The media market is getting pretty easy to figure out.
As predicted, DISH Network
That's more in line with the subscriber bleeding seen at cable operators Comcast
DISH Network isn't regarded as a premium product worth a serious investment, which makes it a disposable commodity just like the cable guys. DIRECTV goes out of its way to offer exclusive programming packages at premium prices, sacrificing potential mass-market sales in favor of stable, committed customers. If that sounds like choosing marriage over a series of random flings, that's exactly what DIRECTV is doing.
DIRECTV is churning through transient customers at a lower rate, quarter by quarter, and ended 2010 at less than 1.5% per month. By contrast, DISH's monthly churn was 1.72% through the first nine months of 2010 but 1.76% at the end of the year.
The company is trying to make up for the subscriber losses by increasing prices, which helped fourth-quarter sales grow by 8.2% year-over-year to $3.2 billion -- but may also have hastened the customer exodus. Earnings jumped 41% to $0.56 per share and beat analyst estimates, but investors know that subscription services are nothing without subscribers and are selling DISH stock today.
The future of media will be dominated by all-digital players, led by Netflix
Fool contributor Anders Bylund owns shares of Netflix but holds no other position in any of the companies discussed here. Amazon.com and Netflix are Motley Fool Stock Advisor recommendations. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.