Jan 12, 2015

To SlingTV Or Not To SlingTV? Defining The Question

Dish was the only television industry player with real news at CES this year. Their new V-POP, SlingTV, made its debut there with a considerably smaller channel line-up than many were expecting.

I think many people are looking at Sling the wrong way though, in that they see it as a substitute for a pay TV subscription.

It’s not.

It’s a competitor for Netflix or Hulu or even Spotify with a higher price point. The audience for Sling is not viewing it as a way to rid themselves of a bloated cable package, because they don't have a cable package, bloated or otherwise. For them, it's going to be a way to supplement their pre-existing online-only options, like Netflix, with some live TV.

So success will boil down to whether or not the target audience feels that they’ll watch enough live ESPN, Bloomberg and Disney Channel to justify paying $20 a month for it. It’s a curious proposition because if you’re comparing SlingTV to Netflix, which is $8/month (and has no commercials) you’d have to feel that SlingTV was more than twice as valuable as Netflix to be worth the outlay.

That's worth watching because the key value proposition of Sling is that it provides viewers with live TV. The sports and news offerings are adequate: ESPN doesn’t run every NFL or NBA game, and Bloomberg and CNN Headline news are just two voices. So the question becomes how badly does the millennial target want a live TV option?

It's an interesting question because realistically, many of the shows on Disney Channel and ABC Family are also available via Hulu and Netflix, though not, granted, their current season. So again, it comes down to the question of whether, say, the current season of The Fosters is worth $20/month or if it's okay to wait 6 months for it.

 (There's also option C, which is to buy the current season of The Fosters on iTunes or Amazon for about $20-$30, a one-time outlay.)

There’s also the advertising conundrum: Sling.TV is going to have advertising on it and Amazon, Netflix and iTunes don’t. Which makes paying $20 a month for the service an even tougher sell. There’s an interesting paradox there too: most of the programming on Netflix and Amazon got made because the first run versions appeared on linear network TV and were funded by the revenue from said commercials. If we start devaluing commercials and don’t come up with an adequate replacement, that deep well of programming the streaming services rely on is going to dry up in a hurry.

There's one other important thing to note about Sling: it makes V-POPs real. Charlie Ergen did the industry a huge favor by going first, which is the one thing most people (in any industry) don’t want to do. So now that the gauntlet’s been thrown down, look for more V-POPs to emerge. Some of which may actually try to be an alternative to a full-on cable package.

Stay tuned.

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