Despite Weak Results, Dish Network Should Regain Market Share in 2012
Source: Trefis Estimates
Dish Network’s (NASDAQ:DISH) posted its Q3 2011 results recently. While subscriber losses continued, the company is holding a more optimistic view about next quarter. While rival DirecTV (NASDAQ:DTV) had record subscriber additions, Dish lost 111,000 net subscribers in Q3 2011. [1] The loss was an improvement over Q2 2011, but still nowhere near DirecTV’s degree of improvement as the gap between the two companies widened. The other service providers that have gained at the expense of Dish are AT&T (NYSE:T) and Verizon (NYSE:VZ).
Our price estimate for Dish Network stands at $31, implying a premium of about 30% to the market price.
See our full analysis for Dish Network
Optimism About Q4, Can It Extend Beyond?
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- How Will The Cyber Attack Impact Dish’s Q1 Results?
- Is Dish Network Stock A Buy Despite Many Headwinds?
- Will Dish Network Stock Continue To Underperform?
Dish seems to be optimistic about Q4 and expects positive net subscriber additions. The company expects cross-marketing opportunities, the improving brand of Blockbuster and improving customer service metrics to help drive these subscriber additions. The company is selling pay-TV service in Blockbuster stores and is marketing Blockbuster services to its current pay-TV subscribers. This sounds good on paper, but how effective is it going to be?
It’s not clear whether this will have a great impact on Q4, but in the long-term with the right content and offering, Dish can certainly improve its subscriber trends. We expect the company to mildly gain share starting in 2012. This will not only be aided by Blockbuster, but also by the deployment of mobile broadband. However the impact of the latter isn’t likely to come until after 2012.
Nevertheless, the primary ongoing issue for Blockbuster pertains to the content side. It seems that the company is finding it hard to negotiate deals with media companies. [1] They need to pick this up quickly, or companies like Netflix (NASDAQ:NFLX) and Amazon (NASDAQ:AMZN) may make it more difficult to make inroads in the market.
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Notes:
- Dish Network’s Q3 2011 Earnings Transcript, Seeking Alpha [↩] [↩]