Dish Network said programming disputes, increased competition and the economic turbulence brought on by the coronavirus pandemic were partially to blame for a significant drop in customers for its satellite and streaming television services.
In its quarterly earnings report released on Friday, Dish Network said around 462,000 customers left in the three-month period ending March 31.
“We simply didn’t execute according to our expectations,” Erik Carlson, Dish Network’s chief executive, said on a conference call with investors.
Overall, Dish Network ended the quarter with just over 10.2 million pay television customers. Of those, the majority — just under 8 million customers — subscribe to Dish Network’s satellite service, while around 2.25 million pay for its streaming service Sling TV.
Carlson said a business dispute with local broadcaster TEGNA caused some subscriber churn over the quarter. Dozens of local broadcast stations owned by TEGNA were yanked off Dish Network and Sling TV last October after both sides failed to reach a new carriage agreement.
Among the affected stations were local CBS, NBC and Fox affiliates that broadcast National Football League games. Around three million Dish Network customers — or around half of its satellite subscriber base — were forced to find an alternate method to watch games and other programming on those stations until the two sides reached an agreement in January.
The end of football season marked the end of some Sling TV subscriptions, Dish Network said, with the company seeing more customer churn than activations immediately after the Super Bowl.
“We had a tough quarter, but we’re optimistic that we can leverage the platform and our messaging and high-value products and great experience to reach customers whose overall video bills are too high, but who still want the excitement of live TV,” Carlson said.
Sling TV was one of the first streaming services to offer live cable channels over the Internet and without a separate cable or satellite subscription. The service launched in February 2015 with channels programmed by the Walt Disney Company (ESPN, the Disney Channel, Freeform), WarnerMedia (CNN, TBS, TNT; now Warner Bros Discovery) and Scripps Interactive (Food Network, HGTV; now Warner Bros Discovery).
Sling TV launched with a starting price of $20 a month, attracting consumers at a time when some households were starting to ditch expensive cable and satellite packages for cheaper, streaming options.
Over the years, several other companies have launched their own streaming pay television services, replicating what Sling TV brought to the table in 2015, but with more channels and features. DirecTV (DirecTV Now), Google (YouTube TV), Philo, Vidgo, Frndly TV and Fubo TV are just some of the many options on the market for customers who want access to live television without cable.
As companies beef up their content offerings, Dish Network has gone in the opposite direction, focusing on value and experience. Sling TV has managed to keep its base price point at $35 a month by moving niche channels into add-on packages and by choosing not to carry some regional sports networks.
The end result is a good service at a good value, but one where customers are ultimately expected to compromise — it costs more than the sports-free Philo ($20 a month), but offers more channels, yet it doesn’t have a robust lineup of sports networks that Hulu with Live TV ($70 a month), YouTube TV ($65 a month) or DirecTV Stream ($70 a month) offer to customers.
This past quarter, customers felt that the compromises were too many.