Looks like Wall Street thinks Dish has some tough sledding ahead based on their analysis of subscriber growth.
Dish Network Dealt HDTV Setback as Satellite Falters
Dish Network Dealt HDTV Setback as Satellite Falters
By ROGER CHENG WSJ
March 18, 2008
In a race where high-definition television content is key, Dish Network Corp. is falling further behind.
The Englewood, Colo., satellite-TV provider suffered a setback after a newly launched satellite failed to reach its intended orbit. It is a blow for the company, whose success hinges on HDTV attracting customers and catching up to rival DirecTV Group Inc., which already offers HD in more markets.
Dish and Echostar Corp., which separated into two public companies at the beginning of the year, said yesterday that the satellite, which experienced an anomaly that left it in a lower orbit than planned, would result in fewer HD channels for Dish and potentially lower revenue to Echostar.
Echostar said it is awaiting further data on the launch anomaly to assess the potential effects on its plans for the satellite. A spokeswoman declined to comment on how the problem would specifically delay the deployment of HD channels.
"Having the most high definition has become a major source of competitive advantage for DirecTV, which has used its HD superiority to appeal to high end subscribers," said Sanford Bernstein analyst Craig Moffett in a research note. "Dish has struggled with a lower end positioning, and has suffered consequently higher [turnover]."
In the fourth quarter, Dish added 85,000 net new subscribers, or less than half of Wall Street's prediction. In comparison, DirecTV added 474,000 net new customers. Dish Chief Executive Charles Ergen cited the lack of HD local channels as a major contributor to the fourth-quarter weakness. He emphasized that the company would be in a better position once it gets more satellites launched.
DirecTV, of El Segundo, Calif., is seen as the primary winner from Dish's misfortune, as it continues to chug along with its HD content. The company jumped ahead last year with aggressive advertisements touting its 100 HD channels and is widely viewed as a leader in the area.
Telecom companies offering HD television service, such as AT&T Inc. and its U-Verse and Verizon Communications Inc. and its FiOS service, also will grab more subscribers, while cable providers such as Comcast Corp. will benefit, although they have similarly been slow to push their HD offerings.
It isn't a total loss for Dish and Echostar. The satellite still functions. Engineers will attempt to fire up its rockets to correct its orbit, but it will burn valuable fuel used to keep it in proper orbit and "substantially" reduce its service life, according to Securities and Exchange Commission filings.
In 4 p.m. Nasdaq Stock Market composite trading yesterday, shares of Dish Network fell $1.10, or 4%, to $26.64; shares of DirecTV fell 30 cents, or 1.2%, to $24.45, also on the Nasdaq.
Dish Network Dealt HDTV Setback as Satellite Falters
Dish Network Dealt HDTV Setback as Satellite Falters
By ROGER CHENG WSJ
March 18, 2008
In a race where high-definition television content is key, Dish Network Corp. is falling further behind.
The Englewood, Colo., satellite-TV provider suffered a setback after a newly launched satellite failed to reach its intended orbit. It is a blow for the company, whose success hinges on HDTV attracting customers and catching up to rival DirecTV Group Inc., which already offers HD in more markets.
Dish and Echostar Corp., which separated into two public companies at the beginning of the year, said yesterday that the satellite, which experienced an anomaly that left it in a lower orbit than planned, would result in fewer HD channels for Dish and potentially lower revenue to Echostar.
Echostar said it is awaiting further data on the launch anomaly to assess the potential effects on its plans for the satellite. A spokeswoman declined to comment on how the problem would specifically delay the deployment of HD channels.
"Having the most high definition has become a major source of competitive advantage for DirecTV, which has used its HD superiority to appeal to high end subscribers," said Sanford Bernstein analyst Craig Moffett in a research note. "Dish has struggled with a lower end positioning, and has suffered consequently higher [turnover]."
In the fourth quarter, Dish added 85,000 net new subscribers, or less than half of Wall Street's prediction. In comparison, DirecTV added 474,000 net new customers. Dish Chief Executive Charles Ergen cited the lack of HD local channels as a major contributor to the fourth-quarter weakness. He emphasized that the company would be in a better position once it gets more satellites launched.
DirecTV, of El Segundo, Calif., is seen as the primary winner from Dish's misfortune, as it continues to chug along with its HD content. The company jumped ahead last year with aggressive advertisements touting its 100 HD channels and is widely viewed as a leader in the area.
Telecom companies offering HD television service, such as AT&T Inc. and its U-Verse and Verizon Communications Inc. and its FiOS service, also will grab more subscribers, while cable providers such as Comcast Corp. will benefit, although they have similarly been slow to push their HD offerings.
It isn't a total loss for Dish and Echostar. The satellite still functions. Engineers will attempt to fire up its rockets to correct its orbit, but it will burn valuable fuel used to keep it in proper orbit and "substantially" reduce its service life, according to Securities and Exchange Commission filings.
In 4 p.m. Nasdaq Stock Market composite trading yesterday, shares of Dish Network fell $1.10, or 4%, to $26.64; shares of DirecTV fell 30 cents, or 1.2%, to $24.45, also on the Nasdaq.
