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DirecTV, Dish Have Tough Third Quarters

New York – Satellite TV providers DirecTV and Dish Network both reported continued tougher times adding new scribers in their respective third quarters, Tuesday. 11/07/2012 04:56:00 AM Eastern

New York – Satellite TV providers DirecTV and Dish Network both reported continued tougher times adding new scribers in their respective third quarters, Tuesday.

DirecTV, the nation’s largest satellite TV service, reported adding 67,000 subscribers in its fiscal third quarter, down significantly from the 327,000 subs it added at the same time last year.

Meanwhile, Dish Network said it lost 19,000 net new subscribers in its fiscal third quarter, compared with a loss of 111,000 in the same period a year ago. The number was also better than predicted by analysts, who had forecast the decline as high as 38,600.

At the end of their respective third quarters, DirecTV said it had roughly 20 million subscribers while Dish said it had about 14 million.

Dish revealed a third-quarter loss due to high litigation costs, and revenue was down 2 percent to $3.52 billion.

The satellite TV provider showed a net loss of $158.5 million for the quarter, ended Sept. 30, compared with net income of $319.1 million.

The company said litigation expenses in the period totaled $730 million, while at the same time it saw higher programming costs and increased advertising expenses related to its Hopper set-top box campaign.

Subscriber acquisition and advertising costs rose 35.7 percent to $123.9 million in the quarter, Dish said.

Average monthly subscriber churn fell to 1.8 percent, from 1.83 percent a year earlier, as average monthly revenue per subscriber rose to $77.57 in the third quarter, from $76.99 a year ago.

Dish recently lost a four-year legal battle with Voom HD Holdings, which the company said reduced net income by $453 million. Otherwise, third-quarter net income would have been $295 million.

Dish also reached an agreement with Gannett in another legal dispute over fees and the commercial-skipping Hopper video recorder.

Some, including EchoStar chairman Charlie Ergen, have recently speculated that Dish’s lackluster core business results could help make a new case to regulators for a merger with DirecTV, although the companies have denied any recent negotiations to that effect.

DirecTV, meanwhile, traced the drop-off in new subscriber additions in the third quarter to a public spat with Viacom over programming fee increases for 26 channels, which went dark for nine days during the battle.

DirecTV's churn rate rose to 1.74 percent, compared with 1.62 percent during last year's third quarter.

DirecTV reported a 9 percent increase in profit to $565 million in the third quarter from the same time last year.

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