Dish Network Corporation stock is trading down at another five year low of around $25. Its chart maps the struggling company’s journey in a changing market. Although the company is keeping its balance sheet in the black, and posting a profit for its shareholders, revenues are falling at a steady rate and subscribers of Dish are down.
When the company reported its 2018 third quarter earnings in early November, it showed a wide marginal upset in earnings per share, with a profit increase of 45 percent. However, year-over-year revenue slipped and revenue from subscribers fell by 5.6 percent. The company’s total number of pay-TV subscribers fell from 13.2 million to 12.7 million.
The loss of Pay-TV subscribers isn’t unique to Dish. In Q3, Charter Communications reported a loss of 66,000 video customers, Comcast reported a loss of 95,000, AT&T reported a loss of 359,000 satellite TV customers in Q3.
The company has a lot to worry about as cord cutting becomes more mainstream and traditional TV subscriptions are dropping like flies. However, Dish already has a nice in-road to the over-the-top market with Sling TV, a growing segment that allows subscribers to watch television in the traditionally timed airing fashion while streaming over-the-top.
“Sling continues to maintain its leadership position in live over-the-top Internet-delivered Pay TV. The power of live continues to prove itself on Sling as customers increasingly embrace it for sports including college and pro football, and we remain dedicated to continuous improvement in reliability and streaming performance,” said President and CEO W. Erik Carlson in the company’s third quarter earnings call.
Dish previous competitors, Comcast and AT&T have a way to stay afloat in this era of cord-cutting by offering broadband services. Dish, as solely a TV provider currently has no such revenue vertical. It’s been reported that March of 2020 is the date Dish is racing towards in building out a wireless 5G network, an endeavor the company is putting all its bets on. In building out a wireless network from scratch, Dish will have an entirely new business vertical to capitalize on and the ability to sell wireless services in addition to TV subscriptions. However, the company needs $10 billion to get the job done, according to a report by FierceWireless. Currently, according to its public balance sheets, Dish has only $1.2 billion in cash, making the endeavor unlikely to succeed without a buyout or partnership.
In 2017, it was reported by the Wall Street Journal that Dish Network was in talks with Amazon on partnering to create a 5G wireless network. The deal would entail eventual bundling plans with Amazon prime consumers and wireless services to Amazon operations including drones and other logistic daily operations. .
There are two key questions for the future of Dish: is a growing Sling TV vertical enough to offset the hemorrhaging pay-tv subscribers?; and will they be able to set up a wireless 5G network in the next two years. If the answer to either of these questions is “no,” the company won’t cut the mustard.