Those who closely follow the broadcasting industry likely noticed that DISH Network suffered an 18% drop in their stock during 2017. That may leave many people wondering why, a company that seems to be doing so well, suffered such a dip and what that means for the future. Let’s take a closer look.
As a broadcasting company, DISH Network suffers from the same systemic issues that the entire subscription-based television industry is suffering from: revenue pressures from the growing cord-cutting trend. The proof is in the numbers. As of the last reported quarter, DISH Network claimed a total of 13.35 million subscribers in the United States. In the corresponding figure from the previous year, that number was 13.64 million–a 2.1% decline.
To get the full picture of the challenges that DISH Network is facing, you have to look at more than just the quarterly numbers. Yes, DISH’s subscription losses are being recouped, in part, by subscribers to their over-the-top SlingTV service. However, the base package for SlingTV is only $20 per month–substantially less than the basic packages for DISH’s traditional television packages. That means that not only is DISH losing subscribers, but the value of each DISH subscriber is falling as well. In the third quarter of 2017, DISH’ revenue per user suffered a 2.3% drop, falling from $89.44 to $87.23.
This cutting-the-cord trend shows no signs of abating anytime soon. For those working in the traditional pay-TV space, like DISH, it’s possible that they will have to deal with a challenging business environment for the foreseeable future.
While these numbers may look bad, it’s par for the course for the entire pay-TV industry, which means DISH Network is still able to stay competitive with its competition. The new GOP tax plan is also good news for DISH Network who will be able to recoup a substantial portion of their losses in tax write offs.