Dish Network: Low Prices Bring New Subscribers
Ockham Research submits:
Aggressive marketing and pricing promotions helped lead Dish Network (DISH) to a stronger than expected fiscal fourth quarter. The second largest satellite TV provider reported Monday that net income fell to $179 million in the quarter from $217 million a year ago. However, EPS of 40 cents per share easily topped analysts’ estimates of 32 cents, and revenue rose 1.4% to $2.96 billion which slightly edged out Wall Street’s expectations. Perhaps most importantly though was the net subscriber additions of 249,000, which was 50,000 more than expected and demonstrated Dish is connecting with cash-strapped consumers.
The latest “Why Pay More” ad campaign out of Dish Network takes direct aim at satellite competitor DirecTV (DTV) claiming that their plan can save consumers $24 per month. However, DirecTV is suing over the ads claiming that the plans that were compared are not equal offerings. The result of the suit is pending, and DirecTV lost the recent ruling on an injunction
pulling the ads from TV. Either way, the ads have been effective as Dish has lured consumers in with less costly plans, and then benefited as many customers upgrade to more pricey high definition plans. Following three straight quarters of subscriber growth Dish Network now has 14.1 million subscribers which means it is still small relative to DirecTV and other cable TV services, but they are gaining with attractive pricing.
Investing, Long Term Investment, stock market | admin March 1, 2010
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