You’ve probably seen the commercials: The lights come up on character actor and all-around imposing figure Danny Trejo, sitting in a chair and directly addressing the camera.
“STOP PAYING TOO MUCH FOR TV!” he admonishes with a typical snarl.
Trejo attempts to sell viewers on the idea that cable companies are “evil” and will promise one low rate at the beginning of service and then, “WHAM! Your bill is over a hundred bucks a month,” as goes one of multiple versions.
The point of all the versions, however, is that instead of paying too much with those “evil” television providers, switch to Sling Television. It’s cheaper than traditional satellite and cable service, eschews annual contracts and works directly over an internet connection with an array of a consumer’s existing internet-enabled technology (computers, Rokus, set-top boxes, USB sticks, etc.).
There’s only one problem with Trejo’s portrayal of the big, bad TV providers as evil: He works for one of them. Sling Television is owned by DISH.
DISH’s finances illustrate bully tactics
| YEAR | REVENUE* | CHANGE | INCOME** | CHANGE |
| (in millions) | (%) | (in millions) | (%) | |
| 2010 | $12,543.8 | n/a | $1,940.8 | n/a |
| 2011 | $12,976.0 | 3.4% | $2,928.0 | 50.87% |
| 2012 | $13,085.9 | 0.8% | $1,221.8 | -58.27% |
| 2013 | $13,559.5 | 3.6% | $2,127.5 | 74.13% |
| 2014 | $14,130.6 | 4.2% | $2,028.3 | -4.66% |
| 2015 | $14,524.5 | 2.8% | $2,052.7 | 1.20% |
*Listed as subscriber-related revenue
**Listed as operating income
According to DISH’s annual filings with the Securities Exchange Commission, subscriber-related revenue has grown in the five years ending 2015 at an average annualized rate of 3.7 percent. Within the same period, DISH reported a marginal decline in subscribers for its pay-TV service, with about 14.6 million as of 2012 but only 13.9 million subscribers as of 2015 (0.4 percent decreases per year on average).
The resulting conclusion can be that, despite marginal declines in subscriptions, DISH has managed to grow revenue significantly. The source of this increasing revenue? Higher rates for service.
Indeed, the company’s reported average revenue per user (ARPU) metric bears this theory out: In 2011 (the earliest year for which DISH’s ARPU was recorded), each customer brought in $76.45 on average (based on dividing subscriber-related revenue by total subscribers in a given period). By 2015, ARPU had grown to $86.79 (a 4.3 percent annualized average increase).
That’s just more than a $2 increase per subscriber per year since 2011.
So even with fewer subscribers, DISH’s subscription-based revenue has been increasing on the backs of customers who are paying more for their TV service.
On a related note, DISH’s operating profit has also been increasing at a marginal rate of 1.4 percent on average during the five years to 2015.
If you purchase Sling TV, you’re paying DISH
DISH’s current Oklahoma subscribers recently lost of a couple of channels after contract renegotiations between service provider DISH and station owner Griffin Communications failed.
Interestingly, as two commenters noted below the Tulsa World story linked above, Sling TV has become a new buzzword among those seeking to cut the cord. The online-based streaming-television service offers packages of 31, 45 and 56 channels for $20, $25 and $40 per month, respectively. None of those includes the channels that were lost in Griffin’s recent renegotiation.
Yet even as DISH’s Sling service seeks to shore up its subscriber base (and Sling subscriptions are included in overall subscriber counts as of 2015), that business strategy could ultimately shoot DISH customers in the foot. According to DISH’s 2015 report:
… our Sling TV subscribers generally have lower priced programming packages than our DISH branded pay-TV subscribers. Accordingly, an increase in Sling TV subscribers has a negative impact on our Pay-TV ARPU.
Gee, I wonder where DISH will find the revenue to offset declining ARPU if Sling really takes off?
Since DISH owns Sling, you may want to seek other options if you’re looking to stick it to the corporation that’s been giving its subscribers the business for years.
Plus, as Alex Cranz with Gizmodo and several commenters below her story attest, Sling’s delivery still lacks a lot to be desired in terms of network lags, buffering and display glitches. Early adopters appear to be doubling as beta testers for the technology.
In the end, DISH remains the “evil” company Danny Trejo’s would-be sermon warns unsuspecting consumers against. Those same consumers would be, to use Trejo’s term, “crazy” to just swap one DISH product for another if that’s their current provider.
