Dish and DirecTV both reported this week and analysts are immediately seeing it as proof that DTH systems are going to find it harder and harder to grow their customer base in modern triple play markets.
Dish added just 36,000 new TV subscribers while DirecTV managed just 21,000 in the US. Both companies had their upsides elsewhere, but they are in vastly different directions from one another ‘ Dish raised prices, tried to manage the inevitable churn this threw up, and opened up a second broadband front, while DirecTV just took its performance south of the border and signed up yet more subs in the virtually unlimited markets of Latin America.
Perhaps this is why DirecTV management sees no reason in the short term for the Dish love affair with a return broadband path and mobility, and in particular and the pursuit of Sprint, something it was happy to state publicly.
Dish revenues were down a fraction to $3.56 billion, but with a 4% rise for subscriber revenue, and the fall attributed to closing more Blockbuster stores. Net income was down to $216 million compared to $360 million a year ago and the margin squeeze has come from increased programming and subscriber acquisition costs.
Gross subscriber additions were off slightly at 654,000 compared to 673,000 last year ending on 14.092 million pay TV subscribers. ARPU was $78.54, up from the $76.24 last year but this came at a price and was driven by price increases. Churn rose to 1.47% a month from 1.35%. But the interesting thing for Dish was the way it has bundled satellite broadband, supplied by Hughes and ViaSat, under the brand dishNET. The trick is to have it as part of a single installation, through the same distributors, when the TV service goes in, saving on one of the major costs of satellite broadband. Dish managed to add 66,000 net broadband subscribers in the first quarter, compared to 6,000 broadband subscribers in the year ago period. Dish also offers wireline voice and broadband services under the dishNET brand as a competitive local exchange carrier to consumers living in about 14 US states.
But at DirecTV the continued rise of Latin America as an economic force, was behind its 8% revenue growth to $7.6 billion this quarter. It added 604,000 net subscriber additions taking in both the US and Latam, with 583,000 of these coming south of the border, a few less than last year. This takes the Latin American subscribers including its part ownership of Sky Mexico to 16 million subscribers. Given that DirecTV US Ended with 20.1 million subscribers, that totals 36.1 million overall. Net incomes was down slightly at $698 million compared to $741million, and this might be explained with a big fall in Latin American ARPU to $54.23 down from $60.59. In the US the opposite happened , with ARPU going up from $92 to $96. Much of the Latin American growth came from Argentina, Brazil and Colombia.