Dish Execs Still See Sling TV as ‘Well-Positioned,’ Eye Q3 for First Major 5G Launch City
Dish Network continues to see its Sling TV over-the-top (OTT) service as being “well-positioned” to compete in the crowded streaming TV market and the firm expects to launch its 5G wireless network in its first major market by the end of the third quarter this year, according to company executives.
“2021 is going to be an exciting and transformative year on many fronts, and we’ve got a lot of work to do, but we’ve got to focus on results to realize our vision,” W. Erik Carlson, Dish CEO and president, said Feb. 22 during an earnings call for the fourth quarter and fiscal year (ended Dec. 31).
The company “had a solid year in Pay-TV despite the headwinds presented by the pandemic,” he noted. “This was driven by our continued discipline and better execution in both” its Dish TV satellite service and Sling TV, he told analysts.
Dish Network closed the quarter with 11.29 million Pay-TV subscribers, including 8.82 million for Dish TV and 2.47 million for Sling TV. That was, however, down from 9.39 million for Dish TV and 2.59 million for Sling TV in the fourth quarter a year earlier.
The company gained about 16,000 Sling TV subscribers in the quarter from the end of Q3, Carlson noted. “While we still have considerable room to grow, we’re encouraged that we added subs in the back half of the year compared to the first half of the year,” he told analysts, adding that was “primarily due to the return of sports and it was also helped by the improvements we made to the platform.”
Dish Network launched Sling Watch Party “to enhance the collaborative viewing experience, added new programming like the Big Ten and increased our on-demand library to over 150,000 titles, and most recently we added 50 hours of free DVR storage,” he pointed out.
However, “with that said, we continue to focus on acquiring and retaining profitable customers and delivering a great experience for both Dish TV and Sling TV,” he said.
During the Q&A, Charlie Ergen, Dish Network chairman and co-founder, conceded: “We should have more market share” with Sling TV, considering the continued cord cutting that is happening. “We really were first to market [but] stumbled a little bit with… the quality of the user interface – user experience,” he admitted. The company “maybe got a little complacent” after a strong start with Sling TV and “it’s taken a while to upgrade it, but that’s all being done the first half of this year,” he told analysts, adding: “We’ll see how it goes. But we have room to improve. That’s for sure.”
He later noted that another challenge for Sling TV is the continued moves by networks included in its subscription packages to launch their own direct-to-consumer streaming services.
Discovery, for example, announced Feb. 22 that its new Discovery Plus service surpassed 11 million total paying direct-to-consumer subscribers globally and was “on pace to be at 12 million by the end of the month,” according to David Zaslav, that company’s CEO and president.
“I think Discovery has got great content, and we’ve had a long-term relationship with them,” Ergen told analysts. “But obviously, to the extent that you can get it on a la carte basis, it will affect future negotiations” between the two companies, he conceded. “Because if… a lot of our customers don’t watch Discovery, should we burden every customer with Discovery if they can get it somewhere else?” he noted. Therefore, it “has to be a fair rate that we can burden customers [with] who don’t watch it and you have to run that math,” he said.
Dish Network reported Q4 revenue grew to $4.56 billion from $3.24 billion a year earlier, while profit grew to $733 million ($1.24 a share) from $389 million (69 cents a share).
“As we enter 2021, we have everything that we need to build [a] one of a kind 5G network” that uses a virtualized, “cloud native” and open-RAN system, Ergen also told analysts. After it gets “through the transition stage… it’s all about execution – and there are certainly significant risks for us as we go execute,” he conceded. For one thing, “there certainly will be lots of problems” initially, but he said, “we have the team and the focus to overcome that… so I have high degree of confidence that we’re going to execute in 2021.”
That means the company is going to build at least its first major 5G launch city by the end of the third quarter, with “more to come,” Ergen said. “I don’t have a number for you at year end, but we’ll be doing, every month after the third quarter… multiple cities,” he told analysts. But he admitted that “we’re not going to be running in the first city – we’ll be crawling and then, hopefully, we’ll get up and be walking by the end of the year.”
That first market “will be an NFL city… so it will be a large market,” he noted, but didn’t identify which one it might be. He described that initial launch as a “beta test” of sorts.
The company is “focused on” reaching 20% of the U.S. population by June 2022 “to meet our first FCC milestone,” Ergen said. After that, it’s targeting 70% of the U.S. population by June 23, Carlson noted.