DISH REPORTS 413,000 SUBSCRIBER LOSSES AMID COVID-19 PANDEMIC

Dish Network reported its highest-ever quarterly loss of subscribers as a result of the Covid-19 pandemic, with a drop of 413,000 total pay-TV customers in the first quarter of the year.  “The COVID-19 pandemic caused severe disruption in certain commercial segments served by Dish, including the hospitality and airline industries,”  the company said Thursday. “We have faced, and could continue to face, fewer subscriber activations and increased subscriber churn rate as a result of the COVID-19 pandemic and the worsening of the global business and economic environment.”

The satellite TV giant closed the first quarter with 11.3 million pay-TV subscribers, down ‭6% since last year, which includes a sequential decline of about 132,000 satellite subscribers to 9 million. It also recorded a net loss of 281,000 Sling TV subscribers, marking the acceleration of the streaming service’s erosion from the fourth quarter of 2019. Charlie Ergen’s Dish has been steadily losing subscribers even before the outbreak, as consumers are cutting back on pay-TV services and opting to stream content instead. The company, however, still blames the unusually steep declines on the pandemic. “We have faced, and could continue to face, fewer subscriber activations and increased subscriber churn rate as a result of the COVID-19 pandemic and the worsening of the global business and economic environment,” Dish said.

As of 31 March, Sling TV had 2.3 million customers, a 4.7% decline from last year, even as the service launched some free promotions during the pandemic to win new subscribers. Net income attributable to Dish fell 79% to USD 73.1 million, or 13 cents a share, from USD 339.8 million. Excluding items, EPS was 55 cents. Revenue rose nearly 1%  to USD 3.22 billion. Analysts were looking for EPS of 58 cents on revenue of USD 3.15 billion. Dish also admitted that some of its ongoing programmings experienced blackouts for hurting subscriber numbers. AT&T’s HBO and Cinemax channels have been dark on Dish TV and Sling TV since November 2018, and “we and AT&T have been unable to negotiate the terms and conditions of a new programming carriage contract,”  the company noted in the Q1 report. Dish’s pay-TV services have also been without Fox-branded regional sports networks since July 2019. Since Sinclair Broadcast Group acquired the Fox RSNs last summer, the parties have not reached a carriage deal for the networks.

The company had 16,000 employees at the end of 2019. Last month, Dish informed its employees about its job cut plans, the shift of focus to in-home services division, which handles on-site installation and support at customer locations. It has not disclosed the scope of the layoffs. Dish CEO, Erik Carlson announced the cutbacks in a memo to employees, as first reported by Reuters and confirmed by the company. “The pandemic has forced us to take a closer look at every aspect of our business, at our work volumes, our areas of focus and investments, and the performance of our team members," Carlson said in the memo, referring to the Dish division that handles on-site installation and support at customer locations. "The company is specifically looking to reevaluate parts of our business, particularly within In-Home Services."

Dish currently has a wireless 5G network in the works, estimated to cost USD 10 billion. It has until 2023 to provide wireless coverage to 70 percent of the US population or it faces USD2.2 billion in fines from the Federal Communications Commission. Despite the project, Dish has been buffeted by the longer-term cord-cutting trend and struggling to adapt even since before the coronavirus crisis.  Analyst Craig Moffett of Moffettnathanson, who has a “sell” rating on the company’s stock, said Dish has an uphill battle if it wants to succeed in building a wireless network while stemming the losses from its TV unit. “History tells us that it is difficult, and rarely advisable, to fight a war on multiple fronts. Dish is fighting a multiple-front war,”  the analyst said. “It would be nice to imagine that the satellite TV business won’t matter for Dish’s wireless business, but the Covid-19 crisis gives all this a wartime feel, as there is a new urgency for all businesses.