DIRECTV vs. Dish: Who's Adding More Subs?

Washington, D.C. (May 9, 2012) -- DIRECTV yesterday revealed that it added 81,000 subscribers in the first quarter, missing analysts' estimated forecast of 92,000 subs.

The nation's largest satcaster also failed to have the most sub growth in its category in the first quarter. Satellite rival Dish Network on Monday said it added 104,000 net subscribers, better than the 62,000 estimate from the analysts.

DIRECTV explained the sub growth gap by saying it was focused on keeping "higher quality subscribers" and using stricter credit card policies with new customers. In other words, the satcaster says it was willing to let some subscribers go, particularly ones who subscribe to lower-priced packages.

DIRECTV's churn rate (the cancellation rate) fell from 1.5 percent to 1.44 percent, but that also trailed Dish which reported a first quarter churn rate of 1.35 percent compared to 1.47 percent in last year's first quarter.

Despite the slightly disappointing sub numbers, DIRECTV did report a 12 percent increase in revenues and an eight percent increase in net profit in the first quarter. Dish's net income fell to $360 million in the quarter, compared to $549 million a year ago. Dish revenue did jump 11 percent to $3.6 billion.

Plus, in the last financial quarter, Dish added 22,000 net subscribers while DIRECTV added 125,000 net subscribers in the fourth quarter of 2011. DIRECTV now has 19.7 million subscribers to Dish's 14 million.

However, with DIRECTV executives saying they will reduce spending on programming acquisition, among other projects, in 2012, the company will likely have to offer more customer inducements to keep sub growth up. For instance, DIRECTV recently announced that it was lowering the price of its NFL Sunday Ticket to new customers to $199 while it will remain free for new subs.