Dish Network Corp posted revenue for its first quarter that came up short of expectations on Wall Street Tuesday as more subscribers to satellite TV canceled packages, per customer revenue dropped, and viewers chose less expensive online options more and more.
The pay-TV service of Dish lost 94,000 subscribers during the quarter, while over the same period Sling TV, its streaming service increased by almost 91,000.
Following the news, Dish shares fell 11% in trading during the afternoon reaching a low of six years.
Chairman at Dish Charlie Ergen during a conference call after earnings were posted said Dish is fully committed to paying debt that stands at $16 billion.
One industry analyst said that the rate in which the business of Dish is deteriorating has become breathtaking. When a business must explain why they will probably not default on debt, it is not a good sign for the equity holders.
Dish has attempted to attract young viewers to its Sling TV at just $20 per month, as it grapples with the cord-cutting in its services of satellite-TV with viewers shifting to its competitors such as Netflix and Prime Video by Amazon.
The average per user revenue in the pay-TV segment of Dish fell from $86.55 to $84.50.
One analyst said that the average per user revenue at Dish could experience even more pressure going forward, as the skinny bundles, including Dish’s own Sling TV put on a cap on the ability to increase prices.
The average revenue generated by each Sling TV users during the quarter reached $25, which was far lower than traditional TV subscribers.
Dish said that revenue and margins for customers of Sling TV were increasing and it is expecting that trend to continue during the ongoing quarter.
Dish is working as well to build its first phase of its Internet of Things network, with the initial step being the building of a 5G network nationwide. Dish has acquired large amounts of spectrum, which are airwaves able to carry data.
Every industry is going to need 5G in order to power the new technologies such as autonomous vehicles and artificial intelligence and Dish will be in a strong stop to offer it. Although, said the analyst, there is skepticism by investors toward the company efforts at building such a network.