Market Share Effects Now Showing at Cablevision and Dish

By

Competitive markets often are tough on competitors with less market share, on both revenue and cost fronts. When scale matters, having less scale than the market leaders means margin pressure and higher costs.

The latest quarterly reports from Dish Network and Cablevision Systems illustrate the problem. Dish Network reported $3.56 billion in revenue for the quarter ending March 31, 2013, compared to $3.58 billion for the same period in 2012. But net income dropped a whopping 40 percent to $216 million, compared to $360 million, year over year. The decrease was primarily due to higher subscriber-related expenses driven by increased programming and subscriber acquisition costs, Dish Network said.

Cablevision Systems likewise reported a surprise first-quarter loss caused by higher costs and lower revenue.

Neither company is in a death spiral, where collapsing revenues and rising costs, inability to obtain financing on reasonable terms or inadequate cash flow simply do not allow a firm to continue as a going concern.

On the other hand, stagnant or falling revenues, with higher costs (absolute or relative) are fairly characteristic of firms in danger of failing.

Some argue that two or three firms in a market change market dynamics and competition. Beyond that, the impact tends to be quite muted. In a way, that tends to support the notion that in highly capital intensive businesses, there really is not room for more than a very few viable contestants, long term.

Dish used to compete in markets where it faced one key satellite competitor and one key cable competitor. These days, Dish faces at least one satellite, one cable and one telco competitor, under conditions where two of the contestants can bundle three to four services in a bundle, in a mature market facing new competition from Internet alternatives as well.

Cablevision likewise used to face two satellite providers. Cablevision now faces a well-heeled telco as well as the other two legacy competitors. And all the evidence suggests the telco is taking market share from the cable provider.

At the same time, Dish has been battling a DirecTV operation that is much larger, and taking share from Dish.

That is why Dish now is so intent on diversifying into the mobile business.




Edited by Jamie Epstein

Contributing Editor

SHARE THIS ARTICLE
Related Articles

Coding and Invention Made Fun

By: Special Guest    10/12/2018

SAM is a series of kits that integrates hardware and software with the Internet. Combining wireless building blocks composed of sensors and actors con…

Read More

Facebook Marketplace Now Leverages AI

By: Paula Bernier    10/3/2018

Artificial intelligence is changing the way businesses interact with customers. Facebook's announcement this week is just another example of how this …

Read More

Oct. 17 Webinar to Address Apache Spark Benefits, Tools

By: Paula Bernier    10/2/2018

In the upcoming webinar "Apache Spark: The New Enterprise Backbone for ETL, Batch and Real-time Streaming," industry experts will offer details on clo…

Read More

It's Black and White: Cybercriminals Are Spending 10x More Than Enterprises to Control, Disrupt and Steal

By: Cynthia S. Artin    9/26/2018

In a stunning new report by Carbon Black, "Hacking, Escalating Attacks and The Role of Threat Hunting" the company revealed that 92% of UK companies s…

Read More

6 Challenges of 5G, and the 9 Pillars of Assurance Strategy

By: Special Guest    9/17/2018

To make 5G possible, everything will change. The 5G network will involve new antennas and chipsets, new architectures, new KPIs, new vendors, cloud di…

Read More