Dish Network Gains Sling TV Subscribers but Retention Is a Problem -- 2nd Update

By Shalini Ramachandran and Imani Moise 

Dish Network Corp. said its Sling TV streaming-video service has signed up 2.2 million subscribers in the company's first disclosure of a figure, but Chairman Charlie Ergen said customer retention is a significant challenge.

Dish launched the streaming service nearly three years ago in an attempt to lure younger viewers and people giving up cable TV. The hope was that it would be an avenue for growth as Dish's traditional satellite TV business declines.

The subscriber figure disclosed Wednesday came as part of the company's fourth-quarter earnings report.

The number of Sling TV customers grew 47% compared with the year-ago period, but it wasn't enough to offset a 9.4% decline in satellite TV subscribers. The company finished the quarter with 13.2 million subscribers overall, including Sling and satellite customers, down from 13.7 million subscribers last year. In the fourth quarter, satellite TV subscribers fell by 121,000.

Sling TV added 711,000 subscribers in 2017, below the 878,000 in the previous year. Growth slowed partly because of increased competition with other streaming services.

Streaming TV services such as Sling, Sony PlayStation's Vue, Alphabet Inc.'s YouTube TV and an offering from Hulu have marketed themselves as consumer-friendly alternatives to cable TV, without the headaches of bulky equipment and two-year contracts.

But Mr. Ergen said service cancellations, or churn, are a major issue for these services, in part because subscription demand can be seasonal. Some consumers only want to sign up for a month to watch the "March Madness" college basketball tournament, after which they disconnect, for example. Moreover, every streaming service has free-trial offers.

"You buy one month and then turn it off," Mr. Ergen said on a conference call to discuss the quarterly results. "You can move from player to player to player. I'm sure there's some college kids who are going a year and never paying a dime for multichannel TV."

Mr. Ergen said streaming services "aren't suicidal" and are likely to rein in promotional offers over time. Dish is also working with television programmers to address high customer turnover. "We both have a motivation to reduce the short-term churn," he said.

As its tries to diversify away from pay TV, Dish is seeking an entry into the wireless business. The company said Thursday that it plans to spend up to $1 billion to build out the first phase of a wireless network to comply with government-mandated deadlines related to wireless airwaves it has licensed.

Overall for the quarter, Dish reported earnings of $1.39 billion, or $2.64 a share, up from $355 million, or 73 cents a share, a year earlier. The period was helped by a $1.2 billion benefit related to the recently enacted tax overhaul.

Revenue fell 7.8% to $3.48 billion, missing the $3.53 billion forecast by Thomson Reuters.

Write to Shalini Ramachandran at [e-mail] and Imani Moise at [e-mail]

(END) Dow Jones Newswires

February 21, 2018 17:00 ET (22:00 GMT)

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