Dish Network reported a big profit in the fourth quarter of 2017 thanks to tax reform legislation, and for the first time broke out subscriber figures for its internet-delivered Sling TV from its traditional pay TV customers.
The satellite and internet TV provider reported a net income of $1.39 billion, which included a roughly $1.2 billion benefit from tax reform, compared to $355 million of net income in the year-ago period.
Revenue, however, dropped to $3.48 billion in Q4, down 7 percent year over year from $3.65 billion.
Dish ended 2017 with 2.21 million Sling TV subscribers, compared to 1.18 million in 2016. The company added 160,000 subscribers to its virtual MVPD service for the quarter.
The company’s legacy satellite TV subscriber base continued to contract, dropping about 1.1 million customers over the last year to 11.03 million.
Dish finished the fourth quarter with 13.24 million total pay TV subscribers, with net additions of 39,000 including 75,000 reactivations in Puerto Rico and the U.S. Virgin Islands. In the third quarter Dish wrote off monthly fees from approximately 145,000 subscribers in the region due to extensive damage from Hurricane Maria. While total subscriber figures were up sequentially, they were down 429,000 year over year.
In its 10-K filing, Dish said subscriber acquisition costs are significantly lower than those for traditional pay TV customers, but noted that an increase in OTT subscribers has a negative impact on the company’s pay TV ARPU, as Sling TV customers on average buy lower priced programming services.
At the end of fourth quarter pay TV ARPU was $86.43, down from $88.66 in 2016. Average monthly subscriber churn for Dish’s satellite TV service was 1.78 percent, compared to 1.97 percent in 2016.