TV Answer Man, I read your article about Dish saying they are not talking about a merger with DIRECTV. How can that company survive without it? That’s my question! — Gerry, Butte, Montana.
Gerry, Dish this week shoveled out a bucket load of bad news. First on Tuesday, it said it lost a net of 64,000 TV subscribers in the third quarter compared to a net increase of 30,000 in last year’s third quarter. (Dish has now lost roughly five million subscribers in the last eight years.) Then, Dish’s stock plunged to a 25-year low, dropping 37 percent on Tuesday. And if that wasn’t bad enough, the company said CEO Erik Carlson is stepping down and it was laying off 500 employees.
Is a Dish-DIRECTV Merger History?
But perhaps the worst news was a revelation from Dish Chairman Charlie Ergen that a merger with DIRECTV is not in the company’s current plans.
“We’re still getting the Echostar-Dish transaction done. (See our article on the Dish-Echostar merger.) I mean, obviously, we filed a lot of stuff but we got a ton of stuff in terms of combining the companies and the management teams and making sure that we don’t wait on synergies and get those and with the starting next week, that will be very helpful. So we just don’t have any plans for DIRECTV based on that,” Ergen said.
The company’s subscriber defections continue a longtime trend for Dish, but most observers expected it would eventually merge with DIRECTV to fortify the positions of both declining services. While DIRECTV would likely benefit from a Dish merger, one could argue that Dish desperately needs it, at least for its video units. (Dish is also working on a 5G wireless initiative.) The company’s financial resources are shrinking.
So What Now For Dish?
And it could get even worse for Dish over the next few years. A large number of Dish’s satellite subscribers are in rural areas, many of which lack reliable high-speed Internet service. They often subscribe to Dish or DIRECTV because it’s the only way to get quality television; they can’t stream, and cable is usually not available.
However, the federal government in 2021 approved $65 billion to bring the Internet to rural communities as part of a larger infrastructure bill. (The FCC has estimated that roughly 20 million Americans are without reliable Internet access.) Over the next few years, many of those Dish subscribers will have more video options than they ever have. Will they stay with Dish or will they opt to subscribe to less expensive Net-based services such as Disney+ and Netflix. I think we already know the answer.
Dish once thought that Sling TV, the live streaming service, would be the company’s video future. But Sling’s growth has stalled.
At this moment, with no DIRECTV merger in sight, it’s getting increasingly difficult to see a successful end game for Dish and Ergen.
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The TV Answer Man is veteran journalist Phillip Swann who has covered the TV technology scene for more than three decades. He will report on the latest news and answer your questions regarding new devices and services that are changing the way you watch television. See the bio for Phillip Swann here.