Dish: Online TV Becoming Replacement for Linear TV

22 Feb, 2017 By: Erik Gruenwedel

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When Dish Network launched Sling TV in 2015, the over-the-top video service was earmarked as an alternative for broadband-only households eschewing traditional pay-TV. That mindset has changed, according to senior executives at the satellite operator.

Speaking Feb. 22 on the company's fiscal call, Roger Lynch, CEO of Sling TV, said AT&T’s November rollout of DirecTV Now expanded the market for online TV, instead of posing singularly as direct competitor to Sling TV. He expects a similar response to Hulu’s pending online TV platform.

“We didn't see … any change in the momentum that we had on Sling TV, including in the month of December after they launched,” Lynch said.

The executive expects online TV use to mushroom on portable devices as telecom carriers roll out data-free plans.

Dish CEO Charlie Ergen contends that as online TV service expands in its offering and consumer acceptance, linear TV will either evolve or decline accordingly.

“How pay-TV programmers react if they continue to raise [subscription] prices, continue to have 16 to 18 minutes of advertising an hour, and [consumers] can go to an OTT world that's a little bit more friendly,” Ergen said.

Sling TV continues to counterbalance satellite-TV subscriber losses. By how much remains unknown. Dish doesn’t disclose specific data, preferring to include Sling TV numbers within its overall pay-TV statistics.

Media reports suggest Sling TV could have from 1 million to 2 million subs. Dish said it added 28,000 net new pay-TV subs in the fourth quarter, ended Dec. 31, 2016, compared with a loss of 12,000 subs during the previous-year period.

Dish activated about 694,000 gross new pay-TV subs in the quarter, compared with about 661,000 gross new pay-TV subs in the year-ago period. Yet, it ended the period with 13.6 million subs, compared with 13.8 million a year earlier.

Ergen said linear TV must become more like OTT video, including search functionality, on-demand access and binge-viewing.

“Our job is to go to our content partners and say, ‘here's how we jointly can make our business better.’ It's a long process, and each company moves at a different pace, and each has a different strategy, and each is in a different strategic position,” he said.

Lynch said that when Sling TV began, it has 20 channels. Today, it has more than 100, with enhanced search function and DVR coming.

“We're starting to get past … the phase of early adopters and attract people who are more comfortable switching to something like this now,” he said.

“I think Netflix sort of helps plow the road for us on that front by bringing more and more people who are less technically inclined into the market for a service like this.”
 

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