Strong 3Q Sales, Losses For EchoStar
By TWICE Staff -- TWICE, 12/6/1999
EchoStar Communications reported strong third-quarter growth in new subscribers to its digital direct-broadcast satellite programming service, along with growth in revenue and an equally major jump in its net loss.
For the three months the operator of the Dish DBS network posted a net loss of $124.4 million, up from the $52 million loss recorded in the same period last year, while total revenue increased 81.6% to $427.5 million. For the first nine months EchoStar's loss climbed to $572.9 million, from the year-earlier $147.6 million, and revenue climbed 56.2% to $1.09 billion.
During the quarter the company's Dish subscription revenue nearly doubled to $356.4 million, with the help of the addition of 375,000 net new viewers, raising its total subscriber count to 2.97 million. But at the same time its marketing expenses more than tripled to $200.6 million, mainly on a 214% surge in subscriber promotion subsidies to $180.9 million.
Separately, EchoStar announced an agreement that could boost its viewership by a full 25%, though achieving that will further boost expenses. The company said it has agreed to offer a free conversion to the Dish package to the 1.4 million existing and inactive subscribers to the C-band service offered by TV Guide subsidiary Superstar/Netlink Group.
Group customers who opt to convert will be given a free Dish system, along with free installation and a period of free programming. As part of the agreement, which is to be exclusive, EchoStar will give the Group an up-front $10 million payment, then provide additional immediate and residual per subscriber payments for conversions.
Commenting on the agreement, EchoStar CEO Charles Ergen said it is "only a matter of time until most of these C-Band customers transition to a high-power service." With his company having an inside track, he added, "we're confident that we will see a large portion of them convert to the Dish Network."
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