How Sling TV plans to make TV simple again: an interview with CEO Roger Lynch
At some point while watching Sling TV’s new commercials – perhaps when “Old TV,” personified by a schoolyard bike gang, comes to a customer’s house to warn of an overdue bill, or, when an installation technician gives a customer a wet willie – you will realize that your relationship with your cable provider is, at best, fractured.
Sure, cable service providers offer hundreds of channels and DVR – but what if you don’t watch Bravo or MTV? What if you only watch ‘Better Call Saul’ and ‘Sunday Night Baseball’ live, and you watch everything else on Hulu and Netflix? Consumers are beginning to ask these questions and seriously consider alternatives.
Sling TV has been on the market for five months and it is currently the leading live TV option for cord cutters and cord nevers who want traditional cable channels via a non-traditional service. It has also become an attractive option for cord supplementers – those with a basic cable package that want additional options like Scripps or HBO (extra).
Even after adding channels like A&E, HISTORY, AMC, and IFC, Sling TV has managed to keep its base package at $20 per month. Part of how it is able to main this price point is because Sling TV only allows up to four channels per TV group in the base package – other channels are offered for $5 more per month in the form of add-ons like Sports Extra, Hollywood Extra, and Lifestyle Extra.
While Sling TV is part of DISH and leverages the satellite company’s best assets, the Sling team operates separately and is helmed by industry veteran Roger Lynch, who also helped re-launch the DishWORLD OTT service back in 2012.
For more on how Sling TV is helping viewers take back TV, we spoke with Lynch.
This interview has been edited and condensed for clarity and length.
Found Remote: With Apple, Google, Sony, Verizon, Microsoft getting into the (OTT) mix, what sets Sling TV apart?
Roger Lynch: A few things. First, Sony is the only one that’s currently available, there are rumors about Apple, and Microsoft seems to be backing away from content services. But I think our strategy is pretty different from Sony’s: We’re part of a traditional paid TV company where we can negotiate deals with the leverage of having 14 million subscribers—and that enables us to create a unique bundle that’s actually quite hard for someone else to create. Sony, in contrast, offers a big bundle, which is the easiest thing to create because programmers want you to put all of their channels in one basic package. They probably haven’t gotten a whole lot of traction with their offer because they are essentially replicating traditional pay TV. We’re not trying to replicate that bundle because we think that’s a pretty well served market already. The real issue is there’s a growing segment of the market for whom that big bundle doesn’t appeal anymore. Also, our service is a mobile one, it’s in and out of the home, so it’s not just tied to the device in your home.
Found Remote: How do you continue to sign up high-profile partners while keeping the base package cost so low? And as you continue to sign up more partners, how are you going to be able to keep the price point low enough to continue to attract cord cutters and cord nevers?
Lynch: We’ve added a lot of content since launch and have still been able to maintain our $20 price point. We’re just not going to do deals with every programmer. If we did, there’s no way we could retain a $20 price point. It’s a matter of us being smart about which programmers we put in our service and try to keep focused on putting content in our add-on packs and not loading up our base pack.
FR: How important are add-on packs to maintaining that base price while also being able to provide additional content?
Lynch: It’s always a balance. Any major programmer is going to want some of their channels in your base pack in order for you to put the rest of their channels in add-on packs. They know the economics that come from the base pack—it’s always a challenge to keep that balance right. That’s why the most we put in our base pack from any one programmer is four channels.
FR: Sling TV just launched a pretty major national ad campaign with the tagline “Take Back TV.” Why do you think that tagline is so fitting for the company?
Lynch: TV actually used to be pretty simple: You either put up an antenna to get the channels you wanted, or you’d select a pretty inexpensive package of channels and just go with it. It’s gotten a lot more complicated in principle because you’re forced to buy so many channels, and pay TV requires that you sign contracts and expensive packages with many more channels than you really want. For us, it was all about how we could bring simplicity back to TV again. And that’s not to say we’re making TV like it used to be—it’s a very different experience than it once was, but the theme of simplicity is one of the things that we’re trying to achieve: No contracts, no commitments, no expensive bundles, you don’t have to pass a credit check, you don’t have to wait for an installer and take time off from work. There’s no special equipment either, it’s just on the devices you already own.
FR: The Diffusion Group recently reported that 25% of Sling TV users are “cord cheaters” - people who use another person’s credentials to access the service - is this something you’re actively combatting?
Lynch: Well, it’s not a very effective cord cheating mechanism, because Sling TV is a single stream service. So if I had an account and I decided to share it with you, then I watch a game on ESPN and all of a sudden you use my credentials to log in, you’re going to knock me off the service. That, and the fact that if you have my login credentials, you can go rent movies and have all those things charged to my credit card—those are natural inhibitors to people sharing accounts.
FR: It’s been five months since Sling TV launched, but how are most people accessing it?
Lynch: One of the things that’s a little surprising to us is about half of people sign up for our service through their mobile phones. They create their account, they download the app, and they start their experience with us on a mobile phone. Of device partners, Roku has been our most popular. We launched DISH World on Roku years ago, so they had a natural head start, but certainly other devices are gaining steam quickly. Amazon has been pretty successful with Fire TV, and other devices like Android TV are going to gain steam too.
FR: One of the problems I experience while watching TV on OTT platforms is that the ads are so repetitive. With all the data that Sling TV is presumably able to collect from usage, you should have a pretty good ability to serve up addressable ads. Do you have plans to build out an ad team for Sling TV and leverage that data that you’re collecting?
Lynch: We have a large ad sales team on DISH that is used to selling addressable advertising – we offer it on DISH today where we pre-position ads on hard drives, dynamically insert them into the streams, and sell those as addressable ads. We plan to leverage that capability and within that ad sales group, there will be people dedicated to Sling. Broadly, we want to leverage what we’ve already built on the satellite side in terms of ad sales. You’re still seeing a lot of repetition, but soon, the networks will sell ads, and we’ll sell ads. You’ll start to see fewer promo spots and more targeted ads.
FR: What do you envision Sling TV looking like a few years from now?
Lynch: You’re going to continue to see us add more content, a lot more devices, and pretty significant changes in the user interface. Since we launched five months ago, we’ve already added many channels and on-demand content. We want to make that on-demand content easier to find, and we also want to make it easier for people to find the channels that they want to watch. Our main goal is to make it easier for people to connect with the content that they’re trying to find.