Dish Network on Wednesday reported a 7% decline in quarterly revenue, showing growth in its Sling TV online streaming service but continuing losses of subscribers to its legacy satellite TV service.
Dish launched Sling TV at $20 per month in January 2015 to target younger consumers avoiding pricey cable and satellite subscriptions. In its first breakdown of the service’s numbers, it said Sling TV had 2.21 million subscribers at the end of the fourth quarter, up from 1.5 million a year earlier.
Sequentially, the service added 160,000 subscribers in the fourth quarter.
But Dish’s overall revenue dropped 7% to $3.48 billion as satellite subscribers fell by 429,000 subscribers from the year-ago period to 11.03 million. Average revenue per user of $84.63 missed analysts’ estimates of $86.10.
New Street Research analyst Jonathan Chaplin told Reuters the fourth-quarter results were “not great”, but that the primary value of the satellite business is to provide cash flow while Dish seeks to monetize the rights it has accumulated to radio frequencies.
Thomas Cullen, executive vice president of corporate development, said in an earnings call that the company expects to spend up to $1 billion to complete Phase I of its first wireless network by March 2020.
Dish, like other pay-TV providers, has been diversifying to combat the shift of “cord-cutting” consumers away from satellite TV packages to online streaming services such as Netflix and Amazon Prime.
“The total subscribers for Sling pales in comparison with Netflix’s about 118 million worldwide or Amazon Prime Video’s 40 million, but they have been accumulated from scratch in just two years at a time when other cable TV providers are struggling,” Reuters noted.
According to Variety, Sling is the largest “virtual pay-TV” service in the U.S., ahead of rivals including Sony’s PlayStation Vue and YouTube TV.
Dish’s fourth-quarter net income jumped to $1.39 billion from $355 million a year earlier due to a $1.2 billion benefit related to the new U.S. tax law. Excluding one-time items, it earned 57 cents per share, topping analysts’ estimates by 2 cents.