Dish Network loses subscribers, shares down

NEW YORK Thu Feb 24, 2011 2:43pm EST

NEW YORK (Reuters) - Satellite television provider Dish Network Corp's posted deeper-than-expected subscriber losses for the fourth quarter as many customers canceled service after a dispute with Fox Network in October blacked out sports programs.

The second-largest U.S. satellite TV provider lost 156,000 subscribers in the quarter. Barclays analyst James Ratcliffe had expected Dish to lose 10,000 subscribers.

Dish shares in midafternoon trading were down 2 percent at $22.47. Earlier in the day, shares fell nearly 3 percent to $22.25, which Ratcliffe attributed to investors being confused about the company's long-term strategy and how it plans to use its cash.

In early February, Dish Network Corp spent about $1 billion buying DBSD North American, a hybrid satellite and land-band communications company.

"The question investors have is: 'What is the company's long-term vision and what does that mean for how it deploys its capital?" said Ratcliffe.

He said the company bought less than $400,000 worth of its shares in the fourth quarter, which pales in comparison with the $1.55 billion in shares that its rival DirecTV bought over the same time period.

LOSING CUSTOMERS

The company also appears to be losing market share to DirecTV, which reported a higher-than-expected profit and subscriber additions.

For Dish, "these are terrible subscriber numbers -- they really lost the match, especially with DirecTV posting such great numbers yesterday," said Wunderlich Securities analyst Matthew Harrigan.

Dish's subscriber losses reflect the same weakness affecting the cable TV industry, where viewers are canceling their service because they can no longer afford it and are turning to free content on the Internet.

In a regulatory filing, Dish blamed "multiple programing interruptions related to contract disputes with several content providers" during the fourth quarter for some of its subscriber losses.

Dish was in a dispute with News Corp's Fox Network in October after their programing deal expired. Viewers were deprived of Fox's regional sports networks, but the companies struck a deal in time for Major League Baseball's World Series.

Earlier this month, Cablevision Systems Corp, another pay-TV provider, also blamed its quarterly subscriber losses on a programing blackout with Fox [ID:nN15171045].

Dish's fourth-quarter net income attributable to common shareholders rose 41 percent to $252 million, or 56 cents a share. Analysts on average were expecting 54 cents a share, according to Thomson Reuters I/B/E/S.

Revenue rose 8.2 percent to $3.21 billion, in line with expectations.

(Additional reporting by Sayantani Ghosh in Bangalore; Editing by Saumyadeb Chakrabarty and Gunna Dickson)

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Comments (4)
FarmerBob wrote:
DISH only has themselves to blame. Oh and the recent rate hikes, and the fear of the TiVo suit, and Charlie the idiot.

Feb 24, 2011 7:08pm EST  --  Report as abuse
Whittier5 wrote:
Just as I canceled my Direct subscription … can’t afford $100/mo in a Great Depression, when Wall St’s Gambling has put me out of a job, mon.

Feb 24, 2011 8:45pm EST  --  Report as abuse
j-lpryor wrote:
Dish just raised my TV rate from $86.27 to $91.27. Dish give me STARZ for the rest of the year, but I don’t watch STARZ and don’t need or want it. I asked Dish to settle for our old rate of $86.27 and they said no!
I will find another company.
Goodbye Dish.
Jim Pryor

Feb 25, 2011 9:16am EST  --  Report as abuse
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