Dish Network Avoids Cord-Cutter Exodus, Posts Strong Q3 Subscriber Gains Thanks to Sling TV

Dish Network avoided the cord-cutting exodus that has ravaged its competitors when it posted its Q3 earnings on Thursday, with its unexpected performance driving a nice Wall Street boost. The company lost 66,000 satellite customers during the third quarter — which isn’t optimal but marked a huge improvement from the same period last year when more than 360,000 Dish subscribers dropped their service. Those Q3 satellite losses were offset by Sling TV, its live TV streaming service, which gained 214,000 customers; it was Sling’s best performance in two years and came a year after it added less than 30,000 customers during Q3 2018. Overall, Sling’s gains pushed Dish to a net gain of nearly 150,000 viewers. Dish finished Q3 with 9.5 million Dish TV subscribers and 2.69 million Sling TV subscribers. The news was well-received by investors on Thursday morning, with Dish’s stock price increasing 4.5% in early trading to $35 per share. Dish’s gains stand out when compared to DirecTV’s recent performance. AT&T, DirecTV’s parent company, reported it lost nearly 1.4 million customers across both its traditional and digital TV divisions during the third quarter., On the company’s Q3 earnings call, AT&T CEO Randall Stephenson said he wasn’t actively looking to sell DirecTV, but added: “We have no sacred cows.” DirecTV’s “meltdown,” according to an investor note shared Thursday by MoffettNathanson analyst Craig Moffett, coupled with Hulu and YouTube TV raising prices, provided a “tailwind” for Dish in Q3. It wasn’t all good news for Dish: revenue dropped 7% year-over-year to $3.17 billion, and average revenue per user dropped 1.2% to $85.29. In other words, a Sling customer doesn’t bring in as much money as a satellite customer, and its something to monitor moving forward. Still, the aggregate subscriber gains amount to a job well done when compared to the rampant cord-cutting that has hit other major providers. “Sling TV obviously isn’t a very profitable alternative to satellite TV; it is very likely still barely breakeven even at the gross margin level, and it is almost certainly a money loser at the net margin level,” Moffett said in his Thursday note. “But after enormous amounts of advertising – their clever ‘we’re Slingers’ campaign is still everywhere – their Sling TV business is at least growing. Perhaps that will provide some optionality down the road, even if it doesn’t do much for profitability.”