While the executive has issued previous warnings in the same vein, his comments during Univision’s third-quarter earnings call with Wall Street analysts suggested a new chapter in the cord-cutting era. Carriage disputes have become rampant as the pay-TV bundle shows the strain of competing, lower-cost consumer options, but the finality of the language this time around is striking. The impasse and its effect on Univision, not surprisingly, dominated the 45-minute call.
Counting both traditional satellite and its skinny-bundle Sling TV service, Dish has about 12.5 million subscribers. Founded in 1980, it staked out a leadership position in packaging offerings for Hispanic viewers in the U.S. under its Dish Latino brand, which has had about 1 million subscribers until recently. Sadusky said Univision estimates between 200,000 and 300,000 of those customers have fled.
“Conversations have been ongoing,” Sadusky said when asked for an update on talks, “but we’ve been really challenged.” While Univision has made “every reasonable effort,” the CEO added, “it’s all about economics. It’s very odd that they’ve been unwilling to recognize the power of the Hispanic audience. It’s really strange. Normally, these conversations are challenging … but their position has been bizarre.”
On Dish’s third-quarter earnings call last week, CEO Charlie Ergen conceded the Univision outage (as well as a historic new fight with HBO, the premium network’s first blackout in its 46-year history) explain why Dish lost 367,000 subscribers in the quarter. But he said the situation had hardened to the point that he would risk a “backlash” from subscribers if he were to restore Univision, given the potential price hikes that move could require.
Univision’s third-quarter results, reported earlier this morning, showed the impact of the Dish battle, with total revenue slumping 17%.
While Univision is privately held, it has elected to hold regular conference calls and report quarterly numbers in order to communicate with the investment community and the media. Sadusky joined the company last spring, replacing longtime chief Randy Falco amid a wave of executive turnover. He has led a strategic return to the company’s traditional Hispanic media roots after a period of exploring digital and crossover English-language content during Falco’s regime.
Sadusky, who had a long stint at Telemundo and in the local TV sector before coming to Univision, told analysts that a marketing campaign would soon kick into gear. The ads will advise Univision viewers of the end of the road with Dish, pushing them toward direct-to-consumer streaming service Univision Now or to other pay-TV providers. “Once we begin to crank up that messaging, you’ll see a continued decline in subscribers to Dish,” Sadusky predicted.
Asked about Dish’s subscriber outlook, CFO Peter Lori said “you’d have to ask our friends at Dish” about the numbers. But based on the satellite provider’s earnings call last week, Lori characterized the company’s view as gaining short-term from not paying for Univision programming, but suffering a longer-term “hangover” without Univision as a subscriber draw. “It’s the opposite for us. We’re feeling some short-term effect but we’re looking at things through a longer lens in terms of how we make business decisions.”
Excluding the Dish impact and a one-time, $41 million charge related to a distribution contract, the company posted a double-digit gain in subscriber revenue, Univision said. “Our customers over-index over-the-air,” Sadusky said. “That makes them great targets for MVPDs” who can sell them pay-TV packages.