Sling TV launches Multi-Stream Service: Is DISH Increasing Focus On Its Streaming Segment?

+102.58%
Upside
5.77
Market
11.69
Trefis
DISH: DISH Network logo
DISH
DISH Network

Recently, Dish Network (NASDAQ:DISH)  launched a new beta version of its internet TV service, Sling TV, which allows subscribers to watch up to three streams simultaneously and includes sports, entertainment and local programming content from Fox Network.  While the subscription charges for single and multiple streams remain the same ($ 20 per month), the content will differ. Single streaming includes content from Disney and ESPN, but excludes Fox Channels. Multi-streaming subscribers will not get access to Disney and ESPN content. However, these networks are in discussions with DISH to provide their content on the multi-stream Sling TV. Dish had launched Sling TV in February last year and is pitching this service as a cheaper and hassle-free alternative to Pay-TV. While Dish Network continues to lose subscribers to the cord-cutting trend, the loss is being compensated to some extent by an increase in Sling TV subscribers. With the current launch, in our view, Dish Network is increasing its focus on the streaming service to attract new customers and safeguard itself from significant loss in subscribers in future.

See our complete analysis for Dish Network

Creating A Niche In the OTT (Over The Top Content) Market

Relevant Articles
  1. With Echostar Merger Approaching, What To Expect From Dish’s Q3 Results?
  2. Can Dish Network Stock Return To Its Pre-Inflation Shock Highs?
  3. Dish Stock Has Big Upside Potential To Its Pre-Inflation Peak
  4. How Will The Cyber Attack Impact Dish’s Q1 Results?
  5. Is Dish Network Stock A Buy Despite Many Headwinds?
  6. Will Dish Network Stock Continue To Underperform?

As an increasing number of households in the U.S. prefer a streaming service to traditional Pay- TV, competition in this space is intensifying. According to Park Research, there are at least 113 OTT video services available in the U.S… They include Netflix, HBO Now and Sling TV, as well as 33 new OTT services that entered the U.S. market in 2015. However, 95% of this market is dominated by the top three players – Netflix, Amazon and Hulu.  Sling TV does not directly compete with Netflix or Amazon, as its content differs. Still, it has not been able to penetrate the OTT market significantly. Dish Network does not report Sling TV numbers separately, but the streaming service had helped the company to absorb some impact of the decline in Pay-TV subscribers. The company lost 81,000 subscribers in 2015 and this number would have been much higher, had it not been for Sling TV. As the Pay-T V market further saturates and competition mounts, the DISH network can benefit by offering Sling TV at competitive pricing so as to slow the loss of subscribers.

 

We expect DISH Network’s Pay- TV market share to decline gradually from nearly 14% in 2016 to less than 13% by the end of our forecast period.

Emergence of alternative platforms to consume content is one of the reasons for this decline. However, by increasing focus on Sling TV, if DISH network is able to provide high quality content at competitive prices it could slow down the pace of this loss or maintain its market share, thus impacting its valuation positively.

As DISH Network tries to shield itself from the cord cutting trend, we believe an increased focus on Sling TV by increasing the quality and quantity of content offered on the streaming service should work to the company’s advantage. However, in a space where three big players already hold substantial market share, Sling TV needs to work towards establishing itself as a serious player to gain market share.

View Interactive Institutional Research (Powered by Trefis):
Global Large CapU.S. Mid & Small CapEuropean Large & Mid Cap
More Trefis Research