Dish Network Loses Record 413,000 Subscribers in Q1, Citing ‘Severe Disruption’ From COVID-19

By Todd Spangler

LOS ANGELES (Variety.com) – Dish Network reported its worst-ever quarterly loss of subscribers, shedding 413,000 total pay-TV customers in the first three months of 2020. The satellite and over-the-top TV provider blamed the drop-off on the upheaval from the coronavirus pandemic.

The company closed the first quarter with 11.32 million pay-TV subscribers, down ‭6% year-over-year. That included a sequential decline of about 132,000 satellite subs (to 9.01 million) and a net loss of 281,000 Sling TV subscribers — accelerating the over-the-top service’s erosion from Q4 . As of March 31, Sling TV had 2.31 million customers, down 4.7% from a year earlier; Sling has launched several free promotions during the pandemic to try to win new subscribers.

Dish has been steadily losing TV subscribers to cord-cutting pressure for several years, and the current health crisis appears to have exacerbated the shrinkage. “[T]he COVID-19 pandemic caused severe disruption in certain commercial segments served by Dish, including the hospitality and airline industries,” the company said in reporting results.

More broadly, Dish said, “We have faced, and could continue to face, fewer subscriber activations and increased subscriber churn rate as a result of the COVID-19 pandemic and the worsening of the global business and economic environment.”

Note that longtime rival DirecTV also suffered a dramatic subscriber decline in Q1 — AT&T reported the pay-TV segment dropped 1 million subscribers in the period , comprising both satellite and broadband-delivered TV.

Dish beat Wall Street expectations for revenue but missed on earnings per share. The company reported revenue of $3.22 billion for Q1, up 0.9% versus $3.19 billion for the corresponding period in 2019. Net income came in at $73 million (down from $340 million from the year-ago quarter), or earnings per share of 13 cents. Dish said the bottom line was hurt by $356 million in impairment charges related to the narrowband internet-of-things network deployment and the D1 and T1 satellites.

Analysts on average expected Dish to report Q1 revenue of $3.15 billion and quarterly earnings of 57 cents per share.

During the first quarter, Dish said, it paused service or provided “temporary rate relief” for certain commercial customers including bars and restaurants “to avoid charging commercial customers for services that were no longer being viewed by their customers.” Those represented about 250,000 subscribers, which Dish dropped from its pay-TV subscriber count as of March 31.

Dish also called out ongoing programming blackouts for hurting subscriber numbers. AT&T’s HBO and Cinemax channels have been dark on Dish TV and Sling TV since November 2018, and “we and AT&T have been unable to negotiate the terms and conditions of a new programming carriage contract,” the company noted in the Q1 report.

In addition, Dish’s pay-TV services have been without Fox-branded regional sports networks since July 2019. Since Sinclair Broadcast Group acquired the Fox RSNs last summer, the parties have not reached a carriage deal for the networks.

Dish last month told employees it planned job cuts , particularly focused in the in-home services division, which handles on-site installation and support at customer locations. It has not disclosed the scope of the layoffs. Dish had 16,000 employees as the end of 2019.

(Pictured above: Dish Network chairman Charlie Ergen)