeking comment on Orby TV's projections. The latest figure was affirmed in an interview that took place two months into the global health crisis spurred by the novel coronavirus COVID-19. Earlier this year, Thornton told employees the pandemic hurt the company's ability to raise more cash from investors.

Brett Sappington, the vice president of media research firm Interpret, said Orby TV was a well-intentioned service that may have arrived to market too late.

"Satellite is just a harder proposition for consumers." Sappington said in a phone interview on Thursday. "They were coming to the market at a time when consumers have all of these other streaming services like YouTube TV and others where you don't have to pay anything upfront."

Satellite was a more-attractive option to consumers when they were seeking an alternate to their fix-line provider, Sappington said. Over the last few years, cheap streaming devices and services have expanded the number of options consumers have to get television service — one that no longer requires spending hundreds of dollars on equipment and installation.

"They've got to communicate the value proposition of Orby TV," Sappington said. "I think [streaming options] made it really difficult from a competitive standpoint to find a good, defensible position in the market."

Orby TV stopped operating in March, just days before it filed for Chapter 11 bankruptcy protection. Remaining customers were directed to sign up for Dish Network, which offered Orby TV's former subscribers a programming package that started at $53 a month coupled with free satellite TV equipment and installation.

In April, documents filed in federal court revealed Orby TV owed its former programming partners over $40 million, including more than $16 million to ViacomCBS and $10.4 million to AMC Networks.

Last month, Orby TV sold its trademark, website, remaining satellite equipment and other assets to Florida-based Disitron Satellite Group for $120,000.

It was not clear how much of that money was used to pay back the programmers and Orby TV's other creditors. Attorneys representing Orby TV did not return an inquiry sent by email on Thursday.