Intellectual Property Law

What's Happening at Dish Network?

By Cynthia Brumfield

Even though its revenues and net income are on the rise, DBS provider Dish Network is on some kind of strange downturn, with subscriber growth plummeting every quarter. The company reported its Q4 07 earnings this morning showing a 12% year-over-year rise in revenues to $2.89 billion and a 14% rise in net income to $175 million.

But net gains in new subscribers were a fraction of the net gains Dish Network posted in Q4 06. During the quarter, the satellite provider added 85,000 net new customers, a quarter of the net gains posted during the year-ago quarter. By year-end Dish Network served a total of 13.78 million subscribers.

In fact, as the above chart illustrates, Dish Network has been on a steady decline over the past year, eking out smaller gains each successive quarter. In comparison, DirecTV, EchoStar's main rival, has accelerated its growth rate over the past two quarters, thanks in part to a big marketing push promoting DirecTV's HD channel line-up.

Still, Dish has the biggest telco partner in the country pushing its wares and has expanded its co-marketing footprint with AT&T to reach into the former BellSouth territory. According to press reports, Dish execs cite a host of factors for the company's downhill slide, including the weak economy, competition, poor customer service and delays in expanding its HD capabilities.

These are all good reasons for bad performance but the drop-off in Dish's subscriber growth is not what I would have predicted. None of this portends well for Dish's ability to withstand competition from not only cable and telco rivals but also a newly revived DirecTV, which is soon to be fully managed by John Malone's Liberty Media.

Full post as published by IP Democracy on February 26, 2008 (boomark / email).