(New Coverage) Dish Network – Trefis price of $24.31, 25%+ upside to market price
Trefis has launched coverage of Dish Network which provides satellite TV service in the US. Dish makes money by charging its 14 million subscribers monthly subscription fees for its satellite TV service along with incremental charges for HD and DVR service. Satellite TV service constitutes 70% of the $24.31 per share Trefis price for Dish.
The company competes with other satellite, cable and telco pay TV providers such as DirecTV, Comcast, Time Warner Cable, AT&T and Verizon. Dish’s market share amongst the 108 million US households that pay for TV service is about 13% today, up slightly since 2006. Historically, Dish has benefited from its relationship with AT&T which helped Dish distribute its TV service to AT&T customers. About 17% of Dish’s new subscribers in 2008 were through AT&T. However, AT&T is now partnered with Dish’s satellite competitor DirecTV which disadvantages Dish at a time of increasing competition amongst satellite, cable and telco providers. Bundling of services (TV, internet and phone) helps cable and telco operators attract users away from satellite providers which are limited to relationships with telcos to provide bundled services.
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We expect Dish’s market share to suffer initially as a result of losing distribution through AT&T; however, we believe that Dish will be able to maintain share over the long-run. Within Dish’s content on our platform, you can see how Dish Network Pay TV Market Share impacts the company’s stock price.