A looming dispute with AT&T (NYSE:T), the new owner of HBO, sent shares of DISH Network (NASDAQ:DISH) down in October. It's not simply that the two sides could not agree on a carriage deal; there's the broader question of whether this means the satellite/streaming company will face multiple problems as deals with various channel owners come up for renewal.
After closing September at $35.76, shares fell to $30.74 at the end of October, a 14% drop, according to data provided by S&P Global Market Intelligence. That trend did not continue into November, as shares have recovered somewhat, closing at $32.12 on Wednesday.
DISH has been making inroads with its Sling live-cable streaming service. That allows customers to cut the cord with traditional cable or satellite but still have access to some popular streaming channels. HBO was integrated into that platform, as well as on DISH's satellite service. Consumers did not get a price break on HBO, but they did receive it in the same fashion they would with a traditional cable-based subscription.
In October, the battle was just beginning, and AT&T had not pulled HBO from DISH's service (that has since happened). DISH has claimed that AT&T wanted to be paid for a guaranteed number of subscribers whether that many people signed up or not.
"Plain and simple, the merger [with HBO] created for AT&T immense power over consumers," DISH Senior Vice President Andy LeCuyer said in a press release. "It seems AT&T is implementing a new strategy to shut off its recently acquired content from other distributors."
Shares in DISH fell on speculation that either a deal would not be reached or that the company would make an agreement worse than its current one. It's worth noting that AT&T owns DIRECTV, which is DISH's most direct competitor.
While the HBO issue and access to content will remain important for DISH, the company has a bigger problem: It lost 341,000 net subscribers in the third quarter. Those numbers are actually a little worse than they appear since DISH lost 367,000 satellite customers and added 26,000 lower-paying Sling live-streaming subscribers.
Solving the HBO dispute remains a priority, but DISH has to figure out how to keep consumers from cutting the cord. That's a problem that likely can't be solved, and the question for the company is exactly where the bottom will be. That's a somewhat bleak future, as it does not appear that Sling gains will make up for satellite losses.