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Dish’s Ergen: “DBS is mature to declining”

Dish Network’s founder and CEO, Charlie Ergen, in an analysts’ call following the company’s results, has said that his DTH/DBS business definitely had a future despite the competitive threats from a “proliferation” of online rivals, but that it was necessary to be more selective in its relationship with subscribers.

“The likelihood that you’re going to keep customers in certain locations as long as you did in the past to me is riskier.” He argued that while rural America was probably more dependable, other customers would need to be examined according to higher credit scores. “We looked at the [problem] asking ourselves whether we would invest in that customer [with a higher credit score], and if that answer is ‘yes’ then we would invest. If the answer is ‘no’ then possibly not.”

He added that Dish Network’s lower-cost Sling TV service tapped into those customers who were not in the pay-TV universe, “and where the Subscriber Acquisition Cost is relatively low”.

However, Ergen also admitted that its DTH/DBS business was “a mature to declining business nationwide, and certainly a declining business at least in the short-term for us”.

He further admitted that some of Dish’s churn was due to taking down of some channels and networks [Dish Network has been involved in some extremely tough negotiations with network broadcasters] and “in my opinion not the wisest decisions”.

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