The good fourth-quarter news for Dish Network was that its virtual pay TV service, Sling TV, grew by 50,000 subscribers during a three-month period in which its biggest competition, AT&T’s DirecTV Now, shrunk by 267,000 users.
The bad news? Sling TV grew by 50,000 customers.
Indeed, Dish’s low-margin virtual MVPD has always been a catch-22: Its growth offsets the ugly decline of the core satellite TV business, which dropped another 334,000 customers in Q4. But the economics of the money-losing Sling TV skinny bundle, which retails for $25 a month, remain a drag on the bottom line, at least until Dish can more fully develop tools like programmatic advertising to better monetize the platform.
With Sling TV now at 2.43 million users and representing 19.6% of an overall Dish subscriber base of 12.32 million customers, average revenue per user fell another 1.1% to $85.46. Dish ARPU is down more than 3% since its all-time high of $88.16 in 2016.
“Pay TV ARPU is down due to a higher percentage of Sling TV subscribers in the pay TV subscriber base,” Dish senior accounting officer Paul Orban conceded during the operator’s fourth-quarter earnings call.
Overall, Sling TV grew by 208,000 users in 2018, a marked slowdown from the more than 700,000 estimated adds in 2017.
But there are green shoots. Orban said the ARPU decline would have been greater if not for revenue stream developments in advanced advertising and new features such as cloud DVR. Sling TV also benefited from a $5 price hike last year.
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Daniel Frankel is the managing editor of Next TV, an internet publishing vertical focused on the business of video streaming. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked on staff for publications including E! Online, Electronic Media, Mediaweek, Variety, paidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!