Image source: Sling.

When Dish Network (DISH) launched Sling TV 18 months ago, nobody else was doing what it was. Since then, Sony (SONY 2.58%) joined the fold of streaming television services, and several other companies are hovering around the space with intentions to launch similar services. AT&T (T 0.29%) will launch DirecTV Now later this year and Hulu is expected to launch another digital TV distribution platform in the first half of next year.

But Dish isn't afraid of the competition.

In fact, Sling TV CEO Roger Lynch thinks his is the only company that will be able to provide exactly what its customers are interested in. Everybody else, he says, is repeating the same mistakes that drove consumers away from cable in the first place.

The cheapest way to get ESPN

Sling TV offers a bare bones service with just 25 or so channels in its primary offer, now called Sling Orange. The package costs just $20 per month and includes top networks such as AMC, TNT, TBS, CNN, Comedy Central, and ESPN. There's no less expensive way to get ESPN without sharing passwords with friends or family.

In fact, Disney (DIS 0.33%) is very proud of the fact that it's gotten ESPN and several other channels into Sling's least expensive bundle. The media company has been losing ESPN subscribers for years now, and it sees skinny bundles like Sling TV as a means to win subscribers back. ESPN will also be available in AT&T's DirecTV Now packages, and it will likely find a place in Hulu's offering considering Disney's ownership stake in the company.

But Disney doesn't make it easy to afford. ESPN costs an average of over $7 for its flagship network and ESPN2 costs another $0.88 on top of that, according to estimates from SNL Kagan. Sling TV may have gotten a slightly better price due to the lack of DVR and the ability to only stream to one device at a time, but most of ESPN's programming is viewed live anyway and customers can use the WatchESPN app on as many devices as they want. Additionally, on Disney's third quarter earnings call, CEO Bob Iger told analysts "The pricing of our networks is similar on the over-the-top networks than it is in the on the MVPD platforms."

If all cord cutters are looking for is cheap and easy access to ESPN and several other big sports events on cable TV, Sling TV is the best option for them.

The competition is offering more, but consumers have to pay more

Sony's PlayStation Vue offers a base package of over 55 channels for $30 per month in markets where they don't include local broadcast networks. (Note, Sling TV doesn't include local broadcast networks either.) That bundle includes nearly all of the same channels as Sling Orange, but bundles quite a few more in as well, raising the price.

Lynch believes Sony was pressured to take on more channels into its bundle by Disney and the other media companies as there's a lot of institutional pressure to protect the big bundle. As a result, he believes AT&T and Hulu will face the same challenge as Sony when putting together a base package. All of the media companies want all of their channels in that package.

Of course, Sony also offers a few other perks on top of Sling TV that make up for the price difference. It includes unlimited cloud DVR and the ability to stream on multiple devices at once (although the list of supported devices is limited.) AT&T and Hulu will likely offer similar perks to make up for the price difference.

Dish's minimalist approach will set it apart and make it the premier destination for cord cutters looking to save money on their cable bill.

Can Sling TV make any money?

Sling's margins on its base package with some of the most expensive networks available must be slim to none. Dish explains the economics of Sling are much better than its satellite service as they don't require service calls to install the service in the house and overall customer acquisition costs are much lower. Even so, the cost of goods on its base service takes up a substantial portion of its monthly price.

With over 600,000 subscribers, Sling TV is seeing accelerated subscriber growth as more people cut the cord. Over 800,000 people left their cable providers last quarter, according to estimates from SNL Kagan. In order to make any money, Sling will have to grow in scale and hope a significant number of subscribers purchase add-on packages with higher margins.

While Sling might be able to attract a certain audience of cord cutters, it's not clear it can make money doing it.