Here’s How Dish Network Can Benefit From Its Deal With Zee

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Recently, Dish Network (NASDAQ:DISH) and its streaming service Sling TV announced a long term renewal agreement with the “Zee” group from India which provides South Asian programming content. Under the agreement, Sling TV will launch 27 new Zee channels in a range of languages including Arabic, Hindi, Tamil and Spanish, of which nine channels will also be carried on Dish. Sling TV will also become the exclusive provider of Zee’s on-demand video content library. With this agreement, Dish network is trying to woo South Asian viewers in the U.S. and exclusive content can provide the necessary consumer pull for Sling TV. South Asians are the fastest growing population in the U.S. and between 2000 and 2010 this community grew by 81%. It is estimated that over 3.4 million South Asians live in the U.S. While this is around 1% of the total U.S. population, it is still a sizeable audience which can be drawn to the service through exclusive regional content.  As Sling TV looks to increase its subscriber base, access to exclusive content appealing to this segment of viewers can aid in this goal and grow revenues in the long term.

See our complete analysis for Dish Network

Growth of “New” Subscribers For Sling TV Positive For Dish’s Valuation

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While Dish Network does not report Sling TV’s numbers separately, it is estimated that the streaming service is seeing steady growth and has 600,000 monthly subscribers. The service, which is cheaper compared to traditional Pay-TV, is attracting millennials and is looking to expand its subscriber base by adding more packages that offer more access to specific channels. However, the concern has been that Sling TV is only attracting Dish’s erstwhile subscriber who are looking for cheaper alternatives to Pay-Tv and the company is losing “net” subscribers. In a recent meeting with analysts, the company stated that a vast majority of subscribers for Sling TV are “incremental”, indicating that it is gaining subscribers in the streaming space which is a positive sign for future growth.

As per our estimates, as Dish TV continues to lose Pay-Tv subscribers, its market share will decline from around 14% in 2016 to 13% by the end of our forecast period. However, if Sling TV can attract more subscribers through its exclusive content appealing to certain segments of the market , Dish will be able to maintain and grow its market share in the long term, impacting its valuation positively.

As Dish network is losing a significant number of subscribers to the cord cutting trend, the company is looking at ways to hedge against these loses.  Sling TV is providing the necessary cushion against this risk. Sling TVs strategy is to provide add-on packages with specific content appealing to certain consumers and it appears to be working well. The deal with Zee group will make Sling TV very popular among the growing South Asian population in the U.S. and should help expand its subscriber base in the long term.

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