Sling Media launched SlingCatcher, a device that enables users to watch PC-based online video on their TVs, on 9 October. Users can also plug USB memory sticks into the device and view sideloaded video content on their TVs, as well as stream content from a primary TV to a secondary TV (or a TV in a remote location, when it is used with a Slingbox). The company developed the Slingbox – one of the first devices to allow users to stream content from a TV to a PC or mobile device – in 2005. The addition of SlingCatcher to the product portfolio completes the circle, because ownership of both devices enables users to stream content from the TV to the PC, and vice-versa (see Figure 1).
Figure 1: Slingbox and SlingCatcher device interaction [Source: Analysys Mason, 2008]
Consumers that only want to enable the flow of video content in one direction can use either device independently, but Sling Media hopes to encourage established and potential purchasers to buy the full solution, which comes as close as possible to the ideal of ‘any content, anywhere’ for broadcast and Internet video. Sling Media will sell the device through several channels – both retail outlets and online stores. In the UK, the recommended retail price for the SlingCatcher will be GBP199.99 (EUR255.48), while the latest iteration of the Slingbox is available in different versions, with prices ranging from GBP129.99 (EUR166.06) to GBP199.99.
Sling Media is one of several players that have attempted to bridge the gap between the PC and the TV. Its pricing for the SlingCatcher matches that of the entry-level Apple TV device – Apple’s proprietary digital media streamer, which is linked to iTunes (although it is also possible to access content from YouTube, following an update in June 2007). The SlingCatcher differs from most alternative solutions by offering open access to the Internet, rather than a ‘walled garden’ online video service. This advantage enables it to fully capitalise on the growing popularity and diversity of online video content. According to comScore, 27 million people watched more than 3 billion videos online in the UK during June 20081. YouTube accounted for nearly half of the videos viewed, but the rest were fragmented across a multitude of sites.
The device is well designed for its purpose, but two key obstacles could prevent it from achieving its full potential.
- The launch coincides with the worst economic crisis of recent times. The level of consumer adoption for this type of device tends not to be high – even in strong economic conditions – because it is perceived as a luxury, rather than a necessity. Purchasing SlingCatcher is unlikely to be a high priority for consumers at a time when they are tightly controlling their spending.
- Consumer awareness of media streaming devices is low. Sling Media gained considerable attention in the industry – most notably in the USA – for launching the Slingbox, but awareness of its solutions among consumers continues to be low. For most consumers, the home networking market – particularly for niche products such as media streaming devices – comprises a bewildering array of solutions from a multitude of largely unknown vendors. The resulting confusion dissuades many potential users from buying such products.
Sling Media has opted to rely predominantly on the retail channel because it has proved difficult to sell innovative products such as SlingCatcher through operator partnerships. We believe that this approach is unlikely to be the most successful for the company, largely because of the previously mentioned obstacles. Operators can play a key role in driving the adoption of new technologies: they can support consumers by making them aware of solutions and their capabilities, and by providing equipment and support as needed.
The company has a key advantage over its competitors: its strategically useful parent company. It was acquired in 2007 by EchoStar, which was best known for its ownership of DISH Network – the second-largest satellite pay-TV operator in the USA (with almost 13.8 million subscribers at June 2008). EchoStar demerged its pay-TV and infrastructure businesses in January 2008. The latter, known as EchoStar Technologies, now focuses on maintaining its fleet of satellites, as well as the design and manufacture of set-top boxes, which it sells to several pay-TV operators, such as Bell.
We believe that a far better approach for Sling Media would be to incorporate its technology within its parent company’s set-top boxes, which could then be supplied to pay-TV operators worldwide. This would enable Sling Media to complement its retail channel and achieve far greater sales volumes. By marketing the benefits of this technology to consumers and providing them with the equipment on a rental basis, pay-TV operators would be able to drive the take-up of such devices. In the current climate, consumers are much less likely to experiment with new technologies and spend GBP199.99 on hardware – the benefits of which they may not fully grasp. Distribution via the operator channel and selling the proposition as a value-added service through a monthly subscription would represent a much more viable business model. This approach also enables pay-TV operators to add online video and ‘place-shifting’ services to their offerings to complement their core pay-TV proposition.
1 comScore, Inc. (London, UK, 2008), 27 Million People Watched More Than 3 Billion Videos Online in the UK in June 2008. Available at http://www.comscore.com/press/release.asp?press=2470.
