DISH Network Reports Second Quarter 2009 Financial Results

[Scott Greczkowski]

So money basically flowed from Charlie's one pocket to the other?

Yup thats how I see it anyways...

BTW I don't know if its true or not but had a few retailers report to me that Dish waited to shut off some non pay subscribers until after the quarter was done in an effort to prevent another subscriber loss in the books. As I said I don't know if its true or not, just passing along what I have heard. (And if they did do it, I think its ok, as in this economy its taking some folks longer to pay their bills.)

But ultimately looking at Dish and DirecTV's numbers side by side it should be obvious who had the better quarter.

 

[Scherrman]

I think it's like a cycle. DirecTV has had a great campaign lately and has gained a lot of subs that Dish is not getting. In another year those customers will no longer be getting promotional prices. Once their contracts run out and they get tired of the higher price, they'll switch over to Dish. Then it will flip back over DirecTV a few years later. It's a vicious cycle, IMHO.

 

[bobvick]

It is clear that DirecTV has been able to better weather the storm in the current economic climate.
However, considering the obstacles that Dish has faced especially with the loss of the AT&T contract, they have been able to remain profitable, and at least for the current quarter, hang on to their subscriber base and add a small amount of subs.

 

[mike123abc]

So money basically flowed from Charlie's one pocket to the other?

Echostar was loosing too much money. It needed to collect more from Dish to break even.

 

[tigerfan33]

In the past with report of losses, coincidently Dish has launched hd pretty close before or after these reports. I wonder since Chuck will paint a rosy picture if he will go slower on more hd channel launches.

 

[johnner1999]

In the past with report of losses, coincidently Dish has launched hd pretty close before or after these reports. I wonder since Chuck will paint a rosy picture if he will go slower on more hd channel launches.

wasn't a rumor going around that in Aug a "wave" of new national HD was coming?

 

[mike123abc]

In the past with report of losses, coincidently Dish has launched hd pretty close before or after these reports. I wonder since Chuck will paint a rosy picture if he will go slower on more hd channel launches.

I would say most of the "demand" for the HD channels is satisfied. There are always going to be channels that people want, but it is no longer a glaring deficiency that Dish had for a while there. New potential customers have a nice long list of HD to look at when they evaluate Dish. I do not think it can be said that Dish is losing customers and having people not sign up because of the lack of HD.

New HD additions will be a lot slower since Dish is running out of space to add new channels. They will have to save slots for channels they have already agreed to carry in HD when they launch. I expect them to slowly trickle out for the next year or so, until new satellites are in place and a conversion to 8PSK takes place. I see them maybe being able to scrape together 5 for a "big" launch at one time, no longer the days of 20 at once.

 

[TNGTony]

I find it funny and a sign of the times that when a company post a $65,000,000.00 profit in three months and net gains in customers in the same period that some would call that a "loss".

I will never understand present-day accounting.

see ya
Tony

 

[Scott Greczkowski]

On the earnings call now. Many they asked a lot of questions this time to listen in on the call.

Looks like Charlie is not there today.

They are looking at "improving the Customer Experiance", and keep saying that.

 

[Scott Greczkowski]

Good question, why is Dish picking up the costs of the Tivo lawsuit when the lawsuit is against Echostar. The answer however didn't make any sense.

 

[mike123abc]

Good question, why is Dish picking up the costs of the Tivo lawsuit when the lawsuit is against Echostar. The answer however didn't make any sense.

The lawsuit happened before the split up of the company. Both companies are on the hook until it is completely resolved. I bet they put in an agreement when they separated the companies to have Dish side pay for it since they have the revenues to cover it.

 

[Scott Greczkowski]

ok makes better sense.

One thing scarry about this call is that they seem to love their current marketing.

 

[jacmyoung]

Good question, why is Dish picking up the costs of the Tivo lawsuit when the lawsuit is against Echostar. The answer however didn't make any sense.

The lawsuit is against all of Charlie's companies, they are all the defendants in the case. Initially it was against Echostar in 2004 back when there wasn't a company called Dishnetwork. Dishnetwork in the past was only a trademark, but recently became the name of the company that provided the satellite TV programming services.

In the lawsuit however the name Echostar remains in the caption. I suppose just like what we discussed earlier, Charlie can decide which of his defedant company gets to account for the legal cost.

 

[goaliebob99]

So much for the 95,000 loss prediction. Looks like the bleeding has stopped for now.

I predicted that if there was an addition it would have been because of the DTV transition. I think the DTV transition could have tainted the numbers a bit as a lot of people pick up on the 6 month deals. The true test is 1. can they keep this going, and 2. What happens in 6 months when all those deals go to full price and people migrate back to free tv!

When was the last time there was a plus on revenue and sub gains for Dish?

We all know this is not happenning due to Dish's great marketing dept!!

You got that right!

ok makes better sense.

One thing scarry about this call is that they seem to love their current marketing.

I think dish just doesn't get it!

 

[CubsWin]

From AP: ... Signal theft and other types of fraud have also hurt its position, but Dish said its security access device replacement program was meant to resecure its system."

Maybe I'm just naive, but I can't imagine that signal theft is really that big of an issue. I would think we're talking about very small fractions of a percent with regard to net income.

 

[rocatman]

More issues with the E12 bird...

EchoStar XII. Prior to 2009, EchoStar XII experienced anomalies resulting in the loss of electrical power available from its solar arrays. During March and May 2009, EchoStar XII experienced more of these anomalies, which further reduced the electrical power available to operate EchoStar XII. We currently operate EchoStar XII in full continental United States (“CONUS”)/spot beam hybrid mode. If we continue to operate the satellite in this mode, as a result of this loss of electrical power, we would be unable to use the full complement of its available transponders for the 12-year design life of the satellite. However, since the number of useable transponders on EchoStar XII depends on, among other things, whether EchoStar XII is operated in CONUS, spot beam, or hybrid CONUS/spot beam mode, we are unable to determine at this time the actual number of transponders that will be available at any given time or how many transponders can be used during the remaining estimated life of the satellite. However, there can be no assurance future anomalies will not cause further losses, which could impact the remaining useful life or commercial operation of EchoStar XII. As a result of the May 2009 anomalies on EchoStar XII, we determined that we had a triggering event related to EchoStar XII. See discussion of evaluation of impairment in “Long-Lived Satellite Assets” below. Based on this triggering event we performed an impairment review of the satellite using an undiscounted cash flow model and concluded that the estimated undiscounted cash flows associated with EchoStar XII were still in excess of its carrying value and therefore no impairment was required.

This makes it more likely that the E-6 satellite will be moved to the 61.5 W slot after the Nimiq 5 satellite is launched and operational hopefully in about 2 months. The questions is how long the FCC will allow Dish to hold on to the 148 W slot without a satellite there. Certainly Dish could move either the E-6 or E-3 satellite to 148 W to hold that slot or perhaps the FCC will allow Dish to wait until the E-14 satellite is launched to 119 Weither later 2009 or early 2010 then the E-7 satellite can be moved there and hold that slot for a few years. The E-7 satellite has probably been Dish's most failure free satellite.

 

[jacmyoung]

Good question, why is Dish picking up the costs of the Tivo lawsuit when the lawsuit is against Echostar. The answer however didn't make any sense.

What was their answer anyway? Anything else said about the TiVo case? Since Charlie was not there I guess no meaningful answers there even if the questions were asked.

Now $196M legal cost, mainly for the TiVo case in Q2, subtract the $120M set aside as the bond, and some other settlement cost, we are looking at about $60M pure legal fees for the TiVo case for Q2. It was reported that TiVo spent up to $20M for the 2/09 three day hearing alone, if E* spent a similar amount, then E* had accounted the 2/09 hearing expenses in the Q2 not Q1.

I don't know if TiVo had already put the 2/09 hearing expenses down in the books for Q1, if not they should report some high legal expenses in Q2 also.

 

[MLBurks]

They are looking at "improving the Customer Experiance", and keep saying that.

They definitely need to do that. I just ordered DISH yesterday and am having it installed today. I nearly canceled because of the BS I had to put up with to get my order straightened out after they got it wrong. I may post about it later. Awful customer service on my first day back to DISH in nearly three years.

 

[Juan]

ok makes better sense.

One thing scarry about this call is that they seem to love their current marketing.

I always seem to think of BINGO-TV when I see their current commercials (maybe its just the familiar faces):rant:

 

[nelson61]

Yep, they wouldn't need to run it in CONUS hybrid mode if E-14's rocket didn't fail.

They have put themselves in a real tight spot. Directv just files to launch Direct 12 which provides robust backup for their network and is ready to pounce on any loss of service for Dish customers.

Dish has nearly 100 percent of their locals distributed over widely separated satellites. A failure on any satellite will immediately affect customers. And, the random probablility of at least one of them unexpectedly failing is fairly high.

Probably will see E1 at 77W pushed into locals in the south and east.

Charlie should have spent his money on more satellites instead of buying up spectrum in that FCC auction a couple of years ago.