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DISH Network Reports First Quarter 2009 Financial Results


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#21 OFFLINE   Stewart Vernon

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Posted 11 May 2009 - 08:34 PM

I always bring this up every quarter too...

We know Dish lost XX customers... and we know DirecTV lost YY customers.

What we don't know is... Where did XX and YY go?

Did they go to cable? FIOS? Did they swap from Dish to DirecTV and vice-versa?

Only if we knew where each lost subscriber went would we have a better picture of why they left and what could be done.

IF, for example, the lost customers just went to the other carrier... then they might go back next quarter! They could be the "hoppers" who keep wanting a better deal and jump ship on a semi-regular basis.

Similarly, we don't know where the "new" additions came from. Maybe DirecTV is getting people to convert from cable or FIOS at a better rate than Dish does, and maybe that accounts for better DirecTV additions.

Or maybe DirecTV is doing a better job at getting customers who are newly entering the market to purchase their services.

We really just don't have enough of a picture to make any concrete conclusions on the data we are given.

As to the percentage... that's sometimes a misleading statistic. Dish has about 5 million fewer total subscribers than DirecTV so if they lose the same quantity of customers, Dish will by default have a higher percentage of churn. There might be nothing Dish can do about that. The emerging market might be that each provider will lose 750,000 customers each quarter no matter what they do... It might not be a quantity they can change (for all we know, since we don't know why the churn is happening)... and frankly the only reason DirecTV "appears" to be doing better is because they are adding more customers than Dish is lately.

Perception says DirecTV is doing good... but the reality might be fools gold, and maybe DirecTV is luring customers with promises that they can't follow-through, and in a year DirecTV will have a mass exodus once people get out of their 2 year contracts.

Note, I'm not saying I know anything with certainty.. but speculating, IF DirecTV makes grand promises and signs you up for 2 years... then we won't know until 2 years from now if DirecTV has really grown its subscriber-base meaningfully. IF all those customers leave in 2 years, then in hindsight these numbers today will look inflated.

Bottom line... we just never know the whole picture and it's hard to draw a real conclusion at our level.

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#22 OFFLINE   Shades228

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Posted 11 May 2009 - 09:02 PM

I always bring this up every quarter too...

We know Dish lost XX customers... and we know DirecTV lost YY customers.

What we don't know is... Where did XX and YY go?

Did they go to cable? FIOS? Did they swap from Dish to DirecTV and vice-versa?

Only if we knew where each lost subscriber went would we have a better picture of why they left and what could be done.

IF, for example, the lost customers just went to the other carrier... then they might go back next quarter! They could be the "hoppers" who keep wanting a better deal and jump ship on a semi-regular basis.

Similarly, we don't know where the "new" additions came from. Maybe DirecTV is getting people to convert from cable or FIOS at a better rate than Dish does, and maybe that accounts for better DirecTV additions.

Or maybe DirecTV is doing a better job at getting customers who are newly entering the market to purchase their services.

We really just don't have enough of a picture to make any concrete conclusions on the data we are given.

As to the percentage... that's sometimes a misleading statistic. Dish has about 5 million fewer total subscribers than DirecTV so if they lose the same quantity of customers, Dish will by default have a higher percentage of churn. There might be nothing Dish can do about that. The emerging market might be that each provider will lose 750,000 customers each quarter no matter what they do... It might not be a quantity they can change (for all we know, since we don't know why the churn is happening)... and frankly the only reason DirecTV "appears" to be doing better is because they are adding more customers than Dish is lately.

Perception says DirecTV is doing good... but the reality might be fools gold, and maybe DirecTV is luring customers with promises that they can't follow-through, and in a year DirecTV will have a mass exodus once people get out of their 2 year contracts.

Note, I'm not saying I know anything with certainty.. but speculating, IF DirecTV makes grand promises and signs you up for 2 years... then we won't know until 2 years from now if DirecTV has really grown its subscriber-base meaningfully. IF all those customers leave in 2 years, then in hindsight these numbers today will look inflated.

Bottom line... we just never know the whole picture and it's hard to draw a real conclusion at our level.



That's exactly why Churn is done in a % format though. Both companies could easily impact that % at the expense or for the increase of profit. I don't see many people stating the discounts they get from Dish so they may not have any big retention offers. They might though so who knows.

As far as the numbers though you are correct no company would give out all the specifics. I know DirecTV used to put out a chart to show voluntary vs involuntary but I haven't seen one in a long time. So all we can do is speculate however the %'s should be comparable between the two companies. We know why Dish has a higher % in profit over DirecTV this quarter. What we don't know is why Dish's churn is higher and why they can't get positive subscriber growth. I thought that with the $9.99 promo that would have been their bread and butter for Q1 and reversed the trend. The timing should have been good enough with the economy. Sure most people wouldn't get the $9.99 promo because it wasn't that good and had no locals but a sales call would have still been generated that wasn't there before. This would have given them that chance to get a sale. The Q2 call in a couple months I think is going to start to be the make or break point.

#23 OFFLINE   BattleZone

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Posted 12 May 2009 - 12:00 AM

I thought that with the $9.99 promo that would have been their bread and butter for Q1 and reversed the trend. The timing should have been good enough with the economy. Sure most people wouldn't get the $9.99 promo because it wasn't that good and had no locals but a sales call would have still been generated that wasn't there before. This would have given them that chance to get a sale. The Q2 call in a couple months I think is going to start to be the make or break point.


If you look at where the majority of the growth is in the TV business, it is in the HD realm. Customers signing up these days want HD and DVRs. They want lots of HD channels too. But Dish's offer was for ultra-basic service that few people want. Low price isn't enough; you have to offer what the customer wants. DirecTV was giving great discounts for HD service and including an HD-DVR. THAT is what people are looking for, and the numbers prove that out.

It goes back to what I said earlier: Dish needs to lose the "low price", low-end mindset completely and start competing at the high end. That means new promotions focused on HD and DVRs, and not on "entry-level" deals. Dish has good equipment and, at the moment, more HD channels than anyone, and they should be on your TV right now talking about how they are the HD leader and what great deals they have on their 722 for new customers. THAT will get people subscribing.

#24 OFFLINE   Curtis52

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Posted 12 May 2009 - 07:50 AM

A transcript of the conference call is here.

#25 OFFLINE   phrelin

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Posted 12 May 2009 - 09:40 AM

A transcript of the conference call is here.

That takes one right to Tivo??? Did I miss something? Probably, but....

Dish Network's Conference Call Transcript is here.

#26 OFFLINE   jclewter79

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Posted 12 May 2009 - 10:10 AM

If you look at where the majority of the growth is in the TV business, it is in the HD realm. Customers signing up these days want HD and DVRs. They want lots of HD channels too. But Dish's offer was for ultra-basic service that few people want. Low price isn't enough; you have to offer what the customer wants. DirecTV was giving great discounts for HD service and including an HD-DVR. THAT is what people are looking for, and the numbers prove that out.

It goes back to what I said earlier: Dish needs to lose the "low price", low-end mindset completely and start competing at the high end. That means new promotions focused on HD and DVRs, and not on "entry-level" deals. Dish has good equipment and, at the moment, more HD channels than anyone, and they should be on your TV right now talking about how they are the HD leader and what great deals they have on their 722 for new customers. THAT will get people subscribing.


Dish has been giving away free 722's to new subscribers for alot longer than Directv has been giving away free HR's. It is a combonation of things but, I personally beleive that it was a combonation of FIOS and Uverse gaining more market share and D* taking the lead in national channels in HD. In my opinion E* needs to focus on upgrading as many exsisting customers to HD equipment with new 2 year contracts and marketing to the hilt about how they have more national HD than D*. They also need to make sure that keep the national HD lead among sat. providers for at least one year. The reason that I say that they need to focus ad dollars to D* subs is twofold: 1. D* customers are already comfortable sat. dilivered tv. 2. Fios/uverse does not have enough market penetration to pull that many customers from them yet. I only bring them up because they are the only other 2 providers that can beat E* in national Hd channels delivered but, they are neither a national provider yet.
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#27 OFFLINE   phrelin

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Posted 12 May 2009 - 10:13 AM

I didn't learn a great deal from the call.

Incidentally, Charlie made it clear he doesn't like discounting programming as a market strategy but is doing it aggressively. They also think they are improving their internal and dealer marketing but IMHO appeared to be stumbling with their telco partners.

Bernie Han thinks that foreclosed homes with a Dish Network dish on the roof represents a built in marketing opportunity.

There was a short discussion of the mobile television market relative to the digital conversion freeing up of spectrum Dish bought with Charlie commenting "700 megahertz is a very unique frequency that goes through the walls, but its one of a kind in real - and I expect I would be viable building block force." I have no idea what he's thinking.

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#28 OFFLINE   Stewart Vernon

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Posted 12 May 2009 - 11:34 AM

I've delved in other threads about my feelings on marketing/advertising in general... so I won't rehash that off-topic here...

But suffice to say, despite my personal feelings... Dish needs to do a better job in marketing their strengths. You can't go a half hour most days without seeing DirecTV in your face... but Dish is like the 3rd cousin you only see at funerals and yearly reunions. Really cool, but disappears and you never see him until next year. :)

We know Dish's strengths because we look for them... The average consumer doesn't know "boo" about Dish because they just aren't out there in the marketplace.

I think Dish has done a great job growing to where they are without much advertising budget... but I think now is the time they have to lift the veil a little and get out there with some better marketing so people know they are there (and leading in some areas) as a great alternative to DirecTV and cable.

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