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News Analysis 
Is Sling TV a Failure?
By Phillip Swann

Washington, D.C. (December 13, 2015) - Sling TV now has fewer than 500,000 subscribers, according to multiple accounts. Is that number disappointing, or has the Net TV service established itself as a disruptive force in the pay TV business?

Before attempting to answer that question, a little background on Sling and why we now believe its subscriber base is around 500,000.

Sling TV, which is owned by satcaster Dish, began last January with a $20-a-month lineup that included ESPN and roughly 10 other channels. At the time, some journalists and industry analysts heralded Sling TV's launch, saying it would give consumers another reason to drop their pay TV operator in favor of less expensive online video services.



Since Sling's introduction, the streaming service has added about 8-10 channels to its basic plan, and 30-40 channels in $5-a-month add-on packages. While the lineup still doesn't include some pay TV staples, such as regional sports channels, Showtime, the Fox News Channel, and the local network affiliates, it does offer a diverse mix of programming that should satisfy many viewers.

However, analyst Dan Rayburn, a leading supporter of streaming video, estimates that Sling TV now has fewer than 500,000 subscribers. He bases his conclusion on talks with "third-party vendors" who do business with Sling.

Rayburn's number is not far off from two other recent estimates. Needham media analyst Laura Martin told the Next TV Summit last month that Sling TV had 350,000 subscribers in October while Craig Moffett of MoffettNathanson said Sling had 394,000 subs at the end of September.

But despite offering a larger number for Sling TV, Rayburn's assessment is a bit more damning because he added that the third-party suppliers say it appears the Net TV service's growth rate is slowing. Hungry for pay TV channels, many cord-cutters signed up when Sling first launched, Rayburn says, but their enthusiasm hasn't spread far.



Still, shouldn't 500,000 subscribers after a little less than a year be called a success, and evidence that's there significant interest in a low-cost, pay TV-like service online?

It's instructive to look back at last January when Dish announced it would launch Sling TV. TheStreet.com reported then that Macquarie Capital analyst Amy Yong said that if Sling TV could generate 1-2 million subscribers in its first year, it might "open the flood gates for other players." Yong's analysis was echoed by others who said Sling TV would be a success if it accumulated at least one million subs in year one.

The fact that Sling TV apparently hasn't even reached half of that total compels me to conclude it has not been a success. It also says something about consumers' interest in streaming as a pay TV alternative.

As we come to the end of 2015, the flood gates have not opened, as Yong said it would if Sling TV was successful. While several channels such as HBO, NBC, CBS and Showtime have launched standalone versions of their pay TV channels, only Sony has introduced a Sling TV-like lineup of multiple channels online. (Called Vue, it's only available in seven markets.) Apple TV has yet to launch its much-anticipated streaming service, and Verizon ditched plans for a similar offering, choosing instead to put together a myriad of offbeat channels for a mobile-only service called Go90.

It would appear that the industry has closely watched the Sling TV experiment and decided the time is not right for an online pay TV challenger.

Did Dish, the journalists, and the analysts overestimate the appetite for a low-cost, online pay TV service?

Probably.

See Amazon's Holiday Sales!

While the pay TV industry continues to raise its monthly fees, most consumers still prefer its big bundle of channels because it provides everything they want, from local channels to local sports to the best of basic cable, and so on. The pay TV operators also offer a largely flawless delivery system. Unlike Sling TV, which has been nagged with chronic technical issues, your cable, telco or satellite operator is able to deliver a perfect picture nearly all the time.

And that is a vastly underrated feature.

If we've learned anything from Sling TV, it's that live streaming isn't ready for prime time yet. Buffering. Picture freezing. And an inability to log on are frequent occurrences, not exceptions. People won't stand for that for long, which probably explains why Sling's growth rate is slowing.

So despite Sling TV's consumer-friendly price, and relatively attractive lineup, it has not been a success. As it continues to develop in year two -- assuming Dish gives it a year two -- it should improve. But considering the technical restraints on live streaming, and pay TV's stronghold on vital programming, Sling TV will likely still have little impact on the pay TV industry by this time next year.

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Phillip Swann is president and publisher of TVPredictions.com. He has been quoted in dozens of publications and broadcast outlets, including CNN, Fox News, Inside Edition, The New York Times, The Washington Post, The Chicago Tribune, The Financial Times, The Associated Press and The Hollywood Reporter. He can be reached at
swann@tvpredictions.com or at 703-505-3064703-505-3064.



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