Dish Network (DISH) has a problem.
The country's second-largest satellite television provider posted disappointing quarterly results on Wednesday morning.
Revenue dipped slightly to $3.57 billion, surprising analysts who were expecting a small advance. Dish's quarterly profit of $0.50 a share was woefully short of both the $0.75 a share it delivered a year earlier and the $0.72 a share that analysts were forecasting.
Good luck winning over Wall Street when you miss on both the top and bottom lines.
There's a popularity problem at Dish. It may market itself as the cheaper alternative to DIRECTV (DTV) and many traditional cable providers, but TV buffs aren't buying it. Dish closed out the quarter with 10,000 fewer subscribers than it had three months earlier, and it may very well get worse.
We're now entering the second month in the dispute between Dish and AMC Networks (AMCX), and that means that Dish's 14 million subscribers still don't have access to AMC's namesake channel and its subsidiaries, including WE, IFC, and Sundance.
These may seem to be fringe cable properties, but keep in mind that AMC is the only cable network that has scored the Emmy for Outstanding Drama Series in four consecutive years.
The Walking Dead
Since the end of the already disappointing quarter, Dish customers have been shut out of the marquee AMC channel that serves up cult favorites Breaking Bad, Mad Men, and The Walking Dead.
In other words, this current quarter isn't likely to get any kinder for Dish in keeping its 14 million -- and shrinking -- subscribers happy. It may be true that AMC is asking for too much money for carriage rights through Dish, but that's not going to stop subscribers from seeking out new providers that carry the full gamut of cable programming.
Dish points to its success in achieving year-over-year growth in gross activations and a reduction in churn, but the end result isn't pretty. It's still losing more customers than it's bringing in.
Cynics called this phenomenon "cord cutting" a couple of years ago. When there was a net decline in pay television customers two summers ago -- the first time that this happened in the history of television, according to marketing research firm SNL Kagan -- industry watchers figured it was the start of a downward spiral for cable and satellite TV companies.
The theory was that Web-savvy viewers would ditch their escalating cable bills in favor of streaming video on demand. Well, that trend has reversed for some companies, indicating that it may have been more of an economic decision during darker recessionary times than a shift away from the industry.
Obviously this doesn't mean that things will work out just fine for Dish. The satellite television provider was a laggard even before its battle with AMC, and this is the third time over the past five quarters that it has missed Wall Street's profit target.
Get it right, Dish, before it's too late.
Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article.