Can DISH Network’s Sling TV Counter the Threat of Streaming?



Competitive threats and subscriber losses

The rising popularity of binge-watching and stiff competition from low-cost video streaming companies such as Netflix (NFLX) and Hulu have forced DISH Network (DISH) to launch its own OTT (over-the-top) service to combat these threats.

In 3Q17, DISH lost 129,000 pay-TV subscribers on an adjusted basis against a loss of 116,000 in the prior year’s quarter. In the same period, satellite and cable operators DirecTV (T), Comcast (CMCSA), and Charter (CHTR) lost 251,000, 125,000, and 104,000 subscribers, respectively, in the United States. But in the same quarter, Netflix gained 850,000 customers in the US market.

From the graph above, we can see the loss of subscribers for satellite and cable operators in 3Q17 against video streaming leader Netflix.

Sling TV’s competitive features

DISH launched its Sling TV service to target the growing population who prefer watching shows on multiple devices through the Internet. The cost is $20 per month for Sling Orange and $25 for Sling Blue, which is competitive with other video streaming players.

Sling TV even provides sports networks, including ESPN and the NFL (National Football League) network, and Latino channels in an attempt to be more competitive with Netflix and Amazon Prime Video. The cloud DVR (digital video recorder) is also available to record shows on Sling. The company believes that the addition will provide incremental revenue growth.

DISH also expects the inclusion of dynamic ad insertion on Sling programs to drive its advertising business, thus helping both ARPU (average revenue per user) and margin expansion for DISH going forward.

More From Market Realist