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Sats Sing Same Sad Song

Discussion in 'General DISH™ Discussion' started by Nick, Aug 11, 2006.

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  1. Nick

    Nick Retired, part-time PITA DBSTalk Club

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    The...
    DISH Results: Same Old 'Less is More' Routine

    Its becoming deja vu... strong financial numbers but weak subscriber additions.
    The 'less is more' song-and-dance is becoming a recurring theme among satellite
    companies, and EchoStar is the latest to be singing along.

    The DISH Network company reported total revenue of $2.46 billion for the three
    month period ending June 30, a 17 percent increase compared with $2.1 billion
    for the same period last year. Basic earnings per share reached $0.38 for the
    quarter, the company said.

    DISH reported approximately 195,000 net new subscribers during the period.
    The additions may have brought the company's total to about 12.46 million,
    but 195K - down 13 percent from the same period last year - is the lowest net
    addition total since the first quarter of 1998.

    According to Bernstein's Craig Moffett, the company's results are just another
    example of why the satellite sector is being downgraded across the board.

    "We have remained concerned that cable's cost advantage in offering low-priced
    'triple-play' bundles will eventually hurt video pricing growth," Moffett said.
    "EchoStar struggles to maintain price/value equilibrium with competitors."

    In addition, the looming shut-off of distant local signals will further problems for
    the Englewood, Colo.-based company. Moffett said a settlement with broadcasters
    is possible, but since they hold the upper hand in the negotiations, EchoStar could
    start facing increased churn rates as early as September.

    www.SkyReport.com - used with permission
     
  2. UTFAN

    UTFAN Legend

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    Nov 11, 2005
    Yet more predictions on the doom of satellite and companies like Echostar. During all this time, both sat providers have added millions of new customers.

    Charlie in recent years has talked several times about the maturing of the industry, and that subscriber additions would become more and more difficult.

    So the companies are now making sure the customers they have actually pay their bills. Which is good.

    But to those who predict the demise, you join a long list of people who continue to be proven wrong.
     
  3. restart88

    restart88 Legend

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    Jun 18, 2006
    In addition, the looming shut-off of distant local signals will further problems for
    the Englewood, Colo.-based company.


    I never have much cared for that whole protected markets BS. I think you should be allowed to receive any channel your provider is willing to provide. All it's done is kill local originated programming and driven folks away from broadcast stations to cable & DBS due to a lack of overall desireable content provided.

    The only way to time shift programming is to record your favorite programs, and that just encourages people to get a Tivo or DVR and just skip past the advertising, which advertising is the whole idea behind protected markets in the first place. :new_Eyecr

    The bundled services is indeed a nice lure for cable, but DBS still has some programming that no cable company can or will provide, such as some foreign channels & Dominion Sky Angel to name 2. Speaking of which, E* really screwed up when they failed to find space to provide the channels lost on Sky Angel due to technical problems on the bird. Allowing those subscriptions to become less attractive means one more reason to jump ship and switch to another provider or start new with someone else in the first place, IMO. When every subscriber counts you want to have less reasons to go to the competition, not make more.

    But a bigger threat to DBS will be the options afforded by internet television assuming the pricing structure is agreeable with consumers and the video quality is fairly good. Personally, I have a good price for broadband via Bright House and Vonage costs $15 a month so I have little incentive towards bundled savings plans. But at mom's the high cost of Comcast as a non cable subscriber is somewhat prohibitive, at least for her. And she is as happy as can be with Direct TV and wants no part of Comcast due to past bad experience.

    Longer term, I think an abundance of free or cheap WiFi will favor internet TV providers and relegate local OTA to the role of morning traffic & weather reports, although satellite radio and GPS reporting are making even that less desirable.

    Five to ten years from now it will be a whole new world as far as how you receive programming and cable's bundled savings will be among the least of problems for DBS. I think DBS providers should start working on providing some programming that nobody else has even if it means running their own production company and hope it draws customers away from or in addition to other options.
     
  4. robert koerner

    robert koerner Icon

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    You might find the articles "I Cringely" writes interesting (on the PBS site) interesting. Recent articles touch on video streams.
     
  5. Stewart Vernon

    Stewart Vernon Roving Reporter Staff Member Super Moderator DBSTalk Club

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    Sometimes I think of this like... if you started at a company in the mailroom... and you worked your way up the chain getting raises and better jobs... and then one day you found yourself promoted to CEO...

    Would you feel your life was over now that you couldn't be promoted any higher?

    There is such a thing as diminishing returns in business... and growth is much faster (for a good business) for a long time early... but eventually you have so many customers that each new customer is harder to get because you have the easy ones already OR there is competition that already has them similarly as loyal as your customers are to you.

    At that point... business is not a failure if it doesn't gain large numbers of new customers each year as long as it maintains its customerbase. The way to grow a business once you've reached customer-saturation... is by offering more services that you can charge more money from your existing customers.
     
  6. James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Club

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    The good news is that existing customers are cheaper than new customers. The bad news is that both major satellite companies are going through a phase where they have to spend a lot of money on old customers to upgrade them to new services. Fortunately they don't have to spend money on ALL old customers, only the ones that want to upgrade to HD.

    The key now is to stop losing customers. While net customer adds are nice, we know that they have actually added more than the net because they have lost customers. Every customer added has a cost. There is no refund of that cost when a customer leaves.
     
  7. DishSubLA

    DishSubLA Legend

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    Apr 9, 2006
    This is why Murdoch and Ergan do want a merge. But don't think either Direct or Dish are going away anytime soon. Their joint uber-aggressive rounds of bidding for spectrum with its near billion dollar "down-payment" say a whole lot about how far they are willing to go to meet the new challanges. They have plans for the long-term, but we really don't know what they are. Satellite still continues to steal customers away from cable. If your doom and gloom were correct, then satellite should have expierenced a net loss of customers some time ago. In fact, satellite is getting subs to increase their spending on services. Quite frankly, I am so sick and tired of those fat Wall Street windbags who only look to the next quarter. Apparantly profits, and revenue, and all the other things that add value to stock and a company mean nothing now. It's all about focusing on tricks and the things that increase the stock price before the closing bell of that day. The insanity of the Time-AOL fiasco: Time, the diversified and PROFITABLE company with a lower stock price than the sexy looking car that turns out to be lemon: AOL. Now it is AOL drowing in the weight of its own pretense, and at the very least it can be said that Time is doing just a little bit better than AOL these days, don't ya think?
    Finally, consumers (and we on this board may not be the best reflection of the majoirty of consumers) no matter how cool the technology or great the bells and whistles, will always have to rank PRICE and SERVICE before even value, or anything else. And currently, satellite still beats the competition there. I tell you, so many people I have turned-on to Dish have stated that the lower bill from Dish was the deciding factor in leaving cable. 'Nuf said.
     
  8. restart88

    restart88 Legend

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    When you get to the top of the heap then you look for a good reason to get paid $millions to jump ship and take over at another company and make even more money with the stock options and incentives, regardless of whether the company makes or loses money. :D

    As far as what companies do at the customer saturation point we already know what many of them do...they ship as much of the workforce as they can off shore to boost the revenue projections then dump their stock holdings a little at a time until they can find a position elsewhere before the other shoe drops. ;)
     
  9. restart88

    restart88 Legend

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    I disagree to a point. True HDTV is an issue, but customer retention at D* does have deals for existing SD customers. I'd call up and pick up another such deal except I feel a tiny bit guilty about it, after all I was willing to subscribe at current cost and have no complaints about their service, but also I'm not willing to get locked in for another year at the moment as other options are coming available.

    On the E* side, I'm as happy as I can be with the Encore pak. I've often considered adding Starz or one of the others but it seems that for $5 a month I get more movies I like than any of the options have at $12 (more or less). :lol:

    So between Encore and various outlets for aquiring DVDs (like Columbia House, Peerflix, and Wal*Mart's discount bin, not to mention online specials - just to name a few) I'm in video hog heaven! :D

    It will be interesting to see what internet channels will be offering once they get established. Expansion of VOD sounds promising, but I'm not sure if that will change my current subscriptions or not. And I'm curious to see what some OTA stations will be offering on some of their sub channels once they dial up to full power. :whatdidid
     
  10. James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Club

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    You may have missed the point about the cost of old customers vs new. Yes, E* and D* both have special deals that they offer all customers from time to time, but the basic cost of providing the service isn't as expensive as handing out new equipment.

    I can sit here with my receivers and bounce between AT60 and AEP adding as much programming as I want. Nearly everything is on a D500 now so unless I have a really old dish (D300) I'm going to get those signals. I could have a D500 a SD105 or SD121 or a D1000 and get every non-HD channel offered. (Certain markets require a wing dish for locals.)

    Unless I'm adding internationals (where the dish is not always free) or HD (where the commitment helps pay back the cost - and I conceeded above HD upgrades cost the company money) it is just a matter of authorizations.

    When E* decides to add more channels as long as they place them on an existing satellite (119 or 110 for SD; 129 and 61.5, or 110 for HD) they don't have to spend money on existing customers. The only cost is the price of promoting the channels and paying for rights.
     
  11. restart88

    restart88 Legend

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    As far as I know D* has had a 3 in 1 dish for a while now and now only installs those, but the SD content is at 101 while HD is at 110 and the remainder of the foreign at 119. Now as I understand it they now use a single integrated LNB. So I suppose the same could be said of them unless your receiver is so old that it doesn't support multi sat positions. But all of my D* programming is at just 1 position and my old dual lnb 18" pizza dish works better than the Dish 500 quad when it comes to rain fade. But I realize that wasn't your main point.

    I guess it's just that for years neither company wanted to do much of anything to keep customers. In fact, short of HDTV upgrades I wasn't aware that E* even offered anything at all.
     
  12. Stewart Vernon

    Stewart Vernon Roving Reporter Staff Member Super Moderator DBSTalk Club

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    Customer retention is a different matter too... I've said this before, but some customers aren't worth the price of retention.

    I've had relatives in the "gimme gimme" category... who would perk up every few months and want some new thing for free or at a "great deal" or they would "take their business elsewhere".

    Problem is... this kind of customer does this ALL the time and is never happy for long... so if you keep trying to retain them, you spend that money again and again... BUT if you let them leave, then they will pull the same routine with the next company... and very likely will bounce back to you at some point without you having to do anything at all.

    Like people who keep switching car insurance to get the best rates... they end up switching often and eventually come back to you without you having to bend over backwards.

    The loyal customers really demand very little and are inexpensive to keep... and those are the ones who would most appreciate the efforts for retention... except it doesn't come up nearly as often with them because they will complain very little and when they do, they don't threaten to go elsewhere as their only solution.
     
  13. jonsnow

    jonsnow AllStar

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    Only if Charlie offers a fourth, at10 package around 14 dollars with a handful of the most watched basic cable channels will he get new subs period end of story. No I do not mean the the unwatchable family package, that experiment was a complete and utter failure. I'd choose sci-fi over the hallmark movie channel any day of the week. Otherwise by the time la carte comes around, in 20 to 30 years when congress finally wakes up, their won't be a echostar company. Good grieve netflix actually offers movies, basic cable, unless your willing to pay for the top120 will only hand you tcm and ifc at a way higher cost.
     
  14. jrbdmb

    jrbdmb Icon

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    But often, the customers don't "threaten" anything, they just up and leave. By the time I decided to leave Comcast for Dish, there were no special offers that Comcast could have thrown me to keep me around. And the same goes for Dish ... it is a dangerous game to take any of your customers (old or new) for granted.
     
  15. Stewart Vernon

    Stewart Vernon Roving Reporter Staff Member Super Moderator DBSTalk Club

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    True I don't believe in taking loyal customers for granted... but you almost proved my point, in that you said there was no offer that could have been made to retain you once you had decided to leave. There's that class of customer too, who has already decided to switch, and is too expensive to try and retain at that point.
     
  16. restart88

    restart88 Legend

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    Not sure I agree. Dish Family is about as close as you'll be getting. An AT10, Pick 10, whatever you call it will not be coming for a number of reasons, short of an FCC imposed a la carte pricing structure. This is due to the numerous contracts involved. If Dish Family had CNBC and Sci Fi I wouldn't mind parting with some of the other channels in the package but I'm thinking that since most of the channels are Disney owned my wants become impractical from a business model standpoint. Oddly, I already have some of the Family Pak channels in my Sky Angel sub, so the plan is less appealing to me; I'm essentually paying for them twice.

    But as I decide on how much of my entertainment dollars to devote to DBS programming I also have to keep in mind that this is FL and when it rains it pours! So many times when I want to see a program or record it I get frustrated because of signal loss. So it's hard not to at least have some level of cable subscription.

    Since my old OTA antenna became worthless I put installed one of those clip on antennas powered by the receiver. In fair weather it works great. But I've noticed that this slightly increases the DBS signal loss window and in fact when the receiver loses the signal the clip on also seems to lose signal, or maybe that's partly due to running it into Tivo. I don't know. Either way, it looks like I need a new OTA antenna or just keep a minimal cable sub.

    Nothing worse than paying for programming and then having nothing to see when you finally have time to watch.
     
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