DISH: Where have all the subscribers gone?

“Put simply, Dish appears to have lost its mojo when it comes to attracting new customers,” Craig Moffett, analyst at Bernstein Research, wrote in a research report. “When DirecTV reports later this week, we are likely to see further evidence that the satellite category as a whole is continuing to lose momentum but that DirecTV continues to gain big chunks of share in a sharply decelerating market.”

Teresa Mastrangelo, principal analyst with broadbandtrends.com, doesn’t share Moffett’s gloomy attitude toward the satellite industry. She said the loss, while surprising, is more an indication of marketing promotions among Dish’s competitors. She also agreed with Dish’s assessment that macroeconomic conditions, particularly the housing crisis, played the most prominent role in the subscriber loss.

“Even though we’ve always had real-estate downturns, we have not experienced what’s happening with the foreclosure market at any other time, at least in my lifetime,” she said. “This is a bit of an anomaly. Lots of people who had second homes that [Dish was] potentially providing satellite service to maybe now are disconnecting that. There is such a glut of homes on the market that, if they are not living in their homes, they are certainly not having the service turned up.”

Yet, As Moffett pointed out in his research note, the question remains: Why haven’t cable and telco competitors felt the same strain as they compete with satellite in similar markets? That’s not necessarily true, Mastrangelo said. Telcos and cablecos have felt the strain, but it’s come in other parts of their bundle. Furthermore, satellite’s loss is intensified based on their previous track record of success.

“On the satellite side, they are not as old nor been in the business as long as these other operators, so they don’t have other metrics to balance it out either,” Mastrangelo said. “Maybe it has been magnified a little more than it might otherwise have been, but I don’t think their losses have been any greater or any smaller than anyone else’s. They just don’t have the advantage of the RGUs [revenue-generating units]. They don’t have voice customers, they don’t have data customers that they can balance RGU growth out with. They just have video. When they have a negative growth, it shows right away.”