Dish Network's strategy paying off
By Deborah Yao
Dish Network Corp., the low-cost leader in a subscription-TV industry where growth comes from taking customers away from competitors, boosted fourth-quarter revenue by attracting budget-conscious customers with aggressive promotions.
As a result, the nation's second-largest satellite TV operator added 249,000 net subscribers during the quarter while several of its cable TV rivals lost ground. The increase in customers overshadowed a 17.5 percent drop in net income to drive shares higher by $1.29, or 6.5 percent, to $21.26 in afternoon trading yesterday.
Dish said it earned $179 million, or 40 cents per share, in the quarter compared with $217 million, or 48 cents per share, in the prior year's quarter.
Revenue rose by 1.4 percent to $2.96 billion, just slightly ahead of the $2.94 billion expected by analysts.
Investors focused on subscriber growth because it marks a continued turnaround at Dish. Starting in the second quarter of 2008, the company endured four straight quarters of subscriber declines — the first reductions at the company since its founding in 1996. Now, the company has increased its customer count for three quarters in a row.
Last year, Dish mounted an aggressive ad campaign that targeted DirecTV Inc., claiming that Dish's TV plans are cheaper. DirecTV said Dish compared plans that were not similar and sued for false advertising. The case is pending.