This week’s earnings results show that Sling TV’s growth has slowed to a crawl while CBS OTT efforts seem to have given the company a new lease on life. We discuss what’s going on and why it’s happening.
Chapter 1: Sling TV growth slows (2:00)
Until 2018, Dish would lose one or two hundred thousand subscribers; Sling TV would claw back a good proportion of them. So far, 2018 has been different. Sling’s growth has slowed dramatically. In the first quarter, it gained 91,000 and the second 41,000. Not so for rivals like DirecTV. It has added 600,000 subscribers this year already, and now has 1.81 million to Sling TV’s 2.3 million.
One of the biggest differences between Sling TV and DirecTV Now’s approach is their treatment of local TV channels. DirecTV Now has many locals while Sling TV only has some Fox and NBC stations. Sling encourages customers to get an antenna and watch the channels for free.
Not having local TV channels immediately available puts Sling TV at a disadvantage when a potential customer wants to watch something on their local channel right now. They likely can’t deliver while competitors likely can.
Chapter 2: CBS getting renewed life from online (14:30)
CBS is the best positioned of the four top broadcasters. It’s Q2 earnings results shows how well the online efforts are paying off for the company. CBS said it would hit the 8 million subscriber target by the end of 2019, a year earlier than planned. It expects that to double by 2022.
Revenue from vMVPDs is helping the company a lot. It said the blended rate from vMVPDs and online offerings translated to a 30% revenue bump in Q2. The company also says it will deliver 14 new series for SVOD and premium cable. These will help drive growth in CBS All Access and Showtime (both online and in the premium cable channel.)
CBS made two pivotal decisions three years ago. The first was to retain digital rights in contracts with pay TV operators. The second was not to join Hulu. These two decisions gave CBS the freedom to carve a separate path in the online world of direct-to-consumer deliver.