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Exploring the World of Skinny Bundles in the Media Sector

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Sling TV

In this part of the series, we will explore “skinny” bundles, such as Dish Network’s (DISH) Sling TV. On February 18, 2016, the Wall Street Journal reported that Sling TV had 600,000 subscribers.

Dish Network announced its fiscal 4Q15 and 2015 earnings on February 18, 2016. DISH does not disclose its Sling TV subscribers separately but includes this information in its pay-TV subscriber numbers. It had 13.9 million pay-TV subscribers as of December 31, 2015. The same report has also cited Sling TV subscriber numbers from MoffettNathanson and Evercore ISI at 523,000 and 400,000, respectively.

Dish stated at the company’s 4Q15, and fiscal 2015 earnings call that the majority of Sling TV subscribers are either “cord-cutters” or “cord-nevers.” These subscribers are generally Millennials, or people in the 18–34 age group, who have cut the cord on pay-TV or have never subscribed to pay-TV.

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As the above chart indicates, Dish’s Sling TV is priced at $20 per month, at a slightly higher end of the over-the-top services available in the market. While Hulu’s ad-supported service is priced at $7.99 per month, Netflix’s (NFLX) plans average ~$10 per month. On the other hand, Time Warner’s (TWX) HBO Now is priced at $15 per month.

Verizon’s FiOS Custom TV

Verizon Communications (VZ), which offers FiOS Custom TV, recently expanded the number of channels available in its basic skinny channel packages. Verizon’s Custom TV-Essentials package will include 78 channels while the Custom TV-Sports & More package will include 59 channels. These packages will be priced at $70 per month, including FiOS’s high-speed Internet and voice services.

Dish Network makes up 0.21% of the PowerShares QQQ Trust Series 1 ETF (QQQ). QQQ also has 4.9% exposure to the television space.

In the next part of this series, we will explore whether skinny bundles will be the way forward for the media sector.

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