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1 Fung business intelligence centre global retail & technology flash report: SLING TV Copyright © 2015 The Fung Group, All rights reserved.
JANUARY 29, 2015
Dish’s Sling TV Fires Its Shot Across the Bow of the Cable Guys
At the Consumer Electronics Show on Jan. 5, Dish unveiled Sling TV, an over-‐the-‐top (OTT) TV service. This represents yet another shot across the bow of the cable service providers, with Dish following in the footsteps of HBO, Amazon Instant Video, Netflix, Hulu, and several others.
For a contract-‐free $20 a month, the basic service offers news (CNN), sports (ESPN and ESPN 2), and family entertainment: TNT, TBS, the Food Network, the Travel Channel, HGTV, the Cartoon Network with Adult Swim, and the ABC Family Channel. For an additional $5 a month, there is a bundle of kids’ channels, as well as an additional $5 bundle (HLN, the Cooking Channel, DIY and Bloomberg), and Dish also plans to offer movies for rent via the service.
The initial channel line-‐up seems targeted at sports fans, cord-‐cutters, and digital natives frustrated with an average cable bill of $64.41 (according to the US Federal Communications Commission, or FCC). A recent Forbes article estimated that there are 10 million households in the US without a pay-‐TV package. One important distinction is that this service offers live TV, in particular sports broadcasts, and complements other TV packages, such as Netflix, Hulu, or Amazon Instant Video, which do not carry live sports broadcasts. Other OTT services include Dramatize (for Hindi shows), DramaFever (for Korean Dramas), Crackle (free movies and TV shows), Hulu Plus (TV shows), myTV (Hong Kong shows), NetD (Turkish shows), Now TV (movies, TV shows, and sports), Qello (live concert films and music), RPI TV (entertainment, ice hockey, and music), Viewster (free movies and TV shows), WhereverTV (global TV), and WWE Network (sports).
Beta users are currently limited to viewing content on mobile devices and TVs connected to a Roku 3 player, however after launch, users will be able to view content on their TVs via any model Roku, as well as Amazon’s Fire TV Stick, Xbox One, Google’s Nexus player, selected Samsung and LG smart TVs, iOS or Android apps, and on Macs and Windows PCs via a browser.
Hundreds of thousands of people have already preregistered for Sling TV according to broadcastingcable.com. It is still only available by invitation, with service commencing on January 27.
Dish’s announcement comes on the heels of a similar announcement by HBO outlining plans to offer a stand-‐alone service, and both Netflix and Amazon Instant Video have been successful in luring consumers away from the big cable operators.
2 Fung business intelligence centre global retail & technology flash report: SLING TV Copyright © 2015 The Fung Group, All rights reserved.
The trickle of subscribers abandoning their cable service providers could quickly turn into a flood. According to a Jan. 2015 survey by Parks Associates, 17% of US broadband households are likely to subscribe to the HBO service, 91% of whom are current pay-‐TV subscribers. Of that group, nearly half would cancel their pay-‐TV service after subscribing to the HBO service. In the graph below, we see that US consumers are the most willing to subscribe to HBO at a price of $14.99 a month.
Willingness to Subscribe to Selected OTT Services (with Estimated Monthly Price)
Source: Parks Associates
On a separate but relevant note, Dish recently won a lawsuit filed by Fox Broadcasting Company, clearing it to rebroadcast live TV through its Hopper and Slingbox set-‐top boxes. This ruling contrasts the Aereo case, in that Dish is retransmitting broadcast content purely to its own subscribers, whereas Aereo was publicly retransmitting broadcast TV.
0% 2% 4% 6% 8% 10% 12% 14% 16% 18%
HBO GO ($14.99)
CBS All Access ($5.99)
Starz Play ($14.99)
Cinemax MAX GO ($14.99)
MOVIEPLEX PLAY ($14.99)
Encore Play ($14.99)
U.S. Broadband Households
3 Fung business intelligence centre global retail & technology flash report: SLING TV Copyright © 2015 The Fung Group, All rights reserved.
Deborah Weinswig, CPA Executive Director – Head Global Retail & Technology Fung Business Intelligence Centre New York: 917.655.6790 Hong Kong: +852 6119 1779 [email protected] Marie Driscoll, CFA [email protected] Christine Haggerty [email protected] John Harmon, CFA [email protected] Amy Hedrick [email protected] John Mercer [email protected] Lan Rosengard [email protected] Jing Wang [email protected]
