Sling TV: ‘The Market Is Ready for This’

-Hits 250K Subs in 4 Months

Dish Network’s Internet TV service Sling TV is proving its value to viewers and should not be underestimated. According to unnamed sources in Re/code, Sling TV now has around 250,000 subscribers, only four months after launching.

Sling TV is the poster child for Internet TV services; it bridges OTT SVoD and traditional pay TV packages.

It offers a decent selection of typical “cable” channels for a low price; it offers flexibility in packages, which resonates with consumers today who don’t want to pay for channels they don’t watch; its biggest content asset is the live sports it offers; and it doesn’t require a year or two-year contract to sign up for the service.

“We’re a next-generation over the top television service,” said Seth Van Sickel, general manager of partner and business operations at Sling TV, who spoke to The Online Reporter at INTX this year. “All you need is Internet.”

The power of that proposition is making itself known now. While pay TV subscriber growth has slowed significantly over the past year, OTT services are gaining new ground in living rooms around the US, and streaming video is now a mainstream behavior: Netflix has 41 million subscribers in the US alone; Hulu has now reached 9 million subscribers.


Millennials - Students_of_CEU

Not just “Millennials” but customers: Sling TV joins the hunt


According to Roger Lynch, CEO of Sling TV, Dish recognized early on that the pay TV model wasn’t going to resonate with consumers who grew up with iTunes, smartphones and YouTube.

“Our view was, there’s going to be a new demographic coming out who would not commit to a subscription to pay TV in nearly the same percentages as generations before,” Lynch said, speaking on a panel at INTX.

“We needed a different model, we needed to look at how do they consume other content, how do they consume music? They don’t sign a two year contract; they don’t pass a credit check and have an installer show up at their house. Let’s model something that really mirrors how they consume other content.”

The service has no hardware specific to it, no installation or truck rolls, and no physical network to manage. It’s available across consumer devices such as Roku net-top boxes, Amazon Fire TV, and Microsoft Xbox One game consoles, as well as on iOS mobile devices, and it’s available on PCs and Macs.

“You’ll see us expand that,” Van Sickel said. “Google Nexus player, and smart TVs – that’s the next generation of what we’re working on.” Sling TV recently became available on Google’s smart TV platform, Android TV. Sling TV has also worked out a deal with Google that will offer Google Nexus NTBs for half-price with three months of Sling TV prepaid.

Dish Network’s experiment will demonstrate to the other pay TV providers just how lucrative the broadband-centric Internet TV business can be for them – all of which are also broadband providers.

For Sling TV, each subscriber is paying at a minimum $20 per month, which gives them the basic package; subs can add genre packs of additional channels for $5 each per month. That means Dish is bringing in around $5 million per month with the service.

Lynch said that subscriber acquisition for Dish’s pay TV service is around $800 per subscriber. “It’s a tiny fraction of that for over-the-top services,” Lynch said. “We saw on Dish World [the Internet TV service that offers international content] that people would come in, use it and leave, then come back. We don’t necessarily think of that as churn, because when they come back, it doesn’t cost us money. They’re just paying us again. It’s not something we discourage at all. Live sports will drive more of that activity. The challenge for us is can we make it more interesting for them year-round.”

The main draw to the service is its live linear channel feeds and channel packages, which viewers can navigate through by genre or channel. One of our initial criticisms of the service when it launched was that it didn’t have much of an on-demand library. The on-demand library is growing, however, and Sling TV also offers a transactional VoD service.

Since INTX, Dish has launched Sling Latino, a new Internet TV service aimed at Spanish-language and bilingual speakers. It offers two tiers: “Pacquete Total,” offering 22 channels for $12 per month, and Paquete Esencial, offering 16 channels for $7 per month. Both offer live streaming channels and on-demand libraries. Sling Latino also offers four additional channel packs, available for $5 per month each.

Lynch told The Online Reporter the on-demand library was one of the top priorities for expansion, as viewers today prefer to watch content according to their own schedules.

“One of our objectives was to make it as simple as possible,” Lynch said. “Look at Hulu or Netflix. Both of those services embody simple user propositions: pay eight bucks and I get lots of great content. We knew we were never going to make it quite that simple, because of the structure of pay TV agreements for live channels, but we wanted to make it as simple as possible.”

Dish is also integrating short-form video into the service, which it knows resonates with Millennial and Generation Z viewers. “We’re bridging the gap with the best of Internet television, and that will continue to expand in the next few months,” Van Sickel said. “There’s some great content out there and people want to see it in an aggregated fashion.”

As part of its deal with Disney, Sling TV already offers short-form content from Maker Studios, the YouTube multi-channel network that Disney owns. We might expect Vevo to appear on the service at some point too, as Dish has already begun experimenting with Vev…

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