Businessweek: Dish Starts Falling to Earth

[Peter Parker]

I think it means what i mentioned above. That he number of people leaving in eriof 2 is 155 grater than the number leaving in period 1.

Actually either spelling is OK here. In fact I think that the US Marshal service is one l but the double l is/was common.

 

[Spatch]

So with out telling us the how many subs left the statement doesn't mean much. Also, With subscriber growth that number becomes a very small amount of the total amount of subs.

Apparently what people say in another thread must be true. I may be an idiot. Well at least at math.

 

[mike123abc]

Dish has to realize that they pretty much have all the new subs they are going to get. They are now just trading back and forth with DIRECTV and cable. All those living in remote areas without cable are DBS subs now. All the ones that want something really cheap are DBS subs. Now Dish has to grow in 2 ways at the same time:

1. Lure the customers away from the other providers, this works, but as Claude mentions a problem happens when the special offer is over. That is when my previous post kicks in and they feel like they are being fee'ed to death and the costs are spiraling out of control

2. Keep the subs they have. What good does it do to let a sub go for a new sub? They essentially are out the hundreds invested the the existing sub's installation and equipment and have to pay the incentives to the new sub. Dish used to rely on low prices and the wiz bang DVR. Now every provider has a DVR and Dish prices are not so low. Cable has unleashed triple play, making Dish look even more expensive.

Dish needs to wake up and keep the subs it already has. By keeping the subs because they have the best deal will save on new people since you will not have to give such steep discounts because they will see that they will end up paying less.

 

[riffjim4069]

I was trying to figure out this statement. "Dish has opened a new service center to help counter a 15% jump in subscriber defections."

So it could just mean as an example that 1000 customers left in 2006 and 1500 in 2007?

Spatch, the numbers you're throwing-out there are killing me. Let's take a look and figure this one out. Dish Network's monthly churn rate during 2007 was 1.70% per month. Multiply this times 12 and roughly 20.4% of Dish Network's customers decided to terminate their service. These numbers are taken directly from EchoStar's 2007 Annual Report.

Dish Network ended 2007 with 13,780,000 customers. Based on last years churn rate of 1.70% per month, and assuming the churn rate remains constant, Dish Network can expect roughly 234,260 customers to cancel service during any given month, or around 2,811,120 customers expected to leave Dish Network during 2008.

Now, if the churn rate for 2008 has risen 15% as stated (1.70 x 1.15) that means the new churn rate is something like 1.955% per month or 23.46% annually. In a nutshell, roughly 269,399 customers are now leave Dish Network each month or 3,232,788 annually.

3,232,788 - 2,811,120 is a difference of 421,668 more customers apparently leaving Dish Network this year for a difference of 15% (421,688 / 2,811,120). So, it would appear more than 421K are leaving Dish Network this year...hence, why Charlie is standing-up a special call center to attempt to retain some of these customers.

Dish Network is still signing-up new customers, but the rate at which they are leaving picked-up during 2007 (according the the 2007 Annual Report) and has been getting 15% worse so far this year.

Anyway, that's my quick take on the 15% increase in churn. Please feel to correct me if I am wrong...I certainly don't do this stuff for a living.

http://biz.yahoo.com/e/080303/dish10-k_a.html

 

[Peter Parker]

well not quite. As the number of subs increases (and it has consistently so far) a 15% increase in the number of subs defecting does not give you a 15% increase in churn.

You also can't simply multiply the monthly rate by 12 to get the annual rate.

Remember he never used the word churn. He said that there was an increase in the number of subs leaving. That is close to the same thing but when the base changes every month you math does not quite work.

Want some proof that your numbers don't oan out? Ok you cite a 2007 churn rate of 1.7% and insist tat the churn rate is increasing. But the latest filing showed a 2008 churn rate (for the 1st quarter that was LESS than the figure you cite.

 

[Gordoco]

Another thing Dish has got to stop doing is dropping channels due to contract snafus, even if it's temporary. A year or so ago I had convinced my girlfriend to consider switching from Comcast to Dish. We went online to see what her rate would be and to check channel availability and ... Lifetime was not available! This was during the 3 or 4 week pissing match between Dish and Lifetime. So that was a no-go and she won't ever consider Dish again, even though her Comcast signal is horrible, because they might take away one of her favorite channels at any time.

 

[Poke]

Yet again these people are clueless when it comes to these things.. Dish is fine and is still the best out there. Just my 2 cents.

 

[Neilkn]

I can agree with most of that. I disagree about Direct offering more for less. The Dish HD Only package is the best value in television programming, IMHO.

And while PQ matters to many or most of us, the vast majority aren't in a location where FIOS is available, AT&T doesn't offer enough bandwidth for three or more HD sets, and the difference in PQ between Dish and Direct isn't significant enough to warrant changing providers.

I can only speak for myself. Why did I go with D* over E* two weeks ago when I finally decided to dump TWC? D* had more HD channels from what I could see. They also offered much more in their packages at lower prices. My wife and I like all of the Discovery and educational type channels ... and I get them all with one simple package with D*. With E*, I would have had to selected multiple packages to get all of the Discovery series and it would have cost me more than D*. My wife and I looked, and agonized, and researched, and looked some more. We sat down and compared channels and prices until we were dizzy. D* came out the clear winner with more for less.

As for AT&T U-verse, which was just put in and being pushed in our community ... I mean a salesman walking door to door knocking and being friendly ... we looked at it too. It was a close runner to D* except for reviews about HD picture quality being compromised due to low bandwidth and over compression. I would have jumped at Verizon FIOS, but was in AT&T territory.

 

[justthinking]

Dish is not fine..don't forget..most of new subs they get are under some sort of speical offer and the old subs they lose are those paying the full retail amount..
Not to mention the new equipments they have to invest w/ new subs and they also have to spend to service the old equipents returned by cancelling subs..
It's a very bad business model when all you care about is adding new subs that will not bring you full revenue stream while losing those old subs that are paying you at full price..

Take TurboHD for example..if what we hear is true..it's for new subs only..Dish need to re-exam their stradegy and realize they need to do a better job of retaining it's customer..

 

[Spatch]

Spatch, the numbers you're throwing-out there are killing me. Let's take a look and figure this one out. Dish Network's monthly churn rate during 2007 was 1.70% per month. Multiply this times 12 and roughly 20.4% of Dish Network's customers decided to terminate their service. These numbers are taken directly from EchoStar's 2007 Annual Report.

Dish Network ended 2007 with 13,780,000 customers. Based on last years churn rate of 1.70% per month, and assuming the churn rate remains constant, Dish Network can expect roughly 234,260 customers to cancel service during any given month, or around 2,811,120 customers expected to leave Dish Network during 2008.

Now, if the churn rate for 2008 has risen 15% as stated (1.70 x 1.15) that means the new churn rate is something like 1.955% per month or 23.46% annually. In a nutshell, roughly 269,399 customers are now leave Dish Network each month or 3,232,788 annually.

3,232,788 - 2,811,120 is a difference of 421,668 more customers apparently leaving Dish Network this year for a difference of 15% (421,688 / 2,811,120). So, it would appear more than 421K are leaving Dish Network this year...hence, why Charlie is standing-up a special call center to attempt to retain some of these customers.

Dish Network is still signing-up new customers, but the rate at which they are leaving picked-up during 2007 (according the the 2007 Annual Report) and has been getting 15% worse so far this year.

Anyway, that's my quick take on the 15% increase in churn. Please feel to correct me if I am wrong...I certainly don't do this stuff for a living.

Summary of DISH NETWORK CORP - Yahoo! Finance

So according to the link in 2007 Dish had a subscriber increase of 5.2% or 675,000 more customers than the year before. So if you are saying they lost 2,811,120 customers that year then they signed up 3,486,120 new customers for the year an average of 290,510 per month. If they continue to add 290,510 a month then :

290510 added beginning each month then 1.955% subtracted per month

2007 13780000+290510= 14070510

Start - 1.955% = ending

Jan 14070510-275078= 13795432
Feb 14085942-275380= 13810562
march 14101072-275675= 13825397
April 14115907-275965= 13839942
may 14130452-276250= 13854202
June 14144712-276529= 13868183
July 14158693-276802= 13881891
Aug 14172401-277070= 13895331
sept 14185841-277333= 13908508
Oct 14199018-277590= 13921428
Nov 14211938-277843= 13934095
Dec 14224605-278091= 13946514

customer growth=166514

That is if everything stays the way it is now and the 15% loss increase is true for the whole year. If that is the case Dish needs to do something now

 

[riffjim4069]

well not quite. As the number of subs increases (and it has consistently so far) a 15% increase in the number of subs defecting does not give you a 15% increase in churn.

You also can't simply multiply the monthly rate by 12 to get the annual rate.

Remember he never used the word churn. He said that there was an increase in the number of subs leaving. That is close to the same thing but when the base changes every month you math does not quite work.

Want some proof that your numbers don't oan out? Ok you cite a 2007 churn rate of 1.7% and insist tat the churn rate is increasing. But the latest filing showed a 2008 churn rate (for the 1st quarter that was LESS than the figure you cite.

I agree....it's just a quick estimate. Someone would have to pull the quarterly numbers in order to build a more accurate model. Also, as Spatch pointed out...an increase in churn is less significant if E*'s promotions department has been successfully acquiring larger numbers of customers. Of course, this would directly relate to an increase in the number of installations. One of the best people to ask about this would be Claude.

 

[jwgreen68]

Another thing Dish has got to stop doing is dropping channels due to contract snafus, even if it's temporary. A year or so ago I had convinced my girlfriend to consider switching from Comcast to Dish. We went online to see what her rate would be and to check channel availability and ... Lifetime was not available! This was during the 3 or 4 week pissing match between Dish and Lifetime. So that was a no-go and she won't ever consider Dish again, even though her Comcast signal is horrible, because they might take away one of her favorite channels at any time.

Would you pay $20K for a new car, if you knew that you could negotiate and get it for $18K? Hell no, you wouldn't! Subs complain about being nickel and dimed to death, plus rising subscription costs, yet when Dish puts their foot down and says we're not going to pay Lifetime and other networks more money, which would raise sub costs again, you bitch about that too. Do you want your cake? Or do you want to eat it too?

 

[MikeD-C05]

BOTH!

 

[jwgreen68]

+1. LOL I just wished it could always work that way!

 

[kstuart]

.... could .... analyst .... possibly ... yawn.

 

[rich88]

There are 3 factors at play here...

#1 Churn

#2 New Customer Promotions

#3 Installing New Customers

First of all, DISH Network needs to be more aggressive when it comes to customers who want to disconnect service they need to be offered something that is better than what they are going to get switching to Directv or cable. Very rarely I see this done, and the most they will give a customer is $10 off for 10 months.

Whenever we switch Directv customers to DISH Network, we tell customers to call Directv a few daysl AFTER they are installed with DISH to cancel service. The reasoning we use is that we want the customers to be satisfied with DISH service so they can switch back if they are not happy, but telling them they need to wait a few days locks them into our contract!Second of all, the current promotions suck. They don't want to be aggressive and offer something like $20 off for 10 months because it causes a problem when the special pricing is over, but they do not realize how many customers this is actually costing them.

Finally, they loose approximatly 25% of all new customer installations simply due to sh!tty installers who don't give a dam and miss appointments.

If the installers would just show up on time and give a dam to take care of the customer they could increase their numbers by 15%

Maybe I'm misunderstanding you, but that sounds unethical. Sounds like you're trying to pull a quick one on the customer.

You bitch all the time about installers, but then you leave your character open to question with a statement like that.

 

[Sammy033]

Would you pay $20K for a new car, if you knew that you could negotiate and get it for $18K? Hell no, you wouldn't!

If you found out that $20,000 car cost will end up costing $22,000 because of hidden fees, would you still buy it?

 

[Bulldog]

Business Math Equation for E*

I agree....it's just a quick estimate. Someone would have to pull the quarterly numbers in order to build a more accurate model. Also, as Spatch pointed out...an increase in churn is less significant if E*'s promotions department has been successfully acquiring larger numbers of customers. Of course, this would directly relate to an increase in the number of installations. One of the best people to ask about this would be Claude.

Basic "KISS" business math equation for E* is simple:

1. For every existing customer that you lose, you have to gain two new customers; one to break even and the other one to move ahead.

2. If you piss off your existing subs, you have to work extra hard at attracting new ones with special deals.

3. Go back to equation 1.

 

[Islandguy43]

And one more thing (5): Bury the hatchet with Fox, Viacom, and Rainbow. The last one might be hard, but those 3 provide some of the last remaining mainstream HD channels not yet carried. The kind of channels some will go to Directv to get if they are not on Dish.

Excellent point, but don't leave out the Dolans and Steinbrenners either. Its time for Dish to give the sub what they want and not for Charlie to decide what he wants to give us.

 

[riffjim4069]

As others have mentioned, what ever happened with "value" for Dish Network's top customers? When I first signed up with E*, their AEP was a bargain compared to D* and Cable. Nowadays, customers signing up for DirecTV get a lot more for the money...not to mentioned Sunday Ticket...and Cable (to include FiOS) offers outstanding bundled savings.