Sling TV reports first-ever subscriber decline

Increased competition from competitors like Hulu and YouTube TV and even Netflix has finally taken its toll on Dish's live TV streaming service, Sling TV. This week, the company reported its first-ever decline in Sling TV subscribers, with a drop of 94,000 customers in the fourth quarter. In the year-ago Q4, Sling TV had gained 50,000 subscribers, for comparison. The streaming service ended the year with 2.59 million total subscribers, Dish says.

In prior quarters, Sling TV's gains have helped to offset some of the losses from Dish's traditional pay-TV business. But in the fourth quarter of 2019, both sides of Dish's business appear to be in jeopardy. On the pay-TV front, the company lost around 100,000 subscribers, in addition to 94,000 it lost from Sling TV.

By year-end 2019, Dish had 11.99 million total subscribers compared with the 12.32 million it reported at the end of 2018.

Although five-year-old Sling TV was one of the first TV streaming services to hit the market, in the years since it's battled for cord cutters' dollars against a growing number of alternatives. In addition to YouTube TV and Hulu with Live TV, Sling TV has also had to compete against niche live TV services like Philo and sports-focused fuboTV.

But Sling TV also today faces competition from other streamers, even if they're not squarely aimed at cord-cutters who want access to live TV. After all, consumers have only so much money in the budget for entertainment - and today, there are so many options for streaming TV besides Netflix. CBS, for example, streams news, TV and sports via its CBS All Access service; premium channels like HBO, Cinemax, Starz, and Showtime offer their own over-the-top subscriptions; Amazon Prime Video is wrapped into Amazon's expensive annual membership; and now new services from Disney and Apple have also arrived.

In the months ahead, the market will expand even further as new streaming services Peacock (NBCU), HBO Max (WarnerMedia/AT&T), and Quibi prepare to launch.

Sling TV's drop in subscribers follows a price hike announced in December which raised prices of its two tiers from $25 each to $30, or $45 for both. It also follows a number of programming changes to the Sling TV lineup, the company noted.

In Dish's 10-K regulatory filing, it explained:

"This decrease in net Sling TV subscriber additions is primarily related to increased competition, including competition from other OTT service providers, and to a higher number of customer disconnects on a larger Sling TV subscriber base, including the impact from Univision, AT&T and Fox RSNs' removal of certain of their channels from our programming lineup."

In June and November 2018, Univision removed channels from the Sling TV lineup, some of which were restored with a March 2019 agreement. In October 2018, AT&T removed HBO and Cinemax channels from the Sling TV lineup, which have not been restored. And in July 2019, Fox Regional Sports Networks removed its channels from the Sling TV lineup. The channels have since been acquired by Sinclair.

With programming in a constant state of flux, while subscription prices increase, many consumers don't see the value in over-the-top television - especially when there's so much to watch elsewhere and for much less.

In addition, Sling TV's app isn't as well-designed as those from rivals like Hulu with Live TV and YouTube TV, or as innovative when it comes to the roll out new features or personalization technology. Hulu, for example, customizes recommendations based on viewer behavior and now, explicit signals from new Like and Dislike buttons. Sling TV, meanwhile, didn't bother with personalized recommendations until last year.

Dish is already diversifying, in light of the bad news ahead for pay-TV. As a part of its deal with T-Mobile and Sprint ahead of their merger, Dish is acquiring Sprint's prepaid business, including Virgin Mobile and Boost Mobile, plus all of Sprint's 800 MHz spectrum. Dish will utilize T-Mobile and Sprint's cell sites to run its own wireless business for seven years, while it builds its own 5G network, the agreement said. The company may also look for strategic partners as it grows its wireless business, the company noted on the earnings call today.