DISH’s view of over-the-top services
DISH Network’s (DISH) pay-TV business and its OTT (over-the-top) service, Sling TV, are facing increasing competition from other OTT services. DISH was asked on its 1Q17 earnings call about the rising number of entrants into the video streaming space, including AT&T’s (T) DIRECTV Now, and whether these new entrants would have an impact on the number of subscribers to its Sling TV service.
The company stated that streaming services such as DIRECTV Now offer channels in bigger bundles compared to its Sling TV service. It also said that it had observed that since the launch of DIRECTV Now, Sling TV customers were for opting more and more for add-on packages besides the basic package.
As a result, the company believes that the launch of services such as DIRECTV Now has resulted in a new class of subscribers who are opting for add-on packs in larger numbers. DISH said that it believes that OTT services will increasingly eat into the market share of pay-TV services and that the future lies in the evolution of OTT services.
However, the popularity of OTT services will depend on the price of these streaming services and what kind of bundles these services will offer.
Rising video viewing on mobile devices
Considering this trend, DISH expects that its transition into a connectivity company could help it, considering its spectrum holdings. To watch videos on mobile devices, viewers will need spectrum. Video streaming on mobile devices is becoming increasingly popular.
According to Cisco Systems’ (CSCO) VNI (visual networking index), at the end of 2015, video accounted for ~61% of mobile data traffic in the United States (SPY). By the end of 2020, analysts estimate that this figure will expand to ~77% of US mobile data traffic.