Dish’s Sling TV Off To A Good Start, But Worries Remain

March 30th, 2015 by Trefis Team
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Dish Network (NASDAQ:DISH) introduced Sling TV, a new streaming service primarily targeting the millennial audience and broadband-only subscribers, in January. The service has witnessed encouraging adoption and has registered at least 100,000 sign-ups in its first month. [1] Dish is also working very hard to improve the consumer experience in order to enhance the popularity of the streaming service. However, some concerns still plague the Sling TV streaming service.

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Off To A Good Start

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Sling TV’s base package is priced at $20 per month and offers a good mix of popular sports channels such as ESPN and ESPN2, as well as entertainment channels such as AMC, TNT, Disney Channel, Cartoon Network/Adult Swim, etc. [2] The service also offers various paid add-ons depending on consumer preferences. Sling was made available to all U.S. subscribers in February and has piqued the interest of around 100,000 subscribers one month down the line. [1] The streaming service offers a one-week free trial period and information is unavailable regarding how many subscribers continued past the one-week point. However, as Sling is primarily targeted at the 10.6 million broadband-only subscribers in the U.S., we believe that the service could witness good retention rates. [3] Dish can generate of more than $600 million in revenues if it manages to capture around 3 million subscribers, representing more than 25% of this market.

Another encouraging aspect is that Dish continues to make improvements in the streaming service in order to enhance the user experience. The service was already supported by Roku players, Roku TV models, Android and iOS, as well as the Mac and PC at the time of its launch. Now it has now added Xbox One to that list, with member also getting an exclusive extended free trial for 30 days. [4] [5] Dish is also working very hard to enhance the content available through the streaming service. The company has signed deals which will add channels such as IFC, Sundance, EPIX, A&E, HISTORY, H2 and Lifetime to its continuously expanding repertoire. [6] [7] The streaming service also plans to introduce video on demand content very soon. All this leads us to believe that the streaming service is heading in the right direction.

The Service Still Suffers From Limitations

Questions about the appeal of Sling TV still persist on the street, however. While it offers some of the live television programming at one fourth the price for a pay-TV connection, it has some limitations. Sling TV does not allow simultaneous streaming by more than one user at a time and the streaming will play full-length advertisements just like pay-TV. While the subscribers can watch some of the shows that have aired in the past three days, it currently does not support a recording feature as in a pay-TV DVR. This puts it at a disadvantage to the PlayStation Vue service offered by Sony. [8] There are also fears that the service might eat into the pay-TV subscriber base of its own company. [9] Dish already competes in a saturated pay-TV environment and Sling TV, along with the  other streaming services (including those from HBO, Sony, CBS and Apple), provides additional competition that may well accelerate the erosion of Dish’s pay-TV subscriber base.

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Notes:
  1. Sling TV’s Web-TV Service Attracts at Least 100,000 Sign-Ups in Its First Month, March 5, 2015, recode.net [↩] [↩]
  2. Sling TV: Everything you need to know, January 20, 2015, cnet.com [↩]
  3. Dish Network Unveils Sling, a Streaming Service to Rival Cable (and It Has ESPN), The New York Times, Jan 5, 2015 [↩]
  4. Sling TV Launches Live, Over-the-Top Service Nationwide, February 09, 2015, Business Wire [↩]
  5. Sling TV Launches Today Exclusively on Xbox One; Xbox Members Get Exclusive One Month Free Trial, March 17, 2015, Xbox Wire [↩]
  6. Sling TV Folds IFC, Sundance TV, And EPIX Into Its Program Offerings, March 4, 2015, Deadline [↩]
  7. Sling TV to Deliver A+E Networks’ Channels by End of March, March 17, 2015, Business Wire [↩]
  8. Sony launches its ‘cable killer’ streaming video service, Mar 18 2015, Seeking Alpha [↩]
  9. Dish’s Charlie Ergen Says Sling TV Will Cannibalize Business, Mar 25, 2015, Wall Street Journal [↩]