Is Blockbuster Helping DISH Turn the Corner?

Is DISH Networks' (NAS: DISH) bargain-bin buy of Blockbuster working out for the satellite TV provider? All signs point to "maybe." DISH put up fourth-quarter and full-year earnings this morning, and chalked up the strength in its subscriber figures to new services carrying the Blockbuster branding.

Revenue in the fourth quarter rose 13%, to $3.63 billion, while net income was $313 million, or $0.70 per share. For the full year, revenue came out to $14.05 billion, with earnings of $1.52 billion, or $3.39 per share.

However, the real story is in the subscriber digits. The company gained roughly 22,000 net subscribers during the quarter, which handily topped the Street's estimates of adding just 5,000 subscribers. The quarter's gains reverse a couple of back-to-back losses. CEO Joe Clayton said, "By introducing new Blockbuster-branded services, we've begun to turn the tide in subscriber losses while continuing to face increased competitive pressures."

DISH gained 58,000 net subscribers in the first quarter, only to lose 135,000 in the second quarter and 111,000 in the third. All of those figures add up to a loss of 166,000 net subscribers for the full year, with DISH's total subscriber base closing out the year just shy of 14 million. That's a big drop-off from the 33,000 subscribers gained in fiscal 2010.

Other service providers have also been reporting slower losses, giving hope that cord-cutting in favor of Web streaming may be on the decline. Time Warner Cable (NYS: TWC) and Comcast (NAS: CMCSK) also saw slower defections recently. Larger Time Warner bid farewell to 129,000 residential video subscribers last quarter, while Comcast lost just 17,000, the smallest drop in five years for that company.

Even as DISH hopes to take on Netflix (NAS: NFLX) in online streaming, everyone is jumping in headfirst. Comcast just unveiled its own offering, Streampix, which has the same hurdle as DISH in that the streaming offering is only available to active cable subscribers. Coinstar (NAS: CSTR) is finally about to deliver after years of promises on a streaming offering, partnering with Verizon later this year. And Amazon's Prime Instant Videos just saw its first birthday yesterday. It's getting crowded in here.

DISH still has high hopes of using all that spectrum it's sitting on to launch a 4G wireless broadband network, but is still waiting on FCC clearance. In the meantime, only time will tell if this quarter's subscriber additions are part of a larger trend or just a speed bump on the way down.

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