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Dish loses record 413,000 TV subscribers amid severe disruption from pandemic

Dish Network on Thursday said it lost a record 413,000 net TV subscribers in the first quarter, compared with a loss of 259,000 in the year-ago period. The latest quarter’s figure included the loss of 132,000 net Dish and approximately 281,000 net Sling TV subscribers.

In the first quarter of 2019, Dish, led by chairman Charlie Ergen and CEO Erik Carlson, has lost about 266,000 Dish subscribers and added about 7,000 Sling TV users.

The latest quarter’s decrease in Sling subscribers was “primarily related to lower Sling TV subscriber activations, increased competition, including competition from other subscription video on-demand and live-linear OTT service providers, and delays and cancellations of sporting events as a result of COVID-19,” the firm said.

Amid an industry backdrop of falling subscriber numbers and lower ratings for traditional linear TV, CEO Ergen during an analyst call discussed his long-standing attempts to tamp down rising carriage fees from distribution agreement renewals that reduce Dish’s value proposition for subscribers.

“Most programmers come in and say you paid this much last year, we want an increase. There’s no math behind it. It’s just that’s what we need to make our budget,” he said of how carriage renewal talks usually start. Ergen argued pay TV operators deserved rate decreases because of falling ratings and heavy ad loads on traditional linear TV.

“The product itself from a consumer point of view isn’t good enough. Everyone is watching more television during the last eight weeks. They’re (viewers) going to Disney+, Netflix or Amazon because there’s no commercials, because you can binge view, or watch when you want to. TV has become an app, without commercials. Even if there’s commercials, it’s a lighter load,” he told analysts.

Ergen compared streaming platforms to traditional linear TV networks with 16 or 17 minutes of advertising per-hour. “It might be a really good show, but it’s painful, once you’ve seen something without commercials. So the ad load needs to change, and be different,” he insisted.

Ergen also talked specifically about Dish’s carriage renewal agreement with ViacomCBS coming up for renegotiation later this year. “From a ratings perspective or viewership perspective, they’ve had declines over the last several years. A lot of their investment has gone into Pluto, and that’s free…. There’s a reality out there of where the market is. And it’s probably not the same as in years past,” he said of ViacomCBS’ bargaining position.

Ergen added ViacomCBS wasn’t alone in that much of its programming was available on multiple platforms. “So the branding of particular channels might have gone away and people are used to a bigger show, but not necessarily the brand of the channel. They’re used to getting a show somewhere else and they don’t want to pay for it twice,” he insisted.

About its pay TV customer trends during the latest quarter, Dish said it activated approximately 299,000 gross new users, up from 243,000 in the year-ago period. But it said that in the second half of March, “COVID-19 and the related governmental recommendations and/or mandates created reduced in-person selling opportunities, and a reduction in customers’ willingness to open direct mail marketing and allow in-home technicians into their homes.”

As a result, “we reduced our marketing expenditures and our gross new DISH TV subscribers began to decrease,” Dish said. “We continue to assess the impact of COVID-19 and cannot predict with certainty the impact to our gross new Dish TV subscribers as a result of, among other things, higher unemployment and lower discretionary spending and reduced ability to perform our in-home service operations due to the impact of social distancing.”

Dish added that the pandemic “caused severe disruption in certain commercial segments served by Dish, including the hospitality and airline industries.” To avoid charging commercial customers for services that were no longer being viewed by their customers, Dish said it paused service or provided temporary rate relief for certain commercial accounts. “Those commercial accounts, including accounts Dish expects to disconnect because of COVID-19 disruption, represent approximately 250,000 subscribers, which Dish removed from its ending pay TV subscriber count as of March 31,” it said.

The company ended the first quarter with 11.32 million pay TV subscribers, including 9.01 million Dish TV subscribers and 2.31 million Sling TV subscribers.

Dish added that it “does not expect to incur significant expenses from the reactivation of any returning commercial accounts.” It also explained that returning accounts will “not be counted as gross new subscriber additions in the period of their return.”

May 7, 10:30 a.m. Updated with comments by Dish Networks execs during an analyst call. Hollywood Reporter

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