TV Answer Man, I can’t understand how Dish stays in business. They are always losing channels in blackouts because they don’t want to pay for them. How can they keep the subscribers when they are losing channels all the time? — Juan, Reno, Nevada.
Juan, Dish has lost hundreds of channels over the last few years due to carriage disputes, far more than any other pay TV provider. (The latest: Dish last night lost NESN after it could not reach a new carriage agreement with the regional sports network.)
Of course, it has added many of those channels back after weeks, months and sometimes even years of not carrying them. But the frequent programming interruptions would seem to be enough to drive millions of subscribers away every year.
However, Dish has lost ‘just’ 540,000 subscribers in the past year. While that’s not anything to brag about, it’s one-third of Comcast’s video sub losses over the last four quarters. (Comcast lost slightly more 1.5 million in the same time period.) And Comcast has had relatively few programming blackouts during that time.
DIRECTV isn’t reporting quarterly subscriber numbers since it became a separate company jointly owned by AT&T and private equity firm, TPG. But Dish’s chief satellite rival was losing more customers than anyone when it did report prior to this year. And DIRECTV also has had relatively few programming interruptions.
So how does Dish do it? Why isn’t it losing more subscribers?
1. Dish subscribers believe the satcaster offers lower prices.
Dish Chairman Charlie Ergen frequently says that Dish is able to keep prices from rising as much as its rivals because it’s willing to play hardball in carriage negotiations. The claim is debatable — DIRECTV’s prices are similar in comparable packages — but Dish’s subscribers seem to buy in. In e-mails to your truly, and social media posts, the satcaster’s customers often say they approve of Ergen’s tough negotiating stance because it helps keep their prices down. The Dish chairman has a reputation with his audience as someone who’s looking out for them. That shouldn’t be underestimated here. People root for Ergen. Comcast, DIRECTV, Charter and other pay TV services don’t have a well-known leader on top. They are viewed more as uncaring anonymous corporations, be that a fair view or not.
2. Many Dish subscribers can’t switch due to 2-year contracts.
Like DIRECTV and Comcast, Dish requires new subscribers to sign two-year agreements that include a $20 a month termination penalty if they cancel early. Unlike live streaming services, which do not require contracts, it can be financially painful to leave Dish even if it loses your favorite channel. At $20 a month, the termination penalty could be in the hundreds of dollars.
3. Many Dish subscribers live in rural areas where Dish and DIRECTV are the only options.
Federal studies have shown that between 20-40 million people live in areas where high-speed Internet service is either not available or is limited. Cable TV is also not readily available in these markets. Consequently, for many Dish subscribers, they have two choices for quality TV: Dish or DIRECTV. When Dish loses a channel, they can switch to DIRECTV (assuming they are not in a contract) but the hassle of getting a different dish installed on their property gives many pause. They often hang in there, hoping that Dish will settle the dispute sooner than later.
Juan, hope that makes sense. Happy viewing and stay safe!
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— Phillip Swann