Dish Network Subscriber Growth Skids 89%

[shibby191]

Charlie is in trouble for this reason as well: All these subs that have left Dish the past few months are now locked into 2 year commitments with DirecTV or cable/telcos (to get the best deals with triple play you are basically into a commitment and most people aren't going to just switch back anyway). So he's not getting these subs back for at least a year if not 2 and if the majority of those subs are happy they won't come back at all.

 

[Stargazer]

It is also going to be harder to gain subscribers from cable/Directv with their triple play/HD offerings.

 

[Greg Bimson]

Charlie is in trouble for this reason as well: All these subs that have left Dish the past few months are now locked into 2 year commitments with DirecTV or cable/telcos (to get the best deals with triple play you are basically into a commitment and most people aren't going to just switch back anyway). So he's not getting these subs back for at least a year if not 2 and if the majority of those subs are happy they won't come back at all.

Dish Network isn't in "trouble", per se, but they are now not growing much.

Take a look at the numbers:
Dish Network signed up 730K subscribers during Q1 2008. In the first quarter of 2007, they signed up 890K. So less people are signing up for Dish Network. This is probably the largest problem of all.

Dish Network lost 695K subscribers during Q1 2008. In the first quarter of 2007, they lost 580K. So more people are leaving Dish Network.

FiOS just added a net of 275K subscribers this past quarter. FiOS is becoming more and more an elephant in the room. If you can get FiOS, you can get internet and TV along with your phone service. I think that triple play is one of the better ones, and in this economy it does present a discount.

DirecTV added a net of 275K subscribers this past quarter. Their gross adds were almost a million subscribers (964K); they lost 690K subscribers, in line with Dish Network. However, that means a smaller percentage of DirecTV's subscriber base left than Dish Network's. And DirecTV is still pointing to its stricter credit controls to sign-up "better" customers.

So the issue here is that in this economy, what can Dish Network do to increase their subscriber base (with better customers) and reduce churn?

K-Mart was in bankruptcy a few years before they purchased Sears. The CEO that drove K-Mart into bankruptcy made one horrible mistake, which compounded all problems: he decided to compete with Wal-mart. So K-Mart was going to win on price, even if they sold products at a loss, just so they could beat Wal-mart. That CEO was replaced with one that knew how to restructure losing operations, so K-Mart shuttered non-performing stores, updated stores and upgraded customer service. The bankruptcy didn't last long; K-Mart was profitable and generating enough revenue to buy Sears.

I happen to believe Dish Network needs a differentiator, not to become more similar to DirecTV. VOOM would have been one, but alas it is done.

Honest question: how many of the new HD locals are on a wing-dish? I wonder if a two-dish solution for new HD locals is going to restrict potential customers?

Perhaps no one states this issue better than Dish Network:

We have historically positioned the DISH Network as the leading low-cost provider of multi-channel pay TV principally by offering lower cost programming packages. At the same time we have sought to offer high quality programming, equipment and customer service.

I once was told at a company I worked for, we strive for, "cheaper, faster and better". However, we all know it is unlikely one can receive all three.

Besides, paint yourself as a value provider, and when customers find there may be better values, it does cause ill will.

It will be an interesting Team Summit.

 

[bobinstaller]

As an installer for many years the figurers from E* come as no suprise. From the tech view the start of the losses began with the duel reciever and dish proand plus systems. They are much more difficult to install require better conections and are more prone to failures even though they are correctly installed. The early hardware and software was not very good and caused many problems. I can't count the times that I have gone to a service call and the reciever was moved or customer got a new tv and the reciever was not corectly installed or changed the channel from tv2 to something other than it was set to. Customer service has become a hit or miss with 20% of all work orders being wrong forcing the tech to eather reschedual or take his time to make the changes so that the order was correct.

E* appeared to resolve these problems by leaning on the tech by making them responsible for not only the install that they did but all problems with the system, including the customer that cant figure out how to use the remote. At the same time they incressed the amount of labor that the tech need to do to complete a work order with out any additional compensation.

With the loss of new customers most techs have lost much of there income and the good ones have gone to greener pastures thus snowballing the situation.

you are correct. marketing will increase subscribers short term, and many companies spend more money there than improving operations, keeping products simple will insure lower churn. good execution of the basics begins with the person who has contact with the customer, the tech seems to be the least invested in asset because they are not considered an asset, but rather a liability. D* has spent yrs, and succesfully so, faulting the techs for poor workmanship. The true culprit is poor engineering, and the rushing of product to the market before being tested for reliability. yet the stock price grows, despite these internal chronic issues

 

[Stargazer]

Dish Network may be looking at how to keep their "risk" down which in return would make up for the lack of subscriber additions. If Dish Network is not spending as much money on acquiring customers then their profits will rise as they will get to keep more of the money that is coming in. If they also lower the amount that they spend on acquiring those customers then they are lowering their costs (raising profits) and not gaining customers that are looking at signing up short term until their contract runs out because they can get a better deal.

One problem I think that both Dish and Direct have is the fact that a lot of the subscriber additions are problem people coming from one satellite provider to the other. This means that the satellite companies are spending money several times on one single customer. At the same time they cannot not offer the deals or they will not attract customers off of cable.

I think a better solution to a lot of the problems would be to drop the monthly cost of the packages or offer more channels and/or other services included and quit nickel and diming the customers to death. Even if they beat cable by $10 per month that would gain a lot of customers without having to give these other deals. What this would do is prevent people from switching just to get a better deal short term and it gives everybody a deal longterm. It reduces the satellite companies churn if the existing customers are getting a good deal and helps go up against the triple play offerings that cable companies are offering. The bad thing would be a larger loss at first because everybody would start paying less so that would be less revenue right off the bat but would help longterm. They should start making people pay more upfront for the hardware and upgrades and the lower monthly fees would help offset those costs. This reduces the satellite companys and retailer's risk as well.