Illustrating the relatively lower margins of virtual MVPD services, the total profit delivered over time by a Sling TV customer is only a quarter of what Dish Network gets from a traditional satellite subscriber, MoffettNathanson analyst Craig Moffett said.

Moffett calculated that the “CLV” (customer lifetime value) of a traditional satellite TV customer is $1,100 vs. just $274 for a Sling TV user.

Moffett conceded that the customer acquisition costs for the IP-based Sling TV platform are significantly lower, with subscribers able to buy in without a truck roll. But that savings doesn’t offset the lower customer profitability over time.

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Each time Dish replaces a satellite user with an OTT customer, “they forgo a future stream of contribution dollars equal to about $1,950 … but why recognize an immediate benefit of about $850,” Moffett said.

“In the substitute OTT subscriber, they gain a future contribution stream worth about $325, and they incur upfront cost of about $55.”

In his latest report, which attempted to peg the true trading value of Dish stock—a math vastly complicated by the unknown value of the operator’s wireless spectrum—Moffett broke down the unhappy reality of Dish’s pay-TV business.

Dish’s satellite subscriber base is shrinking fast—7.8% in 2016, the analyst calculated. In fact, the rate of linear attrition is so fast, the growth of Dish’s OTT platform can’t keep up with it. Moffett set total Dish subscriber shrinkage at 4% last year.