Dish heads into 2012 showing momentum
The satellite broadcaster takes steps to add subscribers and build a larger base to market its other products.
Although for the full year Dish still lost 166,000 subscribers, what's important is that the momentum turned positive and that bodes well for 2012. The company plans to keep prices frozen this year. While this decision could affect the growth of company's ARPU (average revenue per user) and consequently revenues, it will help it sustain subscriber momentum and build a larger base that it can leverage for marketing other products. These other products include Blockbuster movie rental service and recently launched broadband service in partnership with ViaSat.
Dish will be closing 500 additional Blockbuster stores that are making losses. This will help the company optimize its movie-rental business and improve margins. Furthermore, even though the pay-TV market in the U.S. is getting saturated, Dish plans to focus on Hispanic customers as well as the business-to-business segment for incremental growth.
We are in process of updating our valuation model for Dish Network in light of recent earnings results.
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