While Dish was busy rebranding its DishWorld app as Sling International, a report from AdAge published this week claims that Sling TV was forced to agree to a 2 million subscriber cap in order to secure its content agreements. The figure shows the level of discomfort that OTT delivery instills in the content providers, who are scared to rock the boat that holds traditional video delivery channels.
AdAge is the first publication to put a hard figure on what has become a widely known element of the Sling TV contract negotiations. The upper limit for growth, apparently mandated by the contracts, shows the scale that content providers are comfortable with – and it is a figure that is far lower than the potential reach of OTT delivery, given Netflix’s 39 million US subscribers.
According to the Bloomberg analyst cited by AdAge, Geetha Ranganathan, if the 2 million cap is exceeded, content holders have the right to withdraw their programs from Sling TV – forcing Dish to renegotiate the contracts. The cap is also a way of hedging bets against an OTT platform like Sling, in case traditional pay TV begins hemorrhaging subscribers to OTT.
Ranganathan says that the programmers “want it to be a complimentary product and not a competing product that cannibalizes their core business. They don’t want it to become too popular.”
But while that is certainly true, the main fear that the players in the cable and satellite game face is OTT gutting their advertising revenue, rather than just the wholesale seizure of primary subscriptions. OTT is a double-edged sword for them, as TV Everywhere is an increasingly important part of their current offerings, but if the non-linear and on-demand viewing of OTT becomes the norm, it threatens to wipe-out hundreds of smaller channels that currently pad-out the bundles of cable channels.
As such, the shift to OTT would force operators to drastically trim the fat from their channel lineups, wiping out dependable revenue that those smaller and niche channels generate. For consumers, the potential end of paying for dozens or hundreds of channels that they will never watch is a net gain, but for those who are employed in making and servicing those channels, OTT is a looming threat that is poised to kill off their livelihoods.
On the other hand, switching to OTT delivery would allow pay TV to focus more on efficiency than tradition. Why bother maintaining broadcast delivery networks and their associated opex and capex, if the numbers show that simply providing a single internet connection will get your content or channel to a viewer? Why stay in the delivery game at all if net neutrality rules could guarantee a fast enough connection for your video?
The current answer to this question however, is that OTT delivery still makes too many mistakes when it comes to providing the necessary capacity for live events. Notably, ABC’s Oscars coverage was much criticized, as was the premier of the fourth season of Game of Thrones on HBO Go. This weekend, Dish was drawn to issue a public apology via Twitter to appease the many viewers who took to the platform to complain about the poor quality of coverage for the NCAA basketball game between Kentucky and Wisconsin.
Kentucky lost out on a chance for an unbeaten season in the semifinal, and Sling TV suffered a similar dent to its reputation thanks to the volley of complaints levelled against it by a customer base that expects live video to make it to their screens unabated. In the Netflix age, where seemingly any video in a content library can make its way down a CDN pipe to a screen, consumers are still unsure and upset when OTT providers still struggle to broadcast one of the most-watched sports games in the US, while the OTT coverage of the Olympic Games or the World Cup seem to go off without a hitch. In the current paradigm, cable, satellite and terrestrial simply have better uptime at scale than OTT.
In related news, Dish has also announced that it is rebranding its DishWorld app as Sling International. The service was launched in May 2012, and acts as an extension of Dish’s core programming bundles, providing foreign-language content to viewers inside the USA starting at $15 per month.
With the rebranding, Sling TV and Sling International content can be watched in the same OTT application, by logging into the International account while inside Sling TV. The International package offers nearly 200 channels in 19 languages, and Dish has found that the service has not led to International users cutting down on their standard Dish subscription in favor of the overseas content.
“Sling TV grew from the foundation established by DishWorld, enabling us to test, grow and perfect our OTT capabilities through a service that streams tens of millions of hours of content every month. Incorporating DishWorld into the Sling TV portfolio makes it even easier for viewers to get the best of both domestic programming and the shows and sports they love from overseas,” said Sling TV’s CEO Roger Lynch.
Sling TV is currently supported on Amazon’s Fire TV and Fire TV Stick, Android and iOS, the Xbox One, Rokus, PCs and Macs. Those devices will see the DishWorld app replaced by Sling TV. For users with Samsung smart TVs, the DishWorld app will be hanging around for a few weeks longer, as Samsung is likely still writing a workaround for its own Tizen apps, which explains why support for Sling International is due “in the coming weeks” and not immediately like the other devices.
Sling International currently features content in Arabic, Bangla, Bengali, Brazilian, Cantonese, Filipino, Gujarati, Hindi, Kannada, Malayalam, Mandarin, Marathi, Punjabi, Taiwanese, Tamil, Telugu, Urdu and Vietnamese.