• by Wayne Friedman , May 10, 2010

Dish Network gained revenue and subscribers in its first quarter reporting period -- but it came at a cost. Net income sank 26% to $231 million on revenues of $3.06 billion, which gained 5.2% from the first quarter of 2009.

Dish Network spent heavily to gain subscribers during the period -- some 237,000 new customers. Subscriber acquisition costs jumped 41% to $412 million during the period.

Still, the gain for Dish in subs was much higher than its competitor, DirecTV, which grew 100,000 over the same time frame. Dish now tallies 14.4 million subscribers; DirecTV has 18.9 million. A year ago, Dish lost subscribers versus almost a half million gain in satellite customers from DirecTV.

But the bigger battle looming is Dish's ongoing legal tussles with TiVo, which the company is suing over a case of copyright infringement. The suit cost Dish $30.1 million in legal bills in the period, according to the company's filing.

At risk are almost 7 million Dish subscribers who could be forced to be unplugged from their DVR machines.