Echostar continues to grapple with customers leaving its pay television products Dish Network and Sling TV, which collectively lost 104,000 paying subscribers during the second financial quarter (Q2) of the year.
The number of customers lost at Dish Network and Sling TV was lower than the 294,000 subscribers that the pay TV products lost during the same time period last year, and a modest improvement from the 348,000 customers that churned out during Q1.
Echostar ended Q2 with around 8.1 million pay TV customers, most of whom are at Dish Network, which counted 6.07 million subscribers by the end of June. Gains at Sling TV helped offset higher churn at Dish Network, with the streaming service adding 80,000 customers on a sequential basis to end the quarter with 2 million subscribers flat.
Of the two products, Dish Network offers the most local broadcast and national cable networks, with subscribers typically able to access their local ABC, CBS, Fox and NBC stations and affiliates on the satellite service, as well as national channels like the Disney Channel, Comedy Central, Fox News, CNN, MSNBC and national sports channels like ESPN and Fox Sports 1.
Sling TV offers two base subscriptions packages — Sling Orange, which includes legacy Disney-owned networks like ESPN and Freeform, and Sling Blue, which offers legacy Fox and NBC networks like FX, National Geographic, Bravo and E!, as well as the NFL Network — each priced at $40 per month. In areas where ABC offers its owned-and-operated broadcast station through Sling, customers pay $45 per month. A combined package that offers Disney, Fox and NBC channels — called Sling Orange and Blue — costs $55 per month. Both packages include channels like CNN, TBS, TNT, the History Channel, Comedy Central and the Cartoon Network.
Since it debuted nearly a decade ago, Sling’s approach has been to offer customers the flexibility of purchasing packages of channels they want, while saving money by excluding certain networks that they don’t. Because of programming agreements, Sling can’t offer customers the option to purchase channels à la carte; instead, channels like Paramount Network, Turner Classic Movies and CNBC are available through add-on packages that include separate monthly fees.
Building out packages of channels can be a time-consuming endeavor for customers who want access to certain networks. Additionally, Sling TV doesn’t offer local broadcast stations that aren’t owned by Disney, Fox or NBC — meaning large parts of the country have to access those channels by using an antenna or through some other means. Sling TV doesn’t offer local CBS stations at all.
While customers might save money in the long run, Sling offers a less-compelling package of channels compared to YouTube TV or Hulu with Live TV, which have grown to become the largest streaming cable-like services with their approach of offering dozens of broadcast and cable channels — including local ABC, NBC, CBS and Fox stations — for between $73 and $81 per month.
Still, Q2 proved to be an anomaly for Echostar, with the company adding customers to Sling TV after several quarters of subscriber losses.
On a conference call with investors Friday morning, Echostar’s Group President of Video Services Gary Schanman described Sling TV as “one of the industry’s only profitable streaming services,” which he attributed to the company’s decision to target “high-quality profitable subscribers, despite competitive headwinds.” He also said new features, including an expanded free digital video recorder (DVR) and sports replay tools, have increased viewership and engagement on the platform.
“We expect that increase in adoption to continue into the second half of 2024,” Schanman said.
On the satellite side, Echostar is hoping to keep churn levels at bay by offering a new bundle package that includes live TV through Dish Network and broadband Internet through satellite operator HughesNet. Dish is also cross-selling customers on Boost Mobile, the wireless provider it acquired from Sprint several years ago, and the satellite provider recently offered new customers free access to the ad-supported plan of Netflix if they signed a two-year service commitment.
“Our objective moving forward into the second half of 2024 is to more closely integrate these products, improving the customer experience and lowering collective churn,” Schanman said.
