RSSDish Network reports losing subscribers, blames transition period
By Scott M. Fulton, III | Published August 5, 2008, 11:39 AM
For a company that's earning 50% more as a spun-off entity than it did as a wholly-owned division of EchoStar, what could possibly go wrong? Yesterday, Dish Network actually listed 28 possible dire consequences in a filing with the SEC.
For the past year, digital satellite service provider Dish Network has reported gaining subscribers by the truckload, signing up approximately 170,000 net new customers in just the fiscal second quarter of 2007 alone. But that gain was pared down to 110,000 in the third quarter of last year, followed by 85,000 in the following quarter, then 35,000.
Yesterday, the newly independent service provider reported having shed 25,000 subscribers in its fiscal Q2 2008, bringing its total customer base to 13.79 million.
In a filing with the US Securities and Exchange Commission yesterday, Dish cited multiple factors contributing to the company's uncertainty about its outlook, including its recently completed spinoff from parent EchoStar Communications, and its ongoing transition to a full high-definition service. Dish still relies on EchoStar not only for its set-top boxes (EchoStar is Dish's sole provider,) but for its communications licenses, without which the company may not be able to offer Internet service.
"Equipment, transponder leasing and digital broadcast operation costs may increase beyond our current expectations," the company writes in its latest 10-Q filing.
"We may be unable to renew agreements for these services on acceptable terms or at all. EchoStar's inability to develop and produce, or our inability to obtain, equipment with the latest technology, or our inability to obtain transponder capacity and digital broadcast operations and other services from third parties, could affect our subscriber acquisition and churn and cause related revenue to decline."
As far as this last quarter is concerned, Dish's financial performance was actually pretty good. The company reaped just over $2.9 billion in revenue, up 5.6% over the previous year's second quarter; and most impressively, operating income rose by almost 50% to about $335.9 million. (This is when you figure Dish Network's division separately from EchoStar for the prior year.) So the dire consequences aren't being realized just yet.
"Our ability to maintain or grow our subscriber base will be adversely affected if we do not enter into a new agreement with AT&T and we are not able to develop comparable alternative distribution channels," Dish Network writes.
Last March, EchoStar won several 700 MHz licenses in the E-block, where UHF Channel 56 resides now, having bid nearly three quarters of a billion dollars. In an indication that Dish Network's spinoff from EchoStar isn't exactly a separation, the company said it will be somewhat responsible for commercializing those licenses in order to build services in that spectrum. Those services may be especially necessary if Dish finds itself competing directly against AT&T in regions where the two are currently partners.
But finally, on top of all that, the company characterized itself as being in the fight of its life, along with parent EchoStar, against TiVo in a long-standing patent infringement battle regarding DVR functionality in EchoStar's set-top boxes -- the only STBs that Dish uses. That battle heated up even more last month when EchoStar launched its own wave against TiVo, claiming TiVo's software violates EchoStar's established patents.
"If we and EchoStar are unsuccessful in our appeal to the United States Supreme Court in the TiVo case, or in defending against TiVo's motion for contempt or any subsequent claims that EchoStar's alternative technology infringes TiVo's patent, we could be prohibited from distributing DVRs supplied to us by EchoStar, or be required to modify or eliminate certain user-friendly DVR features that we currently offer to consumers," states Dish Network's 10-Q.
"In that event we would be at a significant disadvantage to our competitors who could offer this functionality and, while we would attempt to provide that functionality using different technology and/or manufacturers other than EchoStar, the adverse affect on our business could be material. We could also have to pay substantial additional damages."
These were just some of a 28-point list of possible uncertainties -- which also included the lackluster US economy -- facing Dish Network's future as it begins the second half of its fiscal year. But that 50% gain in quarterly net profit helped offset the company's dire predictions, with Dish Network stock value trading up 2% on the NASDAQ exchange by late morning Tuesday.
IDK Dish network is OK for a TV service when Cable is either not available or just too dang expensive. But Cable defiantly has the advantage with the Cable Modem option for Internet, and in select locations even greater popularity because of FiOS. Which lets face it is Phenomenal as a Internet service and a delivery system for PPV or On demand feeds.
Dish network may have the HD market down, but the additional perks of Cable is growing hard to dismiss even at the greater costs.
IDK My sister has DirecTV and it works great, Much better IMHO, and she uses a DSL modem that does the job OK for her on that aspect. But for me it feels like a crawl most of the time compared to my cable modem service.
Dish network is certainly better then C or KU band Dish options anymore. Especially now that free to air is so limited without illegal hacked equipment. I got my uncle on Dish network using his old Satellite C-band dish. We just locked it in place and he can get what he needs now from dish network at a fraction of the cost. For him Cable is not possible as its not offered. And DirecTV is over the horizon for him so he can not get it. When Dish network has to compete, its a bit harder to produce profits across the board because of lack of good internet service. Lets face it Starband.. just no comparison to DSL let alone FiOS. Thats where DirecTV has a big advantage cause they do deals with DSL services do offer bundles. To my knowledge Dish has no such thing except Starband.
The equipment fiasco with the merger, well I'm sure that will work out eventually with echostar. But for the time being its going to be a bit of a mess for new customers I think.
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|I left Direct TV for much cheaper prices and HD. After I called and cancelled my service they made me pay for a extra month I never used and threatened to ruin my credit if I didnt pay up. Since then they have sent me tons of crap begging me to come back. I dont think so....
I have been happy with Dish HD Network till they informed me my reciever would no longer work and I had to get a new one. I also lost my HD service because the new satilight is in a new direction I cant get. I got all my recievers for free and didnt mind a whole lot about the loss of HD because it saves me money. But the one thing that got under my skin is I had to sign a new contract for 2 years. I fullfilled my commitment with the old reciever so I dont see why I owe them 2 more years because they changed things around. It wasnt my fault and I get less service. But I figure I will just suck it up. Direct TV sure isnt getting my money.
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|you need to acknowlege the fact that customers that stayed with you for 8 years and give them specials first. They will make you the greatest free slaeman. This will be actual working demos. All in all--TREAT YOUR LONG TIME CUSTOMERS WELL, AND YOU WILL HAVE A (fee) HAPPY SALESFORCE.
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|If it wasn't for having to sign a contract I would get satellite in a heartbeat. Until then, I'm sticking to cable, TYVM.
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|Blame it on the rain... J/K
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|Transition period? Hmmm, I would have blamed their crappy service myself. Not to mention their downright hostile telemarketing should you ever have the gall to drop their service. Funny they never had the time of day for me until I dropped them than suddenly they were calling me weekly offering me tons of freebies to come back, and they absolutely will not take no for an answer. Thank goodness for the Do Not Call list.
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|Dish is the less attractive hillbilly cousin of DirecTV. It always seemed to poorly ran and cheap to me.
You can't beat DirecTV with Sunday Ticket Superfan package for fall and winter entertainment. 8 games on one screen and I can switch audio from one to the other.
Amway has a huge stake in Dish Network, that should tell you something about the company.
By the way, the rack mount HR-21 with two way RS-232 let's us poll the receiver and give channel number feedback to our touch panel. You can then press and hold a blank channel preset for two seconds and it will automatically program that channel number in and fetch the channel icon from a dynamic image database. This is huge for home automation customers.
Dish sucks a fat ass.
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|Boy did I strike the motherload on this convo.I have called dish and complained that I want the yes network so I can watch the yankees.the reply was it isnt cost effective,and if they did offer it everyones bill would go up..so I said "SO What"...I am already paying for those stations I dont want..and she said like what.I said how about the Hispanic stations/religious/government access/home shopping..I dont need or want any of those.and I am paying as part of my package,but the 8 million people in ny/ct/nj...; cant watch the yankees..that sux..
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|Because of the the transiton period? How about the poor customer service. I have been a customer for about 4 years. My only other option is OTA or DirectTV. In 2004 we got service. Added HD in 2006 when we paid for all new (4) recievers to get the HD packages, 9 months later the MPEG2 devices were outdated, (although when I got them they were the latest models)since I wanted to continue to get HD, I had to again purchase all new recieivers (with no credit for the 9 month old units) to get the channels back that I lost when the old recievers instantly became obsolete. However I paid for these recievers, but still dont own them, and now two years later, I am under no contract. I wanted to get a new reciever with DVR and they want over 100.00 each. Plus a contract for the new equipment. I currently pay over 150.00 month for programming and we really only watch the movie channels, Disc, and Hist. We only subscribe to the full packages bacause we live 40 minutes from the closest town and it's our only real weekday entertaniment since we work at home. There are so many garbage channels that I have flipped through and wondered "is anyone alive actually watching this right now as a choice" I really believe that some of the channels only have one viewer in the world. What a waste of technology and time. I sometimes wish I lived back where I had my prior cable provider, no contract, basic cable on a few TV's and boxes on the others. Much cheaper, included a DVR with no additional fees. I'm not switching from DISH bacause I bet that DirectTV is not much better, but I sure wish I had other options and when I move again, I will ensure that I move to a place with more options.
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|While I am a Dishnetwork customer,And I am sorry to hear that they might be in financial troubles I believe that some of this they did to themselves.Dish is one of the only companies that doesnt have The Yes Network,DirecTV does comcast etc;
That equates to lost revenue,they were also the last to provide locals.They have made bad decisions on behave of their customers.Stop adding junk channels, I mean how many religious/home shopping and such channels does one need.The people want their sports and entertainment channels.Enough is enough..Just my opinion!
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|I agree. I've been a Dish customer for several years, but I'm looking seriously at dumping them for AT&T U-verse, which just became available in my area, or even, God forbid, Time-Warner. Verizon's not available in my city, or I'd be jumping on their deal.
Also, the fact that they charge extra for local channels is absurd, especially with the impending switch to digital in '09. They're the only provider I know of that does that.
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|WTF is this crap, Stop spamming!
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