Dish Network Continues to Make Money Despite Customer and Employee Hatred
Customers and employees both really hate Dish Network, but it seems that being disliked may not actually be bad for business.
According to 24/7 Wall Street , Dish's own subscribers are less then enamored with the company. The company was even named to MSN.com's 2013 Customer Service Hall of Shame due to its "aggressive sales tactics, confusing contracts, and unreasonable cancellation fees."
And if being hated by your customers is not enough, Dish's employees also despise the company which, according to 24/7 Wall Street's analysis of Glassdoor data, was rated as the worst company to work for last year. According to Glassdoor, only 33% of Dish employees recommend it as a place to work and only 45% approve of the performance of CEO Joseph Clayton. Direct rival DirecTV is recommended as a place to work by 59% of its employees and 79% of DirectTV workers surveyed approve of their CEO Michael D. White.
It doesn't matter if you need it
While Dish may be hated by customers, the company is not exactly in a field known for being loved by the general public. Both the cable companies and DirecTV have had their share of customer complaints, so it's not like Dish is competing for customers against any beloved institutions. Direct-vs-Dish.com, a website that compares the services, has numerous mixed reviews for both products, but the hate is not all aimed at Dish .
Kris from Morgantown, W.Va.'s opinion of DirecTV was in line with many of the comments on the site. "Service was poor and went out every time it rained. Customer service did not help. Got tired of it and switched to cable."
Still, much of the hate on the site is reserved for Dish.
Kristine from St. Louis, posted on the site that Dish was, "the absolute worst company I have ever had to deal with."
It's all about the money
Despite it earning the dislike of both the public and its employees, Dish provides a service the public wants at a price that's generally significantly lower than cable and a little lower than DirecTV in the first year of a contract, and much lower in ongoing years. Since both satellite companies offer different channel packages, it's tough to compare directly, but, the entry level package on DirecTV starts at $24.99 a month (rising to $54.99 after year one) while Dish comes in it $19.99 and stays there.
Price is, of course, not the only factor, as both services have specialized offerings. For example, the NFL Sunday Ticket, which allows fans to watch all out-of-market NFL games, is a DirectTV exclusive, but price has driven people to do business with companies that would not be their first choice. American Airlines, for example, was also on the 24/7 Wall Street list of most-hated companies, but how many customers would willfully avoid the airline if it had the lowest fare to their destination?
Both Dish and DirecTV have been growing and though DirecTV came first and has always had more subscribers, Dish has had a steadily upward trajectory. According to Bloomberg, in 2012, the last full year of subscriber data available for both companies, "DirecTV added 199,000 net U.S. subscribers, while Dish gained 89,000." Those numbers are nothing like they were during the peak growth period for satellite -- in 2007, the article says, DirecTV posted 878,000 additions and Dish had 675,000 -- but growth is growth.
Dish reported in the quarter ending Dec. 31, 2013, that it had 11.2 million subscribers, an increase of 220,000 subscribers. In its last quarterly report, filed in November 2013, DirecTV ended the quarter with 20.16 million subscribers, compared with 19.98 million subscribers reported for the prior quarter.
Dislike makes you vulnerable
Investors certainly have not punished Dish as its stock price has climbed steadily over the last year.
That said, companies that are well-liked by customers have more leeway in a changing market than those that are not. If people generally dislike Dish, but subscribe based on price, they are more likely to leave when someone else offers a similar package on a platform with a better reputation. This theoretically makes Dish vulnerable to cord cutting -- the practice where people (largely younger people) go without cable or satellite service and instead use a combination of online services like Netflix and Hulu.
That practice, however, seems much more likely to eventually impact the higher-priced cable and even DirecTV customers as the savings from eliminating Dish is simply not as large. That said, for all the media hype surrounding the idea that customers will ditch cable and satellite services in droves, in reality, that has yet to happen.
"In 2014, U.S. cable, satellite, and telco TV are expected to end the year with 103.1 million subscribers, up just a smidge from 102.5 million last year, according to a new study by Parks Associates," Variety reported in January. And, the article continued, that subscriber loss for cable over the past few years has occurred "as consumers have switched to satellite and telco providers."
Those numbers suggest that while Dish may not have to clear space on its bulletin board for thank-you letters from satisfied customers, it's actually doing well -- and should continue to do well -- not matter how much its customers and employees dislike it.
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The article Dish Network Continues to Make Money Despite Customer and Employee Hatred originally appeared on Fool.com.Fool contributor Daniel Kline has no position in any stocks mentioned. The Motley Fool recommends DirecTV and Netflix. The Motley Fool owns shares of Netflix. 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. The Motley Fool has a disclosure policy.
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