Weekly Pay-TV Notes: Netflix And Dish Network’s Sling TV In Focus

The pay-TV industry saw significant activity this week, with Netflix announcing that it will be doubling its number of original scripted series next year. The company plans to stream 31 original scripted series along with 10 feature films, 10 standard comedy specials, and a number of kids’ series in 2016. On a separate note, streaming and online video industry news tracking site streamingmedia.com reports that Dish Network’s streaming service Sling TV had less than 500,000 paying subscribers at the end of October. On that note, we discuss below these developments related to the pay-TV companies over the past few days.

Netflix To Double Original Scripted Series In 2016, Scores Multiple Golden Globe Nominations

Streaming giant Netflix (NASDAQ:NFLX) will be doubling its number of original scripted series next year, according to Chief Content Officer Ted Sarandos. ^[1] Sarandos stated that the number of original scripted series will grow from 16 in 2015 to 31 in 2016, while Netflix will also stream 10 feature films, 10 standard comedy specials, and a number of kids’ series. The company continues to increase its investment in original content and the strategy seems to be paying off in spades. The nominations for the 73rd Golden Globe Awards were announced recently and Netflix landed 8 nominations, more than any of the other broadcast networks. ^[2] The streaming service had earlier landed 13 major nominations at the 67th Primetime Emmy Awards, including nominations for Outstanding Comedy Series and Outstanding Drama Series. ^[3]

These nominations are a sign that things are moving in the right direction for Netflix. The company’s original programming has garnered a lot of critical acclaim in the last few years, scoring multiple Emmy, Golden Globe, and Academy Award nominations and several wins. The success of Netflix’s original content has improved perception of the overall brand. The company is no longer considered just an aggregator of popular content from other networks and has come of age as a provider of engaging and interesting content on its own. This, in turn, helps in attracting more subscribers to the streaming service and keeping the competition at bay.

Netflix’s stock declined around 6.1% over the week through Thursday. We currently have a price estimate of $103 for Netflix. For the year 2015, we estimate revenues of $6.79 billion, compared to consensus estimate of $6.78 billion, and EPS of $0.20, compared to a consensus estimate of $0.22.

Dish’s Sling TV Had Less Than 500,000 Paying Subscribers As Of October End

Dish Network‘s (NASDAQ:DISH) streaming service Sling TV had less than 500,000 paying subscribers at the end of October, according to streaming and online video industry news tracking site streamingmedia.com. ^[4] This number has been appropriated using the information provided by a host of Sling TV suppliers. Sling TV was made available to all U.S. subscribers in February and technology news website Re/code had earlier reported that the streaming service had 250,000 paying subscribers as of the first week of June. ^[5] Sling TV is primarily targeted at the 10.6 million broadband-only subscribers in the United States. ^[6]

Sling TV is still a long way off Netflix’s (NASDAQ:NFLX) level when it comes to subscriber additions. Sling TV has attracted around 500,000 subscribers from the start of February to the end of October, which amounts to an addition of around 55,500 subscribers per month. This figure pales in comparison to Netflix’s addition of roughly 300,000 subscribers per month during the April-September period. ^[7] Netflix already has an established presence in the market and is reaping the rewards of the popularity of its brand. Dish will need to spend more on advertising and roll out more promotional offers in order to increase its own brand value, if it aims to emulate Netflix’s subscriber numbers.

Dish Network’s stock declined around 2.3% over the week through Thursday. We currently have a price estimate of $77 for Dish Network. For the year 2015, we estimate revenues of $15.03 billion, compared to consensus estimate of $15.02 billion, and EPS of $1.98, in line with the consensus estimate.

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1. Netflix, Inc. (NFLX) Ted Sarandos Present at the UBS 43rd Annual Global Media and Communications Conference Transcript, December 7, 2015, Seeking Alpha [↩]
2. Golden Globe Nominations Show Netflix Is Taking Over, December 10, 2015, Wired [↩]
3. 67th Primetime Emmy Awards, Wikipedia.org [↩]
4. Sling TV Suppliers Say The Company Has Less Than 500,000 Subscribers, Decelerating Signups, December 8, 2015, blog.streamingmedia.com [↩]
5. Sling TV’s Web TV Subscriber Numbers Keep Growing, Now Around 250,000, June 5, 2015, Re/code [↩]
6. Dish Network Unveils Sling, a Streaming Service to Rival Cable (and It Has ESPN), The New York Times, Jan 5, 2015 [↩]
7. Q3 15 Letter to shareholders, October 14th, 2015, Netflix Investor Relations [↩]