With DISH recently reporting 7% growth in revenues while net income declined 19% to $171 million. The decline in profits was driven by reductions in other income. If we look at the two important trends, pay-TV subscribers and ARPU (average monthly subscription fee), both were positive for the company. Dish added 40,000 subscribers during the first quarter and ARPU improved 5% as compared to the prior year period.^ 

The satellite company has once again managed to post subscriber gains in an environment where pay-TV industry is losing subscribers. It must be noted that in 2013, the U.S. pay-TV industry saw a decline of over 104,000 subscribers. Dish benefited from its initiatives to retain customers and the first quarter churn rate was down to 1.42%, a 5 basis point improvement compared to last year. Going forward, we expect satellite companies such as Dish to continue adding more subscribers in the near term. The company saw half of the benefit of its price increase during the first quarter ARPU and full benefit will be seen in second quarter, according to Dish’s management.

What we basically see from this is the continued shift of monthly cable subscription services that lock consumers into one plan. This is the benefit that DISH offers and consumer are clearly responding. Dish’s pay-tv operations contribute close to 70% to its value, according to our estimates. Dish saw steady growth in the first quarter. ARPU grew 5% to $82.36 and the subscriber base increased to 14.097 million from 14.092 million in the prior year period. Subscriber-related expenses increased by 8% in the first quarter versus the prior period, reflecting higher pay-TV programming expense.

Of course, this is just part of the larger trend within the web-based fields, and DISH Network certainly isn’t being left behind.

Categories: DISH & TV news