# Dish Network: Profits up, but subscribers down



## Stuart Sweet (Jun 19, 2006)

From CNN.com:


> Dish Network Corp.'s (DISH) fourth-quarter net income rose 24% on increased revenue despite another drop in subscribers.
> 
> Dish faces escalating pressure to devise a new survival strategy in the face of tough competition not only from DirecTV Group Inc. (DTV) but also from cable providers and local-phone companies also offering television service.


Read more here: http://money.cnn.com/news/newsfeeds/articles/djf500/200903020635DOWJONESDJONLINE000214_FORTUNE5.htm


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## Richard King (Mar 25, 2002)

> The company lost 102,000 net subscribers during the quarter


Ouch.


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## ImBack234 (Aug 26, 2008)

charlie it's about time you take off the blinders and get clue!!!!:eek2:


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## SaltiDawg (Aug 30, 2004)

ImBack234 said:


> charlie it's about time you take off the blinders and get clue!!!!:eek2:


You think that he doesn't have a clue? lol

I guess *profit* is not something you consider of value?


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## placeman (Jun 7, 2004)

ImBack234 said:


> charlie it's about time you take off the blinders and get clue!!!!:eek2:


Whether you like it or not, Charlie works for the stockholders, not the subscribers.


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## Chris Blount (Jun 22, 2001)

placeman said:


> Whether you like it or not, Charlie works for the stockholders, not the subscribers.


That's true but if the customers aren't happy, the stockholders pay for it in the long run.


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## Kheldar (Sep 5, 2004)

The Morning Bridge is reporting:


> The company blamed the losses on the shaky economy, increased competition from fiber and the termination of its reseller contract with AT&T.


But this is the 2008 Fourth Quarter announcement, and they still had their AT&T agreement through January 31, 2009. I know people that were getting AT&T|DISH Network advertisements right up until mid-January, so how could they blame the Q4 numbers on "the termination of its reseller contract with AT&T" when the agreement hadn't been terminated yet? Maybe it slowed down, but it wasn't terminated yet.

Their 10-Q report they file to the SEC also had some interesting tidbits. Now, granted, these reports are supposed to mention any and all _possible_ "risks and uncertainties" for future performance, so they sound a little dire and paranoid, but here are some clips:

Page 1:


> The loss of our distribution relationship with AT&T on January 31, 2009 may impair our ability to generate gross and net subscriber additions, increase churn and impair our ability to generate revenue growth.


Page 34:


> Our distribution relationship with AT&T has been a substantial contributor to our gross and net subscriber additions over the past several years, accounting for approximately 17% of our gross subscriber additions for the nine months ended September 30, 2008. This distribution relationship will terminate on January 31, 2009. It may be difficult for us to develop alternative distribution channels that will fully replace AT&T and if we are unable to do so, our gross and net subscriber additions may be impaired, our churn may increase, and our results of operations may be adversely affected. In addition, approximately 1 million of our current subscribers were acquired through our distribution relationship with AT&T and these subscribers have historically churned at a higher rate than our overall subscriber base. Although AT&T is not permitted to target these subscribers for transition to another pay-TV service and AT&T and we are required to maintain bundled billing and cooperative customer service for these subscribers, we may still experience churn of these subscribers following termination of the AT&T distribution relationship.


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## Jeremy W (Jun 19, 2006)

Kheldar said:


> how could they blame the Q4 numbers on "the termination of its reseller contract with AT&T" when the agreement hadn't been terminated yet?


Spin doesn't require logic.


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## Kheldar (Sep 5, 2004)

Jeremy W said:


> Spin doesn't require logic.


Especially when Charlie is involved. :grin:


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## CorpITGuy (Apr 12, 2007)

This is probably temporary. Dish is quickly catching up with DirecTV on HD locals and national HD, and passed D* long ago on DVRs.

I wouldn't be worried at all if I were a stockholder.

The constant squabbles with broadcasters are the primary concern right now. He needs to cut that out.


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## Steve (Aug 22, 2006)

CorpITGuy said:


> This is probably temporary. Dish is quickly catching up with DirecTV on HD locals and national HD, *and passed D* long ago on DVRs*.


Interesting to know re: DVRs. Do you have a source for that stat? TIA. /steve


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## Kheldar (Sep 5, 2004)

CorpITGuy said:


> This is probably temporary. Dish is quickly catching up with DirecTV on HD locals and national HD, and passed D* long ago on DVRs.
> 
> I wouldn't be worried at all if I were a stockholder.
> 
> The constant squabbles with broadcasters are the primary concern right now. He needs to cut that out.


I'm not sure I would consider 3 consecutive quarters as temporary. Especially with the loss of AT&T who provided 17% of their gross new customer additions, and the worsening economic situation, not to mention the TiVo situation, this will get worse before it gets better.


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## jacmyoung (Sep 9, 2006)

Anyone care to explain why the revenue and profit were up by quite a bit?


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## zero2dash (Sep 26, 2008)

ImBack234 said:


> charlie it's about time you take off the blinders and get clue!!!!:eek2:


Eventually either D* will give me one final incentive to switch, or E* will start delivering on the broken promises (thus far) of more HD channels.

All bets are off on which is going to happen first, but given E*'s track record, I'd take D* minus the spread. 
It's becoming harder and harder to wait for FX HD and SpikeHD to pop up in my 722.


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## JohnH (Apr 22, 2002)

jacmyoung said:


> Anyone care to explain why the revenue and profit were up by quite a bit?


Look at EchoStar and see who took the hit.


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## CorpITGuy (Apr 12, 2007)

Steve said:


> Interesting to know re: DVRs. Do you have a source for that stat? TIA. /steve


Well, I think you'll find that the majority of us here who have used both the HR-series DVRs from DirecTV and the VIP-series from Dish Network _generally_ prefer Dish's offerings. You'll find some folks that prefer D*, but they are in the minority.

I used the VIP 722 with E* and I currently have an HR-22 from D*. I prefer the 722, but find the HR-22 to be adequate.


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## jacmyoung (Sep 9, 2006)

From his conference call, Charlie said they lost about a million ATT subs in Q4.

Yet the net income was up by 24%. I suspect that had a lot to do with the ATT subs. As I recall the ATT accounts are loss leaders, they did not make DISH any money, only added to the sub count which of course gave a good picture.


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## jacmyoung (Sep 9, 2006)

CorpITGuy said:


> Well, I think you'll find that the majority of us here who have used both the HR-series DVRs from DirecTV and the VIP-series from Dish Network _generally_ prefer Dish's offerings. You'll find some folks that prefer D*, but they are in the minority.
> 
> I used the VIP 722 with E* and I currently have an HR-22 from D*. I prefer the 722, but find the HR-22 to be adequate.


I switched from E* to D* about a year ago, we had two 622s with E* and then 4 HR2Xs with D*, I can tell you I could not get by one day without my family asking me why they are forced to use the so-so slow new DVRs


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## Kheldar (Sep 5, 2004)

jacmyoung said:


> From his conference call, Charlie said they lost about a million ATT subs in Q4.
> 
> Yet the net income was up by 24%. I suspect that had a lot to do with the ATT subs. As I recall the ATT accounts are loss leaders, they did not make DISH any money, only added to the sub count which of course gave a good picture.


I haven't listened to the conference call, but I believe you misunderstood that.

In my previous post I quoted their SEC filing where it says:


> In addition, approximately 1 million of our current subscribers were acquired through our distribution relationship with AT&T and these subscribers have historically churned at a higher rate than our overall subscriber base. Although AT&T is not permitted to target these subscribers for transition to another pay-TV service and AT&T and we are required to maintain bundled billing and cooperative customer service for these subscribers, we may still experience churn of these subscribers following termination of the AT&T distribution relationship.


So they didn't lose 1 million AT&T subscribers. They only _have_ 1 million AT&T subscribers. They are just concerned that the AT&T subscribers are at a higher risk of jumping ship than their non-AT&T customers.


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## Steve (Aug 22, 2006)

CorpITGuy said:


> Well, I think you'll find that the majority of us here who have used both the HR-series DVRs from DirecTV and the VIP-series from Dish Network _generally_ prefer Dish's offerings. You'll find some folks that prefer D*, but they are in the minority.
> 
> I used the VIP 722 with E* and I currently have an HR-22 from D*. I prefer the 722, but find the HR-22 to be adequate.


Gotcha. I misunderstood. You were saying quality and I was thinking quantity.  I thought you were saying E* passed D* in # of DVR's deployed. /steve


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## jacmyoung (Sep 9, 2006)

Kheldar said:


> I haven't listened to the conference call, but I believe you misunderstood that.
> 
> In my previous post I quoted their SEC filing where it says:
> 
> So they didn't lose 1 million AT&T subscribers. They only _have_ 1 million AT&T subscribers. They are just concerned that the AT&T subscribers are at a higher risk of jumping ship than their non-AT&T customers.


You are correct, they had a total of about one million ATT subs, and lost about 55K of them.

The issue of loss leader may be closer to the truth, because DISH's margin on the ATT subs was very thin, and there were all kinds of bundling discounts too.


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## phrelin (Jan 18, 2007)

Couple of comments about the Dish statements.

Current Assets Less Current Liabilities. At the end of 2007, this number was $20 million. At the end of 2008 it was a negative $870 million. It isn't as bad as I expected, but it's bad. Cash and marketable securities dropped from nearly $2 billion to $550 million. It's a corporation that could be easily killed by any significant negative cash flow.

The total subscriber revenue (as was the net operating income) was up $500 million on a net loss of subscribers, which means subscribers are paying more, not really a good sign in bad times.

Echostar, on the other hand, saw an increase in current assets less current liabilities of about $200 million, mostly in cash and marketable securities.

In terms of the two companies which for 2008 you cannot read separately, cash and cash equivalents dropped by about $850 million. In 2008 they had a combined book loss of $200 million versus a combined book profit of about $600 million in 2007. Next year the shuffling of numbers due to the company split will not hide what's going on.

Everything else is accounting spin.


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## DodgerKing (Apr 28, 2008)

Kheldar said:


> Especially when Charlie is involved. :grin:


How can he blame the economy as well when Direct had one if its best Quarters and FiOS and several other cable companies are doing good as well?


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## WebTraveler (Apr 9, 2006)

I am going to be adding to that number too as soon as I get my act together.

Dish's dispute with Fisher Broadcasting has reached the levels of pure pettiness on Charlie Ergen's part. http://www.katu.com/about/36310734.html Charlie is putting subscibers into his own little vendetta with Fisher and I've had it. I have not had ABC programming since December 17 and it looks like nothing is in sight. Of course, Charlie has given me a credit of $1 a month for this. Having access to ABC is one of the reasons why I subscribe in the first place.

On this issue Charlie Ergen has destroyed years of goodwill for me as a subscriber and I know he has done the same to others in this market as well. I am not alone in how I feel.

And the thing is that with the recent increases Dish is actually higher than Directv for a comparable product. My 250 HD or whatever he calls it now is equivilant to a Directv package of the same for the same dollars. Throw in a $5 credit from the phone company for bundling and I actually come out ahead.

I think Dish's customer service has become better in recent years. But the man at the top is a grumpy, revengeful man. It is his attitude and deception that is pushing me out. Let's not forget that I will be directing some family members out of this quandry when their own contracts are done.


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## nmetro (Jul 11, 2006)

DISH Network was split off from Echostar in order to make DISH Network a take over target. It would not surprise me that DirecTV and Dish Network will be merged in the not to distant future. This will be done out of survival for the DBS industry. As the economy continues to decline; people are going to find less expensive alternatives.

Just like Denver losing the Rocky Mountain News (after nearly 150 years in business) last week and Denver could not support two newspapers; two DBS satellite companies cannot compete for an ever shrinking demand. With FIOS, UVerse and expanding HD options on cable, DirecTV and DISh Network would have to merge or one will not survive. Economic realities are driving this; in addition to technical ones.

The irony in all this is that Echostar equipment would end up being the merged DirecTV/DISH Network equipment of choice. So, it would be the best of both worlds; all the programming that one wants, on the best equipment available.


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## Steve (Aug 22, 2006)

nmetro said:


> DISH Network was split off from Echostar in order to make DISH Network a take over target. It would not surprise me that DirecTV and Dish Network will be merged in the not to distant future. This will be done out of survival for the DBS industry. As the economy continues to decline; people are going to find less expensive alternatives.
> 
> Just like Denver losing the Rocky Mountain News (after nearly 150 years in business) last week and Denver could not support two newspapers; two DBS satellite companies cannot compete for an ever shrinking demand. With FIOS, UVerse and expanding HD options on cable, DirecTV and DISh Network would have to merge or one will not survive. Economic realities are driving this; in addition to technical ones.
> 
> The irony in all this is that Echostar equipment would end up being the merged DirecTV/DISH Network equipment of choice. So, it would be the best of both worlds; all the programming that one wants, on the best equipment available.


Didn't DirecTV add more subs last year than Dish lost? If so, it seems the satellite business might be growing, rather than shrinking.

I suspect some of Dish's problems may be related to issues like the horror story that *WebTraveler *posted a link to. If DirecTV left us with no local ABC affiliate for over 2 months (and I couldn't replace them OTA), we'd be long gone to another programming provider. /steve


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## Kheldar (Sep 5, 2004)

Steve said:


> Didn't DirecTV add more subs last year than Dish lost? If so, it seems the satellite business might be growing, rather than shrinking.


The industry is growing, yes, but growing at a slower rate.


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## Steve (Aug 22, 2006)

Kheldar said:


> The industry is growing, yes, but growing at a slower rate.


Assuming population growth continues to decline as well, I guess at some point in the future, everyone who's going to be signed-up with a pay provider will have signed up with someone.

As a result, there will be no more "growth" to speak of, just "churn".  /steve


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## ans2004 (Oct 28, 2008)

dish may have a better dvr for now, but wait till this summer when the new TIVO hd dvr's come out for directv. YOU KNOW TIVO!!! THE SAME COMPANY WHO SUED DISH FOR PATENT VIOLATIONS ON THEIR DVR'S...:lol::lol:


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## phrelin (Jan 18, 2007)

Yeah, about that 24%....

That's a quarterly number which has alot of problems when comparing. The best number one can look at is the annual comparison which on the surface also looks good. In 2008 net income is $903 million vs $759 million in 2007, or a 19% increase. But the moment you back off depreciation expense, a fictitious number that can be manipulated, the picture changes radically. Instead of a 19% increase, you see a 9% decrease in net income before depreciation.

Accountants were the very first spin doctors.


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## evan_s (Mar 4, 2008)

nmetro said:


> DISH Network was split off from Echostar in order to make DISH Network a take over target. It would not surprise me that DirecTV and Dish Network will be merged in the not to distant future. This will be done out of survival for the DBS industry. As the economy continues to decline; people are going to find less expensive alternatives.
> 
> Just like Denver losing the Rocky Mountain News (after nearly 150 years in business) last week and Denver could not support two newspapers; two DBS satellite companies cannot compete for an ever shrinking demand. With FIOS, UVerse and expanding HD options on cable, DirecTV and DISh Network would have to merge or one will not survive. Economic realities are driving this; in addition to technical ones.
> 
> The irony in all this is that Echostar equipment would end up being the merged DirecTV/DISH Network equipment of choice. So, it would be the best of both worlds; all the programming that one wants, on the best equipment available.


I've seen this a number of times but it just doesn't make any sense to me. At this point the two companies just have too many differences for it to make sense to merge them. Lets pretend the merger happened today and look at what would need to occur before any major changes to the way the 2 systems are setup today could occur.

1) They use different encryption so you'd have to swap out access cards.

2) They have their sats in different locations. DirecTV is using 99/101/103 for their core and Dish is using either their eastern or western arc.

3) Their multi-switches and even cabling setups are not compatible. Dish's current switches all use DiSEqC 2.0 and Band stacking to support dual tuner DVRs with a home run single line. DirecTV either uses it's older legacy stack plan which requires 2 home run cables for dual tuners or swm8 to support up to 8 tuners on a single cable that can use splitters. Not to mention DirecTV's use of BBCs to use the 250-750mhz band which Dish doesn't do.

4) Their receivers aren't currently compatible with each others systems. At the very least it would require a major upgrade to the software to support some sort of merged system and you'd have to roll it out for all old legacy receivers not just current receivers. If you didn't roll it out for legacy receivers you'd have to either swap them all for new receivers or maintain one or both legacy systems for compatibility with the existing receivers.

Those are just the issues I see off the top of my head. There could easily be others I'm not aware of or thinking of at this point.

In the end it boils down to either company having to basically convert the others installs over just like they were all new customers before they'd be able to start combining things together and benefit from the greater combined bandwidth available. Even then you'd be back to using a sl5 with all the LOS issues it had or multiple dish installs to get that greater combined bandwidth.

In the end from the DirecTV side of things I think it would be better off to just let dish fail and then just try to grab up any sats or orbital slots they may be interested in. From the dish side of things I think they'd just be better off trying to figure out some deal to get the few transponders DirecTV has at 110/119. They may already be getting the other half of 72.5 for the eastern arc as DirecTv is moving all of it's locals off there.


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## DodgerKing (Apr 28, 2008)

ans2004 said:


> dish may have a better dvr for now, but wait till this summer when the new TIVO hd dvr's come out for directv. YOU KNOW TIVO!!! THE SAME COMPANY WHO SUED DISH FOR PATENT VIOLATIONS ON THEIR DVR'S...:lol::lol:


TiVO sucks!


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## dgordo (Aug 29, 2004)

phrelin said:


> Yeah, about that 24%....
> 
> That's a quarterly number which has alot of problems when comparing. The best number one can look at is the annual comparison which on the surface also looks good. In 2008 net income is $903 million vs $759 million in 2007, or a 19% increase. But the moment you back off depreciation expense, a fictitious number that can be manipulated, the picture changes radically. Instead of a 19% increase, you see a 9% decrease in net income before depreciation.
> 
> Accountants were the very first spin doctors.


Yep, also rise in EBITDA was minimal.


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## Ron Barry (Dec 10, 2002)

Ok folks.. lets try to keep this on topic which is the earnings and stay away from from provider and DVR comparisons. We have plenty of threads for those discussions.


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## calgary2800 (Aug 27, 2006)

In Seattle on most Sundays Directv has a almost full page ad stating Dish no longer has ABC for our area. Good for them for doing this and driving more potential customers away. I truly hope Fisher and Dish lose money in this war.


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## kal915 (May 7, 2008)

nmetro said:


> The irony in all this is that Echostar equipment would end up being the merged DirecTV/DISH Network equipment of choice. So, it would be the best of both worlds; all the programming that one wants, on the best equipment available.


yeah, but they also could charge whatever they want since they have little competition


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## Stewart Vernon (Jan 7, 2005)

*DISH Network(R) Reports Fourth Quarter 2008 Financial Results*

ENGLEWOOD, Colo., March 2, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- DISH Network Corporation (Nasdaq: DISH) today reported total revenue of $2.92 billion for the quarter ended Dec. 31, 2008, a 1 percent increase compared with $2.89 billion for the corresponding period in 2007. 
Net income totaled $217 million for the quarter ended Dec. 31, 2008, compared with $175 million during the corresponding period in 2007. Diluted earnings per share were $0.48 for the quarter ended Dec. 31, 2008, compared with $0.39 during the corresponding period in 2007.

Full article *here*.

SOURCE DISH Network Corporation 
http://www.dishnetwork.com
Copyright (C) 2009 PR Newswire. All rights reserved


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## Jeremy W (Jun 19, 2006)

kal915 said:


> yeah, but they also could charge whatever they want since they have little competition


They still have to compete with cable, FiOS, and U-verse. I currently have 5 pay TV choices. If DirecTV and Dish merged, I'd still have 4.


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## jclewter79 (Jan 8, 2008)

Jeremy W said:


> They still have to compete with cable, FiOS, and U-verse. I currently have 5 pay TV choices. If DirecTV and Dish merged, I'd still have 4.


Yeah, maybe in Detriot that is true but,there is still a large part of this country including my part that DBS is the only option. A merger would never be approved as long as both companies are still making profit.


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## DodgerKing (Apr 28, 2008)

jclewter79 said:


> Yeah, maybe in Detriot that is true but,there is still a large part of this country including my part that DBS is the only option. A merger would never be approved as long as both companies are still making profit.


That is were most of the population lies. It doesn't really matter is some parts of the country can only get satellite and the competitive price will still be determined by the larger population areas (which do have other options)


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## jacmyoung (Sep 9, 2006)

phrelin said:


> Yeah, about that 24%....
> 
> That's a quarterly number which has alot of problems when comparing. The best number one can look at is the annual comparison which on the surface also looks good. In 2008 net income is $903 million vs $759 million in 2007, or a 19% increase. But the moment you back off depreciation expense, a fictitious number that can be manipulated, the picture changes radically. Instead of a 19% increase, you see a 9% decrease in net income before depreciation.
> 
> Accountants were the very first spin doctors.


They do pay more taxes on higher net income? If so why would they try to artificially lower the depreciation? Just so they can pay more taxes?


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## Steve (Aug 22, 2006)

jacmyoung said:


> They do pay more taxes on higher net income? If so why would they try to artificially lower the depreciation? Just so they can pay more taxes?


Sometimes it's worth paying more taxes so as not to take a hit on the stock price, because you've reported a negative instead of a positive. /steve


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## phrelin (Jan 18, 2007)

jacmyoung said:


> They do pay more taxes on higher net income? If so why would they try to artificially lower the depreciation? Just so they can pay more taxes?


Believe me when I tell you that their corporate tax return will look nothing like the forms filed with the SEC that we all see.


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## paja (Oct 23, 2006)

CorpITGuy said:


> This is probably temporary. Dish is quickly catching up with DirecTV on HD locals and national HD, and passed D* long ago on DVRs.
> 
> I wouldn't be worried at all if I were a stockholder.
> 
> The constant squabbles with broadcasters are the primary concern right now. He needs to cut that out.


Temporay?? How do you figure? Now that the DISH / AT&T partnership is over , DISH will probably drop more subs. And now other alternatives are popping up which will further eat into the DISH sub base. I dropped DISH for U-verse which became available in Sep 08 in my neighborhood. I can get tv(with more channels), internet and phone bundled for much less than when I had DISH and two others for intermet & phone. Just in my immediate block, four peolpe I know have dropped DISH for U-verse, one dropped D for U-verse. Between DISH & D, I believe D is stronger overall and I predict that DISH will be in a downward spiral.


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## jacmyoung (Sep 9, 2006)

phrelin said:


> Believe me when I tell you that their corporate tax return will look nothing like the forms filed with the SEC that we all see.


How about an example. I really like to try it myself

I try to keep a little bit of change for myself, but I had never been able to figure out a way to tell my wife I had a 24% pay raise when in fact I had a 10% pay cut I would have to sell my liver just to cover it up.


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## dennispap (Feb 1, 2007)

Steve said:


> Didn't DirecTV add more subs last year than Dish lost? If so, it seems the satellite business might be growing, rather than shrinking.
> 
> I suspect some of Dish's problems may be related to issues like the horror story that *WebTraveler *posted a link to. If DirecTV left us with no local ABC affiliate for over 2 months (and I couldn't replace them OTA), we'd be long gone to another programming provider. /steve


The baton rouge, La abc affiliate has been off of dish for almost 1 year now.:nono:


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## Steve (Aug 22, 2006)

dennispap said:


> The baton rouge, La abc affiliate has been off of dish for almost 1 year now.:nono:


That's very sad. It tells me that the guys are the top are putting profits ahead of customer satisfaction. That's a very short-sighted approach to doing business, IMHO. /steve


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## jacmyoung (Sep 9, 2006)

phrelin said:


> Believe me when I tell you that their corporate tax return will look nothing like the forms filed with the SEC that we all see.


I looked a little further in the 10K, it appeared E* depreciated almost every spacecraft in 2007 but only about half of them in 2008, some of the older ones were simply fully depreciated. E* also depreciated less on furniture, fixture, equipment, buildings and constructions.

But they did have a fairly good size jump on the leased receiver/equipment depreciation.


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## dgordo (Aug 29, 2004)

jacmyoung said:


> How about an example. I really like to try it myself
> 
> I try to keep a little bit of change for myself, but I had never been able to figure out a way to tell my wife I had a 24% pay raise when in fact I had a 10% pay cut I would have to sell my liver just to cover it up.


Its highly unlikely that you have the interest tax shields, can tell your wife you are depreciating assets one way while telling the IRS that you are deprecating them another way and can defer taxes the way DISH can.


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## jacmyoung (Sep 9, 2006)

dgordo said:


> Its highly unlikely that you have the interest tax shields, can tell your wife you are depreciating assets one way while telling the IRS that you are deprecating them another way and can defer taxes the way DISH can.


What about the 10K depreciation details I posted above?

The only thing looked odd was they skipped depreciation on two satellites, others simply were old ones that were fully depreciated.

The less depreciation on the satellites was offset by the increase in depreciation on the leased receivers to the consumers.

The only real difference between 07 and 08 was less depreciation on the furniture, office equipment, buildings and constructions...Other than that the revenue increase in 08 was real compared to 07.


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## inkahauts (Nov 13, 2006)

Chris Blount said:


> That's true but if the customers aren't happy, the stockholders pay for it in the long run.


I don't think there is one ceo that understands that, otherwise companies wouldn't be laying off employees just because profits are down, which many are doing... Many people are being layed off right now to keep profits up, rather than just realizing that running flat is a better option if u keep more peopl eemployed for a year or two, when things turn around, rather than add to a mess... And why do we think all those people have been given loans for homes they couldn't afford? cause it made profits! Who cares if it was bound to destroy the companies eventually.. the stockholders of most companies are short sighted these days, along with the ceos.. it sad really...


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## phrelin (Jan 18, 2007)

jacmyoung said:


> What about the 10K depreciation details I posted above?
> 
> The only thing looked odd was they skipped depreciation on two satellites, others simply were old ones that were fully depreciated.
> 
> ...


Well, my view is heavily influenced by the cash flow info pages where the bottom line looks like this (right column 2006, center column 2007, left column 2008, add three zeroes to the numbers):










In an economy where willing lenders are few and far between, having your cash and cash equivalents drop by 97% in two years is not good. But that's just one former shareholder's opinion.

For anyone who doesn't want to wade through 70 pages of discussion but likes to see the numbers, I've posted the 2008 balance sheet, P&L and Cash Flow statements from the 10K as a 6 page PDF file here.


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## jacmyoung (Sep 9, 2006)

phrelin said:


> Well, my view is heavily influenced by the cash flow info pages where the bottom line looks like this (right column 2006, center column 2007, left column 2008, add three zeroes to the numbers):
> 
> 
> 
> ...


That I agree with you completely!

Though I think Charlie said their next due date is some time in late 2010?

I personally can't understand why he spent $700M during that period to buy the 700MHz spectrum, that is a lot of money not put to good use.

On the other hand I think he made it good on the Sirius Radio "bailout" plan, making a handsome profit from Malone. I think cash balance can improve if he continues to cut cost and not waste money away like the above case.

But hey I am not an investor so it is easy for me to say.


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## calgary2800 (Aug 27, 2006)

I too do not have ABC. Have not had it since 12/18/08. I just went and looked at DTV for a comparison. DTV offers a lot more HD, all my locals, and sport choices for something like 15 dollars more per month. I'm leaving right after my NHL center ice package is over this June.


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## Steve (Aug 22, 2006)

calgary2800 said:


> I too do not have ABC. Have not had it since 12/18/08. I just went and looked at DTV for a comparison. DTV offers a lot more HD, all my locals, and sport choices for something like 15 dollars more per month. I'm leaving right after my NHL center ice package is over this June.


Looks like they're offering $22/month discount for a year on 3 of their packages, here, but it's expiring today.

You might call and see if you can delay the install/start of service, but sign-up at these prices. /steve


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## Greg Bimson (May 5, 2003)

jacmyoung said:


> I personally can't understand why he spent $700M during that period to buy the 700MHz spectrum, that is a lot of money not put to good use.


DISH didn't purchase the 700MHz spectrum, SATS did.


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## Steve (Aug 22, 2006)

Greg Bimson said:


> DISH didn't purchase the 700MHz spectrum, SATS did.


When did the Sling Media acquisition hit the books? '07 or '08? That was like $300 or $400 million, no? /steve


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## Greg Bimson (May 5, 2003)

Steve said:


> When did the Sling Media acquisition hit the books? '07 or '08? That was like $300 or $400 million, no? /steve


That should have hit Echostar's books in late 2007. However, that was when DISH and SATS were the same company. And because they purchased an asset, there should have been no change nor charge to their books.

When SATS split with DISH, Sling went to SATS. I assume some of the write-downs SATS posted for Q4 2008 were regarding this purchase, and I haven't looked at anything regarding SATS over the past month.


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## RandallA (Feb 4, 2005)

"Content sells and not technology. Except for those of you on this site who are video afficionados by far the vast majority don't understand all the bells and whistles. We still have people who dont want a DVR because they don't understand it even if I spend 30 minutes showing them how it works. DISH needs to get back into the content game. More HD channels, pick up a sports package of concert station or something. Distinguish themselves from the competition SOME HOW. If you look at DTV, they have NASCAR hot pass, MLB, and the Sunday Ticket to name a few."

Amen to that.


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## jacmyoung (Sep 9, 2006)

Greg Bimson said:


> DISH didn't purchase the 700MHz spectrum, SATS did.


Is SATS not part of "he"?


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## Greg Bimson (May 5, 2003)

Yes, but not part of the financials which you quoted from phrelin's post. The $700 million has no impact upon DISH, which is what this post is about.


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## jacmyoung (Sep 9, 2006)

Greg Bimson said:


> Yes, but not part of the financials which you quoted from phrelin's post. The $700 million has no impact upon DISH, which is what this post is about.


But that wasn't my post was about.

SATS is the equipment supplier for DISH, in theory they can cut back on the cost of the receivers supplied to DISH with that $700M charge, and DISH might be able to offer its subs free advanced DVR upgrade without that $100 fee, even eliminate the per DVR fee to get more and more to embrace their DVRs. As we know those who use the advanced receivers tend to stick with the provider longer and pay more per month for the programming too.

It is all his money, just a matter of how to best use his money.


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## phrelin (Jan 18, 2007)

Echostar Holding (SATS) isn't in any better shape than Dish Network (DISH). Again, I focus on available cash and cash equivalents:










I've included more than the bottom line so that everyone can see the line item for cash and cash equivalents shifted to Echostar at the split. As with the DISH numbers, I've also posted the SATS 08 balance sheet, P&L, and Cash Flow here in PDF format if you would rather not have to wade through the over 50 pages of discussion.

What has bothered me from the day of the split at the beginning of 2008 can be clearly seen on the balance sheets of the 2008 10K's which I've summarized in this simple spreadsheet:










Between the precarious cash position of Dish Network and the change in the balance sheet (assets less liabilities) of -$2.6 million, it's clear that the new Dish Network was created to dump off all loser operations hoping someone would buy it, while creating an independent looking technology company that looks like a potential winner, except that its only real customer at this time is Dish Network.

Why is this a problem for me? On paper anyway, Dish Network is on the brink of bankruptcy and I get my TV from them. No one has yet to satisfactorily explain how this was not, at best, an unethical manipulation approved by the 2007 incompetent, if not corrupt, SEC. It was clear well before 1/1/2008 that the economy was in the toilet, AT&T was not interested in acquiring Dish Network, and the new Dish Network was being set up for potential disaster.


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## jacmyoung (Sep 9, 2006)

phrelin said:


> ...Why is this a problem for me? On paper anyway, Dish Network is on the brink of bankruptcy and I get my TV from them...


Lost some money as an ex-shareholder?

Please, DISH is a company that takes in cash from its 13+ million subs each month. While you may be correct that they can work the depreciation numbers to make the net income look better, there is no doubt they are making all this revenue.

Can you find me more than a handful of companies these days that actually are making out with any *net income*?


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## Jeremy W (Jun 19, 2006)

jacmyoung said:


> Can you find me more than a handful of companies these days that actually are making out with any *net income*?


There are plenty of companies. The reason they're all freaking out (for now) is because growth is either flat or negative. That doesn't mean they have a net loss, just a smaller net profit than they wanted.


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## jacmyoung (Sep 9, 2006)

Jeremy W said:


> There are plenty of companies. The reason they're all freaking out (for now) is because growth is either flat or negative. That doesn't mean they have a net loss, just a smaller net profit than they wanted.


Can you name a few so we can all benefit?


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## Jeremy W (Jun 19, 2006)

jacmyoung said:


> Can you name a few so we can all benefit?


DTV, MSFT, BBY, DELL. I could go on, but hopefully you've gotten the point.


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## dreadlk (Sep 18, 2007)

A merger is never going to happen because the goverment will see it as a monopoly. That might have flown with the previous goverment but from what I have seen this one is not turning a blind eye to anything.

Remember many people do not have the ability to get cable so Satellite is there only option, and I don't think the Old "CBand competition" arguement is going to make this one pass either.

Also Directv does not have enough money to buy Dishnet!
In this economy you can't get money to borrow and the old stock tricks no longer work!



jclewter79 said:


> Yeah, maybe in Detriot that is true but,there is still a large part of this country including my part that DBS is the only option. A merger would never be approved as long as both companies are still making profit.


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## jacmyoung (Sep 9, 2006)

Jeremy W said:


> DTV, MSFT, BBY, DELL. I could go on, but hopefully you've gotten the point.


While DTV is most certainly doing great, their net income was down 5% in Q4 of 08 compared to Q4 of 07 mainly because much higher programming cost they had to pay.

I don't know enough about the others.


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## Jeremy W (Jun 19, 2006)

jacmyoung said:


> While DTV is most certainly doing great, their net income was down 5% in Q4 of 08 compared to Q4 of 07 mainly because much higher programming cost they had to pay.


Beside the point. You asked for companies with a net profit, and DirecTV is one of them.


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## jacmyoung (Sep 9, 2006)

Jeremy W said:


> Beside the point. You asked for companies with a net profit, and DirecTV is one of them.


I was making a point using the DTV numbers. You don't have to pay attention to it.

The point is, often people blame E* for removing programming when they did not like the fee increase, and D* does not do so, they often just pay the higher fees to keep the channels, as a result it eats into their profit, even though D* had added a lot more subs and are taking in a lot of revenue, their net income was down, not up, mainly because their programming cost was much higher.


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## Greg Bimson (May 5, 2003)

jacmyoung said:


> While DTV is most certainly doing great, their net income was down 5% in Q4 of 08 compared to Q4 of 07 mainly because much higher programming cost they had to pay.





jacmyoung said:


> The point is, often people blame E* for removing programming when they did not like the fee increase, and D* does not do so, they often just pay the higher fees to keep the channels, as a result it eats into their profit, even though D* had added a lot more subs and are taking in a lot of revenue, their net income was down, not up, mainly because their programming cost was much higher.


Programming costs are higher when you have 800,000 more subscribers than last year. That is 800,000 more units of programming DirecTV must pay to their subscribers.

Dish Network didn't have to pay as much in programming because they had less subscribers at the end of 2008 than they did at the end of 2007.

Besides, SAC was higher for both companies, and the company that adds more subscribers has much higher expenses. If DirecTV lost 102,000 subscribers instead of adding 301,000, DirecTV would have been much more profitable.


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## jacmyoung (Sep 9, 2006)

Greg Bimson said:


> Programming costs are higher when you have 800,000 more subscribers than last year. That is 800,000 more units of programming DirecTV must pay to their subscribers.
> 
> Dish Network didn't have to pay as much in programming because they had less subscribers at the end of 2008 than they did at the end of 2007.
> 
> Besides, SAC was higher for both companies, and the company that adds more subscribers has much higher expenses. If DirecTV lost 102,000 subscribers instead of adding 301,000, DirecTV would have been much more profitable.


SAC of course is an issue, but as we had already discussed earlier, it was not the main issue for E*'s higher net income, and also not the main reason for D*'s lower net income.

When I looked at the D* 10K report, what stood out was that much higher programming cost, yes, more subs, more cost, but I am talking about the difference between 08 and 07, also the difference for each sub too.

They make money from each sub's monthly payment, minus the programming cost for that sub, and of course many other items. It is the difference that matters, and that difference showed that the profit (also that difference) was down.


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## Greg Bimson (May 5, 2003)

DISH's programming costs are part of their "Subscriber Related Expenses" on their 10-K, which increased 8.7 percent year over year.

DTV's programming costs (which are their own category) rose 11.1 percent, year over year.

DISH's net customer adds were actually a negative 102,000 between periods. DirecTV's adds were 861,000 between those same periods, an increase of 5.1 percent of their subscriber base year over year. So programming costs should at least increase 5.1 percent, and then the "rise in programming costs" would be the remaining 6 percent, year over year.

Yet DISH, which did not grow subscribers, grew "subscriber related expenses" 8.7 percent. I realize that DISH also includes staffing call centers and admin people in that number, but if that side of the business is growing more than paying programmers, then DISH has employed everyone in the Denver metro area twice.


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## James Long (Apr 17, 2003)

Does DTV offer a "Subscriber Expenses" category similar to DISH's? Without knowing EVERY piece that goes into the puzzle it is difficult to say how much of the expense is channel related and where the rest goes.


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## jacmyoung (Sep 9, 2006)

Greg Bimson said:


> DISH's programming costs are part of their "Subscriber Related Expenses" on their 10-K, which increased 8.7 percent year over year.
> 
> DTV's programming costs (which are their own category) rose 11.1 percent, year over year.
> 
> ...


Of course if you cannot compare apple to apple, then better not compare them. For example, do more subscribers always mean higher per sub programming cost? Because we know that the bigger the provider's sub base, the better rates it may strike with the content providers.

So the better way to look at it may be just that, if one has many more subs added, one would assume the net income will rise, yes the expenses will also rise, but over all, the absolute net income figure should also rise.

Otherwise why bother? Working harder, for more people, but make less?

I am not saying D* is doing anything wrong, just that sometimes things are not what they seem. There is no doubt E* is suffering, they have a long way to make a bad situation better.

As an example, I left E* and went to D* about a year ago. I will not look back unless E* changes its four-tuner-only lease policy.


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## phrelin (Jan 18, 2007)

jacmyoung said:


> Lost some money as an ex-shareholder?


Actually, I didn't lose money, I just waited too long to make any. My Bank of America stock is a different story....:eek2:


> Please, DISH is a company that takes in cash from its 13+ million subs each month. While you may be correct that they can work the depreciation numbers to make the net income look better, there is no doubt they are making all this revenue.


Yeah, they do take in the almost-cash revenue. It's just that their cash flow info says they have cash and cash equivalents equal to 10% of one month's subscriber revenue. In a crashing economy where no lending is going on, that's not even enough to cover some stupid glitch much less a sudden ongoing increase in late subscriber payments.


> Can you find me more than a handful of companies these days that actually are making out with any *net income*?


There are many. I own shares in a couple, IDACORP for instance. And I contribute revenue unwillingly to some like PG&E (Pacific Gas and Electric). Both are examples of companies that sell a product most people must have. There are alot others out there. I don't own shares in most of them, however.


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## jacmyoung (Sep 9, 2006)

phrelin said:


> Actually, I didn't lose money, I just waited too long to make any. My Bank of America stock is a different story....:eek2:


So it might be a case of channeling your anger from somewhere else?



> Yeah, they do take in the almost-cash revenue. It's just that their cash flow info says they have cash and cash equivalents equal to 10% of one month's subscriber revenue. In a crashing economy where no lending is going on, that's not even enough to cover some stupid glitch much less a sudden ongoing increase in late subscriber payments.


Agree with you on that, maybe that is why Charlie is trying so hard to control programming cost, even at the expense of losing channels and some subs as a result. The bright side is they have no major due dates until 2011.

I personally think the cash flow situation can improve quickly if he stops spending a lot of money such as that $700M on things that do not have immediate return on the investment.



> There are many. I own shares in a couple, IDACORP for instance. And I contribute revenue unwillingly to some like PG&E (Pacific Gas and Electric). Both are examples of companies that sell a product most people must have. There are alot others out there. I don't own shares in most of them, however.


Unfortunately even those "well balanced" companies had seen their share prices hammered. So your rationale and logic, which I total can agree, do not necessarily work in today's crazy world of economy.


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## HobbyTalk (Jul 14, 2007)

jacmyoung said:


> I personally think the cash flow situation can improve quickly if he stops spending a lot of money such as that $700M on things that do not have immediate return on the investment.


IMHO, that is the exact reason that so many companies are now in dire straights. They only looked for short term profits and not long term investment to grow a company over the long haul. These companies have short term CEO's that are only looking to make a quick buck because they know they will only be there a few years... gotta take your money while you can, screw those that come after.


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## dgordo (Aug 29, 2004)

Phrelin, have you calculated their free cash flow?


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## jacmyoung (Sep 9, 2006)

HobbyTalk said:


> IMHO, that is the exact reason that so many companies are now in dire straights. They only looked for short term profits and not long term investment to grow a company over the long haul. These companies have short term CEO's that are only looking to make a quick buck because they know they will only be there a few years... gotta take your money while you can, screw those that come after.


Isn't that why we are in such a deep s#$% today?

I wasn't saying Charlie should never have tried to make some long term decisions and investment, only that since at this moment, cash flow seems a big issue where the investors consider put their money in, that investment of his had a major impact on the current cash flow problem and therefore stock performance problem.

Who knows, his $700M investment might just be the thing that will eventually pull him out of this mess, while everyone else continues to go into that black hole.

But today, it does not appear that $700M investment is helping the situation, rather adds to the problem.


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## Paul Secic (Dec 16, 2003)

Stuart Sweet said:


> From CNN.com:
> 
> Read more here: http://money.cnn.com/news/newsfeeds/articles/djf500/200903020635DOWJONESDJONLINE000214_FORTUNE5.htm


If they have higher profits, they should get more HD and go back to the old AT packages..


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## HobbyTalk (Jul 14, 2007)

jacmyoung said:


> I wasn't saying Charlie should never have tried to make some long term decisions and investment, only that since at this moment, cash flow seems a big issue where the investors consider put their money in, that investment of his had a major impact on the current cash flow problem and therefore stock performance problem.


That investment was made before the current economic conditions existed.


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## dreadlk (Sep 18, 2007)

Jeremy you strike me as a person who has a firm grip on what is going on. Do you really think that Dishnet might be on there way to Bankrupcy? I don't want to say that Dishnet is too important to fail since so many big firms have failed but I do think that having millions of customers losing would be something that the government would not just standby and watch happen.



Jeremy W said:


> DTV, MSFT, BBY, DELL. I could go on, but hopefully you've gotten the point.


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## jpl (Jul 9, 2006)

dreadlk said:


> Jeremy you strike me as a person who has a firm grip on what is going on. Do you really think that Dishnet might be on there way to Bankrupcy? I don't want to say that Dishnet is too important to fail since so many big firms have failed but I do think that having millions of customers losing would be something that the government would not just standby and watch happen.


I know this wasn't directed at me, but in general, it wouldn't surprise me if Dish filed for bankruptcy protection. I don't think the government would step in and rescue Dish with a bailout - as it is, this industry is pretty crowded - there are alot of providers out there. The industry as a whole is growing (despite some of the subscriber losses by some of these companies), and people are watching more TV. I just think the market's gotten a whole lot more competitive in recent years - which is a good thing. You get more for your money, and you see lots of new innovations come along. In light of all that, I find the comments by Dish (and by Comcast - they said the same thing) that 'it's the economy' that's to blame for their subscriber loss is, well, silly. Like I said, subscribership, overall, is up.

In other words, there is simply no reason to rescue Dish. It's not like those customers would just disappear. They'd all go over to different service providers. As it is, if Dish gets into really dire straights, I'd look for them to be a buy-out candidate. It wouldn't surprise me if DirecTV made a play for them. I know the platforms are pretty different, but just getting the extra bandwidth would be huge for DirecTV.


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## Jeremy W (Jun 19, 2006)

dreadlk said:


> Do you really think that Dishnet might be on there way to Bankrupcy?


Admittedly, I have not studied DISH's financials as much as others in this thread have. But I don't think they're headed for bankruptcy, unless they're unable to stop their subscribers from leaving like they are right now. There is a chance that they won't be able to stop it, so who knows.


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## dreadlk (Sep 18, 2007)

JPL: I know that they probably don't make a big splash on the Governments Radar but we all know that a major TV provider going out of business is going to hit people in a personal way that will make them even more skeptical about the Direction the Dems are going in! I don't agree that Directv can buy them out because that would give them a Monopoly on Satellite TV and I don't think the old "CBand is competition" argument will fly again, so they will have to explain to the Gov. how rural American's will have a choice in TV providers.

Jeremy: Thanks, I hope your right about them not collapsing on there own. If it's only the loss of subscriptions that is the issue, I feel that they would be ok as this will probably level off soon.


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## jacmyoung (Sep 9, 2006)

DISH can bleed at the same quarterly level for the next 5 years without going out of the business. All they need to do is cutting back on the expenses and investment.

Of course this is not the scenario Charlie wants to see.

I do think with the ATT Uverse and the like offering much cheaper bundling services DISH is in a lot of trouble. In today's economy, people are not as interested in the more advaced DVR technology, as long as the features are adequate, they will choose a $40 plan, rather a $70 plan.

But if they should go out, no there will be no tax payer bailout. For one thing, it will be to a much smaller sub base before any provider will go out anyway.


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## Greg Bimson (May 5, 2003)

Didn't Charter just file for bankruptcy protection? It wouldn't matter if DISH did file; they'd have to reorganize their debts to creditors, and one of their largest creditors outside of the programmers is SATS. Ergen is the CEO of both companies.


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## jacmyoung (Sep 9, 2006)

Greg Bimson said:


> Didn't Charter just file for bankruptcy protection? It wouldn't matter if DISH did file; they'd have to reorganize their debts to creditors, and one of their largest creditors outside of the programmers is SATS. Ergen is the CEO of both companies.


To file for bankruptcy, the company must not be able to meet the due dates in a major way and not able to secure any loans. DISH has no major due dates until 2011, and Charlie just loaned Sirius a whole bunch of money to save Sirius from going under, and while he failed to get the taste of Sirius because Malone came to the rescue of Sirius, Charlie in the process made over $200M from Malone just in that single effort. Of course this is most recent deal not reflected in the Q4 numbers.

It is silly to even talk about this issue.


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## jerbear4 (Dec 19, 2005)

I don't blame the whole loss on Charlie. There could be many reasons on why dish lost subscribers. For one the economy does not help many who have pay service of some type. I know some people who have dropped their pay tv service simply because they could not afford it. I can recall times where I had to drop down to lower packages simply to pay other more important bills. In the area I live it seems that more low cost housing has dish netork to begin with compared to Directv and I could see people in these situations getting rid of their pay service so they can afford other essentials in life. Then maybe some have dropped due to not being happy with the service for that happens. Just recently I know of a lady who dropped her directv service and went to dish because she did not like the equipment for Directv. I just think that there are so many factors one needs to consider in this case. I could hear some arguing that since Dish dropped Smithsonian HD that they are through with them. Plus I know some have stated that they want directv because they want to be able to view MLB Extra Innings or the NFL Sunday ticket program. So therefore they may have dropped their dish and went to directv. The bottom line is that I think there are so many other factors one needs to look at before they can blame it on the actual company.


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## SaltiDawg (Aug 30, 2004)

The original post started off with, "Dish Network Corp.'s (DISH) fourth-quarter net income rose 24% on increased revenue despite another drop in subscribers."

Let's see, a 24% increase in *net* income. Which is more important, decreased subscribers or increased net income?


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## Jeremy W (Jun 19, 2006)

SaltiDawg said:


> Let's see, a 24% increase in *net* income. Which is more important, decreased subscribers or increased net income?


It depends on where that income came from.


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## jclewter79 (Jan 8, 2008)

Jeremy W said:


> It depends on where that income came from.


Well, in this case it came from exsisting customers upgrading to more advanced receivers and paying more per month so, I think we will have to wait a little while before the "fire sale" happens.


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## jpl (Jul 9, 2006)

dreadlk said:


> JPL: I know that they probably don't make a big splash on the Governments Radar but we all know that a major TV provider going out of business is going to hit people in a personal way that will make them even more skeptical about the Direction the Dems are going in! I don't agree that Directv can buy them out because that would give them a Monopoly on Satellite TV and I don't think the old "CBand is competition" argument will fly again, so they will have to explain to the Gov. how rural American's will have a choice in TV providers.
> 
> Jeremy: Thanks, I hope your right about them not collapsing on there own. If it's only the loss of subscriptions that is the issue, I feel that they would be ok as this will probably level off soon.


The thing is, if the market shrinks, such that it can no longer support all the players, the government may make an allowance, even if it results in a monopoly. Look at the XM/Sirius merger. Granted, part of their reasoning behind that merger is that both services are available in the same locations (unlike DBS TV service where that's not necessarily the case) - and that made the XM/Sirius merger more palatable by government standards. It still came down to the fact that the market couldn't support both providers.

Another example happened a number of years ago - the last two US commercial airframe manufacturers were McDonald-Douglas and Boeing. Boeing put in to buy up MD, and the government allowed it because MD was bleeding cash. One way or the other, there was going to only be one commercial airframe manufacturer in the country. Allowing the buy-out was the less destructive course (better to have the buy-out and one company than to have one company go belly-up and still have only one company). The same could happen here. I don't think Dish is there yet, but as some posters have pointed out, Dish is cash-poor. In a better economic environment that wouldn't be too big of a deal, but the credit market is still frozen - there's no money to be had. Look at Circuit City. They filed chapter 11, and they went looking for credit - they couldn't find enough, and they couldn't find a buyer, so they went out of business. In a better environment, even if they got into financial trouble, they would have had a better chance of surviving. In this economic climate, being cash-strapped = death.

BTW, for purpose of disclosure, I'm not now, nor have I ever been, a Dish subscriber. I used to be a DirecTV subscriber and now I'm with FiOS. All that being said, I don't want to see Dish go belly up. I think the competition in the industry has been a great benefit in recent years. Losing such a major player would cause that competition to take a hit.


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## dgordo (Aug 29, 2004)

SaltiDawg said:


> The original post started off with, "Dish Network Corp.'s (DISH) fourth-quarter net income rose 24% on increased revenue despite another drop in subscribers."
> 
> Let's see, a 24% increase in *net* income. Which is more important, decreased subscribers or increased net income?


Just keep in mind that everyone has a different idea of what is important. Some look at net income, some llok at the top line, some look at EBIT, some look at EBITDA, some look to free cash flow, etc. In my opinion it is best to look at a number that the accountants can't easily fiddle with.


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## clyde sauls (Nov 16, 2007)

Hopefully if and when Dish add more Hd channels he will see the company subs go back up. I think one reason the customer base has fallen is him getting rid of dealers that are questionable. I dont know he may also be cutting off customers that continually get behind in their bills or dont pay at all. Of course all this started with Voom being taken down also. It could be that also. Now really dish is not that much different than Directv as for as channels.Maybe a little cheaper but not that much.


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## jacmyoung (Sep 9, 2006)

clyde sauls said:


> Hopefully if and when Dish add more Hd channels he will see the company subs go back up. I think one reason the customer base has fallen is him getting rid of dealers that are questionable. I dont know he may also be cutting off customers that continually get behind in their bills or dont pay at all. Of course all this started with Voom being taken down also. It could be that also. Now really dish is not that much different than Directv as for as channels.Maybe a little cheaper but not that much.


Someone said one of the reasons some dealers were cut out was because they committed fraud, if that contributed to the sub loss, it may not be a bad thing, because depending what kind of fraud it is, most of those subs were probably not paying much to watch. That could explain in part why less subs, more net income too.

I don't recall how DISH handle this, but with DirecTV, you can call to suspend the service for up to 6 months or more, while you still are a sub, but not paying a penny. When people are cutting back but not wanting to pay the termination fee, they can probably "suspend" themselves. Is this number shown on DirecTV's report? I don't think it will be a large number but curious as how each company handles such "suspended" accounts.


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## jpl (Jul 9, 2006)

dgordo said:


> Just keep in mind that everyone has a different idea of what is important. Some look at net income, some llok at the top line, some look at EBIT, some look at EBITDA, some look to free cash flow, etc. In my opinion it is best to look at a number that the accountants can't easily fiddle with.


You also have to consider where that net income increase came from. Let's say a service decides 'you know... ESPN is just too darn expensive... let's drop it...' In the short run there would be a net bounce in profit, because the price that the service is paying per subscriber would go down considerably (ESPN is easily one of the most expensive, if not THE most expensive, cable channels which is why I used it). But that short-term gain would mean long-term pain. It's short-term thinking... Long term it's an idiotic idea because customers would leave. And people considering your service would be much more reluctant to do so if you didn't offer a channel as popular as ESPN.

In other words - the short term gain in profit AND the lost subscribers could actually have the same cause. But again, this is very much a short term gain. Subscribers are the life-blood of any service business. Lose subscribers, and over time, you lose profitability. The only way that doesn't happen is if you decide to market yourself as a more 'selective' service - so that you charge alot more for your stuff, increasing revenue per subscriber - so you could make just as much with fewer customers. But to do THAT, you have to make the cost worth-while. Dish has done nothing to make themselves in the image of a 'selective' provider. The reputation that it has is that it's the poor-man's DirecTV. Whether that reputation is deserved or not (I'm not taking sides on that) doesn't change the fact that that's the perception in the industry.

Personally, I think Dish's propensity to drop channels every time the wind changes direction is killing them.


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## Jeremy W (Jun 19, 2006)

clyde sauls said:


> Hopefully if and when Dish add more Hd channels he will see the company subs go back up.


It's not like DirecTV's been adding HD channels at a fast pace, but they've had no trouble signing people up.


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## jacmyoung (Sep 9, 2006)

Jeremy W said:


> It's not like DirecTV's been adding HD channels at a fast pace, but they've had no trouble signing people up.


DirecTV had been not only carrying more HD LIL markets, but also more HD stations for each market. E* only recently began major HD LIL additions because they had to wait for the new satellite to come online.

HD LIL will help, but will not single-handedly turn things around for E* though.


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## WebTraveler (Apr 9, 2006)

Cancelled today, got heavy, heavy pushback, almost belligerant. The fact remains that until Dish restores the Fisher stations no one in their right mind will sign up for them in Portland, Seattle, and the other places Fisher serves.

Mr. Ergen's insistence on punishing viewers for his fight with Fisher is ridiculous. Fisher has agreed to the terms offered, but Fisher believes it is right on an unrelated matter and is pursuing it in court. http://www.katu.com/about/36310734.html Perhaps Dish is right, or not. Who really knows. But thousands of customers are caught in the middle of this issue with no end in sight. I guess rather than be cordial and compromise for the benefit of his customers, Mr. Ergen would rather hold us all hostage. Trust me, if I could change this, I would, I can't. I've talked to both sides up and down. Fisher will talk with me, Dish senior management really won't. Mr. Ergen can be right on the lawsuit issue, but he is killing the business along the way. It is sad, pathetic, and ridiculous.

I was a pretty happy customer through my time with Dish. I stuck with them for awhile, defended them, but enough is enough. Finally, I gave up. As soon as my parent's contract is up I will move them too. Goodwill is destroyed plain and simple.


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## phrelin (Jan 18, 2007)

jacmyoung said:


> To file for bankruptcy, the company must not be able to meet the due dates in a major way and not able to secure any loans. DISH has no major due dates until 2011, and Charlie just loaned Sirius a whole bunch of money to save Sirius from going under, and while he failed to get the taste of Sirius because Malone came to the rescue of Sirius, Charlie in the process made over $200M from Malone just in that single effort. Of course this is most recent deal not reflected in the Q4 numbers.
> 
> It is silly to even talk about this issue.


Echostar "loaned" Sirius the money, not Dish Network. There's three entities - Echostar, Charlie, and Dish Network. Only one has subscribers to lose.


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## phrelin (Jan 18, 2007)

dgordo said:


> Just keep in mind that everyone has a different idea of what is important. Some look at net income, some llok at the top line, some look at EBIT, some look at EBITDA, some look to free cash flow, etc. In my opinion it is best to look at a number that the accountants can't easily fiddle with.


+1 and AMEN.

Note to investors: net profit is not such a number.


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## jacmyoung (Sep 9, 2006)

phrelin said:


> Echostar "loaned" Sirius the money, not Dish Network. There's three entities - Echostar, Charlie, and Dish Network. Only one has subscribers to lose.


As I said before, he could have "loaned" all that money, for example the money he loaned to Sirius, or the $700M spent to purchase the air wave, to subsidize the DISH equipment leases, and make their HDDVRs not only free for lease, but more than just four tuners, he can also subsidize it so that the monthly HD receiver fees are only $5 not $7, and only one $5 DVR fee could be charged on one account, not $6 for each DVR.

He could have made such decisions instead to stay competitive with DirecTV, that could have made a big difference, at least I would not have switched.


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## jacmyoung (Sep 9, 2006)

WebTraveler said:


> Cancelled today, got heavy, heavy pushback, almost belligerant. The fact remains that until Dish restores the Fisher stations no one in their right mind will sign up for them in Portland, Seattle, and the other places Fisher serves. ...


No one? What about those who are picking up the signals OTA? They have not lost the signals haven't they?

Unless of course those stations are not doing OTA at all.


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## SaltiDawg (Aug 30, 2004)

WebTraveler said:


> Mr. Ergen's insistence on punishing viewers for his fight with Fisher is ridiculous. ...But thousands of customers are caught in the middle of this issue with no end in sight. I guess rather than be cordial and compromise for the benefit of his customers, Mr. Ergen would rather hold us all hostage. ...


If Dish caves on price control attempts, we *all* lose. Not just you in Seattle/Portland, but those of us throughout the US will finance those excessive costs.

Mr. Ergen has to look at the overall picture, not the parochial view of one area. Who is to say that he is not doing just that? Not me.... and certainly not you.


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## Jeremy W (Jun 19, 2006)

SaltiDawg said:


> If Dish caves on price control attempts, we *all* lose.


Yes, you can keep repeating this line like all of the other Dish-boys do. But the fact remains that DirecTV's pricing is comparable to Dish, and they don't have a history of pulling channels over contract negotiations.


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## phrelin (Jan 18, 2007)

jacmyoung said:


> As I said before, he could have "loaned" all that money, for example the money he loaned to Sirius, or the $700M spent to purchase the air wave, to subsidize the DISH equipment leases, and make their HDDVRs not only free for lease, but more than just four tuners, he can also subsidize it so that the monthly HD receiver fees are only $5 not $7, and only one $5 DVR fee could be charged on one account, not $6 for each DVR.
> 
> He could have made such decisions instead to stay competitive with DirecTV, that could have made a big difference, at least I would not have switched.


This is absolutely true. My point since fall 2007 when it was announced that Echostar was spinning off Dish Network is that Charlie's level of interest in, and commitment to, the retail side of the business (now the new Dish Network") had disappeared. He wants to sell it, so he'll have to keep it alive, probably using his own resources which I'm sure aren't as large a number by a significant factor as two years ago.

Not that I blame him. TV signal distribution as a stand-alone business isn't the future of technology, it's just another gritty retail business in which Comcast and AT&T are positioning themselves as "one-stop shops" for TV, internet and phone, while DirecTV is becoming the "big box store" offering everything TV to everyone at competitive prices. Echostar could have become the "Apple" brand of the business, with better technology in the retail market. But you can't sell iPods and Mac's without a strong investment in the music and video retail side of the business. Echostar's 922 will become an expensive doorstop if Dish Network continues to be cash poor and maintains its image as "TV on the cheap" by cutting out major networks in places like Seattle. The industry overall will benefit by Charlie's aggressive negotiation approach, but not Dish Network.


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## SaltiDawg (Aug 30, 2004)

Jeremy W said:


> Yes, you can keep repeating this line like all of the other Dish-boys do. But the fact remains that DirecTV's pricing is comparable to Dish, and they don't have a history of pulling channels over contract negotiations.


Oh nonsense. Were DirecTV to take a tougher negotiating stance would not their prices be lower? As a Direct boy I'm sure you'll have a smart answer. lol


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## Stuart Sweet (Jun 19, 2006)

Please note, some posts have been deleted, and the posts referencing those deleted posts have also been deleted.


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## Greg Bimson (May 5, 2003)

SaltiDawg said:


> Were DirecTV to take a tougher negotiating stance would not their prices be lower? As a Direct boy I'm sure you'll have a smart answer.


The reverse argument is true: how do you know DirecTV doesn't take a tougher negotiating stance? Just because DISH's programming spats are in the public does not mean DirecTV's negotiating stance is spineless.


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## Jeremy W (Jun 19, 2006)

SaltiDawg said:


> Oh nonsense. Were DirecTV to take a tougher negotiating stance would not their prices be lower?


The few dollars of pricing difference between DirecTV and Dish is not nearly enough to form the basis for the arugment you're trying to make. Ask the people who have had their locals ripped away if they would really mind paying a few dollars more per month to not have to deal with this type of petty crap that is so common for Dish customers.


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## Stewart Vernon (Jan 7, 2005)

Probably worth noting that savings on carriage contracts do not automatically correlate to savings for subscribers. Companies all the time negotiate for better prices on their purchases, but do not always lower prices to customers.

So comparing DirecTV and Dish subscriber prices does not necessarily indicate what they are paying to carry the channels. Dish, for example, could be making more profit per customer due to lowering their costs.

This is how companies work... In fact, it is how people work! I see people all the time trying to get prices lowered for things they buy (satellite tv services included)... so why would a company be any different?


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## SaltiDawg (Aug 30, 2004)

Greg Bimson said:


> The reverse argument is true: how do you know DirecTV doesn't take a tougher negotiating stance? Just because DISH's programming spats are in the public does not mean DirecTV's negotiating stance is spineless.


Sheesh. Reading 101.

I never compared Dish's pricing to DirecTV's pricing... (I don't know why the DirecTV discussion was even brought up in a Dish Forum discussing Dish profits.)

I simply suggested that DirecTV's pricing could be lower if DirecTV took a tougher negotiating stance than *DirecTV* has in the past. I did not even suggest that was a wise thing for DirecTV to do. Direct TV should do what their models show does the most for profitability.

The dragging up of DirecTV costs versus Dish's cost should not even relate to this thread, IMHO. Seems at least of some of the folks that brought this into the thread are not Dish subscribers, but some how feel the need to post here... almost like fishing off the fantail. lol


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## SaltiDawg (Aug 30, 2004)

Jeremy W said:


> The few dollars of pricing difference between DirecTV and Dish is not nearly enough to form the basis for the arugment you're trying to make. ...


I made no comparison between Dish and DirecTV, nor wouold I ever. I have never owned D*, don't know their prices, and could care less.

Generally, *any* company can cut costs in some areas and thus permit the price point to be reduced - however, that is not always good business - if the buying public perceives a reduction in value the reduced price may not attract any/enough new business to increase revenue.


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## WebTraveler (Apr 9, 2006)

jacmyoung said:


> No one? What about those who are picking up the signals OTA? They have not lost the signals haven't they?
> 
> Unless of course those stations are not doing OTA at all.


I can't get the OTA signals on most of my TVs without a big antenna; why go to that cost? I can just go with the competition, which is cheaper by the way, notwithstanding their sign up offers, which even brings it to a better deal.


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## WebTraveler (Apr 9, 2006)

SaltiDawg said:


> If Dish caves on price control attempts, we *all* lose. Not just you in Seattle/Portland, but those of us throughout the US will finance those excessive costs.
> 
> Mr. Ergen has to look at the overall picture, not the parochial view of one area. Who is to say that he is not doing just that? Not me.... and certainly not you.


Well, according to Fisher they've AGREED to the Dish price; it is an issue with another station that does not concern me or anyone else wanting ABC in our local market (CBS in some). Fisher has agreed to sever the two and let one go the litigation route.

Dish keeps losing customers and this is no way to retain them - to hold your customers hostage. It's not just me who feels that way. I look in my immediate neighborhood and I see lots of switching going on. Directv trucks in front of a neighbor who has Dish is convincing of the switch.

My speculation and it is just that - customers will continue to leave Dish. There is little upside in my market to be with Dish. They don't have the local ABC, they don't carry Comcast Sportsnet Northwest. Dish cites cost, but their fees really are not different from the competition. Directv is the same for the comprable package I have ($5 less if I bundle it with my phone). Verizon Fios is less (with a different package). Comcast is slightly more, but not much. The three competitors all carry the ABC channel, so how are they doing it? They charge the same or less?!?!?!?!?!

I may not know the whole story and I don't think I ever will, and no one else does either, except Charlie Ergen, and he festers in a veil of secrecy. But I am done with him, and when Dish has poor financial reports I know why.


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## WebTraveler (Apr 9, 2006)

Stewart Vernon said:


> Probably worth noting that savings on carriage contracts do not automatically correlate to savings for subscribers. Companies all the time negotiate for better prices on their purchases, but do not always lower prices to customers.
> 
> So comparing DirecTV and Dish subscriber prices does not necessarily indicate what they are paying to carry the channels. Dish, for example, could be making more profit per customer due to lowering their costs.
> 
> This is how companies work... In fact, it is how people work! I see people all the time trying to get prices lowered for things they buy (satellite tv services included)... so why would a company be any different?


What you say is true, to a point. However, let's say both McDonalds and Wendys have a meal deal. They both charge $5.99; however, McDonalds includes a burger, fries, and a drink. Wendy's includes a burger and a drink. Same price, but different content. As a customer why should I pay more for less - all other things equal. Every competitor has KATU but the fees are the same.

Sooner or later the customer figures out he is getting screwed.


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## WebTraveler (Apr 9, 2006)

Jeremy W said:


> Yes, you can keep repeating this line like all of the other Dish-boys do. But the fact remains that DirecTV's pricing is comparable to Dish, and they don't have a history of pulling channels over contract negotiations.


That's not entirely true. There are some incidents across the country, but it is much less than Dish's constant interaction.


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## Ron Barry (Dec 10, 2002)

Ok guys we are starting to wonder a bit from the topic. We have a thread if I recall regarding the Fisher negotiations and I am sure we have a number of Dish vs. DirecTV comparison threads. Yes there is an certain expectations of discussion regarding why a sub might leave Dish but I think this wondering a bit too far into other topics all ready covered in other threads.

So lets try and wonder back on to the road a bit.


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## Greg Bimson (May 5, 2003)

SaltiDawg said:


> Sheesh. Reading 101.
> 
> I never compared Dish's pricing to DirecTV's pricing... (I don't know why the DirecTV discussion was even brought up in a Dish Forum discussing Dish profits.)
> 
> I simply suggested that DirecTV's pricing could be lower if DirecTV took a tougher negotiating stance than DirecTV has in the past. I did not even suggest that was a wise thing for DirecTV to do. Direct TV should do what their models show does the most for profitability.


Reading 102:

Nowhere did I compare the two. I am trying to understand the assertion that DirecTV hasn't taken "a tougher negotiating stance that DirecTV in the past". You don't know what the terms are, you simply haven't seen channels dropped at DirecTV.

The implication is that in order to take a tougher negotiating stance, channels must be dropped, so that the public can view the disagreement.


SaltiDawg said:


> The dragging up of DirecTV costs versus Dish's cost should not even relate to this thread, IMHO.


Then I expect there will be no more posting that DirecTV doesn't take a tougher negotiating stance.


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## SaltiDawg (Aug 30, 2004)

Greg Bimson said:


> Reading 102:
> 
> Nowhere did I compare the two. I am trying to understand the assertion that DirecTV hasn't taken "a tougher negotiating stance that DirecTV in the past". You don't know what the terms are, you simply haven't seen channels dropped at DirecTV.


Aw, shucks. Your just funnin' me. You accuse me of comparing Dish to DirecTV when I *never* suggested that.

I think I'll cut of the fish hook.

Bye.


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## WebTraveler (Apr 9, 2006)

Ron Barry said:


> So lets try and wonder back on to the road a bit.


But isn't the road full of customers leaving Dish in droves? Customers of Dish seem to be very unhappy overall. The 102K figure is a net figure. After cancellations and new sign ups Dish has 102K less subscribers than before. Dish is offering a $9.99 promo rate. I wonder how many higher tiers of service customers have left to be replaced by $9.99 customers? That would be interesting data to know.


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## Ron Barry (Dec 10, 2002)

How can you come to that conclusion WebTraveler (Customers of Dish seem to be very unhappy overall)? There is not even close to enough data to support such a conclusion as there is not enough data to support a "Yes" Dish Customers are very happy overall. 

You are coming from your viewpoint and your situation.I fully understand the reason to move. Content is king and if product B fits your need at the time, make the move. People do it all the time, but I would not go as far as generalizing the drop to "Customers of Dish seem to be very unhappy overall". 

I am very happy with Dish.. I would not then conclude "Customers must therefore be very happy with Dish". Without a full analysis of the numbers, where they came from, and the sighted reasons people left the sad fact is we cannot conclude anything from them except there was a drop. That is my opinion.


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## Slamminc11 (Jan 28, 2005)

WebTraveler said:


> But isn't the road full of customers leaving Dish in droves? Customers of Dish seem to be very unhappy overall...


You want to have this argument now?


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## Greg Bimson (May 5, 2003)

SaltiDawg said:


> Aw, shucks. Your just funnin' me. You accuse me of comparing Dish to DirecTV when I never suggested that.
> 
> I think I'll cut of the fish hook.
> 
> Bye.


The statements I am debating:


SaltiDawg said:


> Oh nonsense. Were DirecTV to take a tougher negotiating stance would not their prices be lower? As a Direct boy I'm sure you'll have a smart answer.


No comparasion between the two services. Not from me.


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## WebTraveler (Apr 9, 2006)

Ron Barry said:


> How can you come to that conclusion WebTraveler (Customers of Dish seem to be very unhappy overall)? There is not even close to enough data to support such a conclusion as there is not enough data to support a "Yes" Dish Customers are very happy overall.
> 
> You are coming from your viewpoint and your situation.I fully understand the reason to move. Content is king and if product B fits your need at the time, make the move. People do it all the time, but I would not go as far as generalizing the drop to "Customers of Dish seem to be very unhappy overall".
> 
> I am very happy with Dish.. I would not then conclude "Customers must therefore be very happy with Dish". Without a full analysis of the numbers, where they came from, and the sighted reasons people left the sad fact is we cannot conclude anything from them except there was a drop. That is my opinion.


Let's see. 4th quarter has a NET LOSS of 102k subscribers. A quarter is approximately 90 days, so that is approximately 1,133 NET subscibers per day that are leaving. That is a lot of telephone calls to handle. We don't know the detail, but the actual amount leaving is MORE because Dish has signed people up during the 90 days. But the big promo now is a $9.99 deal, so Dish loses the subscribers at the higher rates for a subscriber paying $9.99 (ok, this is speculation).

In the meantime the direct competitor, Directv, added 461K net subscribers with 300K in the USA.

The competitor added 461,000 with 300,000 of those in the USA. That's 4+ additions for every loss at Dish.

Over all, -1 + 4 = 5 customer spread between the two. That certainly speaks of a happy customer base, doesn't it?


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## James Long (Apr 17, 2003)

WebTraveler said:


> That certainly speaks of a happy customer base, doesn't it?


No, it doesn't. I have not checked this past quarter yet, but DirecTV typically loses about the same and sometimes MORE customers during a quarter. If you're equating "happy" with staying with the service you need to look at gross loss.

Where DirecTV has been winning lately is on adding NEW customers ... net increases are not existing customers that are happy to stay.

Edit:
In 2008 DirecTV disconnected/lost 3.043 million subscribers.
In 2008 DISH lost 3.068 million subscribers.

It was a tough year for DISH, but DirecTV isn't exactly keeping all of their customers.


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## Kheldar (Sep 5, 2004)

James Long said:


> No, it doesn't. I have not checked this past quarter yet, but DirecTV typically loses about the same and sometimes MORE customers during a quarter. If you're equating "happy" with staying with the service you need to look at gross loss.
> 
> Where DirecTV has been winning lately is on adding NEW customers ... net increases are not existing customers that are happy to stay.
> 
> ...


While the relationship between "happy" and staying with the service is tenuous at best, it is instructive using your numbers to notice that Dish lost more customers on a smaller customer base, therefore having a higher churn rate.

Of course, that could be because of some different company policies unrelated to subscriber "happiness". Comparing DishNet's Commitment to DirecTV's shows DirecTV's cancellation fees are stricter ($20/mo remaining instead of $12.50), which in itself could explain a difference in willingness to cancel a service.


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## Stewart Vernon (Jan 7, 2005)

I don't think we know enough to do anything but speculate... so here's some random numbers pulled out of the air for example.

Company A -> Gains 300,000 and loses 400,000 subscribers. Has over 13 million total, with a net loss of 100,000 for the quarter.

Company B -> Gains 1,000,000 and loses 600,000 subscribers. Has over 15 million total, with a net gain of 400,000 for the quarter.

So, which company is doing better?

Company B had a net gain... but lost 200,000 more customers than did Company A.

By those numbers, the problem isn't that Company A is losing customers in droves... since Company B is losing even more in that same period! But rather, Company A isn't attracting new customers as well.

So, we'd need to compare apples to apples to be sure.

That said... Dish has nearly 14 million customers (13.7 roughly) and lost 102,000 for the quarter. Not that a loss is a good thing, but I'd hardly predict gloom and doom based on that number alone.

Again, for example...

Company C -> Gains 200,000 and loses 300,000 for a net loss of 100,000.

Company D -> Gains 1,000,000 and loses 1,100,000 for a net loss of 100,000.

Same net loss... but not at all the same conclusion one would draw if the whole situation is taken into account. Based on above, I'd be more concerned if I were Company D because of the high churn.

BUT... more data emerges:

Company C -> Total subscribers 500,000

Company D -> Total subscribers 10,000,000.

With that new data, I'd be more concerned about Company C.


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## Steve (Aug 22, 2006)

Kheldar said:


> While the relationship between "happy" and staying with the service is tenuous at best, it is instructive using your numbers to notice that Dish lost more customers on a smaller customer base, therefore having a higher churn rate.


Correct. Dish has a total of 13.7 million customers and DirecTV 23.2 million, so using the "lost" numbers above, Dish lost 22% and DirecTV some 13%.

I checked, and Dish's net losses for the full year 2008 were also 102,000. DirecTV's net adds were 1,460,000.



> Of course, that could be because of some different company policies unrelated to subscriber "happiness". Comparing DishNet's Commitment to DirecTV's shows DirecTV's cancellation fees are stricter ($20/mo remaining instead of $12.50), which in itself could explain a difference in willingness to cancel a service.


It might make a difference if people cancel within the commitment period. If they are 2 year customers, shouldn't be a factor. Just my .02.  /steve


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## James Long (Apr 17, 2003)

Steve said:


> Correct. Dish has a total of 13.7 million customers and DirecTV 23.2 million, so using the "lost" numbers above, Dish lost 22% and DirecTV some 13%.


DirecTV ended 2008 with 17.621 million ... a net gain of 861k customers (DOWN slightly from the 2007 net gain of 878k). DirecTV's "disconnected" customers represent 18% of their 2007 year end subscriber count, not 13%.



> I checked, and Dish's net losses for the full year 2008 were also 102,000. DirecTV's net adds were 1,460,000.


Where did you check? The 10K DirecTV filed had the 861k net add figure (Page 49).


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## Ron Barry (Dec 10, 2002)

Stewart Vernon said:


> I don't think we know enough to do anything but speculate...


Yep.... That was kinda what I was trying to get at and each person here will make a leap to a conclusion based on a number of factors including biases, gut feeling, tie a few numbers together to connect the dots, anger etc.

This usually leads to a final conclusion which I like to term perceived reality. Problem is... Perceived reality may not match up with reality and when spun by an entity or person that is skilled in spinning things they can turn perceived reality into reality. Which in my opinion kinda sucks...  Microsoft at one time was a master of this technique.

Personally given they are but numbers from a financial report it is anybodies guess what they mean. For me.. I personally just choose not to guess given the lack of any information regarding why people choose to leave.


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## phrelin (Jan 18, 2007)

Yeah. Speculating that problems exist just because the numbers in the financials look weird is not the way we do it in this country. Heck, the folks at Merrill Lynch and AIG and... Enron? Numbers? Hey, just ignore the number details and focus on what they tell you to look at! In this case, an increase in net profit.


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## jacmyoung (Sep 9, 2006)

James Long said:


> DirecTV ended 2008 with 17.621 million ... a net gain of 861k customers (DOWN slightly from the 2007 net gain of 878k). DirecTV's "disconnected" customers represent 18% of their 2007 year end subscriber count, not 13%.
> 
> Where did you check? The 10K DirecTV filed had the 861k net add figure (Page 49).


And let's not forget another issue I have raised, D* allows people to "suspend" their services up to 6 months or more at will. I don't know how E* handles such situation.

When a sub "suspends" his service with D*, he stops paying D* for the suspension period, meaning D* no longer takes in any revenue from that sub, yet D* never loses that sub.


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## Jeremy W (Jun 19, 2006)

jacmyoung said:


> When a sub "suspends" his service with D*, he stops paying D* for the suspension period, meaning D* no longer takes in any revenue from that sub, yet D* never loses that sub.


The sub no longer costs DirecTV anything, either. So it really doesn't matter, because unless the subscriber is out of contract, DirecTV is guaranteed some form of payment from them in the future, either a resumption of their monthly fees or the ETF.


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## Steve (Aug 22, 2006)

James Long said:


> DirecTV ended 2008 with 17.621 million ... a net gain of 861k customers (DOWN slightly from the 2007 net gain of 878k). DirecTV's "disconnected" customers represent 18% of their 2007 year end subscriber count, not 13%.


Numbers I gave were world-wide customers listed in the 4th quarter 2008 reports from both Dish and DirecTV. Since Dish didn't break out US vs. non-US numbers, I used world-wide for DirecTV to do a true apple-to-apples comparison.

Where did you get your 2008 3 million "lost" for each #'s, BTW? Are those world-wide or US for DirecTV?

/steve


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## WebTraveler (Apr 9, 2006)

Well add to the mix a new $9.99 rate from Dish. How many of those "added" customers are really $9.99 customers? It's not good to replace high paying customers wuith those at the bottom. But I guess one gets creative to curb the loss ratio. By adding a $9.99 rate Dish doesn't tell us how its subscriber basis is made up.


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## jacmyoung (Sep 9, 2006)

Jeremy W said:


> The sub no longer costs DirecTV anything, either. So it really doesn't matter, because unless the subscriber is out of contract, DirecTV is guaranteed some form of payment from them in the future, either a resumption of their monthly fees or the ETF.


If an existing sub orders 4 HD DVRs for $99 each on average on a very good deal, uses the service for a year, then suspends the service for the next year (it can be done), since it takes D* about three years to break even on a continuous service, isn't D* now in the hole for four years if the sub suspends the service for one year?

What if he decides to suspend the service on the third year again? Such numbers never show up on the report.


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## Jeremy W (Jun 19, 2006)

jacmyoung said:


> isn't D* now in the hole for four years if the sub suspends the service for one year?


No. Do you understand how corporate accounting works?


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## jacmyoung (Sep 9, 2006)

Jeremy W said:


> No. Do you understand how corporate accounting works?


Do you? You could not even find the correct U.S. sub counts in those reports.


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## Jeremy W (Jun 19, 2006)

jacmyoung said:


> Do you?


Yes, I do.


jacmyoung said:


> You could not even find the correct U.S. sub counts in those reports.


You must be confusing me with another poster, because I haven't mentioned sub counts at all in this thread.


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## jacmyoung (Sep 9, 2006)

Jeremy W said:


> Yes, I do.


What is it? That D* is hiding those suspension numbers reporting only the good ones?



> You must be confusing me with another poster, because I haven't mentioned sub counts at all in this thread.


My apology.


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## Jeremy W (Jun 19, 2006)

jacmyoung said:


> What is it? That D* is hiding those suspension numbers reporting only the good ones?


They're not hiding anything. The number of suspended amounts is most likely low enough to be insignificant.


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## phrelin (Jan 18, 2007)

Total numbers - subscribers canceled, new subscribers, net gain or loss - aren't real helpful. A breakout by packages and other options would be very meaningful. In the case of Dish Network (the only one I'm really familiar with), the totals for end of year 2006, 2007, 2008, - the total of subscribers to AEP (or whatever they name it) with HD and Platinum compared to the total of subscribers with Dish Family with Locals SD compared to the total of new-during-the-year subscribers to the Turbo packages - this might give you a hint about what's been going on during this "recession" that began in 2007 which in turn might provide clues to what will happen during 2009.

The devil is always, always in the details.


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## Greg Bimson (May 5, 2003)

phrelin said:


> this might give you a hint about what's been going on during this "recession" that began in 2007 which in turn might provide clues to what will happen during 2009.
> 
> The devil is always, always in the details.


The NBER defined the beginning of the recession as December 2007. So, for 2008, DISH reported:
Q1 35,000
Q2 (10,000)
Q3 (25,000)
Q4 (102,000)

That is the four worst quarters in DISH history for net subscriber adds. The trend is downward.

Now, DISH's biggest partner for customer additions is no longer in the picture and the recession isn't getting any better.


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## phrelin (Jan 18, 2007)

Greg Bimson said:


> The NBER defined the beginning of the recession as December 2007. So, for 2008, DISH reported:
> Q1 35,000
> Q2 (10,000)
> Q3 (25,000)
> ...


That doesn't tell me anything. If the net losses were mainly in the least profitable packages, should I care? If the net loss was mostly in the HD packages where the recent investments in hardware have been focused, I'd start worrying because that's where the investment costs need to be recovered and where the future is. If the net losses this year reflected a corresponding loss in equipment because the subscribers were folks who walked away from their homes and the equipment has to be written off as "lost", that's a loss. If the net losses in the last quarter were 1,102,000 SD bankrupt subscribers leaving versus 1,000,000 new Turbo HD subcribers in areas seeing the lowest layoffs, I'd be a happy camper if I was Charlie.

If, during the last two quarters of 2008, alot of AEP with HD and Platinum dropped to HD Top 100 with no Platinum and no premiums, I'd be nervous.

And how many 2008 4th quarter lost subscribers canceled from areas that had HD locals? After all, you have to have enough HD local subscribers to recover both the operating costs and the investment in the uplink and the transponder space.

My assumption was that Cheap Charlie was monitoring this info weekly and adjusting accordingly, until he seemingly lost interest in the retail side of the business.


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## Jeremy W (Jun 19, 2006)

phrelin said:


> Total numbers - subscribers canceled, new subscribers, net gain or loss - aren't real helpful.


That's why they report ARPU. The net gain or loss, along with ARPU, gives you a pretty good indication of where things are at.


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## Greg Bimson (May 5, 2003)

Jeremy W said:


> That's why they report ARPU. The net gain or loss, along with ARPU, gives you a pretty good indication of where things are at.


And the ARPU is growing at a normal rate, suggesting the losses in subscribers are across the board.


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## phrelin (Jan 18, 2007)

Greg Bimson said:


> And the ARPU is growing at a normal rate, suggesting the losses in subscribers are across the board.


I'm not so sure about that. When I compare the last quarters of 2007 and 2008 I see an unexplainable deviation. Rate increases account for some of the increase as does movement to HD. But the ARPU increase, as near as I can tell, is 18% higher than the actual subscriber revenue increase. If I haven't made a mistake (which I probably have) and those numbers haven't been manipulated, that's a good thing.

But I can't help but think that in that quarter 2008 there was some movement by subscribers to reduce their costs by downsizing their packages. I would guess that such a trend is evident in January and February. But since February is rate restructuring month we will not get a good picture as the quarter's ARPU change will be lost in the fog of one month at old rates, two months at new, subscriber decisions made to downsize, subscriber loss, etc.

Also, the notes make mention of the estimated allowances for uncollectible accounts, but no actual number is offered anywhere that I can find. Nor, of course, would there be any indication of an increase in subscriber receivables in arrears. In an economy where unsecured commercial lending is essentially unavailable, these are numbers that are going to be significant to any company that doesn't even have one month of revenue available in the form of cash. Of course, Charlie could always loan Dish the money himself, or at least the collateral to secure a loan.:sure:

Not that I particularly care about this stuff. I sold my shares awhile back. It's just interesting to try to get a feel for what's really going on.


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## Kheldar (Sep 5, 2004)

A Multichannel News article about the Q4 results, titled "Cover Story: Is Dish Broken? - Charlie Ergen Scrambles To Stabilize His Company":


> Collins Stewart media analyst Tom Eagan, in a research note issued after the conference call, wrote that Ergen appeared upbeat, but that "it's difficult to understand why. There didn't appear to be a single operational metric that suggested a turnaround was imminent."
> 
> Eagan then went on to lower every growth target he had for the company, increasing his subscriber-loss estimate for 2009 from 98,000 customers to 392,000 and dropping his cash-flow estimate from $3.4 billion to $3.2 billion, as higher subscriber acquisition costs are expected to lower margins. Eagan also reduced his free-cash-flow estimate for the direct-broadcast satellite giant from $1.2 billion to $1 billion for the year.
> 
> ...


There's more, just follow the link.


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## James Long (Apr 17, 2003)

Steve said:


> Numbers I gave were world-wide customers listed in the 4th quarter 2008 reports from both Dish and DirecTV. Since Dish didn't break out US vs. non-US numbers, I used world-wide for DirecTV to do a true apple-to-apples comparison.


What non-US numbers? DISH Network is not including customers outside of the US in their reports.



> Where did you get your 2008 3 million "lost" for each #'s, BTW? Are those world-wide or US for DirecTV?


Annual reports for DISH and DirecTV, as stated in my previous post.


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## James Long (Apr 17, 2003)

WebTraveler said:


> Well add to the mix a new $9.99 rate from Dish. How many of those "added" customers are really $9.99 customers? It's not good to replace high paying customers wuith those at the bottom. But I guess one gets creative to curb the loss ratio. By adding a $9.99 rate Dish doesn't tell us how its subscriber basis is made up.


DirecTV has been offering "new customer" rates that have deep discounts for several years ... so in essence they too replace the millions of customers leaving with millions of customers paying less. It is a new part of the business for DISH (the new deep discounts didn't start until 2009 ... so they wouldn't be factored into 2008 figures anyways) but "introductory rates" have been part of the industry for years.


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## James Long (Apr 17, 2003)

Jeremy W said:


> The sub no longer costs DirecTV anything, either. So it really doesn't matter, because unless the subscriber is out of contract, DirecTV is guaranteed some form of payment from them in the future, either a resumption of their monthly fees or the ETF.


In a world where "subscriber count" is the only thing that matters does a suspended account count as a subscriber?

Both companies allow account suspensions so unless one can find details proving one company has a lot more suspended customers than the other it is pretty much a moot point.


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## Jeremy W (Jun 19, 2006)

James Long said:


> DirecTV has been offering "new customer" rates that have deep discounts for several years


You can't call DirecTV's new customer rates "deep discounts" and then use the same phrasing to describe Dish's $9.99 promotion. They're not even in the same league.


James Long said:


> In a world where "subscriber count" is the only thing that matters does a suspended account count as a subscriber?


Who said subscriber count is the only thing that matters?


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## James Long (Apr 17, 2003)

Jeremy W said:


> You can't call DirecTV's new customer rates "deep discounts" and then use the same phrasing to describe Dish's $9.99 promotion. They're not even in the same league.


DISH is offering a base package worth up to $44.99 per month for only $9.99 - Up to 78% off for the first six months. If that isn't a deep discount what is?

Or are you saying DirecTV's $21 off $55.99 or above packages (37%) for a year is not a deep discount?

DISH is offering up to $210 off, DirecTV is offering $252 off. Both are about 19% off over the life of the contract. If one is deep the other one is too! 



> Who said subscriber count is the only thing that matters?


It seems to be a heavy focus every quarter ... and a heavy focus of this thread (although financials have also been discussed). The point being, that if all that is important is counting households then counting households that are on hold is just part of the program.


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## WebTraveler (Apr 9, 2006)

James Long said:


> DirecTV has been offering "new customer" rates that have deep discounts for several years ... so in essence they too replace the millions of customers leaving with millions of customers paying less. It is a new part of the business for DISH (the new deep discounts didn't start until 2009 ... so they wouldn't be factored into 2008 figures anyways) but "introductory rates" have been part of the industry for years.


Well, maybe; but it gets back to the customer Dish is after versus the customer Directv is after. Dish is now catering to the lower end of the market and hence the $9.99 rate is a big push on that. Perhaps the $9.99 rate is a push to go after those w/o satellite or cable and to help through the transition. Those that already have or want satellite are overwhelmingly choosing Directv. Also at $9.99 its a giveaway rate and it manipulates the subscriber numbers Wall Street sees. It's a way to curb the losses, but not show the detail behind it.


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## danzig13 (Mar 8, 2009)

I'm canceling based on Dish Networks lackluster customer service and inability to compete with Directv in offering us the best content. I sent Dish an email asking why NHL HD and NBA.TV HD are listed in the multi sport package, but when you order it you only get the SD versions and yes i have the GOLD HD package if anyone is curious. They replied by changing my question to suit their answer and their answer had nothing to do with my original question, so basically its false advertising. The final decision to switch was that Dish isn't able to offer us MLB network because Directv has exclusive rights when it comes to satellite providers. Directv gets the HD channels first while Dish still doesnt have Spike and a handful of others that Direct has had for over a year now. Dish you have better prices, but in the end its not worth putting up with you. Directv customer starting 3-11-09


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## Slamminc11 (Jan 28, 2005)

danzig13 said:


> I'm canceling based on Dish Networks lackluster customer service and inability to compete with Directv in offering us the best content. I sent Dish an email asking why NHL HD and NBA.TV HD are listed in the multi sport package, but when you order it you only get the SD versions and yes i have the GOLD HD package if anyone is curious. They replied by changing my question to suit their answer and their answer had nothing to do with my original question, so basically its false advertising. The final decision to switch was that Dish isn't able to offer us MLB network because Directv has exclusive rights when it comes to satellite providers. Directv gets the HD channels first while Dish still doesnt have Spike and a handful of others that Direct has had for over a year now. Dish you have better prices, but in the end its not worth putting up with you. Directv customer starting 3-11-09


:wave:


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## Jeremy W (Jun 19, 2006)

danzig13 said:


> Directv gets the HD channels first while Dish still doesnt have Spike and a handful of others that Direct has had for over a year now.


While I do believe you made the right decision going with DirecTV, especially since you're a sports fan, there are HD channels that Dish has and DirecTV doesn't. Travel Channel HD, WGN HD, and a bunch of premiums.


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## James Long (Apr 17, 2003)

Jeremy W said:


> While I do believe you made the right decision going with DirecTV, especially since you're a sports fan, there are HD channels that Dish has and DirecTV doesn't. Travel Channel HD, WGN HD, and a bunch of premiums.


There are 15 HD channels on DirecTV and not on DISH (7 HD versions of SD channels on DISH, 1 HD only, 2 HD versions of SD channels not on DISH and 5 Showtime channels). There are 15 HD channels on DISH that are not on DirecTV (4 HD versions of SD channels on DirecTV, 1 HD channel, 1 HD versions of a SD channel not on DirecTV, 8 HBO HD (4 not even in SD) and Encore HD).

But who is counting. 

(OK, DirecTV has a lot more HD PPV channels and blacked out RSNs as well.)


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## danzig13 (Mar 8, 2009)

Ok, but how would you compare their customer service? I don't know if you have dealt with both, but i have and i can tell you some horror stories dealing with Dish.


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## Slamminc11 (Jan 28, 2005)

danzig13 said:


> Ok, but how would you compare their customer service? I don't know if you have dealt with both, but i have and i can tell you some horror stories dealing with Dish.


In all but one of my dealings with Dish CSR's (albeit I don't call often) they have done just fine, and in the one instance where it wasn't, it was a simple question about using my DVR without it being hooked to the satellite when I moved and they gave me the wrong answer. No big deal, got to watch some DVD's I had of which I hadn't seen. Dish was connected the next afternoon. No big deal.


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## joshjr (Aug 2, 2008)

SaltiDawg said:


> You think that he doesn't have a clue? lol
> 
> I guess *profit* is not something you consider of value?


With the current pace we will see if your end hold true. If the subs keep dropping the only way for E* to still profit would be another price increase one would think. Sure a profit is great but the goal is to be profitabl every year not just one year.


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## Jeremy W (Jun 19, 2006)

danzig13 said:


> Ok, but how would you compare their customer service? I don't know if you have dealt with both, but i have and i can tell you some horror stories dealing with Dish.


You'll find horror stories as well as totally satisfied customers on both sides of the fence.


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## calgary2800 (Aug 27, 2006)

In Seattle we will never again see ABC on Dish so all these losses for Dish are just due Karma.


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## James Long (Apr 17, 2003)

How many of DISH's 14 million subscribers are in Seattle and subscribe to locals?


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## NorfolkBruh (Jun 9, 2007)

James Long said:


> How many of DISH's 14 million subscribers are in Seattle and subscribe to locals?


It may not be a significant number compared to the overall but your assertion is comparing apples to volkswagons... How about this: How many of DISH's subscribers are in Seattle and subscribe to locals and like All My Children, One Life to Live, General Hospital, The View, etc? THOSE are the ones who may very well leave.


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## WebTraveler (Apr 9, 2006)

NorfolkBruh said:


> It may not be a significant number compared to the overall but your assertion is comparing apples to volkswagons... How about this: How many of DISH's subscribers are in Seattle and subscribe to locals and like All My Children, One Life to Live, General Hospital, The View, etc? THOSE are the ones who may very well leave.


It's not just Seattle, it's Portland, Boise, Bakersfield, Eugene, Tri-Cities, Yakima, and probably some other places. I am gone and I know others are following.......


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## SaltiDawg (Aug 30, 2004)

NorfolkBruh said:


> ... subscribe to locals and like All My Children, One Life to Live, General Hospital, The View, etc? THOSE are the ones who may very well leave.


I can't believe that *anyone anywhere* could like all of those shows. lol


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## ImBack234 (Aug 26, 2008)

SaltiDawg said:


> I can't believe that *anyone anywhere* could like all of those shows. lol


LOL.


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## ronthecook (Sep 24, 2007)

all this talk about abc seattle we live in bellingham wa and get our abc on 245 and 246 so who needs komo.


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## Paul Secic (Dec 16, 2003)

ImBack234 said:


> LOL.


Personally I don't watch network junk now.


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## BattleZone (Nov 13, 2007)

WebTraveler said:


> Well, maybe; but it gets back to the customer Dish is after versus the customer Directv is after. Dish is now catering to the lower end of the market and hence the $9.99 rate is a big push on that. Perhaps the $9.99 rate is a push to go after those w/o satellite or cable and to help through the transition. Those that already have or want satellite are overwhelmingly choosing Directv.


You have the right idea.

The growth in the TV market is the HD segment, which shouldn't be a surprise to anyone here. Unfortunately, for a lot of customers, Dish makes going HD difficult and expensive. Dish wants everyone to use "Duo" receivers, and has designed everything around that standard, but as people replace older TVs with newer HDTVs (and today, it is nearly impossible to buy anything else), they want HD on all of their TVs. Dish's Duo receivers can't do HD on the 2nd TV, and Dish's lease limit of 4 TV outputs makes it hard for existing customers to move more than 1 or 2 TVs to HD.

I've heard more than one Dish person talk about how Dish's HD conversion rate is low, so "therefore, HD isn't that big a deal." This to me is the clearest sign that Dish doesn't understand the market. Dish has some excellent HD offerings, but doesn't market them to the right people and hasn't designed equipment lease offerings to meet the needs of many of these customers. Essentially, they drive the higher-end HD customer to DirecTV, and the subscriber numbers support that quite clearly.

Dish needs to completely change their focus from "affordable TV for the lower-end customer" (Dish is no longer the cheaper option, and many people in that demographic have no money for TV today) and start focusing on the people who ARE paying for TV, and those are the folks with multiple HDTVs. You know, the ones DirecTV is hooking up at the rate of thousands a day.

The problem is not Dish's product; the product is good, and for many people, a better fit than what DirecTV offers. The problem is Dish's marketing, and their refusal to acknowledge the reality of the market, which has changed dramatically since 2004-5.

The world of TV has gotten a whole lot more competitive with the telecoms in play, who can bundle and thereby afford to lose money on TV and make up for it on phone and Internet in order to get a customer installed. That has eroded Dish's traditional market to nearly nothing, so it's crucial that Dish changes marketing strategy if they want to be around 2-3 years from now. I hope they do.


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## koralis (Aug 10, 2005)

It occurs to me that this makes perfect sense. If subscribers leave they return leases, and if the number of new subscribers is less than the returned units then Dish doesn't have to subsidize new receivers which has to be a huge aquisition cost.

So, revenue per customer can be higher with fewer new subscribers during a given period compared to a period of heavy growth, which looks good, but actually costs the company money in the short term.


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## BattleZone (Nov 13, 2007)

koralis said:


> It occurs to me that this makes perfect sense. If subscribers leave they return leases, and if the number of new subscribers is less than the returned units then Dish doesn't have to subsidize new receivers which has to be a huge aquisition cost.


Dish has more-or-less stopped buying new standard-def receivers. The last new SD receiver I've seen was a 625 about 9 months ago. Everything we get now is reman receivers.

But aside from some 622s and some rare 211s, all of the HD receivers are new, and they are putting in a lot of those. Existing customers are still doing upgrades, and Dish is still putting in a lot of new systems every day. It's just that they're losing customers at a faster rate.



> So, revenue per customer can be higher with fewer new subscribers during a given period compared to a period of heavy growth, which looks good, but actually costs the company money in the short term.


Ever work a job where your pay is 2-3 weeks behind? You could quit, and suddenly all of your job-related expenses go to zero. No more gas, parking, fast-food lunches, work clothes, etc. Suddenly, you have a lot more "free" money on your paychecks since you no longer have these expenses... EXCEPT that you'll stop getting any more money after 2-3 weeks.

Picking out the one positive datapoint for your press release is S-O-P when the news is bad, but most people can see the whole picture for what it is.


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