Dish fights slack subscriber growth with free iPads
After seeing subscriber growth slow in the first quarter, Dish Network (Nasdaq: DISH) said it will begin offering new customers who order its multiroom DVR a free iPad 2 next week.
Under the promotion, new subscribers who order the company's Hopper with Sling DVR and sign a two-year contract will be able to get a free iPad or receive discounts on programming packages, Dish said. The promotion runs from May 22 through Sept. 18.
News of the promotion came less than a week after Dish reported that it gained just 36,000 net video subscribers in the first quarter--a big drop from the 104,000 subscribers it signed in the first quarter of 2012.
Apple (Nasdaq: AAPL) sells the 16 GB iPad 2 for $399, and its new iPad with Retina Display costs $499 for the 16 GB version. While Dish will likely receive volume discounts by purchasing the iPad 2 in bulk, the promotion could result in an increase in its subscriber acquisition costs for the third quarter.
Several other pay TV distributors have run similar promotions involving consumer electronics giveaways for new subscribers in the last two years. In March, AT&T (NYSE: T) began offering new U-verse subscribers a free Xbox, Kindle Fire, Nexus 7 or Sonos Play 3 music player. Time Warner Cable (NYSE: TWC) ran a holiday promotion late last year with Best Buy in which it offered new triple-play subscribers who ordered service at Best Buy stores a free Xbox 360 gaming console. Frontier Communications (Nasdaq: FTR) ran a promotion last year in which it offered new subscribers $500 gift cards for the Apple Store.
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