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Dish Network 3rd-quarter profit slides 54 percent

Discussion in 'General DISH™ Discussion' started by DtvSlave, Nov 10, 2008.

  1. BattleZone

    BattleZone Hall Of Fame

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    Uverse is limited to 4 TV streams (i.e., different live channels) simultaneously per household, was recently "upgraded" for most users to allow 2 HD streams and 2 SD streams simultaneously. This was accomplished by further compressing the HD signal to "fit" it in the existing bandwidth.

    There are plans to go to 3 HD/1 SD by early next year, which will require even more compression, as the infrastructure has a fixed bandwidth limit that was approved before HD was "important".

    I don't know what the limit is on simultaneous users watching recorded content, but Uverse uses a "whole home" DVR (1 per house), that streams to client boxes at each TV.
     
  2. jpl

    jpl Hall Of Fame

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    I agree that churn rate is an issue, but DirecTV has managed to grow over that time. Granted, new subscribers are expensive (you pay for their equipment installation and all), but still it's better to add customers than lose them, even if the rate at which you add them is lower than the prior year (which is what you're saying - that DirecTV grew, but by a slower rate than the prior year).

    I personally don't buy the 'economy sucks' angle on all this. Other providers are gaining subscribers - others have mentioned U-Verse on here, which has been growing at a fairly healthy clip, and Verizon just added nearly a 1/4 million new subscribers to FiOS TV last quarter. If the 'economy sucks' line were legitimate, then you'd be seeing contraction across the board. Besides, Dish is a less expensive alternative to alot of other services, and they would likely be the beneficiaries of a slowing economy. Instead, they look to be among the hardest hit. If the loss of subscribers by Dish were due to the economy, then you wouldn't see the big pick-ups by other providers. You'd see most of those folks just go away, and do without pay TV service for the time being. You're not seeing that - you're seeing these folks go to other pay services.
     
  3. phrelin

    phrelin Hall Of Fame DBSTalk Club

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    Northern...
    I guess Charlie's investment portfolio wasn't any better than mine.:sure:
     
  4. jpeckinp

    jpeckinp Legend

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    I just cut down on my package. I did have AEP/w Locals Gold and Plat. HD, it was costing me $126.98/mo. Now I have AT250/w Locals and Gold,Plat HD = $92/mo

    I didn't have to cut down as I can afford it but it made more sense to cut out the movie channels and re-subscribe to Netflix. Total I'm saving $16/mo.

    I would flip through the guide at night and just never really seen anything that interested me and the wife was the same way. And with the expected rate increase in Feb. and the possibility that I will lose my locals when they make me switch to 61.5 to receive them it just wasn't worth the money anymore.
     
  5. BattleZone

    BattleZone Hall Of Fame

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    Dish has spent too many years being the "low cost alternative" that they've diminished their brand appeal, while DirecTV has intentionally marketed itself as a premium product, and touted its technology, capacity, and celeb endorsements to make it desireable. But now that the cable companies and the phone companies are fighting a low-cost war (think: bundling), Dish is being pushed out of its niche. As I listed above, some of their other choices are making less sense as the market changes.

    Dish needs to fire their marketing team and hire someone who knows how to sell Dish as a premium brand. They need to associate Dish with other high-end products and people. Fighting over the bottom is a losing strategy when cable and the telcos can cut prices on phone and Internet to make TV "cost less". Dish doesn't have phone and Internet divisions to absorb the losses. It isn't 2000, or even 2004, anymore. Dish needs to get a grip on TODAY's and TOMORROW's market, not yesterday's.
     
  6. ruffledrooster

    ruffledrooster Cool Member

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    Yeah, right now it's only 2 HD streams and 2 SD streams at the same time. That's actually one of the reasons I have stuck with dish this long. As IIP said, sometime early next year they are going to the 3/1 ratio. I have actually heard that they will be able to push 4 if they are able to implement pair bonding. I think it also depends on what your internet pipe is, as 18 meg service was just announced. A lot of people complain about the compression, but what from what I've seen, the PQ really isn't bad and it's actually quite comparable to dish. Not to get too off-topic though.
     
  7. Greg Bimson

    Greg Bimson Hall Of Fame

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    Churn at Dish Network was at an all-time high during third quarter, just over 2 percent.

    DirecTV blamed some of their third quarter churn from the loss of the BellSouth territories in April, and those are starting to erode some of their base. Dish Network currently has AT&T until the contract expires 31 January, 2009.

    If Dish Network doesn't right the ship soon, what will happen when AT&T checks out of Dish Network in February?
     
  8. James Long

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

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    Current AT&T customers will remain with DISH unless they opt to change services.
    What DISH is losing when they lose AT&T next March is new sales.
    They need to find another way of attracting customers without breaking the bank.
     
  9. Stewart Vernon

    Stewart Vernon Roving Reporter Staff Member Super Moderator DBSTalk Club

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    Surprised no one else is asking, so I will :)

    If Dish gained 825K and lost 835K where did those 835K go? and where did the 825K come from?

    Consider... DirecTV also lost 846K but gained 1,002K for an overall net gain... but where did their 846K go? and where did their 1,002K come from?

    Did all the Dish defectors go to DirecTV? IF that were true, then why would that same amount be leaving DirecTV at the same time and if they went to Dish that would tend to dispel the "its all about marketing and channels that DirecTV has over Dish"?

    Someone needs way more in depth knowledge than we get in these kinds of reports to really draw any conclusions. Maybe none of the losses went to each other, but instead went to cable or FIOS! In which case, where did their gains come from? People leaving cable or FIOS? Again, the same what-does-that-really-mean question comes to mind.

    With those kinds of large numbers leaving and going to both companies... I'm not sure the numbers by themselves tell any kind of meaningful tale about why so many both left and subscribed.
     
  10. James Long

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

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    Numbers are only the beginning of understanding.

    BTW: DirecTV gross gained 1,002k - not 1,200k.
     
  11. ruffledrooster

    ruffledrooster Cool Member

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    I'm with James on this one...numbers are only a part of the puzzle. Understanding why they moved from one service provider to another or left at all is really the meat of the matter. AT&T has been signing up quite a few subs every day...I forget the exact number, but they are expecting to have ~1 mil. subs by EOY. I'm sure that's where some of them are going, but even Uverse is only available in select urban areas. Without getting a lot of data and compiling, it's really all just speculation at this point. Something I'm sure someone is being paid to do somewhere:D
     
  12. Chihuahua

    Chihuahua Legend

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    Dish Network's penchant for getting into carriage disputes with program suppliers has certainly not helped matters.
     
  13. phrelin

    phrelin Hall Of Fame DBSTalk Club

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    Northern...
    :rant: - Don't say I didn't warn you.

    Yeah, about AT&T. From the quarterly:
    Let's see now. What's AT&T going to do beginning in February? Oh, I know. They are going to sell DirecTV as well as Uverse.

    So AT&T has gone with DirecTV, some say over price. Dish hasn't offered a number of important HD nationals, some say over price. Dish doesn't do customer retention like DirecTV because of cost. Dish doesn't provide PBS HD or The CW HD locals, because of cost. Because of cost, Dish doesn't provide alot of HD channels in areas where they have some of the HD channels. Dish doesn't have the sports because of cost. Dish is currently screwing around with the international packages subscribers. Dish got itself into a position where it must phase out its MPEG2 equpment and is confusing subscribers into paying for the change. And all the cash Dish and Echostar didn't use to get and retain subscribers disappeared because it was being used for clever marketable securities investing or to pay for the "you can't do that to me" lawsuits.

    Yeah, let's don't do anything to serve customers that will break the bank. Problem is they sound like the broken banks - just really clever businessmen who were making it big until they overreached. Only thing is, the government isn't going to bail Dish out.

    Yeah, I'm not impressed with the past 3 years of Echostar's "business plan" and am particularly suspicious of the motives behind the company split. I want to see a Dish Netowork quarterly MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Overview that doesn't begin with
    and include stuff like
    I have a suggestion. Let's sell Echostar and transfer the proceeds to Dish Network so it can provide satellite TV customer service which is it's only reason to exist. Or shut down Dish Network and manufacture really cool stuff to use on the 700MHz spectrum in case anyone really wants to use it.

    After three quarterly reports as separate companies, IMHO Dish Network is in serious trouble and Echostar is dead without it. In a normal economy it takes large companies on a downward curve many years to reach the critical point for survival. In economies like this one, not so many years. If Ciel-2 were to not make it, will that be enough to push it over the edge? If Ciel-2 does make it, what is the plan to retain existing customers and get new ones?

    We'll see what packages Dish offers to existing and to new customers in February. If it represents a business plan committing available financial resources to technology like Sling that would be of limited market appeal or the "what's the point of that" 700Mhz band instead of committing to the basics of HD satellite TV, then they will have made a decision that will (to use management's own words) "ultimately harm our business, financial condition and results of operations."

    In the meantime, will someone please fix the intolerable audio dropout problem, the growing video jitter and/or frame jumping problem, and other problems that are plaguing existing customers who use one or more of the existing nifty Cnet Editor's Choice ViP DVR's to receive that nifty TurboHD.
    :rant:
     
  14. James Long

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

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    DISH will do what is needed to stay in business ... perhaps that does not match with your business plans, but you're not running the show. :)

    It has been a rough year ... but nobody's ready to turn off the lights and give up. At least, nobody who has a say in the matter.
     
  15. FTA Michael

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    The Rocky Mountain News had a thorough rundown of the story, along with extensive quotes from Charlie Ergen's conference call.

    About customer churn: ""One is just our normal churn. And that probably is under some pressure from the economy. The second and third parts of churn really are piracy and really consumer fraud kind of stuff."

    Main story: http://www.rockymountainnews.com/news/2008/nov/10/subscriber-retention-costs-cut-dish-earnings/
    Ergen quotes: http://www.rockymountainnews.com/news/2008/nov/11/you-have-to-be-willing-to-tread-a-little-water/
     
  16. inazsully

    inazsully Icon

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    That's a comforting statement. "Dish will do what is needed". What exactly do (YOU) think that might be? Provide current HD channels that are already available? Fix the technical glitches? Acceptable phone support? One of the functions of any forum is to let someone (Dish) know what the populace is thinking. Your statement is akin to a parent telling a child that the reason to do something is "because I told you so, that's why".
     
  17. phrelin

    phrelin Hall Of Fame DBSTalk Club

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    Northern...
    Hence, the "rant", a noun meaning "extravagant or violent declamation." Couldn't do that if I had any meaningful influence as I'd just be expressing frustration with myself.:sure:
     
  18. DodgerKing

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    Wouldn't one who has more expect to lose more??? Heck, even if they lost the same percentage/proportion of customers, Direct would have still lost more total due to the fact that they have more customers to begin with. No matter how good or bad of a quarter any of the providers have, Direct will probably lose more total customers than Dish simply because they have more to lose. A better way to compare is look at a percentage or proportion of sub losses.

    Direct lost 4.9% of their existing subs and Dish lost 6%. Which means they lost proportionally less subs than Dish.
     
  19. phrelin

    phrelin Hall Of Fame DBSTalk Club

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    Northern...
    The most interesting quarter results are going to be the 1st quarter of 2009.

    We'll see results from the installation of Christmas season HD TV purchases and the impact of the February digital conversion, all combined with people experiencing the reality of the "recession."

    How that all will affect net subscriber gain(loss) in total for all the "cable" carriers will be interesting, as well as what carrier choices people make. Also, how that will affect revenue as people scale back on premiums and extras will be another factor. Finally, will a significant number of people switch from going out for entertainment to home entertainment?

    It will be interesting to see if people will attempt to keep the combined cost of internet, "cable" TV, and land line telephone service under $100 per month. I know that I'll be considering dropping Platinum and Starz in February. And depending on how the packages change I'll be looking closely at HD only packages.
     
  20. Ron Barry

    Ron Barry 622 Tips & Trick Keeper

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    I have to agree with some of the posts earlier in this thread. Though a net drop is not a good thing, it is hard to tell the reasons behind the drop. There is also the balance of the cost of adding subs and at what price are you willing to pay to get those subs given the fact that in two years they may be jumping elsewhere to get that new user discount.

    My take on this... I don't think any conclusions can be made of this except that there was net loss of subs for Dish. Is the sky falling? Is this because of Voom? Does this mean D* is kicking E*'s butt? Is this a result of bad customer service? Is it a result of a bad product? Is this a result of the economy?

    Well I don't think the Sky is falling and definitely don't think this is a result of Voom (Sorry guys). I also think the economy will have more effect on E* customers if it is true that E* tends to attract the more price aware customer. As for the other possibilities (I am sure there are more), they are possible but without more data to back up any of those points It is hard to say.

    On a side note. As UVerse pushes out I am sure it will take some share away from both D* and E* customers. Heck.. I just saw and ad where they claimed to be the "HD Leader" though I did not notice any thread popping up that includes 1000+ posts discussing what "HD Leader" means. ;)

    Bottom line.. Drop is subs is never positive and my opinion is most likely a number of factors contributed to the drop. For us Dish subs, lets hope that unlike the stock market recently that it stabilizes because a trend like this over a long period would not be good for any content provider. Like Pherlin posts says... Be interesting to see what the next two quarters bring given the holiday buying and transitions to HD continues to occur.
     

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