Dish President & CEO Joe Clayton yesterday indicated that he did not believe Sling TV, the new streaming video service that costs $20 a month and includes ESPN, would "lead to cannibalization of our core business." Appearing yesterday on CNBC, Clayton said, "I'm not in the 18-35 year-old millennial age group which we’re targeting, but I have five kids at home and I know they’re well educated. They’re mostly urban dwellers and they’re not going to pay for pay TV unless I paid for it for them. They’re an ideal market that the pay TV industry is missing today." CNBC's Julia Boorstin noted ESPN was the “crown jewel of this service” and asked whether Dish is “paying the $5-6 that ESPN gets paid by traditional cable and satellite TV providers.” Clayton noted Dish does not release financial specifics of its programming contracts. But he said, "Obviously, they’re not doing it for free." Clayton: "Suffice it to say that ESPN, the ABC family and Disney are the anchor. ESPN is the most-watched ... channel in that 18-35-year-old age group. We are pretty excited about them being the anchor.” He did not dismiss the notion that Sling TV could at some point in the future become more profitable than their core business of satellite channel packing. Clayton: "Who’s to say what the future may bring? But we do know that the pay TV industry as it exists today is in a decline, and we saw it with last year's numbers, especially in the cable industry. So what are you going to do? We have to invest in growth initiatives and we see Internet video as one. We see satellite radio as one and we see wireless as one” (“Power Lunch,” CNBC, 1/6).
SLOW YOUR ROLL: Former NBA Commissioner David Stern appeared on CNBC today and was asked about the potential impact of unbundling cable networks on the value of sports teams and broadcast packages. He said, "I don't think that the unbundling is occurring so fast. The idea that Dish has announced that many networks, including ESPN, will be available online over the top is appealing to an audience that either has cut their cord already or ... never had cable." Stern: "Actually, I think it's going to bring in more people, and I would hope that somebody who gets to see the occasional games that are on ESPN or ABC will want to make sure they get to see all the games which requires a whole different package” ("Squawk Box," CNBC, 1/7).
MORE THOUGHTS ON SLING TV: SBD/SBJ media reporter John Ourand gave his thoughts on the Dish-ESPN streaming deal today on NPR's "Morning Edition." Hear the full conversation.
