Entries in DBS Connections (4)


DirecTV Extends Lead Over DISH in DBS Market Share Battle

3Q11 Connections: DBS Subscribers

As has been the trend in recent quarters, the number of DBS connections continued to grow in the third quarter, but DirecTV was the beneficiary,  while DISH Networks continued to lose customers. Total DBS video connections numbered more than 33.7m at the end of September, up 216k from 2Q11. YoY DBS customers have grown by nearly 500k—but DirecTV has added a total of 826k while DISH’s total has fallen by 344k, or 2.4%. DirecTV was serving nearly 19.8m at the end of the quarter while DISH’s sub base slipped below 14m. Cable provider Comcast remained the largest video service provider in the quarter, with 22.36m customers, but given recent trends, could be displaced by DirecTV some time next year. DISH comes in fourth, followed by Time Warner Cable with 12.1m.

Fewer and fewer ILECs are breaking out their DBS subscriber counts, and some, like Verizon and AT&T are no longer actively marketing the service as they promote their own video services. At last count, CenturyLink was serving approximately 1.7m DBS customers and Frontier Communications had between 400k-500k. Windstream also served about 450k at the end of the third quarter, up 3.6% YoY.


2Q11 Connections: DBS Subscribers

Satellite Providers Lose 109k Video Subs in 2Q11  

The second quarter was the first quarter on record that the two dominant satellite providers had a net loss of video subs in the U.S.—the base fell by 109k customers overall. Leading the downward tumble, DISH Networks (Nasdaq:DISH) lost 135k subs in 2Q11, its second-worst quarterly loss on record (156k in 4Q10). DirecTV (Nasdaq:DTV) didn’t fare well either, adding only 26k subs domestically—a 75% drop from its 2Q10 adds. As gross customer adds lagged for DirecTV in 2Q11, its churn rate also ticked up 5.3% as customers jumped ship to other providers.

Both satellite providers blamed the flight of subscribers in 2Q11 to aggressive marketing from competitors and attributed the lack of new customer gains to the lagging economy. Both trends however are deeply intertwined. DISH and DirecTV lack their own Internet and phone services, preventing them from independently offering the deeply-discounted promotional offerings for multiple services that cablecos and telcos can. As consumers have become more cost conscious with the lagging economy, these bundled packages can logically lure customers away from DISH and DirecTV. The cheaper OTT video substitutes such as Hulu and other streaming options have no doubt impacted DISH and DirecTV’s video market share as well. 

The publicly-traded ILECs that offer DISH or DirecTV to their customers, added approximately 15k satellite video subs in 2Q11. CenturyLink inherited Qwest’s 1m DirecTV subscribers in the quarter, while Frontier Communications (NYSE:FTR) renewed its partnership with DISH and will expand of its DISH offering to all Frontier markets. AT&T (NYSE:T) shed 44k satellite subs in 2Q11, while Verizon (NYSE:NZ) once again did not disclose its DirecTV subs.


1Q11 Connections: DBS Connections

CenturyLink Closes on AT&T as Largest Reseller; DirecTV Extends Lead Over DISH 

As a whole, the public ILECs reported an increase of 34k DBS subs during the first quarter of 2011 and 233k for the year—“reported” however, being the key term.  Verizon (NYSE:VZ) no longer breaks out its DBS subs, but at last estimate it had around 1.45m DBS customers.  That was in 2Q10, however, prior to Frontier's (NYSE:FTR) acquisition of 214k former Verizon DBS customers.  

The merged CenturyLink/Qwest (NYSE:CTL) grew DBS subs at a strong pace in 1Q11, and post merger could soon overtake AT&T (NYSE:T) as the top-ILEC provider of DBS services.  Elsewhere, Frontier reported strong DBS customer growth of nearly 140k subs in 1Q11. 

AT&T has shed DBS customers steadily since 2Q10, and lost 11.3% of its customer base in the year ended March 31, 2011. Logically, AT&T also provides the best proxy for Verizon as both providers have pushed similar video services—U-Verse and FiOS—over the past year. One could safely assume that Verizon has experienced similar DBS losses, as it transitions its customers from DBS services to FiOS.

Among the DBS giants, DirecTV (Nasdaq:DTV) extended its connections lead over DISH Networks in 1Q11, adding 184k subscribers.  DISH Networks (Nasdaq:DISH), however, showed signs of life, adding 58k subs after three straight quarters of losses.  Despite its 1Q11 growth, DISH lost 1% of it customer base over the past year, during which DirecTV has grown its connections by nearly 750k. 


4Q10 ILEC DBS Subscribers

Growth Continues, Despite Declines by AT&T and Verizon

The public ILECs as a group added 147k DBS subs during 4Q10 and 265k for the full year (4.8% weighted average annual growth), primarily through  growth reported by CenturyLink (NYSE:CTL), Qwest and Windstream (Nasdaq:WIN).  Frontier Communications (NYSE:FTR) added a record number of DBS subscribers during 2010 as a result of its acquisition of lines from Verizon (NYSE:VZ) on July 1, 2010, and VZ reported a loss of 130k DBS subs during the year (-9.4%).  AT&T (NYSE:T) gave up 244k DBS subs during 2010 (-11.2%).  AT&T’s U-Verse and Verizon’s FiOS video products are likely causing much of the decline in the companies’ respective DBS subscriber counts, as customers switch to U-Verse and FiOS from DBS service.