Analyst: Sling TV to Reach 2 Million Subs by Year End
14 Jan, 2016 By: Erik GruenwedelSling TV, the industry’s first online TV “skinny bundle” service launched by Dish Network last February, is on track to have 2 million subscribers by the end of the year — nearly five times the estimated 350,000 subs generated at the end of Q3, according to a Goldman Sachs analyst.
In a Jan. 14 , analyst Brett Feldman said Sling TV’s gain would offset a projected loss of more than 700,000 satellite TV subs this year. Dish did not formally disclose Sling sub numbers at the end of Q3.
"We expect Dish to end 2016 with more than 2 million Sling TV subscribers," Feldman wrote.
Last year, Frost & Sullivan analyst Dan Rayburn, citing third-party vendor sources, said Sling had less than 500,000 subs at the end of October. The service costs $20 monthly for 20 pay-TV channels, including ESPN. Additional sports and entertainment packages are available for $5 monthly surcharge.
Sling TV at CES unveiled a second-generation user interface (UI) designed to enhance the user experience that it will phase in over the next 90 days. New features include movie rentals and navigation screens.
For Dish, Sling TV appears to be a double-edged sword. It contributed to the satellite TV operator generating 751,000 gross subscriber additions in Q3 — up 8.7% from the previous-year period. Dish said Sling contributed to 14.5%-lower subscriber acquisition cost as well.
At the same time, Dish lost 23,000 net pay subscribers in the period, up almost 92% from 12,000 subs lost during the previous-year period. It ended the period with 13.9 million video subs, compared with 14 million a year ago. It also had a negative impact on average-revenue-per-unit (subscriber), or ARPU.
Dish said the pay-TV churn rate (percentage of subs not renewing) increased to 1.86% from 1.67% a year ago, which it attributed to “competitive pressures,” including “aggressive” marketing, bundled discount offers such as combined broadband, video and/or wireless services and cord cutting.
“We’re bringing our content partners new incremental subscribers that they’re not able to get any other way. I think the future is probably pretty bright for OTT in general and hopefully for Sling," CEO Charlie Ergen said on the company's Nov. 2 fiscal call.