January 22, 2015

The Real Target of Dish’s Sling TV

In this week’s Deadline Hollywood, David Lieberman points out that, while many assume that Dish’s new Sling TV service is aimed at Millennials – and Dish has done little to counter this perception – the stations featured in the basic tier have audiences whose demographics lean heavily towards Baby Boomers.

Lieberman speculates that the potential audience for the new Sling TV service may in fact be those Boomers who have cut the cord and are looking for a way back in. And while I would not be surprised if there were indeed a few older folks who fell under that umbrella, it is Millennial Cord Nevers who will be the ones ponying up $20 a month for the app.

The problem, of course, will be convincing them that it’s worth it. The value proposition behind Sling TV is that it provides live TV – especially news and sports – to those who do not currently have access to such content. Yes, there are other channels thrown in, but the main draw seems to be live CNN and ESPN, which are pretty much the gold standards when it comes to live news and sports, regardless of your age.

That’s why I have trouble with Lieberman’s hypothesis. If the draw of Sling TV is indeed live cable news and sports, shouldn’t channels like ESPN and CNN prove equally attractive to Millennials?

Though $20/month seems like a reasonable fee for someone looking for a replacement to basic cable, it may seem like a lot of money for someone who sees it as an additional OTT service. Cord Never Millennials will quickly figure out that most of the other programming on Sling TV is also available on Netflix or Hulu Plus – and without eight minutes of commercials. Though such streaming services may not feature the newest episodes, this will matter to only a small subset of the potential audience, as most of this demographic is unfazed by having to buy recent episodes from Amazon or iTunes.

While Dish has promised to keep adding networks to the service, the current iteration seems a bit thin to attract Cord Cutters hoping to return to legacy pay-TV. This is especially true for involuntary Cord Cutters (those who enjoyed legacy pay-TV but had to give it up for economic reasons) versus voluntary Cord Cutters (those who cancelled service because they didn’t watch a lot of TV or wanted to make a ‘statement’).

And while tech bloggers would like us to believe that the vast majority of Cord Cutters do so for voluntary reasons, TDG’s research continues to indicate that the reverse is true. It is economic reasons that primarily drive their behavior (i.e., saving money), though the availability of less-expensive subscription-based OTT services make such a move easier to swallow.

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Put another way, involuntary Cord Cutters are relatively satisfied with current pay-TV services save not being able to afford them, meaning they would likely return if economic circumstances improve.

Which brings me back to my original hypothesis: if the Sling TV app is going to be seen as an additional piece of a Cord Never’s lineup, then its utility is going to depend on how important live news and sports are to that audience, not necessarily the other stations that make up the bulk of the channel lineup (again, the programs of which are available sans recent episodes on OTT SVOD services).

It may be that live news and sports are indeed important to Cord Nevers and thus justify the cost of the entire package; or it may be that the $20 price point (more than double the cost of Netflix) exceeds the value of having a live TV option.

It will be interesting to see how this plays out, and TDG will be keeping a close eye on who signs up for Sling TV and why, as well as how competitors adjust to lessons learned from this experiment.

Stick with TDG and stay in front of the curve.

Alan Wolk has become one of the industry’s most influential thought leaders and futurists. He has been recognized by Wired as one of the Top 20 Thinkers In Social TV and Second Screen.

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