Dish yesterday released its 2020 fourth quarter report which showed its satellite TV service lost a net of 149,000 customers while its live streaming service, Sling TV, added a net of 16,000. At the end of the year, Dish had roughly 11.3 million subscribers with 8.82 million for Dish and 2.47 million for Sling.

Following the report’s release, Dish executives took questions from industry analysts and journalists on a variety of topics, including why Sling TV isn’t adding more subs, Dish’s declining customer base, why the Discovery networks may be shooting themselves in the foot, and whether satellite TV has a future. As usual, Dish Chairman Charlie Ergen was the dominant speaker during the event and here are the highlights of his remarks:

Ergen: Sling TV Is underperforming — “We stumbled.”
The Dish chief noted that Sling TV was the first multi-channel live streaming service on the market. (It launched in January 2015). However, Sling’s sub total has been surpassed by both YouTube TV and Hulu, both of which launched two years later. Ergen blamed Sling’s user interface and occasional technical snafus for the disappointing performance.

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“We should have more market share there,” Ergen stated. “We really were first to market. We stumbled a little bit with our — with just the quality of the user interface — user experience. And technically, as we — our network was the best to first, but we got — maybe got a little complacent, and it’s taken a while to upgrade it, but that’s all being done the first half of this year. So we’ll see how it goes. But it — we have room to improve, that’s for sure. And we should, we should have gotten more market share.”

Ergen: Satellite TV is declining, but it has a future.
Despite both DIRECTV and Dish losing subscribers over the last several years, Ergen said the satellite TV industry still has a viable future, in part because high-speed Internet isn’t available in many rural areas. (Dish’s marketing effort focuses heavily on underserved rural communities.)

“It’s a mature declining business, and it’s a solid business,” Ergen said. “The cash flows are good. It’s not going away, but it’s going to decline.”

Ergen issues a warning to networks such as Discovery which are selling their programming directly to consumers.
The Dish chairman suggested that his TV services may be less inclined to carry channels that are available a la carte via streaming apps, such as HBO Max and Discovery+. (Dish has been without HBO for more than two years due to a carriage dispute with the premium channel.)

“And then the content providers are strategically, I think, in their strategic rooms, they are saying, how do we keep these linear guys (cable and satellite) paying us much money as possible for as long as possible while we go direct to the consumer and cut them out,” Ergen said. “And by the way, we are making these guys bundle every channel and we will go to the consumer and give them a lot more flexibility and be a la carte…that’s going to be a tough business model going forward.”

The Dish executive said those programmers might have to lessen their fee demands in future carriage negotiations with cable and satellite operators.

“And I would expect that our cost of programming would go down or would — or wouldn’t go up as much based on customers going direct,” he said, adding that could lead to more channel blackouts if the programmers don’t agree.

“We probably will lose some of our customers, some of our programming partners, we may lose as a result of that,” he said.

When asked specifically about Discovery+, a direct-to-consumer streaming service that launched last month, Ergen said:

“I think Discovery has got great content. And we’ve had a long-term relationship with them. But obviously, to the extent that you can get it on a la carte basis, it will affect future negotiations,” Ergen said. “Because if our customers — some of our customers don’t watch Discovery. A lot of our customers don’t watch Discovery, should we burden every customer with Discovery if they can get it somewhere else? (It) has to be a fair rate that we can burden customers who don’t watch it and you have to run that math.”

It’s unknown when Dish’s current carriage pact with Discovery expires.

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