Dish Network (DISH)
Q3 2011 Earnings Call
November 07, 2011 12:00 pm ET
Jason Kiser - Treasurer
Charles W. Ergen - Co-Founder and Chairman
Thomas A. Cullen - Executive Vice President of Sales, Marketing and Programming
Robert E. Olson - Chief Financial Officer, Principal Accounting Officer and Executive Vice President
Joseph P. Clayton - Chief Executive Officer, President and Director
R. Stanton Dodge - Executive Vice President, General Counsel and Secretary
Bernard L. Han - Chief Operating Officer and Executive Vice President
Tuna N. Amobi - S&P Equity Research
Benjamin Swinburne - Morgan Stanley, Research Division
Stefan Anninger - Crédit Suisse AG, Research Division
Jeffrey Duncan Wlodarczak - Pivotal Research Group LLC
Vijay A. Jayant - ISI Group Inc., Research Division
Douglas D. Mitchelson - Deutsche Bank AG, Research Division
Jason B. Bazinet - Citigroup Inc, Research Division
Marci Ryvicker - Wells Fargo Securities, LLC, Research Division
Craig Moffett - Sanford C. Bernstein & Co., LLC., Research Division
Previous Statements by DISH
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Thanks, Stephanie. Thanks for joining us. I'm joined today by Charlie Ergen, our Chairman; Joe Clayton, our CEO; Tom Cullen, Executive Vice President; Bernie Han, COO; Robert Olson, CFO; Paul Orban, our Controller; and Stanton Dodge, our General Counsel. Before we go to our opening remarks we do need to do some Safe Harbor disclosure. So for that, we will turn it over to Stan.
R. Stanton Dodge
Thanks, Jason, and good morning, everyone, and thank you for joining us. We invited media to participate in a listen-only mode on the call and ask that you do not identify participants or their firms in your reports. We also do not allow audio taping and ask that you respect that.
All statements we make during this call that are not statements of historical fact constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that could cause our actual results to be materially different from historical results, from any future results expressed or implied by such forward-looking statements. For a list of those factors, please refer to the file of our 10-Q. All cautionary statements that we make during this call should be understood as being applicable to any forward-looking statements we make wherever they appear. You should carefully consider the risks described in our reports and should not place undue reliance on any forward-looking statements. We assume no responsibility for updating any forward-looking statements.
With that out of the way, I'll turn it back over to Jason.
Thanks, Stan. I think Joe actually has some opening remarks that he would like to do.
Joseph P. Clayton
Thanks, Jason, and good morning to those of you on the West Coast, and good afternoon to our East Coast listeners. Now I started back on June 20, so the end of the third quarter really represents my first 100 days with DISH. I had ownership of this quarter's performance so I get to take the credit for the good and the bad on today's call.
First, I'll review the significant modifications and accomplishments plus the areas that will require additional improvement. These include organizational changes, net activations, churn, financial metrics, customer service and marketing communication.
But first, let me address our corporate projects. As you are aware, we have submitted our license transfer applications to the FCC for TerreStar and DBSD. The formal comment cycle ended last Thursday, November 3. We will now work with the Commission to move to closure. Needless to say, these acquisitions are a necessary step in the development of our wireless strategy. In the meantime, we continue to explore our technology and deployment options. I would be speculating to say anything more regarding wireless at this juncture.
On the Blockbuster front, we are still in the process of evaluating our acquired assets by mail, DVDs and games, streaming capabilities, store locations and their operating metrics and, of course, the power of the brand itself.
On the physical distribution front, we have seen good improvement, input traffic and transaction growth at most stores. And we are encouraged with customer enrollments and new promotional offerings. For example, the Blockbuster combo pass, which provides unlimited in-store exchanges along with our by-mail service, has attracted over 600,000 customers in its first few months.
On the content front, some studios are evolving their economic and dwindling months, which creates some challenges. However, we're working with them while developing other sourcing options. It is disappointing that some studios appear to be less than enthusiastic about this channel of distribution and its promotional capabilities. Nevertheless, we will continue to evaluate the performance of each store location individually. We remain committed to maintaining only those stores that we believe will operate profitably.
On the marketing front, we are testing different sales approaches to capitalize on the Blockbuster acquisition. For example, we're currently selling DISH services in 150 Blockbuster stores across America. And just last month, we launched our first nationally coordinated and advertised Blockbuster-DISH marketing initiative, the Blockbuster Movie Pass. This consumer offer for new and existing DISH subscribers includes one year of DVDs and video games by mail, over 20 live movie and entertainment channels and, in addition to streaming of thousands of movies and TV shows to both your TV and PC, all included with the 2-year subscription to DISH. October results are encouraging and I believe that this marketing promotion can be the primary catalyst for positive subscriber growth in the fourth quarter. And more importantly, it's a consumer service that no other pay-TV provider can offer. As an added benefit, we believe that the DISH-Blockbuster cross-marketing and advertising efforts are giving both brands a positive lift in the minds of the buying public.