Faced With a Shrinking Net Income and a $280 Million Fine, DISH Struggles to Hold On to Subscribers
DISH is still getting its butt kicked by life even with Sling TV, its slimmer and more affordable friend, backing it up. Today in its Q2 earnings report, the company showed a loss of 196,000 net pay-TV customers. The company reported revenue of $3.64 billion (down 6% y/year) and diluted earnings per share of 9 cents — financial analysts expected $3.72 billion and EPS of 74 cents. The company now has a net income of $40 million for the period which dropped 91% from a year ago.
It is no surprise that DISH TV was under performing, most traditional cable and satellite companies are facing the same threat. The real question is “How is Sling TV Performing?” But unfortunately, DISH’s ego is to big to show its satellite subscriber numbers separate from its Sling TV Numbers. The company lumps the data together forcing investors to guess at how well the OTT service is doing, and how poorly its core satellite biz is performing.
The usual estimate of Sling TV subscribers falls between 1.3–2.5 million, which is a great start for having been launched just two years ago, but not enough to keep all of DISH afloat. Of course, the company has been active in their efforts of attracting subscribers. Most recently, Sling TV broadcasted UFC 214, its first of many pay-per-view offering. But even if Dish was able to convert all of its remaining 13 million subscribers (about 11 million if you take out the estimated Sling TV Subscribers) over to its SVOD platform, the company would still take a hit. Sling TV subscribers generate lower revenue than satellite customers, which would cause the company’s average revenue per user (ARPU) to nose dive.
And as if losing 91% of its net income wasn’t bad enough, the company was just slapped with a record $280 million fine that a federal district court ordered the company to pay for violating the “Do Not Call” telemarketing law.