Churn, Baby, Churn! DISH-o Inferno!

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OK, a few entertainment providers are losing customers in this recession. When I reported on DIRECTV's (Nasdaq: DTV) earnings last week, it looked like the entire sector had a bomb-proof crash shelter to hide in while the macroeconomic fallout spreads worldwide. But DISH Network (Nasdaq: DISH) seems to be the exception that confirms that rule.

While DIRECTV, Comcast (Nasdaq: CMCSA), Verizon (NYSE: VZ), and many other cable or satellite broadcasting hubs are reporting subscriber growth in these hard times, DISH is dishing out shrinkage. Last quarter, 94,000 net subscribers left the service. That's not a big defection from a customer base that still numbers 13.6 million households, but it's down while others are up, nonetheless.

And the all-important churn rate expanded by 9% year over year to 1.83% per month. If that sounds brilliant next to the 4.2% subscriber churn rate reported by Netflix (Nasdaq: NFLX), you should consider that Netflix calculates quarterly churn while DISH goes with monthly numbers. That skimpy 1.83% monthly turnover rate exceeds 5% on a quarterly basis. TiVo (Nasdaq: TIVO), to name another subscriber business with razor-sharp focus on customer experience, runs at 1.3% monthly churn. DISH comes out on the losing end of many direct comparisons, despite stepping up its customer retention spending in recent quarters.

So DISH looks like the weakest link in the broadcasting chain these days. CEO Charlie Ergen isn't beating around the bush either, telling analysts that "once you get better, then you got to get to be best in class. So, we got a lot of work to do to get there."

You sure do, Charlie. I'll be watching you from the sidelines and buying other entertainment providers until you get your act together.

Further Foolishness:

• Is Comcast the New Netflix?
• Verizon Outgrows Its Wires
• Analysts Say This Stock Is a Double