Ergen: “Some subscribers worth losing”
November 11, 2015
By Chris Forrester
US pay-TV giant Dish Network has seen an increase in subscriber churn in its Q3 period. Dish Network said that while its profits topped Wall Street expectations, it lost 23,000 net pay-TV subscribers in the quarter, compared with a loss of 12,000 a year earlier.
Dish does not break apart its core DTH subscriber numbers from those to its new Sling TV OTT service.
Market research company MoffettNathanson initially suggested in a note to clients that about 47,000 core DTH subscribers churned out while some 24,000 new subs joined up to its Sling TV offering. However, a second analysis of Dish Network’s numbers – and financials – prompted MoffettNathanson to revise its numbers, saying that Dish might have lost 178,000 subs and added a healthy 155,000 to its Sling OTT package.
On a conference call with analysts, Dish founder and Chief Executive Charlie Ergen expressed optimism that Sling TV additions will eventually offset satellite TV’s decline. “We hope that our subscriber counts grow positive in the future as opposed to negative,” he said.
Ergen also explained that there were times when it was better to let some subscribers go. “One of the other things that we’re looking at is that we do have customers that are unprofitable for us today, and they’re unprofitable because they call multiple times during the month, they are always asking for discounts. Even if you gave them the discount they asked for, they’d be an unprofitable customer. And I think it’s just smart business that over time that we wean those customers off of our service. And we’ve done some of that. I would rather have 13 million customers that are profitable than 13 million customers that are profitable and a million customers that are unprofitable.”
“For us, it’s all about economics and what kind of return we’re getting,” Ergen continued. “And sometimes the best return you get is to let a customer go. And there’s just a variety of reasons. If you have a customer that calls you 50 times a month or 30 times a month, he or she is an unprofitable customer. And everybody in the industry has those types of customers. And I have challenged our guys to make sure that we have alternatives for them.”