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Dish CEO says company endured hard times before

By Jeff Smith, Rocky Mountain News (Contact)

Published November 11, 2008 at 12:05 a.m.
Updated November 11, 2008 at 12:43 a.m.

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Dish CEO Charlie Ergen says some consumers are going to downscale to save money in today's market and the company needs to take that into consideration.

Photo by The Rocky File Photo

Dish CEO Charlie Ergen says some consumers are going to downscale to save money in today's market and the company needs to take that into consideration.

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Dish CEO Charlie Ergen told analysts Monday that the satellite TV provider has been through difficult times before that required it to tread water for a while before conditions changed.

Here are some excerpts from the third-quarter conference call:

On Dish's challenge to add subscribers:

"In today's environment the question is how much are you going to spend to go get customers and what kind of customers can you get? So obviously people are shopping for deals and customers are flipping around and they have a variety of choices. I think at some point in time you have to be willing to tread a little water based on the marketplace out there."

On possible price increases in 2009:

"I think you have to balance what you can do with where the market is. Almost everything in programming goes up at least the rate of inflation if not higher. The real key is who can get their operational costs under control and scale those costs. We probably didn't pay the kind of attention for three years that we should have to those things, and you can't turn that around in two quarters. But you can certainly turn it around (eventually). It's a good environment to do it. People are focused, people are worried about their jobs.

On customer churn:

"One is just our normal churn. And that probably is under some pressure from the economy. The second and third parts of churn really are piracy and really consumer fraud kind of stuff. (Dish is sending out set-top box "smart cards" based on a new encryption system to fight piracy and has been terminating retailers that allegedly engaged in consumer-account fraud).

On high-def programming:

"We have stepped up our marketing in HD in terms of TurboHD (all high-definition program package). We're a little concerned about the fact that consumers have pulled their horns in a little bit on high-end product. But we still think that's a good place for us to play, and we think we're very competitive in that field. There also is the other side of the market where people are going downscale a little bit. So McDonald's is having really good numbers. So there's certainly a flight to saving money by consumers. We have to take that into consideration."

On why Dish lost its partnership with AT&T to DirecTV:

"That's probably more properly answered by AT&T. I don't think HD channels would have been a factor. Obviously we had the power of incumbency so there has to be other motivations to make a change and you'd really have to just ask AT&T those questions. I think we're very competitive (with DirecTV).

On surviving the current market turmoil:

"The market is going to get better at some point in time and I think it's difficult for management teams to tread water, (but) there's been a few times in our life where we had to tread water. I think we're always pretty conservative (but) we're probably more conservative than we normally are. And I think we'll look for opportunities and make sure that we can take advantage of them if they develop."