Dish gains sub momentum in Q1

But profit down, subscriber acquisition cost high

Dish Network posted decent earnings and added a respectable number of new subscribers in the first quarter, adding more fodder to the theory that satellite TV companies are thriving at the expense of cablers.

Dish said it added 237,000 new subs for a total of 14.3 million, a vast improvement over the 94,000 lost in the same quarter a year ago.

That news comes on the heels of an earnings announcement last week from DirecTV, which said it added 100,000 new subs in the U.S. and 221,000 in foreign markets in its latest quarter.

The two form a stark contrast to cable companies and, in fact, Sanford C. Bernstein analyst Craig Moffett downgraded his rating on the entire cable sector on Monday, saying that stricter broadband regulation might be afoot.

Cable also isn't adding many TV customers nowadays. Cablevision Systems recently reported it added just 900 video subscribers in the quarter. Comcast, meanwhile, lost 82,000 subs, Time Warner Cable dropped 42,000 and Charter Communications lost 23,000.

As for Dish, it said Monday that its net income fell 26% to $231 million on revenue that rose 5% to $3.1 billion.

During a call with analysts, CEO Charlie Ergen sounded a cautionary note about TiVo, which has been winning its patent lawsuits against Dish. If Dish wants to keep offering DVRs to its customers, it might have to strike a deal with TiVo.

"We are joined at the hip in the sense that if we don't get a deal done, those fees will go away for them, and obviously we'll lose customers," Ergen said when asked about TiVo. "A strong Dish Network is probably beneficial to TiVo if we're utilizing their technology."

Dish shares rose 3% Monday to $21.88. TiVo shares jumped 6% to $16.49.
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