Dish Network between a rock and hard place

Interesting break out from Colin Dixon @ nScreenMedia on the economics of streaming vs. traditional pay TV providers.

Monthly revenue per customer:
Dish Network — $103
Sling TV — $20 (↓ 81% less)

The cost to acquire a customer:
Dish Network — $700
Sling TV — $30 (↓ 96% less)

If these numbers hold, then it would take the streaming provider 1.5 months to re-coup the customer acquisition costs versus 6.8 for traditional pay TV.

There are other tradeoffs for streaming TV providers.

Positive tradeoffs:
Less customer hardware (satellite dish, set-top-box, etc.) to manage
2) Higher margin options for advertising due to digital style targeting

Negative tradeoffs:
Higher churn due to lack of annual contracts
2) Thinner margins due to lower monthly bill

Quote from Charlie Ergen — Chairman and CEO @ Dish.
“I think it’s fair to say that advertising will be a bigger portion of revenue and margin for OTT than it is in linear TV.”

Leave a Reply