AT&T Loss: How Bad for Dish?

I don't think it's that huge of deal. With Uverse continuing to expand, AT&T will push that and not market DirecTV. I thought I remembered seeing the in 2Q that AT&T only signed up 3,000 customers, down from over 20,000 the previous quarter. I bet they don't get better for DirecTV.

Nope, not a big deal at all. AT&T isn't pushing TV with the exception of U-Verse.

Well, that's not exactly how the article presents the numbers:

During the first six months of 2008, AT&T accounted for 15% of Dish's gross subscriber adds, or 222,000 of its 1.48 million gross new subscribers. During this same period, almost as many Dish subscribers churned off the service as were added, leaving Dish with only 10,000 net new subscribers. Without AT&T's contribution as a distribution channel, Dish would have suffered a net loss of over 200,000 subscribers during the first half of the year.

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But maybe his numbers are off.

Well, here in Cleveland, I have not seen and add for AT&T/Dish in a very long time, including before the contract was not to be renewed. But I see a ton of ads for Uverse.

Its interesting his numbers are for "the first six months." It would be interesting to see the actual numbers Q1 v. Q2 (and, soon, Q3). Its also interesting that he does not show that, even without AT&T, some of those customers would have signed up for Dish. He acts as without AT&T, 222,000 would not have signed up. While not all would have subscribed, a few would have. Without AT&T, Dish signed up 1.26 million subscribers, a lot more than AT&T got. Clearly, Dish is capable of signing up large volume of customers, they now just need to do better, which I think they are with the TurboHD campaign.

phrelin said:

Well, that's not exactly how the article presents the numbers:

During the first six months of 2008, AT&T accounted for 15% of Dish's gross subscriber adds, or 222,000 of its 1.48 million gross new subscribers. During this same period, almost as many Dish subscribers churned off the service as were added, leaving Dish with only 10,000 net new subscribers. Without AT&T's contribution as a distribution channel, Dish would have suffered a net loss of over 200,000 subscribers during the first half of the year.

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But maybe his numbers are off.

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The numbers are reasonable but they assume DISH would not have added any of the AT&T customers if it were not for the deal.

The base numbers are from the quarterly reports. Interpretations vary.

In the area I live AT&T sent a letter out to all of their customers telling them that as of the end of June 2008 they were discontinuing their cable service. As a result many of these customers signed on for Dish Network service just to keep their bundle. But AT&T also promised to have U-verse live by the end of the year. Seems very planned out to me.

Will people who have Dish through AT&T start getting a separate bill from Dish once the agreement ends?

As James alludes... the assumption that Dish would not have added any of the 200,000 or so AT&T subscribers without AT&T is not a good one and has no basis.

To assume that one would have to assume that the only reason those subscribers went with Dish was because of the bundle and that none of them would have done so otherwise.

Further, one has to assume that Dish would not have done anything else to bring in new subscribers during that time. My gut says that if Dish didn't have AT&T bringing in new customers they would have been doing something else to bring them in themselves. For that matter, I'm not sure AT&T did much in the way of "selling" Dish to people that didn't call specifically asking for the bundle.

But I thought the quote from the OP was really saying the ATT deal is a bad deal because it will cause the D* sub acquisition cost to go up, meaning it will be a money losing deal, or a "loss leader", as some said about the ATT/E* deal.

If so it might have made sense for E* to let it go, or the title of this thread should have been: ATT loss: a good thing for DISH?

How about "AT&T Loss: Better than TiVo".

jacmyoung said:

But I thought the quote from the OP was really saying the ATT deal is a bad deal because it will cause the D* sub acquisition cost to go up, meaning it will be a money losing deal, or a "loss leader", as some said about the ATT/E* deal.

If so it might have made sense for E* to let it go, or the title of this thread should have been: ATT loss: a good thing for DISH?

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That's what the article implied as a big picture. He's looking at Fios and U-verse and questioning the long term advantage for the DBS providers from an association with telcos.

But he also has an opinion that includes a back-handed compliment to Dish but a doubtful prognosis for DBS in the long term:

There is no pleasure in piling on Dish Network, an innovative and entrepreneurial company. For what it's worth, DirecTV is also far from a long-term sure thing. For several years, I have opined that both DBS operators face a strategic competitive disadvantage vis-à-vis the multiplay cable and telco operators.

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I don't entirely agree with him, but he makes some points about the overall picture regarding the packages and issues associated with them including cable v dsl for ISP's.